diff --git a/parsed_sections/prospectus_summary/2013/AUGG_augusta_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/AUGG_augusta_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..b6e987f5ad307eaa7f2b8ee69d4c27da4cfae5e2
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@@ -0,0 +1 @@
+Prospectus Summary Our principal executive offices are located at 897 Quail Run Drive Grand Junction, CO 81505 and our telephone number is (970) 628-1670. Our website is www.bullfroggold.com. Information on or accessed through our website is not incorporated into this prospectus and is not a part of this prospectus. As used in this prospectus, unless otherwise specified, references to the "Company," "we," "our" and "us" refer to Bullfrog Gold Corp. and, unless otherwise specified, its direct and indirect subsidiaries. The Offering Common stock offered by the selling stockholders: A total offering of 7,000,000 shares of common stock issuable upon the exercise of 7,000,000 warrants issued to RMB Australia Holdings Limited ("RMB") as part of the December 10, 2012 debt facility (the "Facility"). The registration of the shares will satisfy the Company s obligations to RMB as part of a facility agreement dated December 10, 2012 between the Company and RMB (the "Facility Agreement"). Common stock outstanding before and after this offering: 44,303,545(1) and 51,303,545 (2) Use of proceeds: We will not receive any proceeds from the sale of shares in this offering by the selling stockholders. OTCQB Marketplace symbol: BFGC
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0000026076_cubic_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0000026076_cubic_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..6fd1b31a26ec10bc1fd1e216e073634da63e7929
--- /dev/null
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@@ -0,0 +1 @@
+Prospectus summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0000826773_unitek_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0000826773_unitek_prospectus_summary.txt
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+PROSPECTUS SUMMARY The following is only a summary and therefore does not contain all of the information you should consider before investing in our securities. We urge you to read this entire prospectus, including the matters discussed under Risk Factors and the risk factors incorporated by reference into this prospectus as described in that section, and the more detailed consolidated financial statements, notes to the consolidated financial statements and other information incorporated by reference from our other filings with the SEC. Our Company We are a leading full-service provider of permanently outsourced infrastructure services, offering an end-to-end suite of technical services to customers in the wireless telecommunications, public safety, satellite television and broadband cable industries in the United States and Canada. Our services include: Comprehensive installation and fulfillment; Construction and project management; Wireless telecommunication infrastructure services; and Wireless system integration for public safety and land mobile radio applications. Our customers utilize our services to build and maintain their infrastructure and networks and to provide residential and commercial fulfillment services. These services are critical to our customers ability to deliver voice, video and data services to their end users. Our customers include leading media and telecommunication companies such as DIRECTV, AT&T, Clearwire Communications, Ericsson, Sprint, T-Mobile, Comcast, Charter Communications, Time Warner Cable and Rogers Communications. Corporate Information We were organized as a corporation under the laws of the State of Delaware in 1987, as Adina, Inc. In January 2010, the Company entered into a merger agreement with Berliner Communications, Inc. ( Berliner ), pursuant to which we became a wholly owned subsidiary of Berliner (the Merger ). For accounting purposes, the Company was considered the accounting acquirer, but the Merger was structured so that Berliner was the surviving entity. The Company subsequently changed Berliner s name to UniTek Global Services, Inc. Our principal executive offices are located at 1777 Sentry Parkway West, Gwynedd Hall, Suite 302, Blue Bell, Pennsylvania, 19422 and our telephone number is (267) 464-1700. Our website address is http://www.unitekglobalservices.com. Except for the documents referred to in the section Incorporation of Certain Documents by Reference, which are specifically incorporated by reference in this prospectus, the information contained therein or connected thereto shall not be deemed to be incorporated into this prospectus or the registration statement of which it forms a part. Amendment of Term Loan and Issuance of Warrants Prior to July 25, 2013, the Company s long term debt consisted of (i) a Credit Agreement by and among the Company and several banks and other financial institutions (the Term Loan ); and (ii) a Revolving Credit and Security Agreement by and among the Company and PNC Bank, National Association (the Revolving Loan ). In the second and third quarters of 2013, the Company entered into a series of forbearance agreements with the lenders under the Term Loan and the Revolving Loan which provided that the lenders would not exercise their rights in response to the covenant compliance violations and events of default. Effective July 25, 2013, the Company entered into a Second Amendment and Limited Waiver to Credit Agreement (together with the Term Loan, the Amended Term Loan ). Defined terms used in the following Copy to: Justin W. Chairman, Esq. Morgan, Lewis & Bockius LLP 1701 Market Street Philadelphia, Pennsylvania 19103 Telephone: (215) 963-5000 Facsimile: (215) 963-5001 Table of Contents description are used as defined in the Amended Term Loan. In addition to waiving various historical events of default, the Amended Term Loan, among other things: Charged a higher interest rate, payable in cash at a rate equal to either LIBOR (with a floor of 1.50%) plus a margin of 9.50% or an alternate base rate (equal to the greatest of three other variable rates, as defined) plus a margin of 8.50%, plus in either case PIK Interest to be added to the principal balance of the term loan at an annual rate equal to 4.00% of the outstanding balance. Modified the mandatory prepayments of annual Excess Cash Flow ( ECF ), to increase the rate from 50% to 75% of ECF paid annually until the Consolidated Leverage Ratio is below 2.50:1.00, at which point the rate will decrease to 50%. Reduced the maximum allowable indebtedness (including capital lease obligations) secured by permitted liens from $30,000,000 to $15,000,000, less the amount of capital lease obligations and any permitting refinancing thereof. Limited capital expenditures (excluding expenditures related to capital leases) to a maximum of (i) $7,000,000 for the 2013 fiscal year; and (ii) $8,000,000 per annum for each fiscal year thereafter, provided that up to 100% of such amount in 2013 or the years thereafter, if not so expended in the fiscal year for which it is permitted, may be carried over for expenditure in the next succeeding fiscal year. Modified financial covenants for the Consolidated Leverage Ratio and Consolidated Fixed Charge Coverage Ratio. The Amended Term Loan will continue to mature on April 15, 2018. In connection with the Amended Term Loan, the Company issued warrants to its lenders, exercisable at $0.01 per share, for 3,791,169 shares of the Company s common stock, an amount equal to 19.99% of the shares outstanding prior to the effective date of the Amended Term Loan. The warrants (and the shares of common stock issuable upon exercise of the warrants) were offered and sold by the Company pursuant to an exemption from the registration requirements of the Securities Act set forth in Regulation D promulgated thereunder. The warrants are exercisable immediately on a cash or cashless basis (at the election of the holder), do not have an expiration date, and are freely transferable subject to compliance with applicable securities laws. The exercise price and the number of shares of common stock issuable upon exercise of the warrants are subject to adjustment for issuances of common stock at less than 94% of the market price (as determined in accordance with the warrants) and certain dividends, distributions, stock splits, subdivisions, reclassifications, combinations, repurchases of common stock and business combinations. The warrants are subject to Registration Rights Agreements which require the Company to file a registration statement by November 15, 2013 to provide for resales and transfers of the common stock issuable upon any conversion or exercise of the warrants. This registration statement has been filed in accordance with the Registration Rights Agreements. If the registration statement filed is not declared effective within 120 days thereafter (or earlier in certain circumstances), subject to certain conditions, exceptions and grace periods, the Company must pay liquidated damages pursuant to the terms of the Registration Rights Agreements. The above descriptions of the Amended Term Loan, warrants and Registration Rights Agreements are qualified in their entirety by reference to Exhibits 99.1, 99.2 and 99.3, respectively, to the Company s Current Report on Form 8-K filed with the SEC on July 31, 2013, which are incorporated herein by reference. Additional Information For additional information related to our business and operations, please refer to the reports incorporated herein by reference, including, without limitation, our Annual Report on Form 10-K for the year ended December 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, as amended (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, 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 Securities Exchange Act of 1934, as amended. (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 (1) Proposed Maximum Offering Price Per Share (2) Proposed Maximum Aggregate Offering Price (2) Amount of Registration Fee Common Stock, par value $0.00002 per share 3,791,169 $1.19 $4,511,491.11 $581.08 (3) (1) All of the shares of common stock offered hereby are for the account of the Selling Stockholders (as defined below) and consist of 3,791,169 shares issuable upon the exercise of warrants. Pursuant to Rule 416 of the Securities Act, this registration statement also covers any additional shares of common stock which become issuable by reason of any share dividend, share split, recapitalization or any other similar transaction without receipt of consideration which results in an increase in the number of shares or common stock outstanding. (2) Estimated solely for the purpose of calculating the amount of registration fee pursuant to Rule 457(c) under the Securities Act. The proposed maximum offering price per share and proposed maximum aggregate offering price are based upon the average of the high $1.19 and low $1.18 sales prices of the registrant s common stock on the NASDAQ Global Market on November 8, 2013. The registrant is not selling any shares of common stock in this offering and, therefore, will not receive any proceeds from any sale of shares in this offering. (3) The registrant previously paid $581.08 in connection with the initial filing of this registration statement. Table of Contents 31, 2012 and our Quarterly Reports on Form 10-Q for the quarters ended March 30, 2013, June 29, 2013 and September 28, 2013, as described under the caption Incorporation of Certain Documents by Reference. The Offering Common stock offered by the Selling Stockholders Up to 3,791,169 shares of common stock underlying warrants Use of proceeds We will not receive any proceeds from the sale of the shares offered by this prospectus. We may, however, receive the proceeds of any cash exercises of the warrants which, if received, would be used by us for working capital purposes; any such proceeds would however be minimal. NASDAQ Global trading symbol UNTK 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, 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. Table of Contents
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0000861838_aceragen_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0000861838_aceragen_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/CIK0001024657_west-corp_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001024657_west-corp_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001024657_west-corp_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001095996_william_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001095996_william_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..f98330a5a604e7fdc2a46a01a1a7f5db314a9860
--- /dev/null
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights the information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information that may be important to you. For a more complete understanding of this offering, we encourage you to carefully read this entire prospectus. Unless otherwise indicated, market data is derived from a market study prepared for us in connection with this offering by JBREC. Except as otherwise noted, all information in this prospectus: gives effect to the 1-for-8.25 reverse stock split of our Class A Common Stock, or the Reverse Split, which will occur upon pricing of this offering; gives effect to the conversion of all outstanding shares of our Class C Common Stock, Class D Common Stock (including shares underlying outstanding equity awards) and Convertible Preferred Stock into Class A Common Stock on a one-for-one basis and as automatically adjusted for the Reverse Split, or the Common Stock Conversion, which will occur immediately prior to the consummation of this offering; gives effect to the adoption and effectiveness of our Third Amended and Restated Certificate of Incorporation, or the Certificate of Incorporation, which will become effective at the consummation of this offering and which gives effect to the 1-for-8.25 reverse stock split of our Class B Common Stock (which, together with the Reverse Split and the Common Stock Conversion, is referred to as the Common Stock Recapitalization); assumes that our shares of Class A Common Stock will be sold at $23.00 per share, which is the midpoint of the price range set forth on the cover page of the prospectus; and assumes that the underwriters do not exercise their option to purchase additional shares. In this prospectus, unless otherwise stated or the context otherwise requires, the Company, we, our, and us refer to William Lyon Homes, a Delaware corporation, and its subsidiaries. In addition, unless otherwise stated or the context otherwise requires, Parent refers to William Lyon Homes, and California Lyon refers to William Lyon Homes, Inc., a California corporation and wholly-owned subsidiary of Parent. 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 MAY 6, 2013 William Lyon Homes 8,700,000 Shares of Class A Common Stock We are selling 6,525,000 shares of our Class A Common Stock and the selling stockholder named in this prospectus is selling 2,175,000 shares of our Class A Common Stock. We will not receive any proceeds from the sale of shares by the selling stockholder, including any shares sold by the selling stockholder in connection with the exercise of the underwriters option to purchase additional shares. The initial public offering price of the Class A Common Stock is expected to be between $22.00 and $24.00 per share. Following this offering, we will have two classes of authorized common stock, Class A Common Stock and Class B Common Stock. The rights of the holders of Class A Common Stock and Class B Common Stock are identical, except with respect to certain voting, conversion and preemptive rights. Each share of Class A Common Stock is entitled to one vote per share. Each share of Class B Common Stock is entitled to five votes per share and is convertible into one share of Class A Common Stock upon the occurrence of certain events. Prior to this offering, there has been a limited market for our Class A Common Stock. We have applied to have the Class A Common Stock listed on The New York Stock Exchange under the symbol WLH . The underwriters have an option to purchase an aggregate maximum of 1,305,000 additional shares from us and the selling stockholder, including 652,500 additional shares from us and 652,500 additional shares from the selling stockholder, to cover over-allotment of shares. Investing in our Class A Common Stock involves risks. See Risk Factors on page 19. Price to Public Underwriting Discounts and Commissions Proceeds to Issuer Proceeds to Selling Stockholder Per Share Total Delivery of the shares of Class A Common Stock 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 determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Credit Suisse Citigroup J.P. Morgan Zelman Partners LLC Houlihan Lokey Comerica Securities The date of this prospectus is , . Table of Contents DESCRIPTION OF OUR BUSINESS Our Company We are one of the largest Western U.S. regional homebuilders. Headquartered in Newport Beach, California, we are primarily engaged in the design, construction, marketing and sale of single-family detached and attached homes in California, Arizona, Nevada and Colorado. Our core markets include Orange County, Los Angeles, San Diego, the San Francisco Bay Area, Phoenix, Las Vegas and Denver. We have a distinguished legacy of more than 55 years of homebuilding operations, over which time we have sold in excess of 75,000 homes. Our markets are characterized by attractive long-term housing fundamentals and, based upon the Burns Home Value Index, eight of our markets have experienced double-digit year-over-year home price appreciation. We hold leading market share positions in most of our markets and we have a significant land supply with more than 13,200 lots owned or controlled as of March 31, 2013, representing an approximately 12-year supply of lots based upon our home closings during the twelve month period ended March 31, 2013. We have a proven expertise in understanding the needs of our homebuyers and tailoring our product offerings to meet such needs, which allows us to maximize the yield on our land investments by pairing product with market demand. We build and sell across a diverse range of product lines at a variety of price points with an emphasis on sales to entry-level, first-time move-up and second-time move-up homebuyers. We are committed to achieving the highest standards in design, quality and customer satisfaction and have received numerous industry awards and commendations throughout our operating history recognizing our achievements. In 2012 we delivered 950 homes, with an average selling price of approximately $275,000, and recognized home sales revenues and total revenues of $261.3 million and $398.3 million, respectively. In the three months ended March 31, 2013, we delivered 268 homes, with an average selling price of approximately $285,200, and recognized home sales revenues and total revenues of $76.4 million and $80.9 million, respectively. We have experienced significant operating momentum since the beginning of 2012, during which time a variety of key housing, employment and other related economic statistics in our markets have increasingly demonstrated signs of recovery. This rebound in market conditions, when combined with our disciplined operating strategy, has resulted in five consecutive quarters of period over period growth in our net new home orders, home closings and sales backlog. As of March 31, 2013, we were selling homes in 22 communities and had a consolidated backlog of 498 sold but unclosed homes, with an associated sales value of $170.8 million, representing a 50% and 115% increase in units and dollars, respectively, as compared to the backlog at March 31, 2012. As of April 28, 2013, we had a consolidated backlog of more than 550 units with a sales value of more than $200 million. The average selling price for homes in our backlog as of April 28, 2013 was approximately $363,600, representing a significant increase relative to the average selling price of $285,200 for homes closed in the three month period ended March 31, 2013. We believe that the attractive fundamentals in our markets, our leading market share positions, our long-standing relationships with land developers, our significant land supply and our focus on providing the best possible customer experience position us to capitalize on meaningful growth as the U.S. housing market continues to rebound. Table of Contents Table of Contents Industry Overview U.S. Housing Market The U.S. housing market continues to improve from the cyclical low points reached during the 2008 2009 national recession. Between the 2005 market peak and 2011, new single-family housing sales declined 76%, according to data compiled by the U.S. Census Bureau, and median resale home prices declined 34%, as measured by the S&P Case-Shiller Index. In 2011, early signs of a recovery began to materialize in many markets around the country as a result of an improving macroeconomic backdrop and excellent housing affordability. In the year ended December 31, 2012, homebuilding permits increased 29% and the median existing single-family home price increased 6.6% year-over-year. Growth in new home sales outpaced growth in existing home sales over the same period, increasing 20% versus 9% for existing homes (which were propped up by foreclosure-related sales). Historically, strong housing markets have been associated with great affordability, a healthy domestic economy, positive demographic trends such as population growth and household formation, falling mortgage rates, increases in renters that qualify as homebuyers and locally based dynamics such as housing demand relative to housing supply. Many markets across the U.S. are exhibiting most of these positive characteristics. The recent economic growth trajectory in the United States has resulted in an increase in the ratio of newly-created jobs to number of new home permits issued during the last twelve months. Further, the inventory of resale and new unsold homes is well below historical averages and affordability is near its best level in more than 30 years, as measured by the ratio of homeownership costs to household income. As a result of the improving fundamentals, home values are trending up, and the combination of historically low mortgage rates, a declining percentage of distressed sales, and low inventory levels should drive rising home values. JBREC estimates national home values appreciated by approximately 2% in 2012, and forecasts national appreciation of 7.2% in 2013 and 8.7% in 2014, slowing to 6.5% by 2015. While the U.S. housing market continues to improve, regional strength varies. As of February 2013, Northern California, the Southwest, and Southern California rank as the top housing regions in the country based on demand, supply and affordability metrics according to JBREC. Table of Contents TABLE OF CONTENTS Page PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001137204_epm-live_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001137204_epm-live_prospectus_summary.txt
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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/CIK0001168990_superfund_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001168990_superfund_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..57cfc8eb3017c59e232ff61e4086f6596a5982c8
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+S-1/A 1 d516570ds1a.htm S-1/A S-1/A Table of Contents AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 12, 2013 REGISTRATION NO. 333-184998 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 1 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 SUPERFUND GREEN, L.P. (Exact name of registrant as specified in its charter) Delaware 6221 (State of Organization) (Primary Standard Industrial Classification Code Number) 98-0375395 (I.R.S. Employer Identification Number) Superfund Office Building P.O. Box 1479 Grand Anse St. George s, Grenada West Indies (473) 439- 2418 Martin Schneider Superfund Office Building P.O. Box 1479 Grand Anse St. George s, Grenada West Indies (473) 439-2418 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) (Name, address, including zip code, and telephone number, including area code, of agent for service) Copy to: James B. Biery Daniel F. Spies Sidley Austin LLP One South Dearborn Street Chicago, Illinois 60603 (312) 853-4167 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 (the Securities Act ) 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. 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 (Do not check if a smaller reporting company) Smaller reporting company CALCULATION OF REGISTRATION FEE Title of Each Class of Securities being Registered Proposed Maximum Aggregate Offering Price Amount of Additional Registration Fee(1)* Series A Limited Partnership Units $201,733,991 $0 Series B Limited Partnership Units $304,970,060 $0 (1) Pursuant to Rule 457(o). * As of the date hereof, Registrant registers pursuant to this Amendment No. 1 to the Registration Statement on Form S-1 (Registration No. 333-184998) $201,733,991 of Series A Units and $304,970,060 of Series B Units. Upon the filing of this Amendment No. 1 to the Registration Statement on Form S-1, Registrant carries forward and registers, pursuant to Rule 415(a)(6), $201,733,991 of registered but unsold Series A Units and $304,970,060 of registered but unsold Series B Units from Registrant s previous Registration Statement on Form S-1 (Registration No. 333-162132) for which Registrant has paid $21,533.54 and $24,731.64 in registration fees to the Securities and Exchange Commission, respectively. 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 TABLE OF CONTENTS Page SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001195734_potbelly_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001195734_potbelly_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
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@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001237746_endurance_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001237746_endurance_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..acac44615b64677b53e415310d1fa949b1b55d46
--- /dev/null
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. You should read the following summary together with the more detailed information appearing in this prospectus, including our consolidated financial statements and related notes, and the risk factors beginning on page 16, before deciding whether to purchase shares of our common stock. Unless the context otherwise requires, we use the terms Endurance International Group Holdings , Endurance , our company , we , us and our in this prospectus to refer to Endurance International Group Holdings, Inc. and its subsidiaries. References to The Endurance International Group, Inc. refer to The Endurance International Group, Inc., which is our primary operating company and a wholly owned subsidiary of Endurance International Group Holdings, Inc. See Corporate Information and Structure below for more information. References to Warburg Pincus refer to Warburg Pincus LLC. References to Goldman Sachs refer to Goldman, Sachs & Co. Endurance International Group Holdings, Inc. Mission Our mission is to deliver technology solutions that help SMBs transform the way they do business. Overview We are a leading provider of cloud-based solutions designed to help small- and medium-sized businesses, or SMBs, establish, manage and grow their businesses. We serve approximately 3.4 million subscribers globally with a comprehensive and integrated suite of over 150 products and services that includes initial website design and creation, email and commerce solutions as well as more advanced offerings such as scalable and on-demand computing, security, storage and bandwidth, online marketing, mobile and productivity solutions. There are expected to be more than 76 million SMBs worldwide by the end of 2013,* of which more than 43 million will have direct access to the Internet.** We believe SMBs form the backbone of the global economy and will continue to serve as an engine of innovation and growth. Since our founding in 1997, we have focused on the needs of SMBs and have demonstrated a passion for empowering our subscribers to build their businesses and navigate the rapidly changing technology landscape. Our unwavering focus on serving SMBs has enabled us to amass significant insight into the needs and aspirations of our subscribers while developing a deep understanding of the challenges of serving SMBs at scale. We believe SMBs: are seeking technology solutions to address fundamental business challenges and opportunities, including those presented by the emergence of the digital era; require guidance and support in order to deploy and operate these solutions; face budget constraints which limit their ability to make large capital investments in technology; and are difficult to identify, reach and serve effectively, given their breadth and diversity. * The source of all data denoted with a single asterisk is Access Markets International (AMI) Partners, Inc., June 20, 2013. ** The source of all data denoted with a double asterisk is Access Markets International (AMI) Partners Inc., August 2, 2013. Table of Contents The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. PRELIMINARY PROSPECTUS Subject to Completion, dated October 23, 2013 23,390,000 Shares Common Stock This is the initial public offering of shares of common stock of Endurance International Group Holdings, Inc. Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price per share will be between $14.00 and $16.00. Our common stock has been approved for listing on The NASDAQ Global Select Market under the symbol EIGI. Upon completion of this offering, we may be a controlled company as defined under the NASDAQ Listing Rules. As an emerging growth company, we are eligible for reduced public company reporting requirements. See Prospectus Summary Implications of Being an Emerging Growth Company. See Risk Factors beginning on page 16 to read about factors you should consider before buying shares of the common stock. Neither the Securities and Exchange Commission nor any state securities commission or other regulatory body 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. Per Share Total Initial public offering price $ Underwriting discount(1) $ Proceeds, before expenses, to Endurance International Group Holdings, Inc. $ (1) The underwriters will receive compensation in addition to the underwriting discount. See Underwriting (Conflicts of Interest) beginning on page 161 of this prospectus for a description of the compensation paid to underwriters. To the extent that the underwriters sell more than 23,390,000 shares of common stock, the underwriters have the option to purchase up to an additional 3,508,500 shares at the initial public offering price less the underwriting discount. The underwriters expect to deliver the shares against payment in New York, New York on , 2013. Goldman, Sachs & Co. Credit Suisse Morgan Stanley Cowen and Company Jefferies Lazard Capital Markets Wells Fargo Securities Prospectus dated , 2013 Table of Contents We built our company to serve the needs of this vibrant, complex and fragmented SMB universe. Our approach allows us to effectively serve this expansive subscriber base at scale while driving a business model with significant growth and strong cash flow. Technology and data form the foundation of our approach. We leverage our substantial investment in proprietary, advanced technology to offer our solutions while relentlessly seeking to reduce the cost of serving our subscribers. In addition, we are rigorously data-driven, collecting valuable information throughout our business and applying sophisticated analytics to inform our subscriber acquisition, engagement and retention strategies and product development initiatives. Our technology platform and data assets enable us to: deliver an integrated and comprehensive suite of products and services that helps SMBs grow their businesses and exploit new digital opportunities; intelligently engage with subscribers, consistent with their needs and in a manner that encourages their adoption of our technology to support and drive the growth in their businesses; provide compelling and affordable solutions to our subscribers; and efficiently acquire and serve different types of SMB subscribers through our multi-brand, multi-channel strategy. Our ability to address the needs of SMBs, while leveraging our technology platform and data assets, has enabled us to grow rapidly, to create long term subscriber relationships and to build an attractive business model that generates substantial cash flow. During the past three years, our revenue grew from $87.8 million to $292.2 million, representing a compounded annual growth rate, or CAGR, of 82%, while our net losses increased from $44.3 million to $139.3 million. During the same period, our adjusted EBITDA grew from $25.1 million to $132.8 million, representing a CAGR of 130%, and our unlevered free cash flow grew from $26.4 million to $101.2 million, representing a CAGR of 96%. For an explanation of adjusted EBITDA and unlevered free cash flow and a reconciliation of adjusted EBITDA and unlevered free cash flow to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, see Non-GAAP Financial Measures. Industry Background There are expected to be more than 76 million SMBs worldwide by the end of 2013,* of which more than 43 million will have direct access to the Internet.** The number of SMBs worldwide is projected to increase by 1.1 million in 2013, of which 770,000 will have access to the Internet.** Within the United States, Canada, Brazil, Russia, India, China, Indonesia and Turkey alone, there are expected be more than 25 million SMBs by the end of 2013, of which more than 15 million will have direct access to the Internet.*** SMBs are broad and diverse, spanning every industry and region of the world. SMBs collectively represent 99% of all private sector companies in the world and employ more than 90% of private sector, non-farm workers.* SMBs are increasingly adopting technology to operate and grow their businesses. Those SMBs that utilize cloud services, including web, email and application hosting and data backup, generate 1.5 times more in annual revenues compared to those that do not deploy cloud-based solutions.* SMBs understand that the growth in global Internet penetration and the proliferation of mobile devices are changing the way in which consumers discover and transact with businesses. Increasingly, SMBs are seeking to take advantage of new developments in e-commerce, online marketing, social media and *** The source of all data denoted with a triple asterisk is Access Markets International (AMI) Partners Inc., September 24, 2013. Table of Contents Table of Contents mobile to transform their businesses, or to build new businesses that were not possible before the advent of these tools. As a result, SMBs are expected to spend approximately $96 billion annually on cloud-based services by 2015, representing a CAGR of 28% since 2012.**** We believe that this growth is driven in large part by the need of SMBs to respond to these digital opportunities. However, approximately 75% of all SMBs do not have a website today.** We believe that the opportunities presented in the digital era will further accelerate the adoption of cloud-based services as SMBs continue to recognize the importance of technology solutions to their success. Over our 16-year operating history, we have developed a deep understanding of the diverse needs of SMBs and the challenges of serving them at scale. We believe SMBs are: Seeking to address fundamental business challenges and opportunities, including the emergence of the digital era. SMBs are seeking comprehensive, flexible, reliable, secure and personalized technology solutions that address challenges and unlock opportunities to succeed in the digital world. For example, SMB customers are shifting their activities online and embracing mobile technologies, social media and e-commerce, which requires SMBs to deploy technology tools, serve customers and compete for business in new and innovative ways. Requiring informed guidance and support. Most SMBs, particularly the one-to-five employee companies that represent the majority of our subscribers, possess limited technology expertise and resources. As a result, SMBs require informed advice and support on ways to improve their operations through technology and to take advantage of new opportunities at all stages of their lifecycles. Facing budget constraints limiting their ability to make large capital investments in technology. SMBs want to leverage modern technology, but are looking for cost-effective solutions that do not require large upfront investments. Difficult to reach and serve effectively, given their breadth and diversity. SMBs are fragmented in terms of size, geography, sophistication and type of industry. As a result, it is challenging to effectively market to, acquire and serve SMB subscribers at scale and in a cost-effective manner. While SMBs represent the largest proportion of all businesses and are massive consumers of technology solutions in the aggregate, we believe that other providers have generally struggled to meet the diverse needs of SMBs for high-quality products, services and support in a comprehensive and profitable way. Our Solution Our passion for empowering diverse SMBs to navigate the rapidly changing technology landscape has led us to a solutions-based approach built on a foundation of technology, data and analytics. We address the challenges of serving this large and fragmented market at scale, in the following manner: We deliver an integrated and comprehensive suite of products and services. We offer a compelling platform with a wide range of products and services designed to help our diverse base of SMB subscribers establish, manage and grow their businesses. By leveraging critical insights drawn from our proprietary collection of SMB data, we develop and expand our **** Source: Parallels IP Holdings GmbH, Parallels Global SMB Cloud Insights, February 5, 2013. Table of Contents Table of Contents portfolio of products and services to provide the solutions our subscribers need and the functionality and features they value. Our cloud-based offerings allow our subscribers to select a customized set of solutions from among a broad range of internally developed and validated third-party products. We intelligently engage with subscribers, consistent with their needs. We leverage our technology and proprietary data to identify subscriber needs and opportunities. This allows us to proactively engage with them via a myriad of customer engagement channels, including phone, email, chat, dashboards, an application marketplace and web video. This ongoing engagement allows us to offer the right solutions at the right time. We believe these capabilities, in turn, lead to greater adoption and deeper entrenchment of our technology and superior subscriber experience, thereby increasing our subscriber retention rates and revenue per subscriber. We provide affordable solutions to our subscribers in a cost-effective manner. Our cloud-based delivery model enables our subscribers to address their business needs with minimal upfront capital investment. As a result of our relentless focus on operational efficiency and lowering our cost to serve, we deliver affordable solutions to our subscribers, by operating: an integrated, cloud-based customer-facing technology platform which permits us to efficiently deliver our products and services and add new subscribers. This technology platform allows us to optimize our investments in infrastructure, benefit from economies of scale and integrate new products and services seamlessly; and proprietary and unified operating and support systems which allow us to operationalize data insights, serve our subscribers intelligently and efficiently, and optimize our internal processes and procedures. We operate these systems across our subscriber base and all of our brands, allowing us to develop an integrated view of each subscriber and enabling us to contact our subscribers through the right channels and offer them the most relevant solutions at the most opportune times. We efficiently acquire and serve subscribers with our multi-brand, multi-channel strategy. We leverage our proprietary data to implement a multi-brand, multi-channel approach that allows us to precisely target the SMB universe, identify the best ways to reach different categories of subscribers and tailor our brands and solutions specifically toward those audiences. Although word-of-mouth referrals represent the largest source of new subscribers, we also leverage online and mobile marketing activities, as well as our network of resellers, strategic partners and referral sources, to grow our subscriber base. Our approach is designed to reach and efficiently on-board subscribers at scale while minimizing subscriber acquisition costs. Our Model We believe that our solution results in a strong, efficient and differentiated business model with the following attributes: Attractive Subscription Model and Retention Rates. Our subscriptions require payment in advance, providing significant cash flow benefits and revenue visibility. Our products and services are tailored to the needs of SMB subscribers and are integral to their businesses. As a result, we benefit from high subscriber and revenue retention rates. Strong Average Revenue Per Subscriber. Our comprehensive platform, data driven approach and proactive subscriber engagement enable us to sell relevant and useful additional Table of Contents Table of Contents products and services to existing and new subscribers, driving higher average revenue per subscriber. Cost-Effective Customer Acquisition. Through our multi-brand, multi-channel approach, we are able to target our marketing spend carefully and acquire subscribers cost-effectively. Due to our large base of subscribers and high customer satisfaction, we also attract a significant percentage of our new subscribers through word of mouth referrals, at no cost to us. Efficient Cost to Serve. We serve our subscribers in a cost-efficient manner as a result of our integrated technology platform and operating support systems which facilitate the collection, analysis and application of large amounts of data. Our cloud-based delivery model enables us to serve subscribers with minimal incremental expense and deploy new products and services quickly and efficiently. We have also developed proprietary techniques that help us to operate with highly efficient server configurations, resulting in low capital expenditures. Virtuous Cycle. As our business continues to grow, we enjoy even greater benefits of scale collecting more data, improving our analytical capabilities, deriving more insight, enhancing our operational efficiency, increasing our cash flow and re-investing in the growth of our business. Our Growth Strategy Since our formation in 1997, we have focused on helping SMBs establish, manage and grow their businesses. To fulfill our mission, we intend to continue to increase our scale, broaden our subscriber footprint, expand our range of product and service offerings and pursue strategic acquisitions. Grow Our Subscriber Base We believe there is a substantial opportunity to expand our subscriber base by: Expanding Existing Channels. We intend to continue to invest in our multiple subscriber acquisition channels, including our resellers, strategic partners and referral sources. We also plan to continue to collaborate with resellers and strategic partners to increase the value proposition of our solutions to subscribers. Expanding Internationally. We have successfully entered foreign markets such as Brazil and India and believe there are significant opportunities to continue growing our global presence. We intend to expand further into international markets by leveraging our technology platform to deliver offerings customized to local markets. Increase Sales of Our Products and Services We intend to expand sales of our products and services to support our subscribers as they grow, by: Expanding Sales of Existing Products and Services. We aim to offer our subscribers the right products and services at the right time. We believe our strong subscriber relationships and our comprehensive portfolio of products and services provide us with the opportunity to drive incremental sales. Continuing to Add Innovative Products and Services. We plan to continue to introduce value-added products and services that address our subscribers needs. As we further expand our solutions, we expect that our subscribers will be more likely to purchase additional products and services from us. Table of Contents TABLE OF CONTENTS PROSPECTUS Page 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 investing in our common stock, you should carefully read this entire prospectus, including our financial statements and the related notes included in this prospectus and the information set forth under the headings Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations. Overview Our Business Tengion is a regenerative medicine company focused on discovering, developing, manufacturing and commercializing a range of neo-organs, or products composed of living cells, with or without synthetic or natural materials, implanted or injected into the body to engraft into, regenerate, or replace a damaged tissue or organ. Using our Organ Regeneration Platform, we create these neo-organs using a patient s own cells, or autologous cells. We believe our proprietary product candidates harness the intrinsic regenerative pathways of the body to regenerate a range of native-like organs and tissues. Our product candidates are intended to delay or eliminate the need for chronic disease therapies, organ transplantation, and the administration of anti-rejection medications. In addition, our neo-organs are designed to avoid the need to substitute other tissues of the body for a purpose to which they are poorly suited. Building on our clinical and preclinical experience, we are initially leveraging our Organ Regeneration Platform to develop our Neo-Urinary Conduit for bladder cancer patients who are in need of a urinary diversion and our Neo-Kidney Augment for patients with advanced chronic kidney disease. Our Neo-Urinary Conduit is intended to replace the use of bowel tissue in bladder cancer patients requiring a non-continent urinary diversion after bladder removal surgery, or cystectomy. We are able to manufacture our Neo-Urinary Conduit using a proprietary process that takes four weeks or less and uses smooth muscle cells derived from a routine biopsy. We are currently conducting a Phase I clinical trial for our Neo-Urinary Conduit in bladder cancer patients to assess its safety and preliminary efficacy, translate the surgical implantation procedure utilized in preclinical studies, and optimize post-operative care. This trial is an open-label, single-arm study, which is currently expected to enroll up to ten patients. In the first quarter of 2013, we enrolled the seventh patient in this trial. Surgeons from three new clinical sites attended the surgery for the seventh patient for training purposes and those clinical sites are now actively recruiting patients. In October 2012, we announced the death of two patients enrolled in our Neo-Urinary Conduit Phase I clinical trial. One patient died of metastatic bladder cancer and the other died of cardiopulmonary arrest following a myocardial infarction, or heart attack. Each of these patients Neo-Urinary Conduits was properly functioning at the time of their death. Both patients died due to afflictions unrelated to the Neo-Urinary Conduit or the surgical procedure. We notified the Data Safety Monitoring Board of these events and the Phase I clinical trial is ongoing. In March 2013, we announced that one patient enrolled in the trial for ten months, who had metastases prior to implantation, had developed metastatic bladder cancer requiring chemotherapy. In order to permit the entire therapeutic approach with this patient to be consistent with the current standard of care, the Neo-Urinary Conduit has been removed and replaced with an ileal conduit. Native-like urinary tissue has been demonstrated in the explanted urinary conduits and function has been demonstrated for up to 10 months post-implantation. We and our clinical investigators believe that the surgical technique used in animal models has been successfully translated to humans. We are actively recruiting patients for the Phase I clinical trial of our Neo-Urinary Conduit product candidate. Seven patients have been implanted with the Neo-Urinary Conduit to date and we are focused on completing implantation of the remaining three patients in the trial and then working with the U.S. Food and Drug Administration, or FDA, during 2013 to plan for a potential Phase 2/3 clinical trial of this product candidate. Our Neo-Kidney Augment is being developed to prevent or delay dialysis by increasing renal function in patients with advanced chronic kidney disease. Our Neo-Kidney Augment is based on our proprietary technology, which uses the patient s cells, procured by a needle biopsy of the patient s kidney, to create an injectable product candidate that can catalyze the regeneration of functional kidney tissue. In April 2012, we completed a successful Pre-IND meeting with the FDA for the Neo-Kidney Augment. We and the FDA agreed on a good laboratory practice, or GLP, animal study program required to support an Investigational New Drug, or IND, filing for a Phase I clinical trial in chronic kidney disease, or CKD, patients. Those GLP studies have been completed. We initiated a clinical trial to dose CKD patients with our Neo-Kidney Augment in Sweden during the second quarter of 2013, and we anticipate commencement of a clinical trial for CKD patients in the United States during the fourth quarter of 2013. To date, we have devoted substantially all of our resources to the development of our Organ Regeneration Platform and product candidates, as well as to our facilities that we employ to manufacture our neo-organs. Since our inception in July 2003, we have had no revenue from product sales, and have funded our operations principally through the private and public sales of equity securities and debt financings. We have never been profitable and, as of June 30, 2013, we had an accumulated deficit of $264.9 million. We expect to continue to incur significant operating losses for the foreseeable future as we advance our product candidates from discovery through preclinical studies and clinical trials and seek marketing approval and eventual commercialization. AMENDEMENT NO. 1 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Recent Developments 2013 Financing On June 28, 2013, we entered into several agreements with certain new and existing investors (each a 2013 Investor and, collectively, the 2013 Investors ) to provide financing to us of approximately $18.6 million (the 2013 Financing ). Pursuant to the 2013 SPA and the Facility Agreement between us and the 2013 Investors, the 2013 Investors purchased an aggregate of approximately $18.6 million of 2013 Notes as well as 2013 Warrants to purchase an aggregate of approximately 81 million shares of our common stock. The 2013 Investors purchased the 2013 Notes and 2013 Warrants (together, the Securities ) pursuant to the right granted to the 2012 Investors (as defined below) in the securities purchase agreement entered into by us and the investors party thereto (collectively, the 2012 Investors ), dated October 2, 2012 (the 2012 Securities Purchase Agreement ), to purchase up to an additional $20 million of Securities until June 30, 2013 (the Call Option ). Pursuant to the 2013 SPA, the 2013 Investors have the right to participate in any financing conducted by us on or before June 28, 2015. In connection with the 2013 Financing, we also entered into an Amendment, Waiver and Consent Agreement (the Amendment, Waiver and Consent Agreement ) with the 2012 Investors. Pursuant to the Amendment, Waiver and Consent Agreement, we and the 2012 Investors agreed to amend the documentation related to our private placement completed on October 2, 2012 (the October 2012 Financing ) and to waive certain rights thereunder, to, among other things: (i) explicitly permit certain of the 2012 Investors to assign the rights under the Call Option that each such 2012 Investor did not exercise to 2013 Investors; (ii) waive certain procedural requirements regarding the 2013 Financing; (iii) allow us to enter into certain right of first negotiation agreements with respect to our Neo-Urinary Conduit program and Neo-Kidney Augment program, (iv) provide for automatic release of the security interests in assets related to the Esophagus Program upon permitted dispositions of such assets; (v) provide for automatic release of the security interests in assets related to our 80,000 square feet facility in East Norriton, Pennsylvania upon permitted dispositions of such assets; and (vi) allow for waivers and amendments to certain of the October 2012 Financing documentation by a super-majority of the 2012 Investors. 2013 Agreements with Celgene On June 28, 2013, we entered into the Collaboration Agreement with Celgene Corporation ( Celgene ) and Celgene European Investment Company LLC (together with Celgene, the Celgene Companies ), pursuant to which the Celgene Companies paid us $15 million in exchange for (i) five-year warrants to purchase 7,425,743 shares of common stock and ten-year warrants to purchase 14,851,485 shares of common stock, (ii) a right of first negotiation to our Neo-Kidney Augment Program; and (iii) entering into the Collaboration Agreement in which we agreed to limit development of our Esophagus Program to activities under the Collaboration Agreement and in which we also granted to Celgene the option to acquire the rights to our Esophagus Program for 125% of the value of the program, as determined by independent valuation firms. The Esophagus Program is our autologous neo-esophageal implants, which use certain of our intellectual property and a scientific platform relating to the potential creation of new human tissues and organs using autologous cells. The Collaboration Agreement shall expire June 28, 2020, as will Celgene's option to acquire the rights to the Esophagus Program, unless earlier terminated in connection with a change of control transaction. The Right of First Negotiation Agreement (the ROFN Agreement ) granted Celgene a right of first negotiation to the license, sale, assignment, transfer or other disposition by us of any material portion of intellectual property (including patents and trade secrets) or other assets related to the Neo-Kidney Augment program. In the event of a change in control of the Company, the ROFN Agreement and all of Celgene s rights pursuant thereto shall automatically terminate in all respects and be of no further force and effect. 2013 Registration Rights Agreement In connection with the 2013 Financing and the Collaboration Agreement, we entered into a Registration Rights Agreement (the 2013 Registration Rights Agreement ) with the 2013 Investors and Celgene. The 2013 Registration Rights Agreement provides that, within 30 days of the closing of the 2013 Financing, we will file a resale registration statement (the Registration Statement ) covering up to the maximum number of shares underlying the 2013 Notes, 2013 Warrants and the Celgene Warrants that we are able to register pursuant to applicable Securities and Exchange Commission ( SEC ) limitations. The registration statement of which this prospectus forms a part satisfies the requirements of the 2013 Registration Rights Agreement. Under the terms of the 2013 Registration Rights Agreement, we are obligated to maintain the effectiveness of the Registration Statement until all securities therein are sold or otherwise can be sold without registration and without any restrictions. TENGION, INC. (Exact name of Registrant as specified in its charter) 2012 Financing Transaction Document Amendments On February 14, 2013, we entered into the Amendment Agreement to the Warrants and Notes (the Warrants and Notes Amendment ) and the Third Amendment Agreement to the Registration Rights Agreement and Facility Agreement (the Registration Rights and Facility Amendment and together with the Warrants and Notes Amendment, the 2012 Financing Transaction Document Amendments ), each by and among us and the investors in the 2012 Financing (as defined below). Pursuant to the 2012 Financing Transaction Document Amendments, we and the investors in the 2012 Financing agreed to: Limit our registration obligations for the shares underlying the 2012 Notes and the 2012 Warrants, issued in connection with the 2012 Financing to the share limitations imposed by the SEC, which requires that the amount of shares registered not exceed one third of our public float; Provide that shares underlying the Warrants be registered prior to any other securities that we are required to register under the 2012 Financing Transaction Document Amendments and extend the deadline for us to file an initial registration statement to register shares underlying the securities issued in the 2012 Financing to March 31, 2013, a day that is 180 calendar days following the date on which the 2012 Notes and Warrants were issued; Extend the additional filing and registration deadlines with respect to additional registration statements that are required to be filed by us; Provide for a pro rata allocation amongst the 2012 Financing investors of the shares of common stock we are able to register in each registration statement we are required to file; Provide for the assumption that resales of shares of our common stock, when eligible, will be under Rule 144 under the Securities Act of 1933, as amended, unless a 2012 Financing investor informs us of a sale under the registration statement; Allow us to satisfy our interest obligations under the 2012 Notes through the issuance of shares of restricted common stock or, if such issuance would result in a 2012 Financing investor holding more than 9.985% of the total number of our outstanding shares (the 9.985% Limitation ), with warrants to purchase shares of common stock for nominal consideration that would become exercisable only to the extent that such exercise would not result in an investor going over the 9.985% Limitation; Extend the interest payments due April 1, 2013 under the 2012 Notes by one day to April 2, 2013; and Exclude securities that may be issued or issuable pursuant to any financing that we may complete in 2013 with securities with an issuance, conversion price or exercise price greater than $0.75 and gross proceeds of no more than $30 million from the definition of a Major Transaction and to include such financing in the definition of Permitted Liens and Indebtedness under the 2012 Financing Transaction Document Amendments. Consent and Amendment Agreements On October 2, 2012, we conducted a private placement (the 2012 Financing ) of senior secured convertible notes (the 2012 Notes ) and warrants (the 2012 Warrants ), in which we raised approximately $15 million in gross proceeds. The 2012 Financing is described further below. On December 31, 2012, we entered into a Consent and Amendment Agreement (the Amendment ) with holders of the 2012 Notes issued in our 2012 Financing, as described below. Pursuant to the Amendment, the investors agreed to extend the interest payments which were due on January 1, 2013 under the 2012 Notes to February 1, 2013. The aggregate amount of the interest payments is $369,992.48, which amount will continue to accrue interest at the rate of 10% per annum. Additionally, the Amendment amends the registration rights agreement between the Company and the investors entered into in connection with the 2012 Financing to extend the deadline to register the shares underlying the 2012 Notes and 2012 Warrants from December 31, 2012 to January 30, 2013, a date that is 120 days following the issuance of the 2012 Notes and 2012 Warrants. On January 30, 2013, we entered into a Second Consent and Amendment Agreement (the Second Amendment ) with holders of the 2012 Notes issued in the 2012 Financing. Pursuant to the Second Amendment, the investors agreed to extend the interest payments which were due on February 1, 2013 under the 2012 Notes to February 15, 2013. The aggregate amount of the interest payments is $560,051.13, which amount will continue to accrue interest at the rate of 10% per annum. Additionally, the Second Amendment amended the registration rights agreement between the Company and the investors entered into in connection with the 2012 Financing, as amended by the Amendment, to extend the deadline to register the shares underlying the 2012 Notes and 2012 Warrants from January 30, 2013 to March 1, 2013, a date that is 150 days following the issuance of the 2012 Notes and 2012 Warrants. Delaware 2836 20-0214813 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 3929 Westpoint Boulevard, Suite G Winston-Salem, NC 27103 (336)722-5855 (Address, including zip code, and telephone number, including area code, of Registrant s principal executive offices) Amended and Restated 2011 Warrants The 2012 Financing triggered an anti-dilution adjustment to the exercise price of the warrants issued in our private placement completed on March 4, 2011 (the 2011 Warrants ). As a result of disagreements with the holders of the 2011 Warrants as to the appropriate adjusted exercise price of the 2011 Warrants, starting on December 31, 2012, we made offers to each of the holders of the 2011 Warrants to amend and restate the 2011 Warrants. Pursuant and subject to exchange agreements (the Exchange Agreements ), the 2011 Warrant holders executing the Exchange Agreements exchanged the 2011 Warrants for amended and restated warrants (the Amended and Restated 2011 Warrants ) that provide for the following amendments: an adjusted exercise price of $1.10, and a proportionate adjustment in the number of shares underlying the 2011 Warrants, which takes into account all adjustments under the 2011 Warrants as a result of the 2012 Financing; certain edits to remove a Delisting (as defined in the 2011 Warrants) from qualifying as a fundamental transaction; a Black-Scholes calculation used to the determine the cash value received by a holder from us in connection with a repurchase of the unexercised portion of a warrant after the occurrence of a fundamental transaction that assumes a zero cost of borrow and a price per share equal to the closing market price of our common stock, immediately prior to the closing of a fundamental transaction; a Black-Scholes calculation for purposes of determining the value of options issued in connection with the sale of other securities that assumes a zero cost of borrow and a price per share equal to the closing market price of our common stock on the date the options are publicly announced, and if not announced, on the date they are issued; and excluding the 2012 Financing and exercise of the call option as a trigger for adjustments to the exercise price of the warrants except that adjustments to the exercise price, conversion price or purchase price of the 2012 Financing securities (i) resulting from registration of such securities with the SEC or the commencements of the Rule 144 Period, as contemplated by the 2012 Financing documents, will result in a proportional adjustment to the exercise price of the warrants and (ii) resulting from additional financings or other events will result in adjustments of the exercise price of the warrants pursuant to the terms of the Amended and Restated 2011 Warrants. Prior to the 2012 Financing, the holders of 2011 Warrants had the right in the aggregate to purchase 1,046,102 shares of common stock at an exercise price of $28.80 per share. As of the date of this prospectus, all holders have executed the Exchange Agreements and received Amended and Restated 2011 Warrants. In April 2013, the exercise price of the Amended and Restated 2011 Warrants was adjusted from $1.10 to $1.01 as a result of the conversion price of the 2012 Notes and the exercise price of the 2012 Warrants being reduced from $0.75 to $0.69. Accordingly, the holders of the Amended and Restated 2011 Warrants now have right in the aggregate to purchase 27,218,851 shares of common stock at an exercise price of $1.01. 2012 Financing On October 2, 2012, we conducted a private placement (the 2012 Financing ) of senior secured convertible notes (the 2012 Notes ) and warrants (the 2012 Warrants ), in which we raised approximately $15 million in gross proceeds. Each of the holders of the demand notes described below exchanged their demand notes for the securities issued in the 2012 Financing. Venture Debt Amendments In connection with the 2012 Financing, on October 2, 2012, the Company, Horizon Credit II LLC ( Horizon ) and Horizon Technology Finance Corporation entered into a First Amendment of Venture Loan and Security Agreement (the Loan Amendment ). The Loan Amendment amends the Venture Loan and Security Agreement dated as of March 14, 2011 pursuant to which Horizon made a loan of $5 million to us (the Horizon Loan ). The Loan Amendment provides that, effective September 1, 2012, the maturity date for the Horizon Loan is extended from January 1, 2014 until May 1, 2014. We were required to make monthly interest payments of $39,654.12 through June 1, 2013 and are required to make monthly interest and principal payments of $354,779.67 from July 1, 2013 through and including May 1, 2014. Horizon s security now includes a lien on our intellectual property assets. Effective September 1, 2012, the interest rate on the Horizon Loan was increased from 11.75% to 13.0% per annum. A. Brian Davis Chief Financial Officer Tengion, Inc. 3929 Westpoint Boulevard, Suite G Winston-Salem, NC 27103 (336)722-5855 Right of First Negotiation On October 2, 2012, we entered into a Right of First Negotiation Agreement (the ROFN Agreement ) with Celgene, pursuant to which we granted Celgene a right of first negotiation to the license, sale, assignment, transfer or other disposition by us of any material portion of intellectual property (including patents and trade secrets) or other assets related to our Neo-Urinary Conduit program. The ROFN Agreement provided for Celgene to receive 2012 Warrants to purchase 50% fewer of the shares that otherwise would have been issued to Celgene in the 2012 Financing. In the event of a change in control of the Company, the ROFN Agreement and all of Celgene s rights pursuant thereto will automatically terminate in all respects and be of no further force and effect. Bridge Financing On September 7, 2012, we issued demand notes (the Demand Notes ) in the aggregate amount of $1 million to certain new and existing investors (the Bridge Financing ). In connection with the transaction, holders of the Demand Notes had the option to exchange the principal balance and accrued interest of their Demand Notes with debt securities and warrants issued by the Company in any subsequent offering. Reverse Stock Split On May 30, 2012, we announced that the Board of Directors approved a reverse split of our common stock at a ratio of 1-for-10, effective June 14, 2012. Our common stock began trading on a split-adjusted basis when the Nasdaq Capital Market opened on June 14, 2012. Listing of our common stock On September 4, 2012, we were notified by Nasdaq of its determination to delist our common stock from Nasdaq effective at the open of business on September 6, 2012, due to our failure to comply with the minimum $2,500,000 stockholders equity requirement for continued listing on the Nasdaq Capital Market. Effective at the opening of the market on September 6, 2012, our common stock was transferred from the Nasdaq Capital Market to the OTCQB, which is operated by OTC Markets, Inc., and continues to trade under the symbol TNGN . Company Information We were incorporated in the State of Delaware in 2003. Our headquarters are at 3929 Westpoint Boulevard, Suite G, Winston-Salem, North Carolina. Our telephone number is (336) 722-5855 and our Internet website address is www.tengion.com. Information on our website is not incorporated into this prospectus and should not be relied upon in determining whether to make an investment in our common stock. Our common stock trades on the OTCQB, which is operated by OTC Markets, Inc., under the symbol TNGN .
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+Prospectus Summary 1
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+PROSPECTUS SUMMARY 1
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+PROSPECTUS SUMMARY You should read the following summary together with the more detailed information concerning our company, the common stock being sold in this offering, and our consolidated financial statements appearing in this prospectus. Because this is only a summary, you should read the rest of this prospectus before you invest in our common stock. Read this entire prospectus carefully, especially the risks described under the section entitled Risk Factors. Our Company We have pioneered a new class of persistent memory-based storage solutions designed to bring storage performance in line with high-speed applications, servers and networks. Our Flash Memory Arrays are specifically designed at each level of the system architecture starting with memory and optimized through the array to leverage the inherent capabilities of flash memory and meet the sustained high-performance requirements of business-critical applications, virtualized environments and Big Data solutions in enterprise data centers. Our Velocity Peripheral Component Interconnect Express, or PCIe, Flash Memory Cards leverage our persistent memory-based architecture in servers and are optimized for applications that require continuous access to large quantities of low latency persistent memory located directly in servers. We have demonstrated that our persistent memory-based storage solutions provide low latency and sustainable performance with enterprise-class reliability, availability and serviceability through product testing and customer feedback. Our solutions enable customers to realize significant capital expenditure and operational cost savings by simplifying their data center environments. A number of important IT trends are transforming the architecture, design and performance requirements of data centers and highlighting the widening performance gap between storage and other data center technologies. Traditional disk-based storage solutions provided by incumbent primary storage vendors have been unable to adequately scale performance to address this widening gap due to the inherent limitations of hard disk drives, contributing to a performance bottleneck in the data center. We believe there is a pressing need for a new approach to storage, across both array- and server-based architectures, designed to address the input/output, or I/O, intensive requirements of today s real-time applications and enable organizations to optimize the utilization and performance of their enterprise data centers and hyperscale cloud environments. Our Flash Memory Arrays integrate enterprise-class hardware and software technologies to cost effectively address the limitations of other storage solutions. Our storage systems are based on a four-layer hardware architecture which is tightly integrated with our Violin Memory Operating System, or vMOS, software stack to optimize the management of flash memory at each level of our system architecture. In March 2013, we expanded our innovation in persistent memory technologies and proprietary techniques in flash management from our memory arrays to our Velocity PCIe Flash Memory Cards. Our Velocity PCIe Flash Memory Cards leverage our expertise in persistent memory-based storage and controller design, as well as our vMOS software stack, to offer a differentiated architecture in a widely deployable PCIe form factor. Additionally, we believe our relationship with Toshiba, a leading provider of flash memory and one of our principal stockholders, allows us to design our systems to unlock the inherent performance capabilities of flash technology and enables us to develop around new generations of flash memory rapidly. As of July 31, 2013, we believe our persistent memory-based storage solutions have been implemented by more than 250 enterprises in diverse end markets, including financial services, Internet, government, media and entertainment and telecommunications. We primarily sell our products and services through our direct sales force and global network of over 100 resellers to provide a high level of end-customer engagement. We maintain relationships with systems vendors and key technology partners, such as Dell, Fujitsu, IBM, Microsoft, SAP, Symantec, Toshiba and VMware. We have grown our business substantially for the past three years with total revenue of $11.4 million, $53.9 million and $73.8 million in fiscal 2011, 2012 and 2013, respectively and $51.3 million for the six months ended July 31, 2013. We only recently introduced our Velocity PCIe Memory 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 such offer or sale is not permitted. SUBJECT TO COMPLETION, DATED SEPTEMBER 16, 2013 Preliminary Prospectus 18,000,000 Shares Common Stock This is the initial public offering of shares of common stock of Violin Memory, Inc. Prior to this offering, there has been no public market for our common stock. We are offering 18,000,000 shares of common stock. The initial public offering price of our common stock is expected to be between $8.00 and $10.00 per share. We have applied to list our common stock on the New York Stock Exchange under the symbol VMEM. We are an emerging growth company, as defined in section 2(a) of the Securities Act, and may elect to comply with reduced U.S. public company reporting requirements. Investing in our common stock involves a high degree of risk. Please read Risk Factors beginning on page 11 of this prospectus. Per Share Total Initial public offering price $ $ Underwriting discounts and commissions(1) $ $ Proceeds to Violin Memory, before expenses $ $ (1) See Underwriting for a description of the compensation payable to the underwriters. The underwriters have an option to purchase a maximum of 2,700,000 additional shares of common stock from us at the public offering price, less underwriting discounts and commissions. The underwriters can exercise this option at any time within 30 days from the date 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 underwriters expect to deliver the shares of common stock to purchasers on , 2013. J.P. Morgan Deutsche Bank Securities BofA Merrill Lynch Barclays Baird Pacific Crest Securities , 2013 Table of Contents Card solutions in March 2013 and have not derived significant revenue from the sale of these solutions to date. We had a net loss of $16.7 million, $44.8 million and $109.1 million in fiscal 2011, 2012 and 2013, respectively and $59.2 million for the six months ended July 31, 2013. Industry Background A number of important IT trends are highlighting the widening performance gap between storage and other data center technologies. These trends include the acceleration of server and network technologies; widespread adoption of virtualization technologies; proliferation of public and private cloud-based environments; explosive data growth and demand for high-frequency, real-time access; the increasing strategic importance of in-memory computing; and a focus on reducing data center complexity and lowering total cost of ownership. Organizations seek to address this performance gap and optimize the utilization of both their enterprise data center and hyperscale cloud environments. Traditional disk-based storage solutions provided by incumbent primary storage vendors, such as Dell, EMC, Hewlett-Packard (3PAR), Hitachi, NetApp and Oracle, have been unable to adequately scale performance to address this widening gap due to the inherent limitations of hard disk drives, contributing to a performance bottleneck in the data center. There has been an increasing shift towards the use of persistent memory-based solutions, across array- and server-based configurations. We believe other flash-based solutions provided by vendors, including EMC, Fusion-io, Intel, Micron, Samsung, SanDisk and sTec, while offering greater performance than disk-based storage solutions, have nevertheless been unable to adequately address this bottleneck due to the limitations of their software and controller technologies that have not been specifically designed to address the technical challenges of flash memory. IDC estimates worldwide spending on enterprise storage systems will grow from $35.0 billion in 2012 to $42.5 billion in 2017. A majority of this market is comprised of disk-based capacity-optimized and performance-optimized systems, which together is expected to grow at a compound annual growth rate, or CAGR, of 2.2% from $32.8 billion in 2012 to $36.5 billion in 2017. As enterprises seek alternatives to traditional disk-based storage solutions and the price of flash continues to decline, there has been a shift toward I/O intensive storage, which is expected to grow at a CAGR of 23.1% from $2.2 billion in 2012 to $6.1 billion in 2017.1 We believe there is an opportunity for a disruptive solution to capture the I/O intensive storage market as well as a meaningful portion of the market for disk-based capacity-optimized and performance-optimized systems. Furthermore, the server-based flash storage market continues to be a large and growing opportunity. IDC estimates the server-based, or PCIe, storage market will grow at a CAGR of 32.1% from $0.9 billion in 2012 to $2.9 billion in 2016.2 In an effort to overcome the limited performance capabilities of disk-based storage solutions, vendors have begun incorporating persistent memory-based solutions as an alternative. Adoption of solid state storage has accelerated as flash memory prices have decreased. According to Gartner, the worldwide average selling price of NAND flash memory per gigabyte has declined from $19.13 in 2006 to $0.73 in 2012.3 Persistent memory-based solutions are generally deployed in two configurations, array-based and server-based. Array-based solutions are found in two configurations, arrays built using off-the-shelf controllers and solid state drives, or SSDs (or a 1 IDC, Worldwide Enterprise Storage Systems 2013 2017 Forecast: Customer Landscape Is Changing, Defining Demand for New Solutions, May 2013 2 IDC, Worldwide Solid State Storage 2012-2016 Forecast Update, December 2012 3 Gartner, Forecast: Memory, Worldwide, 2010-2017, 2Q13 Update, June 27, 2013. Gartner, Forecast: Memory, Worldwide, 2006-2016, 3Q12 Update, September 11, 2012. The Gartner Report(s) described herein (the Gartner Report(s) ) represent(s) data, research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ( Gartner ), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this filing) and the opinions expressed in the Gartner Report(s) are subject to change without notice. Table of Contents Table of Contents hybrid of both HDDs and SSDs) or specifically designed all-flash memory arrays. Array-based and server-based solutions using off-the-shelf components, which we refer to as other flash-based storage solutions, deliver improved performance relative to disk-based storage solutions. However, their ability to optimize flash memory technology is severely limited principally due to their utilization of off-the-shelf flash memory chips, commodity controllers, commercially available data protection algorithms and management software originally designed for HDDs. We believe that the implementation of purpose-built intelligent software and controller technologies that are tightly integrated with persistent memory-based solutions are necessary to address the technical challenges of flash memory and to deliver sustained high performance and endurance. Without the implementation of technologies specifically designed for flash memory, the performance sustainability and endurance of other flash-based storage solutions remain significantly limited. Key Limitations of Disk-based and Other Flash-based Storage Solutions Slow response times of disk-based storage solutions. Disk-based storage solutions are unable to deliver the low latency required by today s high-performance applications. While over-provisioning with more HDDs modestly increases I/O throughput, this approach cannot reduce I/O response time due to the physics of rotating media and the architecture of disk-based storage solutions. Limited ability to provide scalable and sustained performance under peak workloads. While other flash-based storage solutions can provide improved performance over disk-based storage solutions, they suffer from the Write Cliff issue, a phenomenon that refers to a significant spike in latency and slower I/O response times experienced by flash memory during erase cycles. This prevents other flash-based storage solutions from delivering predictable and sustainable performance during periods of peak workload. Additionally, the performance scalability of other flash-based storage solutions is restricted by the limitations of storage controller technologies and software algorithms that were not specifically designed for flash technology. High cost per transaction and overall total cost of ownership. Disk-based and other flash-based storage solutions are not typically optimized to reduce the cost of storage associated with the execution of individual transactions of high-speed applications, which we refer to as cost per transaction. In addition, the current approach of over-provisioning storage resources to address the performance gap increases facilities costs, management overhead and energy consumption. Not optimized for real-time application workloads. Disk-based storage solutions were not originally designed to serve the dynamic requirements of real-time application workloads. For example, disk-based storage solutions are designed for sequential workloads, not the random I/O patterns inherent in virtualized and cloud-based environments. Similarly, disk-based storage solutions are not designed to deliver the high performance and high scalability requirements of Big Data analytics applications. While other flash-based storage solutions deliver improved performance over disk-based storage solutions, they are generally limited in their ability to address the sustained and scalable performance required by I/O intensive virtualized and cloud-based environments, Big Data analytics and other real-time application workloads. As a result of these limitations, we believe there is a pressing need for a fundamentally new approach to provide sustained high-performance storage that offers low latency, high bandwidth and extensive capacity as well as enterprise-class reliability, availability and serviceability. In addition, these solutions must enable enterprises to realize capital expenditure and operational cost savings by simplifying their data center environments. Our Solution We have pioneered a new class of persistent memory-based storage solutions, in both array and server configurations designed to bring storage performance in-line with high-speed applications, servers and networks. Table of Contents Pioneering a new class of persistent memory-based storage solutions Low latency and fast response times Sustained and scalable high performance Low cost per transaction and overall total cost of ownership Designed for real-time application workloads Violin Flash Memory Array Violin PCIe Flash Memory Card High performance density Financial service media & Entertainment Internet Government Telecom Consumer Healthcare Industrial Education Transportation Table of Contents Our Flash Memory Arrays are specifically designed at each level of the system architecture starting with memory and optimized through the array to leverage the inherent capabilities of flash memory and meet the sustained high-performance requirements of business-critical applications, virtualized environments and Big Data solutions in enterprise data centers. In addition, we have brought our innovation in persistent memory technologies and proprietary techniques in flash management from our memory arrays to our Velocity PCIe Flash Memory Cards. Our Velocity PCIe Flash Memory Cards leverage our expertise in persistent memory-based storage and controller design, as well as our vMOS software stack, to offer a differentiated architecture that delivers sustained high performance, spike-free low latency and enterprise-class availability and reliability in a widely deployable PCIe form factor. Our persistent memory-based storage solutions address fundamental challenges in the data center and deliver critical benefits to enterprises, including: Low latency and fast response times. Our persistent memory-based storage solutions significantly reduce latency and enable fast response times as a result of our parallel system and proprietary hardware-accelerated management algorithms. Sustained and scalable high performance. Our persistent memory-based storage solutions provide enterprises with the sustained high performance required to run business-critical applications in today s random I/O workload environments, overcoming the Write Cliff issues experienced by other flash-based storage solutions. Further, we believe our vMOS software-stack enables our Flash Memory Arrays and Velocity PCIe Flash Memory Cards to scale performance more effectively than disk-based and other flash-based storage solutions on a sustained performance basis. Low cost per transaction and overall total cost of ownership. Our persistent memory-based storage solutions can generate significant savings on a cost per transaction basis and provide greater return on investment to enterprises. Additionally, the enhanced performance provided by our systems offers significant opportunities for infrastructure consolidation, which reduces both capital and operating expenses necessary to manage data center assets. Optimized for real-time application workloads. Our Flash Memory Arrays are specifically designed to deliver the sustainable and scalable performance required by a broad range of real-time application workloads. Additionally, unlike many other flash-based storage solutions, our solutions are highly interoperable with existing virtualization infrastructures, allowing IT managers to leverage existing data center networking and operating systems in both virtual and cloud-based environments without making changes to management software. Our Strategy Our objective is to be the leading supplier of persistent memory-based storage solutions for business-critical applications, virtualized environments, Big Data solutions and data center and hyperscale cloud environments. Key elements of our strategy include: Continue to pursue technology and product innovation to bring storage capabilities in line with advancements in server and network technologies. We intend to continue to innovate and invest in new products, across both server- and array-based configurations, designed to leverage the capabilities of future generations of memory technology to cost-effectively provide greater levels of sustained performance. We also plan to continue to integrate software into our hardware to build an end-to-end storage platform that further enhances storage optimization, data management and analytics capabilities and other embedded applications. Maintain high levels of customer engagement to drive sales. We intend to drive further penetration and deployment of our persistent memory-based storage solutions within our existing base of over 250 Table of Contents TABLE OF CONTENTS Page Prospectus Summary 1
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+This summary highlights information appearing elsewhere in, or incorporated by reference into, this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in common stock offered hereby. You should carefully read the entire prospectus, including the section entitled Risk Factors, along with the financial data and related notes and the other documents that we incorporate by reference into this prospectus. Except as otherwise indicated or otherwise required by the context, references in this prospectus to we, us, our, SolarCity, the company or the Issuer refer to the combined business of SolarCity Corporation and its subsidiaries. SolarCity Our Vision for Better Energy We sell renewable energy to our customers at prices below utility rates. Our long-term agreements generate recurring customer payments and position us to provide our growing base of customers with other energy products and services that further lower their energy costs. We call this Better Energy. Overview The demand for Better Energy is allowing us to install more solar energy systems than any other company in the United States. We believe this significant demand for our energy solutions results from the following value propositions: We lower energy costs. Our customers buy renewable energy from us for less than they currently pay for electricity from utilities with little to no up-front cost. They are also able to lock in their energy costs for the long term and insulate themselves from rising energy costs. We build long-term customer relationships. Most of our customers agree to a 20-year contract term, positioning us to provide them with additional energy-related solutions during this relationship to further lower their energy costs. At the end of the original contract term, we intend to offer our customers renewal contracts. We make it easy. We perform the entire process, from permitting through installation, and make it simple for customers to switch to renewable energy. We focus on quality. Our top priority is to provide value and quality service to our customers. We have assembled a highly skilled team of in-house professionals dedicated to the highest engineering standards, overall quality and customer service. We currently serve customers in 14 states, and we intend to expand our footprint internationally, operating in every market where distributed solar energy generation is a viable economic alternative to utility generation. We generate revenue from a mix of residential customers, commercial entities such as Walmart, eBay and Intel, and government entities such as the U.S. Military. Since our founding in 2006, we have provided or contracted to provide systems or services to more than 82,000 customers. Every five minutes of the working day a new customer makes the switch to Better Energy. In addition, aggregate contractual cash payments that our customers are obligated to pay over the term of our long-term customer agreements have grown at a compounded annual rate of 109% since 2009. We structure these customer agreements as either leases or power purchase agreements. Our lease customers pay a fixed monthly fee with an electricity production guarantee. Our power purchase agreement customers pay a rate based on the amount of electricity the solar energy system actually produces. 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 the offer or sale is not permitted. Subject To Completion, Dated October 15, 2013 3,400,000 Shares SolarCity Corporation is offering 3,400,000 shares of common stock, par value $0.0001 per share, pursuant to this prospectus. Elon Musk, the chairman of our board, and Lyndon R. Rive, our chief executive officer, have indicated their intent to purchase up to an aggregate of approximately 560,000 shares of common stock in this offering, and Hayes Barnard, our chief revenue officer, and Bennet Van de Bunt, a prospective board nominee, have indicated their intent to purchase up to an aggregate of approximately 290,000 shares of common stock in this offering, in each case from the underwriters at the public offering price as described under Underwriting in this prospectus. Concurrently with this offering, we are offering up to $200.0 million aggregate principal amount of convertible notes, assuming no exercise of the underwriters over-allotment option (or up to $230.0 million aggregate principal amount of our convertible notes if the underwriters in the convertible notes offering exercise their over-allotment option in full), pursuant to a separate registration statement. The offering of shares pursuant to this prospectus is contingent upon the closing of the convertible notes offering, and the concurrent offering of our convertible notes is contingent upon the closing of the offering of the shares hereunder. Our common stock is listed on the NASDAQ Global Market under the symbol SCTY. On October 14, 2013, the closing sale price of our common stock was $46.46 per share. See Risk Factors beginning on page 9 to read about important factors you should consider before buying our common stock. Neither the Securities and Exchange Commission nor any other regulatory body 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. Per Share Total Public offering price $ $ Underwriting discount(1) $ $ Proceeds, before expenses, to us $ $ (1) See Underwriting for a description of the compensation payable to the underwriters. The underwriters have the option to purchase up to an additional 510,000 shares of common stock from us at the offering price less the underwriting discount, within 30 days from the date of this prospectus. The underwriters expect to deliver the shares sold on the date hereof to investors in book-entry form through The Depository Trust Company on or about . Goldman, Sachs & Co. Credit Suisse BofA Merrill Lynch J.P. Morgan Prospectus dated , 2013 Table of Contents INCORPORATION BY REFERENCE The rules of the Securities and Exchange Commission, or SEC, allow us to incorporate by reference information into this prospectus. The information incorporated by reference is considered to be a part of this prospectus. This prospectus incorporates by reference the documents listed below: our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the SEC on March 27, 2013, or the Form 10-K; the information specifically incorporated by reference into the Form 10-K from our Definitive Proxy Statement on Schedule 14A filed on April 30, 2013; our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 filed with the SEC on May 15, 2013, and for the quarter ended June 30, 2013 filed with the SEC on August 9, 2013 or the Form 10-Q; our Current Reports on Form 8-K filed with the SEC on February 14, 2013, May 29, 2013, June 7, 2013, June 13, 2013, June 24, 2013, August 19, 2013, September 10, 2013 and October 10, 2013; and the description of our common stock contained in our Registration Statement on Form 8-A (SEC File No. 001-35758), filed with the SEC on December 6, 2012. Notwithstanding the foregoing, we are not incorporating by reference any documents, portions of documents, exhibits or other information that is deemed to have been furnished to, rather than filed with, the SEC. Any statement contained in a document incorporated by reference into this prospectus shall be deemed to be modified or superseded for the purposes of this prospectus to the extent that a statement contained herein or in any subsequently filed document that is also incorporated by reference in this prospectus modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. Documents incorporated by reference are available from us without charge, excluding all exhibits unless we have specifically incorporated by reference the exhibit in this prospectus. You may obtain documents incorporated by reference in this prospectus by requesting them in writing or by telephone from: SolarCity Corporation Attention: Investor Relations 3055 Clearview Way San Mateo, CA 94402 investors@solarcity.com (650) 963-5920 Table of Contents Our long-term lease and power purchase agreements create high-quality recurring customer payments, investment tax credits, accelerated tax depreciation and other incentives. Our financial strategy is to monetize these assets at the lowest cost of capital. We share the economic benefit of this lower cost of capital with our customers by lowering the price they pay for energy. Historically, we have monetized the assets created by substantially all of our leases and power purchase agreements via financing funds we have formed with fund investors. In general, we contribute the assets to the financing fund and receive upfront cash and retain a residual interest. The allocation among us and the fund investors of the economic benefits as well as the timing of receipt of such economic benefits varies depending on the structure of the financing fund. We use a portion of the cash received from the financing fund to cover our variable and fixed costs associated with installing the related solar energy systems. We invest the excess cash in the growth of our business. Most of our customer relationships begin when we enter into long-term energy contracts. These long-term energy contracts serve as a gateway for us to perform energy efficiency evaluations and facilitate energy efficiency upgrades for our residential customers. During an energy efficiency evaluation, our proprietary software enables us to capture, catalog and analyze all of the energy loads in a home to identify the most valuable and actionable solutions to lower energy costs. We then offer to facilitate the appropriate upgrades to improve the home s energy efficiency. Through the first quarter of 2013, we typically acted as a general contractor and performed energy efficiency upgrades for our customers following energy efficiency evaluations and recommendations. Our current plan is to implement a new sales approach of facilitating energy efficiency upgrades through trusted third-party vendors and to transition from performing these upgrades ourselves. We also offer energy-related products such as electric vehicle charging stations and proprietary advanced monitoring software, and are expanding our product portfolio to include additional products such as on-site battery storage solutions. As our customers energy needs evolve over time, we believe we are well-positioned to be their provider of choice. Market Opportunity According to the Energy Information Agency, or EIA, in 2012, total sales of retail electricity in the United States were $363 billion. U.S. retail electricity prices have increased at an average annual rate of 3.5% and 2.5% from 2002 to 2012 for residential and commercial customers, respectively. The average annual rate increase in the states where we operate has been higher. For example, in Hawaii, retail electricity prices have increased at an average annual rate of 9.1% and 9.5% from 2002 to 2012 for residential and commercial customers, respectively. Despite these increasing U.S. retail electricity prices, U.S. electricity usage has continued to grow over the past 10 years. Across the United States, many utility customers are paying retail electricity prices at or above our current blended electricity price of 14.1 cents per kilowatt hour, or kWh. Based on EIA data, in 2011 approximately 377 terawatt hours, or TWh, of the retail electricity sold in the United States was priced, on average, at or above our current blended electricity price. The volume of sales in TWh at or above this rate increased approximately 267% from 2001 to 2011. In dollar terms, 2011 data suggests a U.S. market size of $63 billion at an electricity price at or above 14.1 cents per kWh. Using historical annual growth rates for residential and commercial retail electricity prices for 2002 to 2012 and flat electricity consumption, the implied U.S. market size at or above 14.1 cents per kWh increases to $185 billion, or 1,069 TWh, by 2018. As a result of rising energy prices, the market for energy efficiency solutions is expected to grow significantly. According to an October 2012 report by Navigant Research, the energy efficient housing market will expand rapidly over the remainder of the decade, growing from an annual market value of $14 billion in 2012 to almost $84 billion by 2020. This sector consists primarily of the installation and Table of Contents CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements. These statements may be made directly in this prospectus or may be incorporated into this prospectus by reference to other documents. You can identify these forward-looking statements by use of words such as strategy, expects, continues, plans, anticipates, believes, will, estimates, intends, projects, goals, targets and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be achieved. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements in this prospectus. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, we are identifying important risk factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by us; any such statement is qualified by reference to the following cautionary statements. These factors include those appearing under the heading Risk Factors in this prospectus, the factors discussed below and any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statements. You should understand that it is not possible to predict or identify all risk factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to subsequently update or revise any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events. Some of the factors that we believe could affect our results include: the impact that existing electric utility industry regulations, and changes to those regulations, may have on demand for the purchase and use of solar energy systems; our reliance on net metering and related policies to offer competitive pricing to our customers in some of our key markets; our dependence on the availability of rebates, tax credits and other financial incentives; our dependence on the regulatory treatment of third-party owned solar energy systems; determinations by the Internal Revenue Service or the U.S. Treasury Department of the fair market value of our solar energy systems; our ability to finance solar energy systems through financing arrangements with fund or other types of investors; the retail price of utility-generated electricity or electricity from other energy sources; and the costs of being a public company, including Sarbanes-Oxley Act compliance. We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this prospectus may not in fact occur. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. Table of Contents deployment of energy efficiency products and services, including energy efficiency-related engineering, construction, services, technical support and equipment. Rising retail electricity prices, coupled with inelastic demand, create a significant and growing market opportunity for lower cost retail energy. SolarCity sells cleaner, cheaper energy than utilities. Our Approach We have developed an integrated approach that allows our customers to switch to Better Energy in a simple and cost-efficient manner. The key elements of our integrated approach are: Sales. We have structured our sales organization to efficiently engage prospective customers, from initial interest through customized proposals and, ultimately, signed contracts. Financing. We provide multiple pricing options to our customers to help make renewable, distributed energy affordable. Engineering. We have developed software that simplifies and expedites the custom design process and optimizes the energy production of each solar energy system. Installation. We obtain all necessary building permits and handle the installation of our solar energy systems. By managing these logistics, we make the installation process simple for our customers. Monitoring and Maintenance. Our proprietary monitoring software provides both SolarCity and our customers with a real-time view of their energy generation, consumption and carbon offset through an easy-to-read application available on smartphones and any device with a web browser. Complementary Products and Services. Using our proprietary software, we analyze our customers energy usage and identify opportunities for energy efficiency improvements. Our Strengths We believe the following strengths enable us to deliver Better Energy: Lower cost energy. We sell energy to our customers at prices below utility rates. Our customers typically achieve a lower overall electricity bill immediately upon installation. As retail utility rates rise, our customers savings increase. Easy to switch. By providing the sales, financing, engineering, installation, monitoring and maintenance ourselves, we offer a simple and efficient process to our customers. Long-term customer relationships. Most of our solar energy customers purchase energy from us under 20-year contracts, and we leverage these relationships to facilitate energy services and products tailored to our customers needs. In addition, because our solar energy systems have an estimated life of 30 years, we intend to offer our customers renewal contracts at the end of the original contract term. Significant size and scale. We believe that our size and scale provide our customers with confidence in our continuing ability to service their system and guarantee its performance over the duration of their long-term contract. Innovative technology. We continually innovate and develop new technologies to facilitate our growth and to enhance the delivery of our products and services. Brand recognition. Our ability to provide high-quality services, our dedication to best-in-class engineering efforts and our exceptional customer service have helped us establish a recognized and trusted national brand. Table of Contents Strong leadership team. We are led by a strong management team with demonstrated execution capabilities and an ability to adapt to rapidly changing market environments. Our Strategy Our goal is to become the largest provider of clean distributed energy in the world. We plan to achieve this disruptive strategy by providing every home and business an alternative to their energy bill that is cleaner and cheaper than their current energy provider. We intend to: Rapidly grow our customer base. We intend to invest significantly in additional sales, marketing and operations personnel and leverage strategic relationships with new and existing industry leaders to further expand our business and customer base. Continue to offer lower priced energy. We plan on reducing costs by continuing to leverage our buying power with our suppliers, developing additional proprietary software to further ensure that our integrated team operates as efficiently as possible, and working with fund investors to develop innovative financing solutions to lower our cost of capital and offer lower-priced energy to our customers. Leverage our brand and long-term customer relationships to provide complementary products. We plan to continue to invest in and develop complementary energy products, software and services, such as energy storage and energy management technologies, to offer further cost-savings to our customers. Expand into new locations. We intend to continue to expand into new locations, initially targeting those markets where climate, government regulations and incentives position solar energy as an economically compelling alternative to utilities. Recent Developments On September 6, 2013, we completed our acquisition of specified assets and liabilities pursuant to an asset purchase agreement with Paramount GR Holdings, LLC, a Delaware limited liability company, and Paramount Energy Solutions, LLC, a Delaware limited liability company, which we collectively refer to as Paramount Solar. Under the terms of the purchase agreement, we issued 3,674,565 shares of our common stock and we paid $3.7 million in cash consideration. For further details regarding the Paramount Solar transaction, see our Forms 8-K filed on August 19, 2013 and September 10, 2013, which are incorporated in this prospectus by reference. On October 8, 2013, we entered into a merger agreement with Zep Solar, Inc., a California corporation ( Zep Solar ), pursuant to which, on the terms and subject to the satisfaction of the conditions set forth in the merger agreement, we will acquire Zep Solar. Under the terms of the merger agreement, the consideration will consist of approximately $158.0 million worth of shares of our common stock, subject to certain adjustments. The transaction is expected to be completed in December 2013, subject to customary closing conditions and the completion of a fairness hearing with the California Department of Corporations with respect to the shares of our common stock to be issued in the merger, and in any event no earlier than December 3, 2013. By acquiring Zep Solar, we believe we can deliver solar electricity at a lower cost than was previously possible. We plan to continue to offer the Zep Compatible platform to international installers looking to increase their productivity. For further details regarding the Zep Solar transaction, see our Form 8-K filed on October 10, 2013, which is incorporated in this prospectus by reference. Corporate Information Our principal executive offices are located at 3055 Clearview Way, San Mateo, CA 94402. Our telephone number is (650) 638-1028 and our website address is www.solarcity.com. The information on, or accessible through, our website is not a part of this prospectus. Table of Contents The Offering Issuer SolarCity Corporation. Common Stock Offered 3,400,000 shares. Common Stock Outstanding Following this Offering(1) 81,678,355 shares. Option to Purchase Additional Shares The underwriters have an option to purchase a maximum of 510,000 additional shares of common stock from us. The underwriters can exercise this option at any time within 30 days from the date of this prospectus. NASDAQ Global Market Our common stock is listed on the NASDAQ Global Market under the symbol SCTY. Use of Proceeds We intend to use the net proceeds from this offering for general corporate purposes, including working capital, capital expenditures, potential acquisitions and strategic transactions. From time to time, we evaluate potential acquisitions and strategic transactions of businesses, technologies or products. Currently, however, we do not have any definitive agreements with respect to any material acquisitions or strategic transactions.
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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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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001412284_momentive_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001412284_momentive_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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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001420030_targeted_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001420030_targeted_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights information contained throughout this prospectus and is qualified in its entirety by reference to the more detailed information and financial statements included elsewhere herein. This summary may not contain all of the information that may be important to you. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date. Before making an investment decision, you should read carefully the entire prospectus, including the information under "Risk Factors" beginning on page 4 and our financial statements and related notes thereto . Unless the context otherwise requires or indicates, when used in this prospectus, references to "we," "our," "us," "the Company" and "TMP" refer to Targeted Medical Pharma, Inc. and its subsidiaries; references to "Reorganization" refers to the merger by and between Targeted Medical Pharma, Inc. and AFH Acquisition III, Inc. and its subsidiaries, pursuant to which we became a publicly-held reporting company. references to "CCPI" refer to Complete Claims Processing Inc., our wholly-owned subsidiary; references to "PTL" refer to Physician Therapeutics, a division of our Company; and references to "LIS" refer to Laboratory Industry Services, a division of our Company. Our Business Targeted Medical Pharma, Inc. is a specialty pharmaceutical company that develops and commercializes nutrient- and pharmaceutical-based therapeutic systems. We began our operations as Laboratory Industry Services LLC, a Nevada limited liability company, which was founded in 1996 by Elizabeth Charuvastra, our former Executive Chairman and Vice President of Regulatory Affairs, and William E. Shell, MD, our Chief Executive Officer and Chief Science Officer. Laboratory Industry Services is an independent diagnostic testing facility. In 1999, Ms. Charuvastra and Kim Giffoni, our Executive Vice President of Foreign Sales and Investor Relations, co-founded Targeted Medical Foods, a California general partnership, which was converted into a California limited liability company in 2002, to develop medical food products. In 2003, Targeted Medical Foods formed Physician Therapeutics LLC, a Nevada limited liability company and a majority-owned subsidiary of Targeted Medical Foods, to distribute medical food products. In 2006, Targeted Medical Foods reorganized as a Delaware corporation and changed its name to Targeted Medical Pharma, Inc. Physician Therapeutics LLC and Laboratory Industry Services LLC became divisions of Targeted Medical Pharma, Inc. In 2007, we formed Complete Claims Processing Inc., a California corporation and our wholly-owned subsidiary, as a specialty billing and collection services company to provide billing and collection services relating to our products dispensed by physician clients and to physician clients of some of our distributors. We develop and sell a line of patented prescription medical food products that are currently sold in the United States through a network of distributors and directly to physicians who dispense medical foods and other pharmaceutical products through their office practices. Our proprietary patented technology uses a five component system to allow uptake and use of important neurotransmitter precursors to produce the neurotransmitters that control autonomic nervous system function such as sleep and pain perception. The neurotransmitters addressed by our patents include nitric oxide, acetylcholine, serotonin, norepinephrine, epinephrine, dopamine and histamine. The technology addresses neuron specificity and elimination of attenuation, or tolerance that is characterized by the need for increased dosage. The combination of the neurotransmitters and their precise proportions allows for a wide range of products. There are six issued patents and nine pending applications that cover aspects of the inventions. We support our physician clients with a proprietary pharmacy claims processing service specifically designed for billing and collecting insurance reimbursement from private insurance, workers compensation and Medicare for our medical food products, therapeutic systems, generic and branded drugs. Our wholly-owned subsidiary, Complete Claims Processing Inc., provides this service to physician offices for the specific purpose of optimizing insurance reimbursement for dispensed products. The Reorganization On January 31, 2011, we entered into an Agreement and Plan of Reorganization (the "Merger Agreement"), by and among AFH Acquisition III, Inc. ("AFH"), TMP Merger Sub, Inc. ("TMP Merger Sub"), AFH Merger Sub, Inc. ("AFH Merger Sub"), AFH Holding and Advisory, LLC ("AFH Advisory"), Targeted Medical Pharma, Inc. ("Old TMP"), William E. Shell, MD, Elizabeth Charuvastra and Kim Giffoni, whereby TMP Merger Sub merged (the "TMP Merger") with and into Old TMP with Old TMP continuing as the surviving entity (we are the surviving entity of the TMP Merger). Immediately after the TMP Merger, AFH merged (the "AFH Merger" and, together with the TMP Merger, the "Reorganization") with and into AFH Merger Sub with AFH continuing as the surviving entity under the name "TMP Sub, Inc." (the surviving entity of the AFH Merger, the "Subsidiary"). As a result of the Reorganization, the Subsidiary is our wholly-owned subsidiary. The purpose of the Reorganization was to become a publicly reporting company providing regular updates on our business to our stockholders and to be able to access additional sources of financing to expand our business. Risk Factors Investing in our securities involves a high degree of risk. As an investor you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the section entitled " Risk Factors " immediately following this prospectus summary. Company Information Our executive offices are located at 2980 Beverly Glen Circle, Suite 301, Los Angeles, California 90077 and our telephone number at this location is (310) 474-9809. Our website address is www.targetedmedicalpharma.com . The information on our website is not part of this prospectus.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001427030_bioneutral_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001427030_bioneutral_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information you should consider in making your investment decision. Before investing in the securities offered hereby, you should read the entire prospectus, including our financial statements and related notes included in this prospectus and the information set forth under the headings Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations. This prospectus contains forward looking statements that involve risks and uncertainties. In this prospectus, the terms BioNeutral, the Company, we, us, and our refer to BioNeutral Group, Inc. OUR BUSINESS We are a life science specialty technology company that has developed a novel combinational chemistry-based technology which we believe in certain circumstances may neutralize harmful environmental contaminants, toxins and dangerous micro-organisms, including bacteria, viruses and spores. We currently operate our business through our subsidiary, BioNeutral Laboratories Corporation USA ( BioNeutral Laboratories or BioLabs ), a corporation organized in Delaware in 2003. We currently are not generating any meaningful revenues and we have incurred losses since inception. We have relied upon the sale of our securities in unregistered private placement transactions and loans from affiliated and non-affiliated persons to fund our operations. For the foreseeable future, we will continue to be dependent on additional financing in order to maintain our operations and to pursue our business activities. We were incorporated in the State of Nevada on April 10, 2007 under the name Moonshine Creations, Inc. , and changed our name to BioNeutral Group, Inc. On December 22, 2008, from our incorporation until January 30, 2009, we did not have significant business operations. Table of Content 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. TABLE OF CONTENTS PAGE Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001429658_biolectron_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001429658_biolectron_prospectus_summary.txt
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+This summary highlights aspects of our business and the notes. You should, however, carefully read the entire prospectus, including the information presented under the section entitled Risk Factors and our consolidated financial statements and the notes thereto incorporated by reference into this prospectus before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements as a result of certain factors, including those set forth under Risk Factors and Forward-Looking Statements. Unless the context otherwise requires or indicates, references to Biomet, the Company, we, us and our refer to Biomet, Inc. and its subsidiaries. Our Company General Biomet, Inc., an Indiana corporation incorporated in 1977, is one of the largest orthopedic medical device companies in the United States and worldwide with operations in more than 50 locations throughout the world and distribution in approximately 90 countries. Our principal subsidiaries include Biomet U.S. Reconstruction, LLC; Biomet Orthopedics, LLC; Biomet Manufacturing Corp.; Biomet Europe BV; EBI, LLC; Biomet 3i, LLC; Biomet International Ltd.; Biomet Microfixation, LLC; Biomet Sports Medicine, LLC; Biomet Trauma, LLC; and Biomet Biologics, LLC. We design, manufacture and market a comprehensive range of both surgical and non-surgical products used primarily by orthopedic surgeons and other musculoskeletal medical specialists. We operate in one reportable business segment, musculoskeletal products, which includes the design, manufacture and marketing of products in five major product categories: Large Joint Reconstructive; Sports, Extremities and Trauma ( S.E.T. ); Spine & Bone Healing; Dental; and Other Products. We have three geographic markets: United States, Europe and International. Corporate Information Biomet is incorporated in the State of Indiana. Our principal executive offices are located at 56 East Bell Drive, Warsaw, Indiana 46582. Our website address is www.biomet.com. The information on our website is not deemed to be part of this prospectus. For additional information, contact our Corporate Communications department at (574) 372-1514. Ownership and Corporate Structures LVB Acquisition, Inc., or Parent, owns all of our issued and outstanding capital stock. LVB Acquisition Holding, LLC ( Holding ) owns 97.0% of the issued and outstanding capital stock of Parent. Substantially all the equity interests in Holding are owned, directly or indirectly, by a consortium of private equity funds affiliated with The Blackstone Group, Goldman, Sachs & Co., Kohlberg Kravis Roberts & Co. and TPG Global, LLC (together with its affiliates, TPG ), and their co-investors (jointly, the Sponsors ). Table of Contents Summary of the Terms of the Notes The following summary contains basic information about the notes and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of the notes, you should read the section of the prospectus entitled Description of Senior Notes and Description of Senior Subordinated Notes. For purposes of this summary and the Description of Senior Notes and Description of Senior Subordinated Notes, references to the Company, Biomet, the issuer, we, our and us refer only to Biomet, Inc. and not to its subsidiaries. Issuer Biomet, Inc. Notes Offered Senior Notes $1,825 million in aggregate principal amount of 6.500% Senior Notes due 2020. Senior Subordinated Notes $800 million in aggregate principal amount of 6.500% Senior Subordinated Notes due 2020. Maturity Dates The senior notes will mature on August 1, 2020. The senior subordinated notes will mature on October 1, 2020. Interest Rates Interest on the notes will be payable in cash and will accrue at a rate of 6.500% per annum. Interest Payment Dates Senior Notes August 1 and February 1, commencing February 1, 2013. Senior Subordinated Notes April 1 and October 1, commencing April 1, 2013. Guarantees Each of our existing and future wholly-owned domestic restricted subsidiaries has jointly, severally and unconditionally guaranteed the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis, in each case to the extent such subsidiaries guarantee our senior secured credit facilities. Table of Contents Ranking Senior Notes The senior notes are our senior unsecured obligations and rank pari passu in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto; are senior in right of payment to any future indebtedness that is expressly subordinated in right of payment thereto (including our senior subordinated notes); and are effectively junior to our existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. Similarly, the guarantees of the senior notes are such guarantors senior unsecured obligations and rank pari passu in right of payment with all existing and future indebtedness of each guarantor that is not expressly subordinated thereto; are senior in right of payment to any future indebtedness of each guarantor that is expressly subordinated in right of payment thereto; and are effectively junior to all existing and future secured indebtedness of each guarantor to the extent of the value of the collateral securing such indebtedness. Senior Subordinated Notes The senior subordinated notes are our senior subordinated unsecured obligations and rank junior in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto (including the senior notes); rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and are senior in right of payment to any future subordinated indebtedness and effectively junior to our existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. Similarly, the guarantees of the senior subordinated notes are such guarantors senior subordinated unsecured obligations, and rank junior in right of payment with all existing and future indebtedness of each guarantor that is not expressly subordinated thereto; rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and are senior in right of payment to any future indebtedness of each guarantor that is expressly subordinated in right of payment thereto and effectively junior to all existing and future secured indebtedness of each guarantor to the extent of the value of the collateral securing such indebtedness. Table of Contents The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. Filed Pursuant to Rule 424(b)(2) Registration No. 333- SUBJECT TO COMPLETION, DATED MAY 1, 2013 PRELIMINARY PROSPECTUS $1,825,000,000 6.500% Senior Notes due 2020 $800,000,000 6.500% Senior Subordinated Notes due 2020 NOTES OFFERED $1,825.0 million of our 6.500% Senior Notes due 2020, which we refer to as the senior notes. $800.0 million of our 6.500% Senior Subordinated Notes due 2020, which we refer to as the senior subordinated notes. We refer to the senior notes and the senior subordinated notes collectively as the notes. MATURITY The senior notes will mature on August 1, 2020. The senior subordinated notes will mature on October 1, 2020. INTEREST Senior notes: Interest is payable in cash and accrues at the rate of 6.500% per annum. Senior subordinated notes: Interest is payable in cash and accrues at the rate of 6.500% per annum. INTEREST PAYMENT DATES Senior notes: August 1 and February 1, commencing February 1, 2013. Senior subordinated notes: April 1 and October 1, commencing April 1, 2013. REDEMPTION We may redeem some or all of the senior notes on or after August 1, 2015 at redemption prices described in this prospectus. We may redeem some or all of the notes on or after October 1, 2015 at redemption prices described in this prospectus. CHANGE OF CONTROL Upon certain change of control events, each holder of notes may require us to purchase all or a portion of such holder s notes as described in this prospectus. Table of Contents Optional Redemption Senior Notes At any time prior to August 1, 2015, we may redeem up to 35% of the aggregate principal amount of the senior notes with the net proceeds of certain equity offerings at the redemption price set forth in this prospectus, plus accrued and unpaid interest, if any, to the redemption date. At any time prior to August 1, 2015, we may redeem the senior notes, in whole or in part, at our option, at a redemption price equal to 100% of their principal amount plus a make-whole premium and accrued and unpaid interest, if any, to the date of redemption. On and after August 1, 2015, we may redeem some or all of the senior notes at any time at the redemption prices set forth in this prospectus plus accrued and unpaid interest, if any, to the date of redemption. See Description of Senior Notes Optional Redemption. Senior Subordinated Notes At any time prior to October 1, 2015, we may redeem up to 40% of the aggregate principal amount of the senior subordinated notes with the net proceeds of certain equity offerings at the redemption price set forth in this prospectus, plus accrued and unpaid interest, if any, to the redemption date. At any time prior to October 1, 2015, we may redeem the senior subordinated notes, in whole or in part, at our option, at a redemption price equal to 100% of their principal amount plus a make-whole premium and accrued and unpaid interest, if any, to the date of redemption. On and after October 1, 2015, we may redeem some or all of the senior subordinated notes at any time at the redemption prices set forth herein plus accrued and unpaid interest, if any, to the date of redemption. See Description of Senior Subordinated Notes Optional Redemption. Change of Control Upon certain change of control events, each holder of notes may require us to purchase all or a portion of such holder s notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the purchase date. See Description of Senior Notes Repurchase at the Option of Holders Change of Control and the definition of Change of Control under Description of Senior Notes Certain Definitions, and Description of Senior Subordinated Notes Repurchase at the Option of Holders Change of Control and the definition of Change of Control under Description of Senior Subordinated Notes Certain Definitions. Table of Contents GUARANTEES Each of our existing and future wholly-owned domestic restricted subsidiaries will jointly, severally and unconditionally guarantee the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis, in each case to the extent such subsidiaries guarantee our senior secured credit facilities. RANKING The senior notes and the related guarantees will be our senior unsecured obligations and will rank pari passu in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto; be senior in right of payment to any future indebtedness that is expressly subordinated in right of payment thereto (including our senior subordinated notes); and be effectively junior to our and our guarantors existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. The senior subordinated notes will be our senior subordinated unsecured obligations and will rank junior in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto (including the senior notes); rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and be senior in right of payment to any future subordinated indebtedness and effectively junior to our and our guarantors existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. See
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001453001_vaccinogen_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001453001_vaccinogen_prospectus_summary.txt
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+Prospectus Summary 2
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001497632_green_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001497632_green_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..e4ea53dba8183a9356d340d2cc9675c9781b2b99
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+PROSPECTUS SUMMARY GREEN AUTOMOTIVE COMPANY We are a company involved in the automotive sector for niche vehicles and their drive train components. We design, develop, manufacture, sell and support a range of niche vehicles or their drive trains, with a focus on the rapidly emerging market for zero / low emission solutions. We have the capability to develop and support all types of electric vehicles. Typically these niche vehicles or drive trains are deployed in the following sectors: passenger and shuttle buses, coaches and limousines, specialty trucks and vans, military vehicles, emergency vehicles, taxis, disabled transport solutions, construction vehicles, forestry vehicles, and off-road vehicles. We also provide a comprehensive after sales program with the intent of maximizing the life time value of clean transport solutions, primarily through our E-Care program, which sources replacement components from around the world at the best possible prices to enable the continued use of electric vehicles when replacement with manufacturer-sourced components would make it not cost effective to continue their use. Currently, we do not have the money or funding to achieve the above goals and we will not be able to achieve our goals unless we are successful in obtaining funding through this offering and potentially future offers as well, all of which may serve to dilute the ownership position of our current and future shareholders.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001503455_bci_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001503455_bci_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..5c965159b0920c75857f228b4e50dfe7b57045b5
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+PROSPECTUS SUMMARY The following summary highlights selected information from this prospectus and may not contain all the information that is important to you. To understand our business and this offering fully, you should read this entire prospectus carefully, including the financial statements and the related notes beginning on page F-1. When we refer in this prospectus to the Company, we, us, and our, we mean Bauman Estate Planning, Inc., a Nevada corporation. This prospectus contains forward-looking statements and information relating to Bauman Estate Planning, Inc. See Cautionary Note Regarding Forward Looking Statements on page 11. Our Company Bauman Estate Planning, Inc. (BEP) was formed in August 2010. BEP is a unique, full service, one-stop, estate planning and asset protection company. Mr. Bauman and Ms. Scott are professional, dedicated, experienced, knowledgeable and highly competent personnel trained to offer a broad range of estate planning and asset planning services. Mr. Bauman is licensed to offer such services. We can assist you from minimizing or eliminating probate, and/or federal estate taxes to highly sophisticated estate planning tools. Our number one priority is to protect what you have. The company is not a blank check company and the company, its management, and its shareholders have no intentions, commitments, arrangements, or plans to engage in a merger or acquisition. The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act The Company 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 registration statement under this title; (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 the company is 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 the company is exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes. The Company has irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act. Our executive offices are located at 9500 W. Flamingo Road, Suite 205, Las Vegas, NV 89147. Our telephone number is (702) 897-9997. The Offering This prospectus covers up to 2,000,000 shares to be issued and sold by the company at a price of $0.05 per share in a direct public offering. ABOUT THIS OFFERING Securities Being Offered Up to 2,000,000 shares of common stock of Bauman Estate Planning, Inc. to be sold by the company at a price of $0.05 per share. Initial Offering Price The company will sell up to 2,000,000 shares at a price of $0.05 per share. Terms of the Offering The company will offer and sell the shares of its common stock at a price of $0.05 per share in a direct offering to the public. Termination of the Offering The offering will conclude when the company has sold all of the 2,000,000 shares of common stock offered by it. The company may, in its sole discretion, decide to terminate the registration of the shares offered by the company.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001503754_jpm-xf_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001503754_jpm-xf_prospectus_summary.txt
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001513153_fca-us-llc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001513153_fca-us-llc_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary may not contain all of the information that you should consider before deciding to invest in our common stock. You should read this entire prospectus carefully, including (i) the Fiat North America LLC and consolidated subsidiaries audited consolidated financial statements as of December 31, 2012 and 2011 and for the year ended December 31, 2012, the period from May 25, 2011 to December 31, 2011 (Successor as defined below under Successor and Predecessor Presentation), the period from January 1, 2011 to May 24, 2011 and the year ended December 31, 2010 (Predecessor as defined below under Successor and Predecessor Presentation), (ii) the Fiat North America LLC and consolidated subsidiaries condensed consolidated financial statements as of September 30, 2013 and the three and nine months ended September 30, 2013 and 2012, as well as (iii) the information set forth under the sections Risk Factors, Unaudited Pro Forma Condensed Consolidated Financial Information and Management s Discussion and Analysis of Financial Condition and Results of Operations, in each case included in this prospectus. This prospectus relates to an offering of common stock of Chrysler Group Corporation, a Delaware corporation, following certain reorganization transactions described herein that will occur immediately prior to the effectiveness of the registration statement of which this prospectus is a part, which we refer to as the Company Conversion. Refer to Our Structure and Company Conversion for additional information regarding these transactions. In this prospectus, unless otherwise specified, the terms we, our, us, Chrysler Group and the Company : (i) following the date of the Company Conversion discussed in Our Structure and Company Conversion, refer to Chrysler Group Corporation and its consolidated subsidiaries, or any one or more of them as the context may require; (ii) for the period from June 10, 2009 to the date of the Company Conversion, refer to Chrysler Group LLC and its consolidated subsidiaries, or any one or more of them as the context may require, which from May 25, 2011 was a consolidated subsidiary of Fiat North America LLC, or FNA LLC, which holds a 58.5 percent ownership interest in Chrysler Group as of the date of this prospectus; and (iii) for the period from August 4, 2007 through June 9, 2009, refer to Old Carco LLC (f/k/a Chrysler LLC) and its consolidated subsidiaries, or Old Carco, or any one or more of them as the context may require. Solely with respect to information relating to financial results and related disclosures for the period from May 25, 2011 to the date of the Company Conversion, the terms we, our, us, FNA and the Company refer to FNA LLC and its consolidated subsidiaries (which, as described in (ii) above, are Chrysler Group LLC and its consolidated subsidiaries), or any one or more of them as the context may require. Fiat refers to Fiat S.p.A., a corporation organized under the laws of Italy, its consolidated subsidiaries (excluding FNA LLC and its consolidated subsidiaries) and entities it jointly controls, or any one or more of them as the context may require. Chrysler Group LLC was formed on April 28, 2009 as a Delaware limited liability company to complete the transactions contemplated by the Master Transaction Agreement dated April 30, 2009, among Chrysler Group, Fiat and Old Carco and certain of its subsidiaries, which was approved under section 363 of the U.S. Bankruptcy Code, or the 363 Transaction. On April 30, 2009, Old Carco and its principal domestic subsidiaries filed for bankruptcy protection. On June 10, 2009, Chrysler Group LLC completed the 363 Transaction and purchased the principal operating assets and assumed certain liabilities of Old Carco and its principal domestic subsidiaries, in addition to acquiring the equity of Old Carco s principal foreign subsidiaries. As a result of the 363 Transaction, a new basis of accounting was created. As Chrysler Group LLC succeeded to substantially all of the business of Old Carco and as Chrysler Group LLC s own operations before the succession were insignificant relative to Old Carco s operations, Old Carco represents the Predecessor to Chrysler Group LLC for accounting and financial reporting purposes for periods prior to June 10, 2009. Table of Contents EXPLANATORY NOTE Chrysler Group LLC, the registrant whose name appears on the cover of this registration statement, is a Delaware limited liability company. Immediately prior to the effectiveness of this registration statement, Chrysler Group LLC will be converted into a Delaware corporation, renamed Chrysler Group Corporation and undergo certain reorganization transactions described herein. Shares of the common stock, par value $0.001 per share, of Chrysler Group Corporation are being offered by the prospectus that forms a part of this registration statement. Table of Contents INDUSTRY DATA In this prospectus, we include and refer to industry and market data obtained or derived from internal surveys, market research, publicly available information and industry publications. Industry publications and surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of included information. Although we believe that this information is reliable, we have not independently verified the data from third-party sources. Similarly, while we believe our internal estimates with respect to our industry are reliable, our estimates have not been verified by any independent sources. While we believe the industry data presented in this prospectus is reliable, our estimates, in particular as they relate to market share and our future expectations, involve
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001513513_trans_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001513513_trans_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..fa44de8d79c7e9f5ebf24d7fef42e91334495c2d
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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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+S-1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________ FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ____________ SELWAY CAPITAL ACQUISITION CORPORATION (Exact name of registrant as specified in its charter) Delaware 6770 27-4563770 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 66 Ford Road, Suite 230 Denville, NJ 07834 973-983-6300 (Address and telephone number of principal executive offices) Gary Sekulski Chief Executive Officer 66 Ford Road, Suite 230 Denville, NJ 07834 973-983-6300 (Name, address and telephone number of agent for service) Copies to: Mitchell S. Nussbaum Giovanni Caruso Loeb & Loeb LLP 345 Park Avenue New York, New York 10154 (212) 407-866 (212) 937-3943 (fax) 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. 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 Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company CALCULATION OF REGISTRATION FEE Title of Class of Securities to be Registered Amount To be Registered Proposed Maximum Aggregate Price Per Share (1) Proposed Maximum Aggregate Offering Price Amount of Registration Fee Common Stock 12,639,708 7.40 $93,533,839.20 $12,758.02 (1)Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, using the average of the high and low prices for the registrant s Class C Common Stock as reported on the Over the Counter Bulletin Board on June 6, 2013, which was $7.40 per share. Pursuant to Rule 429 under the Securities Act of 1933, the prospectus included in this Registration Statement is a combined prospectus also relating to Registration Statement No. 333-172714 previously filed by the Registrant on Form S-1 and declared effective November 7, 2011. This Registration Statement, which is a new registration statement, also constitutes Post-Effective Amendment No. 1 on Form S-1 to Registration Statement No. 333-172714, and such post-effective amendment shall hereafter become effective concurrently with the effectiveness of this Registration Statement in accordance with Section 8(c) of the Securities Act of 1933. All fees payable in connection with the registration of securities covered by the post-effective amendment were previously paid with the filing of the original registration statement. 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. The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities publicly 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, June 11, 2013 PRELIMINARY PROSPECTUS SELWAY CAPITAL ACQUISITION CORPORATION 12,639,708 shares of Common Stock (for Resale) 2,200,000 shares of Common Stock and 100,000 Warrants (for Issuance) ______________________ This prospectus relates to the public offering of up to 12,639,708 shares of common stock, par value $0.0001 per share (the "Common Stock"), of Selway Capital Acquisition Corporation, by the selling stockholders. The total amount of shares consists of 8,543,458 shares of Common Stock outstanding, up to 2,800,000 shares of Common Stock issuable pursuant to our earnout obligation related to our acquisition of Healthcare Corporation of America, and 1,296,250 shares of Common Stock underlying warrants. This prospectus also relates to the issuance of: (i) 2,000,000 ordinary shares underlying outstanding warrants issued in our IPO pursuant to a prospectus dated November 7, 2011; and (ii) 100,000 ordinary shares and 100,000 warrants underlying a unit purchase option issued to the underwriters in our IPO and 100,000 ordinary shares underlying such warrants. We will not receive any of the proceeds from the sale of Common Stock by the selling stockholders. However, we will receive up to $12,221,875 from the exercise of the warrants for up to 1,296,250 shares of our Common Stock, which are presently offered under this prospectus. We intend to use any proceeds received from the exercise, as the case may be, for working capital and other general corporate purposes. We, however, cannot assure you that any of the warrants will be exercised. The selling stockholders may sell the shares as set forth herein under "Plan of Distribution." Our Series C Common Stock ("Series C Shares") is traded on the Over the Counter Bulletin Board ("OTCBB") under the ticker symbol "SCWAL". The last reported sales price on June 6, 2013 was $7.40. We will pay the expenses of registering these shares. _____________________ Investment in the Common Stock involves a high degree of risk. You should consider carefully the risk factors beginning on page 3 of this prospectus before purchasing any of the shares offered by 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 SELWAY CAPITAL ACQUISITION CORPORATION TABLE OF CONTENTS Page PART I – INFORMATION REQUIRED IN PROSPECTUS PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001515319_national_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001515319_national_prospectus_summary.txt
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+If capital is not available to us to expand our business operations, we will not be able to pursue our business plan. We do not have sufficient cash to complete our website and market it to consumers and potential advertising partners. Cash flows from operations, to the extent available, will be used to fund these expenditures. We intend to seek additional capital from loans from our majority shareholder and from public and private equity offerings. Our ability to access capital will depend on reaching certain milestones in our business plan such as attracting a sizable number of viewers. It will also be dependent upon the status of the capital markets at the time such capital is sought. Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected. In such event it would not be likely that investors would obtain a profitable return on their investments or a return of their investments. External events that are beyond our control such as natural disasters, terrorist attacks, or a recession may harm our business. Events like the war with Iraq or the terrorist attacks on the U.S. in 2001 or the current global financial crisis have a negative impact on the art industry. We are not in a position to evaluate the net effect of these circumstances on our business. In the longer term, our business might be negatively affected by financial pressures on the art industry. If such events result in a long-term negative impact on the art industry, such impact could have a material adverse effect on our business. We may not be able to develop awareness of our brand name which we believe is critical to our success. We believe that creating awareness of the Kopjaggers brand name is critical to achieving widespread acceptance of our business. Brand recognition is a key differentiating factor among providers of online advertising opportunities, and we believe it could become more important as competition in our industry increases. In order to maintain and build brand awareness, we must succeed in our marketing efforts. If we fail to successfully promote and maintain our brand, incur significant expenses in promoting our brand and fail to generate a corresponding increase in revenue as a result of our branding efforts, or encounter legal obstacles which prevent our continued use of our brand name, our business could be materially adversely affected. We will not be able to attract art companies or Internet users if we do not build our website and continually enhance and develop the content and features of our website. We must complete the development of our website and continually improve the responsiveness, functionality and features of our website. We may not succeed in developing features and functions that art purchasers, aficionados, or companies and Internet users find attractive. This could reduce the number of art companies and Internet users using our website and materially adversely affect our business. We may not be able to access third party technology upon which we depend which could limit or curtail our business. We use and will continue to require technology and software products from third parties. Technology may not continue to be available to us on commercially reasonable terms, or at all. Our business will suffer if we are unable to access this technology, to gain access to additional products or to build out our existing site. This could cause delays in our development and introduction of new features or enhancements of our existing website until equivalent or replacement technology can be accessed, if available, or developed internally, if feasible. If we experience these delays, our business could be materially adversely affected. There is a high degree of risk that our website will not turn out to be commercially viable. A website such as ours involves a high degree of risk that will not attract a sufficient number of consumers to become commercially viable. The costs building and marketing our website is uncertain. Since our director and officer has no previous art industry experience, investors cannot rely on our officer and director as being an expert in the area of art which is our business focus. Our officer and director has no previous experience in the art industry. All business decisions made by him regarding art will be in reliance on the advice of others due to this lack of experience. If reliable advice is not available, it is unlikely our business will succeed. If our company is dissolved, it is unlikely that there will be sufficient assets remaining to distribute to our shareholders. In the event of the dissolution of our company, the proceeds realized from the liquidation of our assets, if any, will be used primarily to pay the claims of our creditors, if any, before there can be any distribution to the shareholders. In that case, the ability of purchasers of the offered shares to recover all or any portion of the purchase price for the offered shares will depend on the amount of funds realized and the claims to be satisfied there from. Risks relating to our common stock We may, in the future, issue additional common stock, which would reduce investors percent of ownership and may dilute our share value. Our articles of incorporation authorize the issuance of 10,000,000 shares of common stock, no par value, of which 525,500 shares are currently issued and outstanding. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock. Our common stock is subject to the "penny stock" rules of the Securities and Exchange Commission ( SEC ) and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock. Trading in our common stock is subject to the penny stock rules. The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer that recommends our common stock to persons other than prior customers and accredited investors, must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market price and liquidity of our common stock.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001521549_blackcraft_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001521549_blackcraft_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," Merculite, Company and Merculite Distributing refer to Merculite Distributing, Inc. You should read the following summary together with the entire prospectus, including the more detailed information in our financial statements and related notes appearing elsewhere in this prospectus. You should carefully consider the matters discussed in Risk Factors beginning on page 4. Merculite Distributing, Inc. ( Merculite Distributing ) Merculite Distributing is a development stage company incorporated in the State of Nevada on April 29th, 2011. We were formed to engage in the business of distributing a privately labeled, environmentally green, non-caustic cleaning solution developed and manufactured by an unrelated entity. In May 2011, we commenced our planned principal operations, and thus far our operations have been limited to start up and developmental activities. At present we have a confirmed credit of inventory awaiting shipment from our main supplier, but we have not begun to distribute any products, including the privately labeled cleaning solution. Since our inception on April 29th, 2011 through June 30, 2013 , we have not generated any revenues and have incurred a net loss of $78,915 . In April of 2011 our only business activity was the formation of our corporate entity and start up and developmental activities. In the period from May through December of 2012, the Company focused on the development of our business model, as well as the execution of a Separation and Distribution Agreement from our former parent, Oraco Resources, Inc. Upon completing the separation from Oraco Resources, we executed a Contribution Agreement, which has given the Company access to inventory in exchange for an issuance of equity within the Company. The party to the Contribution Agreement had a credit with the third-party manufacturer for the inventory of cleaning solution. That credit entitling the individual to the inventory was contributed to Merculite in exchange for equity. Additionally, in February of 2013, the Company filed Form-10 registering the Company s common stock under Section 12(g). We anticipate generating revenues in the next twelve months, of which we can provide no assurance. Merculite Distributing is building a business based on distributing a product which is an environmentally green, non-caustic sterilization product, which will be offered as a cleaning solution which is safe for both home and industrial/institutional use. In the future we may consider manufacturing the product ourselves. We have acquired through a trademark and licensing agreement, with Oraco Resources, an application for a trade-mark under Sterilite Solutions , which at this time is pending. We have no intentions to be acquired or to merge with an operating company. Additionally, our shareholders have no intention of entering into a change of control or similar transaction. No members of our management team or any of our affiliates have been previously involved in the management or ownership of a development stage company which has not implemented its business plan. Our management staff recently has engaged in a change of control in the formation of Merculite Distributing, Inc., and the separation from its former parent corporation Oraco Resources, Inc. Since we commenced operations in April of this year, we currently are in the process of establishing our website and developing our marketing plan. Our business model, which is still evolving as new ideas are brought forth, is built on revenue streams from a variety of industries. We intend to generate revenues primarily from the sale, distribution and eventually manufacture of EPA and FDA approved cleaning solutions and sterilization products. In the future we intend to purchase the equipment necessary for producing our private labeled solution. We are unsure at this time as to the time frame of our initial equipment purchase therefore, as the result of a lack of capital; we intend to purchase the product on a private label basis. Green Solutions and Marketing Merculite Distributing initially plans to work with office complexes, public institutions, nightclubs and restaurants as well as suppliers of cleaning/disinfecting products to promote sterilization through cost effective, non caustic methods. We are also researching the possibility of utilizing our product in the mining industry to neutralize mining by-products such as mercury and other potentially dangerous chemicals and compounds. As of the date of this prospectus we have two officers, one of whom also serves as our sole director. They are our only two employees, who at this time anticipate devoting a significant portion of their time to the company going forward. Our auditor's report dated April 29, 2013 on our financial statements from Inception (April 29, 2011) to December 31, 2012 included a going concern qualification which stated that there was substantial doubt as to our ability to continue as a going concern. Our principal executive office address and phone number is: Merculite Distributing, Inc. 19081 N Shelby Drive Maricopa, AZ 85138 (480) 729-0204 info@merculitedistributing.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1/A (Amendment No. 3 ) REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Merculite Distributing, Inc. (Exact name of registrant as specified in its charter) Nevada (State or other jurisdiction of incorporation or organization) 2842 (Primary Standard Industrial Classification Code Number) 30-0686483 (I.R.S. Employer Identification Number) 19081 N. Shelby Dr. Maricopa, AZ 85138 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Steven A. Subick, President Merculite Distributing, Inc. 19081 N. Shelby Dr. Maricopa, AZ 85138 (480) 729-0204 (Name, address, including zip code, and telephone number, including area code, of agent for service) Approximate date of commencement of proposed sale to the public: 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: 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. 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 file, 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 (Do not check if a smaller reporting company) Smaller reporting company x
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001524931_chuy-s_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001524931_chuy-s_prospectus_summary.txt
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001526796_ignite_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001526796_ignite_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 you should consider in making your investment decision. You should read the following summary together with the entire prospectus, including the more detailed information regarding our company, the common stock being sold in this offering and our consolidated financial statements and the related notes appearing elsewhere in this prospectus. You should also carefully consider, among other things, the matters discussed in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this prospectus, as well as the documents we incorporate by reference, before deciding to invest in our common stock. Some of the statements in this prospectus constitute forward-looking statements. For more information, see "Forward-Looking Statements." Due to the timing of our recent acquisition of Romano's Macaroni Grill, the results of operations of Romano's Macaroni Grill are not yet included in our historical financial and operating data contained in this prospectus, including this "Prospectus Summary." Our Company Ignite Restaurant Group, Inc. is a diversified restaurant company that operates a portfolio of three restaurant brands, Joe's Crab Shack, Brick House Tavern + Tap and Romano's Macaroni Grill. Each of our restaurant brands offers a variety of high-quality food and beverages in a distinctive, casual, high-energy atmosphere, and operates in a diverse set of markets across the United States. As of June 30, 2013, we owned and operated 134 Joe's Crab Shacks, 16 Brick House Tavern + Taps and 186 Romano's Macaroni Grills. Since the beginning of their tenures (starting in 2007), our management team has been developing and implementing many of the initiatives and strategies that serve as the foundation for what our company is today. The impact of these strategies began to take effect in fiscal year 2008. From the fiscal year ended December 29, 2008 through the fiscal year ended December 31, 2012, total revenues and Adjusted EBITDA (a non-GAAP financial measure) have improved at compounded annual growth rates of 14.2% and 27.8%, respectively. Over the same period, our total revenues increased from $273.4 million to $465.1 million, net income increased from a net loss of $5.0 million to net income of $8.7 million and Adjusted EBITDA increased from $19.5 million to $52.0 million. In addition, we have grown our comparable restaurant sales by 27.9% on a cumulative basis over the last five years, which has outperformed the KNAPP-TRACK growth rate of (6.7%) by more than 3,400 basis points on a cumulative basis over the same period of time. During fiscal year 2012, 2011 and 2010, our comparable restaurant sales increased by 2.2%, 6.9% and 4.9%, respectively, over the comparable period in our prior fiscal year. On April 9, 2013, we completed the acquisition of Romano's Macaroni Grill, which owns, operates and franchises Romano's Macaroni Grill restaurants, for an aggregate purchase price of approximately $60.8 million in cash, consisting of $54.1 million paid directly to the sellers and $6.7 million paid to other third parties related to outstanding indebtedness and transaction-related expenses of the sellers, subject to a working capital adjustment. Through the acquisition, we acquired 186 company-owned and twelve franchised restaurants across 36 states and Puerto Rico as well as twelve additional franchised units throughout nine foreign countries. For the twelve months ended December 31, 2012, Romano's Macaroni Grill generated $388.0 million in revenues and had average unit volumes of $2.1 million. Joe's Crab Shack Joe's Crab Shack, founded in 1991, is an established, national chain of casual seafood restaurants serving a variety of high-quality seafood items, with an emphasis on crab. Joe's is a high-energy, family-friendly restaurant that encourages guests to "roll up your sleeves and crack into some crab." Our FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents MARKET DATA AND FORECASTS Unless otherwise indicated, information in this prospectus concerning economic conditions, our industry, our markets and our competitive position is based on a variety of sources, including information from independent industry analysts and publications such as KNAPP-TRACK , as well as our own estimates and research. KNAPP-TRACK is a monthly sales and guest count tracking service for the chain dinner house/theme restaurant market in the United States. Each monthly KNAPP-TRACK report aggregates the change in comparable restaurant sales and guest counts compared to the same month in the preceding year from the competitive set of participants in the chain dinner house/theme restaurant market and provides an average to which we can compare our results. The competitive set of participants for each KNAPP-TRACK report is comprised of approximately 55 casual dining restaurant brands and typically includes restaurants such as T.G.I. Friday's, Outback Steakhouse, Red Lobster and Olive Garden. We and other restaurants benchmark our performance against the data included in the monthly KNAPP-TRACK report. The term "designated market area", or "DMA", refers to a geographic area as defined by Nielsen Media Research Company as a group of counties that make up a particular media market. Our estimates are derived from publicly available information released by third-party sources, as well as data from our internal research, and are based on such data and our knowledge of our industry, which we believe to be reasonable. None of the independent industry publications used in this prospectus were prepared on our behalf, and none of the sources cited in this prospectus have consented to the inclusion of any data from its reports, nor have we sought consent from any of them. TRADEMARKS AND TRADENAMES This prospectus includes our trademarks, such as Joe's Crab Shack and the design, our stylized logos set forth on the cover and back pages of this prospectus, Brick House Tavern + Tap and the design and Romano's Macaroni Grill and the design, which are protected under applicable intellectual property laws and are the property of Ignite Restaurant Group, Inc. or its subsidiaries. Solely for convenience, trademarks, service marks and tradenames referred to in this prospectus may appear without the , TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, service marks and tradenames. This prospectus may also contain trademarks, service marks, tradenames and copyrights of other companies, which are the property of their respective owners. ABOUT THIS PROSPECTUS Except where the context otherwise requires or where otherwise indicated, the terms "Ignite," "we," "us," "our," "our company" and "our business" refer to Ignite Restaurant Group, Inc. and its consolidated subsidiaries. The term "Joe's" refers to Joe's Crab Shack, "Brick House" refers to Brick House Tavern + Tap and "Macaroni Grill" refers to Romano's Macaroni Grill. The term "crab house" refers to a restaurant at which the featured entrees are predominantly crab. The term "Queen Crab" refers to Opilio crab that meets our size specification for designation as Queen Crab. The term "selling stockholders" refers to J.H. Whitney VI, L.P. ("J.H. Whitney VI"), an affiliate of us, together with the other selling stockholders identified in this prospectus. Throughout this prospectus, we provide a number of key performance indicators used by management and typically used by our competitors in the restaurant industry. These key performance indicators are discussed in more detail in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations Key Performance Indicators." In this prospectus, we also reference Adjusted EBITDA and restaurant-level profit margin, which are both non-GAAP financial measures. See "Prospectus Summary Summary Historical Consolidated Financial and Table of Contents Southern seaside provenance, distinctive menu, hospitality and flavors are our most important differentiators. Joe's Crab Shack is America's only national crab house. Crab is deliberately placed center stage as a defining item to the Joe's experience. Joe's Steampot and Crab in a Bucket offerings allow guests to choose among four varieties of crabs (Queen, Snow, Dungeness and King) and lobster. Steampots, our best-selling item, are overflowing with generous portions of crab, other seafood, red potatoes, a fresh ear of corn and sausage and seasoned to our guests' tastes. Our Crab in a Bucket entr es allow guests to pair their favorite crab selection with several distinctive preparations ranging from Spicy Citrus to Chesapeake Style or Garlic Herb. Joe's Crab Shack also leverages its crab-forward menu with other craveable crab items, including made-from-scratch Crab Cakes, Crab Nachos and Crazy-Good Crab Dip. In addition to our core crab-focused menu, Joe's also offers a broad range of entr es featuring a variety of seafood, including the Redfish Orleans, Surf 'N Turf Burger and The Maine Grill, as well as a wide range of traditional seafood entr es like the Fisherman's Platter. Joe's also offers several "out of water" options such as Cheesy Chicken and Whiskey Smoked Ribs. We continuously seek to innovate our menu offerings. For example, we have dramatically shifted the menu mix at Joe's to focus on entr es featuring crab over the last five fiscal years. As a result of this strategy, the percentage of entr es at Joe's featuring crab increased from approximately 20% to over 50% of total food revenues over the last five fiscal years. We believe this mix shift has contributed to increases in guest satisfaction, comparable restaurant sales and restaurant-level profit. For the fiscal year ended December 31, 2012, our average check was $23.80, lunch and dinner represented 27% and 73% of revenue, respectively, and our revenues were comprised of 86% food, 13% alcohol and 1% retail merchandise. Many Joe's Crab Shack restaurants are located on waterfront property, and most locations offer outdoor patio seating and a children's playground. Joe's Crab Shack restaurants perform well in targeted markets with high population density and a propensity for seafood, as well as "destination" markets with national and regional tourist attractions, both of which are key characteristics of our site selection strategy. Brick House Tavern + Tap Brick House Tavern + Tap, founded in 2008, is a casual restaurant brand that provides guests a differentiated, chef-inspired tavern experience by offering a distinctive blend of menu items in a polished setting. As a next generation bar and grill, Brick House appeals to a broad customer base providing guests with an elevated experience. Brick House was recently named by Nation's Restaurant News as one of the 50 Breakout Brands of 2013. Brick House offers guests a broad selection of high-quality, chef-inspired, contemporary tavern food. Menu items include handcrafted appetizers such as Deviled Eggs, Meat and Cheese Board, and Fried Stuffed Olives. In addition, Brick House's Brick Burgers, including the Gun Show Burger and the Greek Lamb Burger, offer guests a distinct take on the traditional burger. Brick House further enhances its burger offerings through its most popular burger, The Kobe, which is hand-formed from high-quality American Wagyu beef. Guests can also choose from a broad selection of homemade entr es such as Prosciutto Wrapped Meatloaf, Drunken Chops, BBQ Baby Backs and Chicken & Waffles, which are among our most popular items. A seasonal Daily Special menu features classic tavern food with a twist including, Chicken Pot Pie, Shrimp & Grits and Prosciutto Crusted Halibut. A Brick Pizza section offers our take on traditional pizzas, as well as the more unique Kobe Brick Pizza and Wild Mushroom Pizza. We also recently introduced meatballs to our menu, including Greek, buffalo chicken and drunken pork varieties. In addition, we consider Brick House to be a "Temple to Beer," with a diverse beverage selection highlighted by over 80 varieties of beer, including local microbrews and distinctive imports, a tap-at-your-table Beer Bong and a hand-pulled Cask Beer IGNITE RESTAURANT GROUP, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 5812 (Primary Standard Industrial Classification Code Number) 94-3421359 (I.R.S. Employer Identification No.) 9900 Westpark Drive, Suite 300 Houston, Texas 77063 (713) 366-7500 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Table of Contents Operating Data" for a discussion of Adjusted EBITDA and restaurant-level profit margin, as well as a reconciliation of those measures to the most directly comparable financial measure required by, or presented in accordance with, generally accepted accounting principles in the United States, or U.S. GAAP. Our fiscal year ends on the Monday closest to December 31 of each year. Our most recent fiscal year ended on December 31, 2012. Fiscal years 2012 and 2011 were 52-week years, while fiscal year 2010 was a 53-week year. Prior to fiscal year 2013, the first three quarters of our fiscal year consisted of 12 weeks and our fourth quarter consisted of 16 weeks for 52-week fiscal years and 17 weeks for 53-week fiscal years. Commencing in fiscal year 2013, we changed our quarterly accounting periods to be comprised of 13 weeks, except for 53-week fiscal years for which the fourth quarter will be comprised of 14 weeks. Table of Contents Engine. All Brick House restaurants have a full bar that supports a variety of liquor drinks, wine and beer cocktails like the Grizzly and Bee Sting, as well as specialty cocktails like the Blood Orange Whiskey Sour, Basil Gimlet and the Bloody Good Mary. The interior design of Brick House Tavern + Tap consists of diverse seating and gathering areas where guests can select multiple ways to enjoy their experience. In addition to a traditional dining room and bar area, Brick House also offers large communal tables and a section of leather recliners positioned in front of large HD TVs, where guests receive their own TV tray for dining. Each restaurant has a state-of-the-art entertainment package and provides guests with a clear line of sight to at least two HD TVs from every seat, making Brick House Tavern + Tap restaurants an ideal gathering place for sports enthusiasts. Outdoor seating is also available on the patio or around an open fire pit at nearly all locations. For fiscal year ended December 31, 2012, the daypart mix at Brick House Tavern + Tap was 19% lunch, 25% afternoon, 39% dinner and 17% late night and our revenues were comprised of 54% food and 46% alcohol. Our entr es range in price from $6.50 to $20.00. Romano's Macaroni Grill Romano's Macaroni Grill, founded in 1988, is an established chain of casual Italian restaurants. A pioneer in the polished casual dining segment, Macaroni Grill offers guests a blend of authentic Italian food with innovative Italian preparation. Macaroni Grill aims to be a place where family and friends can come together to celebrate a big night or any night featuring wine, an abundant meal and a premium, comfortable and never intimidating experience. Since our acquisition of Macaroni Grill, we have begun transforming the service, menu, atmosphere and operations with what we believe to be the right people, the right culture and the right initiatives to create a distinctive experience for our guests. We are in the process of bringing many of the original brand elements that historically made a visit to Macaroni Grill a memorable experience back to our Macaroni Grill restaurants. For example, we have begun to restore wine as the key focus of a Macaroni Grill visit by, among other things, reviving our house honor system wine as a feature at every table, which we believe was a key element of Macaroni Grill's early success. We have also reintroduced the consistent presence of opera singers to our Macaroni Grill restaurants system-wide to provide entertainment that elevates our guests' dining experience to an authentic Italian experience. Macaroni Grill currently offers guests an expansive food and beverage menu that features fresh, classic pastas and wine. We also offer a wide variety of pizzas, meats, seafood, salads and desserts utilizing fresh, seasonal ingredients. In addition, we plan to launch revitalized pasta and classic Italian dishes as well as introduce a new line of entr es served in braiser pans. We intend to build on this strong menu foundation by refocusing on wine as a central aspect of the Macaroni Grill experience. We believe the honor wine system was an original cornerstone of the brand that guests fondly associate with Macaroni Grill and that a full restoration of the honor wine system coupled with a broader effort to refocus on wine as a central menu component are important elements in our transformation plans for Macaroni Grill. Therefore, in addition to restoring our honor system wine at every table, we intend to introduce a combination of Italian and American wines that match well with our new menu offerings. Our objective is to improve on the quality of existing menu items while offering premium options for guests that are looking for a big night out and want to have an Italian steakhouse experience. We expect to introduce our revamped wine program and food menu in August of 2013. Macaroni Grill restaurants feature open kitchens, brick ovens, festive string lights and fresh-cut flowers. Our staff is encouraged to greet guests with a traditional Italian greeting, leverage the open kitchen design and provide polished and professional service to provide a dinner filled with energy for Macaroni Grill guests. For the twelve months ended December 31, 2012, Macaroni Grill's lunch and dinner day parts represented approximately 22% and 78% of revenue, respectively, and revenue Raymond A. Blanchette, III Chief Executive Officer Ignite Restaurant Group, Inc. 9900 Westpark Drive, Suite 300 Houston, Texas 77063 (713) 366-7500 (Name, address, including zip code, and telephone number, including area code, of agent for service) Table of Contents distribution was approximately 87% food and 13% alcohol. Our entr es range in price from $7.00 to $23.00. Our Business Strengths We are focused on developing brands that have category leading and defendable positions within the casual dining segment. As a result, our core business strengths with respect to the restaurant brands we have historically operated, Joe's Crab Shack and Brick House Tavern + Tap, include the following: Highly Differentiated Restaurant Brands. Our restaurants strive to provide a unique guest experience in a "come-as-you-are," upbeat and inviting restaurant environment. Both Joe's Crab Shack and Brick House Tavern + Tap are distinctively positioned restaurant brands, designed to have unique guest appeal. Joe's Crab Shack is a leading casual seafood brand that offers more than just a meal a visit to Joe's is an event for the whole family. We provide a memorable, shareable "crab-cracking experience" where guests can roll up their sleeves and "break out of their shell" in a vacation-themed environment that offers an escape from the everyday. Brick House Tavern + Tap offers a comfortable, trend-forward yet timeless setting where guests can gather and share their passion for elevated, chef-inspired comfort food, while enjoying their favorite local, national or imported brand of beer and cheering for their favorite team. Each brand features food offerings and an atmosphere that attracts a diverse group of guests. Authentic and Unique Menu Offerings Delivered with Memorable Guest Service. We offer high-quality, authentic seafood at Joe's Crab Shack and trend-forward, chef-inspired, contemporary tavern food at Brick House Tavern + Tap. Signature dishes at both brands feature craveable flavor profiles. Food menus are complemented by an assortment of beverages and distinctive cocktails, including Joe's Shark Bite and Brick House's tap-at-your-table Beer Bongs. Our culinary and beverage teams develop recipes and menu offerings for both Joe's and Brick House to ensure that all items feature distinctive twists on classic items, as well as items exclusive to each brand. Our servers are friendly, attentive and responsive to the needs of our guests and strive to provide guests an unforgettable dining experience. Joe's staff creates a fun-loving atmosphere through high-energy everyday celebrations, while the staff at Brick House is focused on providing hospitable and personalized service to guests. We achieve this through experienced restaurant management teams that implement training programs specific to the menu and culture of each brand. We believe our distinctive guest service models provide an additional layer of brand differentiation. Attractive Unit Economics. We have successfully increased our restaurant average unit volumes at a compounded annual growth rate of 6.7%, from $2.4 million in fiscal year 2008 to $3.1 million in fiscal year 2012. Over the same period of time, we have increased our restaurant-level profit margin (a non-GAAP financial measure) by 460 basis points from 12.3% to 16.9%. Experienced Management Team. Our experienced team of industry veterans has an average of over 20 years of experience with restaurant companies such as T.G.I. Friday's, Applebee's, The Cheesecake Factory, Landry's, Sbarro and Pinkberry. Our management team is led by Raymond A. Blanchette, III, our Chief Executive Officer, who joined us in 2007 and Michael J. Dixon, our President and Chief Financial Officer, who joined us in January 2013, with a dedicated President for each of our restaurant brands. Our team has a track record of delivering strong growth and increased profitability. From fiscal year 2008 to fiscal year 2012, we increased net income from a net loss of $5.0 million to net income of $8.7 million and Adjusted EBITDA from $19.5 million to $52.0 million. Our management's experiences with leading restaurant companies have enabled us to deliver strong performance and growth. With copies to: Keith M. Townsend King & Spalding LLP 1180 Peachtree Street, N.E. Atlanta, Georgia 30309 (404) 572-4600 Johnny G. Skumpija Cravath, Swaine & Moore LLP 825 Eighth Avenue New York, New York 10019 (212) 474-1000 Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. Table of Contents In addition to the above strengths, we intend to transform our newly acquired Romano's Macaroni Grill into a leading restaurant brand using the following business strengths: Proven Track-Record of Improving Performance. We believe that Romano's Macaroni Grill has significant earnings potential but has underperformed in the last several years. Similar to Macaroni Grill, the performance of Joe's Crab Shack brand was lagging before it came under Ignite's management. However, the experience of our management team allowed us to transform Joe's Crab Shack into a market leader, while simultaneously developing and launching Brick House Tavern + Tap. Despite a difficult economic environment, we achieved 18 consecutive fiscal quarters of comparable restaurant sales growth, expanded our geographic footprint and improved our financial performance in the four year period following the acquisition of Joe's. Ability to Identify Key Elements for Transformation. We believe many of the same key elements of the Joe's Crab Shack transformation are present at Macaroni Grill, including the ability to: accelerate menu innovation to create a relevant, compelling menu; elevate service, atmosphere and operations to create a premium dining experience; revamp the current marketing plan and emphasize innovation and continuity in our messaging; and optimize real estate by converting underperforming restaurants into Joe's or Brick House restaurants. In addition, Macaroni Grill will benefit from the talent and innovation of our culinary and beverage teams that have driven innovation success at Joe's Crab Shack and Brick House Tavern + Tap. Our Strategy Our strategies include the following: Disciplined New Restaurant Growth. We believe there are meaningful opportunities to grow the number of restaurants of both Joe's Crab Shack and Brick House Tavern + Tap. We seek to maximize free cash flow for reinvestment into new restaurants at attractive returns. For both our Joe's Crab Shack and Brick House Tavern + Tap brands, we target new restaurant cash-on-cash returns, which we define as restaurant-level profit per store divided by total build-out cost (excluding capitalized interest) and cash pre-opening costs, in excess of 25%. Joe's Crab Shack. We target steady state new restaurant average unit volumes of approximately $3.9 million for Joe's Crab Shack. Joe's has a defined development strategy that predominantly targets new restaurants in (i) specific geographies with high population density and a propensity for seafood and (ii) locations in close proximity to regional and national tourist attractions. In fiscal year 2010, we developed a new restaurant prototype for Joe's Crab Shack, which has given Joe's a polished look and feel while maintaining the authentic crab shack ambiance. As of April 1, 2013, we have successfully opened 22 new restaurants using this new prototype and development strategy. Twelve of these restaurants opened using this new prototype have been open for at least twelve months and generated average unit volumes of $4.5 million for the twelve month period ended April 1, 2013. Brick House Tavern + Tap. We target steady state new restaurant average unit volumes of approximately $3.2 million for Brick House Tavern + Tap. We believe Brick House has significant growth potential and intend to focus future development in the top 50 designated market areas across the country. We initially opened a limited number of Brick House restaurants across a broad range of geographies with the intent of optimizing the brand prior to a continued build-out and believe the brand is now positioned for expansion. Optimize Attractive Real Estate Portfolio. We have been able to optimize our real estate portfolio by converting underperforming restaurants to another brand in our portfolio that may be better suited for a particular location. With the addition of Macaroni Grill to our brand portfolio, we are able to further utilize restaurant conversions to achieve our goal of realizing the maximum 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. 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 Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Proposed Maximum Aggregate Offering Price(1)(2) Amount of Registration Fee Common Stock, $0.01 par value per share $80,000,000 $10,912 (1)Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended. (2)Includes the aggregate offering price of any additional shares of common stock 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 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 potential use of our real estate portfolio across our brands. The Macaroni Grill real estate portfolio primarily consists of exceptional locations in top DMAs, with approximately 62% of locations in the top 25 DMAs and approximately 95% in the top 100 DMAs. Macaroni Grill locations have leases with an average remaining lease term available of approximately 22 years, beneficial co-tenancy and other strong fundamentals. This real estate portfolio represents a compelling opportunity for us to execute on a development strategy that is unique to a company with a multi-concept portfolio and allows us to evaluate and convert underperforming Macaroni Grill restaurants to Joe's Crab Shacks or Brick House Tavern + Taps, as needed, for an estimated $500,000 savings on investment per restaurant location as compared to a new construction. With the vast majority of Macaroni Grill's located in desirable markets for both Joe's and Brick House and the typical site footprint closely matched with Joe's and Brick House, we believe Macaroni Grill restaurants represent an ideal complement to our real estate portfolio and provide us flexibility to realize conversion opportunities. Franchise Opportunities. Our acquisition of Macaroni Grill added a franchise element to our business that provides an opportunity for us to explore franchise opportunities across our brands both in the United States and internationally. We believe we will be able to utilize our current Macaroni Grill franchisee relationships and develop new relationships with well capitalized franchisee candidates to allow us to grow the franchising component of our business. For fiscal year 2013, we target opening as many as 12 new Company-owned restaurants, the vast majority of which will be new Joe's Crab Shack restaurants, and may convert as many as four existing restaurants to either a Joe's Crab Shack or a Brick House Tavern + Tap. Historically, our new restaurant growth had been substantially weighted towards new Joe's Crab Shack restaurants. However, given the compelling new unit volumes and returns recently achieved at our Brick House Tavern + Tap restaurants and the addition of the Macaroni Grill brand, we are in the process of evaluating our future growth strategy. We do not currently anticipate opening any new Company-owned Macaroni Grill's while we are in the process of transforming the brand. Focus on Comparable Restaurant Sales Growth. We believe the following strategies have contributed to our successful growth and will allow us to generate comparable restaurant sales growth in the future: Continuous Menu Innovation. We believe menu innovation is a critical factor in building guest loyalty and frequency. Both Joe's Crab Shack and Brick House Tavern + Tap have signature food and beverage offerings and a tradition of consistent menu innovation, and we are currently in the process of refining and introducing new offerings at Romano's Macaroni Grill. New menu items are introduced at both Joe's and Brick House at least twice a year, but are commonly introduced more often as we continue to focus on constant innovation. We test new menu items in restaurants across several diverse geographies before they are introduced into the broader base of restaurants, while maintaining the ability to go to market quickly with a deep inventory of new items. As we did at Joe's Crab Shack with Steampots, we intend to offer guests at Macaroni Grill an opportunity to trade into a more premium product offering while improving on the quality of their current favorite menu items. We are in the process of creating a number of new menu items in our Macaroni Grill restaurants, including braisers that contain slow-cooked meats served tableside, and we expect to introduce new menu items at Macaroni Grill on a regular basis as we transform the brand. We have successfully introduced new and innovative items at both Joe's and Brick House and plan to continue our tradition of menu innovation at both. We will also apply the same strategy of innovation to Romano's Macaroni Grill, including the introduction of updated high frequency classics, new product upgrades, daily kitchen specials and a focus on wine. Table of Contents The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED JULY 8, 2013 PROSPECTUS Shares Ignite Restaurant Group, Inc. Common Stock Table of Contents Marketing our Restaurant Brands. We believe that our marketing strategies will continue to increase brand awareness while driving new guest trial and repeat guest visits. Our current marketing strategy for Joe's Crab Shack is supported by quantitative analysis that is designed to increase comparable restaurant sales and guest count, as well as build the brand for the future. Our marketing efforts are aimed at maintaining the focus on "celebratory occasions" but increasing frequency through everyday enjoyable moments. We advertise using a national cable platform, which provides television advertising reach to our Joe's Crab Shack restaurants. These national marketing efforts are complemented by a combination of local marketing programs and social media. Brick House Tavern + Tap is primarily marketed through local marketing, digital media and social media outlets. We are in the process of revamping the Macaroni Grill marketing plan and intend to optimize media and take our new and improved brand story national by shifting from local television efforts to national cable. By repurposing Macaroni Grill media dollars towards national cable, we expect to cover all of our domestic Macaroni Grill restaurants, as opposed to an average of only 61% of Macaroni Grill restaurants that were covered prior to the acquisition. We also promote each brand using other in-restaurant sales initiatives, which are typically focused on new products and are not price point promotions. Driving Guest Satisfaction. We believe our focus on menu innovation and guest service has contributed to Joe's Crab Shack's overall guest satisfaction. At Joe's Crab Shack, we use third-party research consisting of feedback from more than 40,000 guests, to develop operational initiatives, which we expect will continue to deliver high levels of guest satisfaction. We implemented a similar program at Brick House Tavern + Tap during the fourth quarter of fiscal year 2011 and expect to introduce a similar program at Macaroni Grill in the near future. We are also in the process of making changes to the service, atmosphere and operations of Macaroni Grill, which we believe will enhance guest satisfaction and create a premium experience that will increase the number of repeat Macaroni Grill customers. We believe improving guest satisfaction will continue to build loyalty and lead to increased sales from our guests. Leverage our Scale to Enhance our Profitability. We believe we have a scalable infrastructure and can continue to expand our margins as we execute our strategy. While each of our three brands have independent field operations, we use our shared services platform to handle many of the administrative functions for all brands. In connection with our acquisition of Macaroni Grill, we expect to realize further savings due to administrative synergies, as well as extra benefits of economies of scale, which we plan to utilize as we continue to integrate the brand. Such benefits include, but are not limited to, our ability to cost efficiently employ the most sought after advertising and marketing agencies for all of our brands and efficiencies associated with being able to utilize a single distribution model for all of our restaurants. Our leverageable structure should further our ability to enhance our profitability as we grow. Principal and Selling Stockholder One of the selling stockholders, J.H. Whitney VI, L.P., or "J.H. Whitney VI," an affiliate of J.H. Whitney Capital Partners, LLC, or "J.H. Whitney," currently owns approximately 68% of our common stock. Following completion of this offering, J.H. Whitney VI will own approximately % of our outstanding common stock, or approximately % if the underwriters' option to purchase additional shares is fully exercised. As a result, J.H. Whitney VI will continue to be able to exert significant voting influence over fundamental and significant corporate matters and transactions. See "Risk Factors Risks Related to This Offering and Ownership of Our Common Stock." However, to the extent the ownership of J.H. Whitney VI is less than 50% following the completion of this offering, the Company will no longer be a "controlled company" under The NASDAQ Stock Market corporate governance standards. See "Management Corporate Governance Controlled Company." This is a public offering of shares of common stock of Ignite Restaurant Group, Inc. The selling stockholders identified in this prospectus, which include certain of our officers, are offering all of the shares offered hereby. We will not receive any of the proceeds from the sale of the shares by the selling stockholders. Our common stock is listed on The NASDAQ Global Select Market under the symbol "IRG." On July 5, 2013, the last reported sale price of our common stock on The NASDAQ Global Select Market was $19.12 per share. The underwriters have an option to purchase a maximum of additional shares from the selling stockholders. The underwriters can exercise this option at any time within 30 days from the date of this prospectus. We are an "emerging growth company" under applicable Securities and Exchange Commission rules and are subject to reduced public company reporting requirements. Investing in our common stock involves risks. See "Risk Factors" beginning on page 18. Price to Public Underwriting Discounts and Commissions Proceeds, before expenses to us Proceeds, before expenses to the selling stockholders Per share $ $ $ $ Total $ $ $ $ Delivery of the shares of common stock 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 determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Credit Suisse The date of this prospectus is , 2013. Table of Contents J.H. Whitney is a Connecticut-based private equity firm whose affiliated investment funds have current investments and remaining committed capital totaling $1.3 billion. J.H. Whitney focuses on investing in small and middle market companies with strong growth prospects in a number of industries. Company History and Information The first Joe's Crab Shack was opened in Houston, Texas in 1991. Landry's Restaurants, Inc., or "Landry's," acquired Joe's Crab Shack in 1994. On October 13, 2006, in connection with the purchase by JCS Holdings, LLC, an entity controlled by J.H. Whitney VI, of 120 Joe's Crab Shack restaurants from Landry's, which we refer to as the "Landry Acquisition," we changed our name to Joe's Crab Shack Holdings, Inc. In 2008, we developed our second brand, Brick House Tavern + Tap. With the addition of the Brick House brand, on July 7, 2009, we changed our name to Ignite Restaurant Group, Inc. In May 2012, we completed an initial public offering, or the "IPO," of 6,438,087 shares of common stock sold by us (inclusive of 865,384 shares of common stock from the full exercise of the overallotment option granted to the underwriters) and 196,528 shares of common stock sold by our previous parent, JCS Holdings, LLC, or "JCS Holdings." The price of the shares sold in the IPO was $14.00 per share. We did not receive any proceeds from the sale of shares by JCS Holdings. The total proceeds to us, net of underwriters' discounts and commissions and other fees and expenses, were approximately $81.1 million. We used the proceeds from the IPO, together with cash on hand, to prepay a portion of our then outstanding senior secured credit facility, to pay a J.H. Whitney a fee in connection with the termination of a management agreement and for other general corporate purposes. In connection with the IPO we effected a 19,178.226-for-1 stock split. Immediately after completion of the IPO, JCS Holdings, distributed substantially all of the shares of our common stock then held by it and/or the cash proceeds received in the IPO to the holders of its Series A preferred units and its common units in accordance with the provisions then in effect of the Third Amended and Restated Limited Liability Company Agreement of JCS Holdings, LLC, as amended. JCS Holdings continues to hold shares equal to less than one percent of our outstanding common stock for the benefit of certain of our officers and directors who continue to hold unvested common units in JCS Holdings. On April 9, 2013, we completed our acquisition, referred to herein as the "acquisition," of Romano's Macaroni Grill from private equity firm Golden Gate Capital, management and other investors. The final purchase price remains subject to additional working capital and post-closing adjustments. In connection with and to finance the acquisition, on April 9, 2013, we entered into an amendment to our revolving credit facility and added a $50.0 million term loan facility. See "Unaudited Pro Forma Condensed Combined Financial Data." Our principal executive office is located at 9900 Westpark Drive, Suite 300, Houston, Texas 77063. Our telephone number is (713) 366-7500, and our website addresses are www.igniterestaurants.com, www.joescrabshack.com, www.brickhousetavernandtap.com and www.macaronigrill.com. The information contained on our websites are not deemed to be, and you should not consider such information to be, part of this prospectus.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001534101_xtreme_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001534101_xtreme_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights some information from this prospectus, and it may not contain all the information important to making an investment decision. A potential investor should read the following summary together with the more detailed information regarding the Company and the common stock being sold in this offering, including Risk Factors and the financial statements and related notes, included elsewhere in this prospectus. The Company History Xtreme Healthcare Corporation, a Delaware corporation (the Company ), provides ambulance and emergency medical services. The Company was incorporated in the State of Delaware in September 2011, and was formerly known as Bluewood Acquisition Corporation ( Bluewood or Bluewood Acquisition ). In April and May 2012, the Company implemented a change of control by issuing shares to new shareholders, redeeming shares of existing shareholders, electing new officers and directors and accepting the resignations of its then existing officers and directors. In connection with the change of control, the Company changed its name from Bluewood Acquisition Corporation to Xtreme Healthcare Corporation. On November 12, 2012, the Company acquired Xtreme Care Ambulance, Inc., a California corporation ( Xtreme Care ), in a stock-for-stock transaction (the Acquisition ). The purpose of the Acquisition was to facilitate and prepare the Company for a registration statement and/or public offering of securities. Xtreme Care was formed in May 2010 in the State of California. Since its inception, Xtreme Care has provided ambulance and emergency medical services in southern California. Prior to the Acquisition, Bluewood had no ongoing business or operations and was established for the purpose of completing a business combination with target companies, such as Xtreme Care. As a result of the Acquisition, Xtreme Care became a wholly owned subsidiary of the Company. The Company, as the sole shareholder of Xtreme Care, has taken over the operations and business plans of Xtreme Care. The Company is located at 4636 Mission Gorge Place, Suite 103-C, San Diego, California 92120. The Company s main phone number is (619) 822-2674. Business The Company operates an ambulance and emergency medical services business in southern California. The Company currently has seven type II ambulances, one type III ambulance and two wheelchair vans, and is licensed through the San Diego County Emergency Medical Services and The California Highway Patrol as a ground ambulance service. The Company employs paramedics, emergency medical technicians (EMTs), registered nurses (RNs), and support staff, including dispatchers, marketers, billers and others. The Company offers services for critical care transport, basic life support, non-emergency transportation, wheelchair transportation and event standby services. Its customers include government agencies, hospitals, skilled nursing facilities, healthcare facilities, dialysis centers, hospice agencies and home health agencies. The Company posted a record high number of 437 calls in June 2012 that it provided emergency response to on behalf of its customers. Type II ambulances are built using a van type chassis, improved with a raised roof. Type III ambulances have a square patient compartment that is mounted on a cut-a-way van chassis. Wheelchair vans are equipped with a wheelchair lift to lift the patient in a wheelchair into the van. Type III ambulances have increased gross vehicle weight rating (GVWR), storage, and payload capacity over type II ambulances. Risks and Uncertainties facing the Company The Company has a limited operating history and may experience losses in the near term. The Company needs to maintain a steady operating structure, ensuring that expenses are contained such that profits are consistently achieved. In order to expand the Company s business, the Company would likely require additional financing. As an early-stage company, management of the Company must continually develop and refine its strategies and goals in order to execute the business plan of the Company on a broad scale and expand the business. One of the biggest challenges facing the Company will be in securing adequate capital to continue to expand its business and build a larger scale and more efficient set of operations. Secondarily, an ongoing challenge remains the maintenance of an efficient operating structure and business model. The Company must keep its expenses and the costs of employees at a minimum in order to generate a profit from the revenues that it receives from its clients. Third, in order to expand, the Company will need to continue implementing effective sales and marketing strategies to reach and forge new business relationships. The Company has devised its initial sales, marketing and advertising strategies, however, the Company will need to continue refinement of these strategies and also skillfully implement these plans in order to achieve ongoing and long-term success in its business. Fourth, the Company must continuously identify, attract, solicit and manage employee talent, which requires the Company to consistently recruit, incent and monitor various employees. High employee turnover or attrition is a significant risk for the Company, as it requires expending substantial resources to locate and train new personnel and also to replace personnel for clients. These tasks require significant time and attention from the Company s management, and employees may nevertheless become dissatisfied with their respective tenure with the Company. Due to financial constraints and the early stage of the Company s life, the Company has to date conducted limited advertising and marketing to reach customers. In addition, the Company has not yet located the sources of funding to develop the Company on a broader scale through acquisitions or other major partnerships. If the Company were unable to locate such financing and/or later develop strong and reliable sources of potential new business relationships and a means to efficiently reach new business partners and customers, it is unlikely that the Company could develop its operations to return revenue sufficient to further develop its business plan. Moreover, the above assumes that the Company s services are consistently met with client satisfaction in the marketplace and exhibit steady success amongst the potential customer base, neither of which is reasonably predictable or guaranteed. Trading Market Currently, there is no trading market for the securities of the Company. The Company intends to initially apply for admission to quotation of its securities on the OTC Bulletin Board as soon as possible, which may be while this offering is still in process. There can be no
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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 you should consider in making your investment decision. Before investing in our securities, 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, BioAmber, we, our company, the Company and similar designations in this prospectus refer to BioAmber Inc. and its subsidiaries, and unless the context otherwise requires, all references to capacity refer to annual capacity. BioAmber Inc. Overview We are a next-generation chemicals company. Our proprietary technology platform combines industrial biotechnology and chemical catalysis to convert renewable feedstocks into sustainable chemicals that are cost-competitive replacements for petroleum-derived chemicals. We currently sell our first product, bio-succinic acid, to customers in a variety of chemical markets. We intend to produce bio-succinic acid that is cost-competitive with succinic acid produced from petroleum at our planned facility in Sarnia, Ontario. We currently produce our bio-succinic acid in a large-scale demonstration facility using a 350,000 liter fermenter in Pomacle, France, which we believe to be among the largest bio-based chemical manufacturing facilities in the world. We have produced approximately 1.25 million pounds, or 568 metric tons, of bio-succinic acid at this facility as of December 31, 2012. We sold 144,500 pounds and 356,900 pounds of bio-succinic acid to our customers in the years ended December 31, 2011 and December 31, 2012, respectively. We have achieved a number of accomplishments through the successful implementation of our proprietary technology platform including: a history of large scale fermentation and continuous purification; low-cost bio-succinic acid production capability; a customer-qualified manufacturing process; supply agreements with large and established customers; an equity partnership for our first global scale biochemical manufacturing facility; and multiple commercial and exclusive technology partnerships. Succinic acid can be used to manufacture a wide variety of products used every day, including plastics, food additives and personal care products, and can also be used as a building block for a number of derivative chemicals. Today, petroleum-derived succinic acid is not used in many potential applications because of its relatively high production costs and selling price. We believe that our low-cost production capability and our development of next-generation bio-succinic derived products including 1,4 butanediol, or 1,4 BDO, which is used to produce polyesters, plastics, spandex and other products, will provide us with access to a more than $10 billion market opportunity. Combining these opportunities with other building block chemicals we are developing, including adipic acid and caprolactam, which are used in the production of nylons, we believe that our total addressable market is in excess of $30 billion. We believe we can produce bio-succinic acid that is cost-competitive with succinic acid produced from oil priced as low as $35 per barrel, based on management s estimates of production costs at our planned facility in 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 we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION. DATED May 9, 2013. 8,000,000 Units This is the initial public offering of units, consisting of one share of our common stock and one warrant to purchase half of one share of our common stock at an exercise price of $11.00 per whole share of common stock. Prior to this offering, there has been no public market for our units, common stock or warrants. The initial public offering price is expected to be between $10.00 and $12.00 per unit. Our units have been approved for listing on the New York Stock Exchange, where they will trade under the symbol BIOAU. The common stock and warrants comprising the units have also been approved for listing on the New York Stock Exchange and will begin trading separately on the first trading day following the expiration of the underwriters 30-day over-allotment option under the symbols BIOA and BIOAWS , respectively. We also intend to list our common stock on the Professional Segment of NYSE Euronext in Paris under the symbol BIOA. The underwriters have an option to purchase a maximum of 1,200,000 additional units from us at the public offering price, less underwriting discounts and commissions, within 30 days from the date of this prospectus to cover over-allotments, if any. BioAmber Inc. is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012. Investing in our securities involves risks. See Risk Factors on page 12. Price to Public Underwriting Discounts and Commissions(1) Proceeds to BioAmber Per Unit $ $ $ Total $ $ $ (1) We have agreed to reimburse the underwriters for certain expenses in connection with this offering. See Underwriting. Delivery of the units 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 determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Credit Suisse Soci t G n rale Corporate and Investment Banking Barclays Pacific Crest Securities Prospectus dated , 2013. Table of Contents Sarnia, Ontario and an assumed corn price of $6.50 per bushel. While we can provide no assurance that we will be able to secure corn at $6.50 per bushel given the fluctuations in corn prices, we believe this assumption is reasonable given the historic price of corn and management s expectations as to their ability to manage the cost of corn and other inputs for our planned facility in Sarnia, Ontario. Over the past five years, the price of corn ranged from a low of $2.68 per bushel to a high of $8.44 per bushel. As of April 1, 2013, the spot price was $6.55 per bushel and the six month forward price was $5.51 per bushel. We estimate that a $1.00 increase or decrease in the per bushel price of corn would result in just a $0.024 per pound change in our variable cost of our bio-succinic acid. We expect the productivity of the organism used in our fermentation process and other on-going process improvements to further reduce our production costs. Our ability to compete on cost is not dependent on government subsidies or tariffs. We are working to rapidly expand our accessible markets and product portfolio. We have entered into strategic relationships with several leading companies, such as our multi-year agreement with Mitsubishi Chemical Corporation, or Mitsubishi Chemical, for bio-succinic acid. We have also entered into agreements with LANXESS Deutschland GmbH, or Lanxess, Faurecia, S.A., or Faurecia, NatureWorks LLC, or NatureWorks, and others for the development of derivatives of bio-succinic acid. We have also entered into technology partnerships to lower our production costs, expand our product portfolio and enhance our biochemical production platform. For example, we entered into a technology partnership with Cargill Inc., or Cargill, through which we exclusively license a proprietary yeast organism for use in our fermentation process to produce our products. Throughout this prospectus, we refer to the yeast organism that we have licensed from Cargill as our yeast. We have also established other technology licenses and collaborations, including with E.I. du Pont de Nemours and Company, or DuPont, Evonik Industries AG, or Evonik, Agro-industrie Recherches et D veloppements, or ARD, Celexion, LLC, or Celexion, and entities funded by the U.S. Department of Energy, or DOE. Our business strategy is to leverage the value of our technology by building and operating production facilities around the world. However, depending on our access to capital and third-party demand for our technology, we may also enter into technology licenses on an opportunistic basis. In order to support our growth strategy, we have begun to rapidly expand our manufacturing capacity. We have entered into a joint venture agreement with Mitsui & Co., Ltd., or Mitsui, for our planned facility in Sarnia, Ontario, which has an initial projected capacity of 30,000 metric tons of bio-succinic acid and could subsequently be expanded to produce another 20,000 metric tons of bio-succinic acid. A portion of our aggregate capacity could be further converted to produce bio-based 1,4 BDO. As an example, we estimate that approximately 30,000 metric tons of bio-succinic acid production could be converted into approximately 22,000 metric tons of bio-based 1,4 BDO production. We have commenced engineering and substantially completed permitting for this facility and the initial phase is expected to be mechanically complete in 2014. By mechanically complete, we mean that construction of the facility has been substantially completed such that we can begin commissioning and start-up. We expect this facility will be fully funded through equity contributions by both us, with a portion of the net proceeds from this offering, and Mitsui, as well as a combination of government grants and interest-free loans. As we commission and start-up our planned facility in Sarnia, Ontario, we expect to terminate production of our products at the large-scale demonstration facility in Pomacle, France. Our joint venture with Mitsui also contemplates the potential construction and operation of two additional facilities, which we expect to occur over the next three to four years. We are committed to managing our economic, social, environmental and ethical performance through continued sustainable business practices. We have recently completed a life cycle analysis for our planned facility in Sarnia that indicates that only 0.04 kilograms of carbon dioxide equivalent (or greenhouse gases) will be emitted per kilogram of our bio-succinic acid produced, making our processes essentially carbon neutral. This is significantly less carbon intensive than the current petrochemical process for making succinic acid, in which Table of Contents Table of Contents 7.1 kilograms of carbon dioxide equivalent are emitted per kilogram of succinic acid produced. This represents a 99.4% reduction in greenhouse gases for our bio-succinic acid process, relative to the current petrochemical process for making succinic acid. The life cycle analysis also indicates that our planned facility in Sarnia will consume 56% less energy than the current petrochemical process. The analysis also indicates that field-to-gate energy use will be 42.7 mega joules per kilogram of our bio-succinic acid produced, as compared to the current petrochemical process, which uses 97.7 mega joules per kilogram of succinic acid produced. We are a development stage company and recognized revenues from the sales of products during the years ended December 31, 2011 and 2012. We incurred net losses of $30.9 million and $39.5 million, respectively, during the years ended December 31, 2011 and 2012. These losses are expected to continue as we further develop our technologies and proprietary processes, build our operating infrastructure, and provide customers with products for testing and verification for their various end uses. Our Industry The global chemical industry is a $4.1 trillion market, based on total global chemical shipments in 2012, according to the American Chemistry Council. Chemicals are utilized in a broad range of end-use markets, including heavy industry, mining, construction, consumer goods, textiles and healthcare. While the global chemical industry provides many value-added products to industrial and consumer end-markets, it is facing an increasing number of challenges as a result of its significant reliance on petroleum as its primary feedstock. Consequently, we believe there is significant and growing demand for a low-cost and sustainable alternative to using petroleum for chemical production. In addition, low-cost natural gas in certain geographies has led to a shift from naphtha cracking to natural gas liquid cracking. This in turn led to a 25% reduction between 2007 and 2012 in the U.S. production of crude four-carbon, or C4, chemicals, the primary feedstock for the petrochemicals we are seeking to substitute, contributing to growing demand for alternative sources of C4 chemicals. Multiple biochemical processes have been developed to address this demand, primarily using microorganisms that can convert sugars derived from renewable feedstocks into chemical building blocks. We believe there is a significant opportunity for bio-based chemical manufacturers who can reliably deliver product at scale with the required specifications of potential customers and at a competitive cost. Our Solution Our proprietary technology platform combines industrial biotechnology and chemical catalysis to convert renewable feedstocks into chemicals that are cost-competitive replacements for petroleum-derived chemicals. We have delivered high quality bio-succinic acid that meets the specifications of chemical companies, including Mitsui and Mitsubishi Chemical. We believe our solution enables us to address multiple large chemical markets, including polyurethanes, plasticizers, personal care products, de-icing solutions, resins and coatings, food additives and lubricants that are currently being served by petrochemicals by: providing value to chemical companies through cost-competitive, renewable chemical alternatives that offer equal or better performance; delivering products in quantities, which we believe are in excess of our bio-based competitors, that enable our customers to test and certify our products; utilizing our yeast and simplified purification process, which we expect will further drive down facility and production costs and expand the market opportunity; mitigating the impact of potential feedstock volatility by using less feedstock per ton of output than most other sugar-based processes for biochemicals other than succinic acid; and producing significantly lower greenhouse gas emissions than the processes used to manufacture petroleum-based products by sequestering carbon dioxide in the process of producing bio-succinic acid and eliminating the emission of nitrous oxide in the process of producing bio-adipic acid. Table of Contents TABLE OF CONTENTS Page PROSPECTUS SUMMARY 1
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001548432_counseling_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001548432_counseling_prospectus_summary.txt
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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 Consolidated Financial Statements, before making an investment decision. About Our Company Counseling International, Inc. (the Company, or we ) is a developmental stage company. We intend to generate revenue by directing internet traffic to providers of online counseling services, as well as certain other websites from which we can earn a commission from proceeds generated. To date we have not generated any revenues. We intend to start a marketing campaign in the next 60 days, including purchasing purchase advertisement on Google.com to display our banners. LiveChatCounseling.com is online portal from which direct individuals to providers of online counseling services, such as LivePerson.com. The Company does not evaluate the legality or professional licensure or qualifications of counselors provided by such providers. Our strategy is to exploit existing opportunities in the counseling industry through the development and growth of our existing website. We continuously strive to operate efficiently and deliver value and low cost counseling services with valuable customer care. We were incorporated in Nevada on September 30, 2011. The Company was founded by Layla Stone, who served as the director and chief executive officer of the Company until she sold all of her equity interest in the Company to Maribel Flores on October 19, 2012, and resigned from such positions on the same date. On October 19, 2012, Ms. Flores became the sole director and officer of the Company. With the current economic downturn and unemployment in the United States above 8%, the majority of our target market is beginning to think about investing in their health and well-being. We believe that this will help us attract additional traffic to LiveChatCounseling.com. The Company has entered into an affiliate agreement with LivePerson.com, under which it will obtain a commission for sending traffic to such website. We have also entered into agreements with certain other websites such as Amazon.com, under which we will earn a certain commission from purchases made on the website that are the result of traffic from LiveChatCounseling.com. As of the date hereof, we have not yet earned any revenue under the commission programs with LivePerson.com, Amazon.com or any other websites. Where You Can Find Us Our business office is located at 2333 Boone Avenue, Venice, California 90291. Our telephone number is (310) 801-3368. 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. Terms 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 resale of these shares. The offering price of $0.05 was determined by the price shares were sold to our stockholders in a private placement memorandum and is a fixed price at which the selling security holders may sell their shares until our common stock is quoted on the OTC Bulletin Board, at which time the shares may be sold at prevailing market prices or privately negotiated prices. 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. TABLE OF CONTENTS SUMMARY FINANCIAL DATA The following summary financial data should be read in conjunction with Management s Discussion and Analysis, Plan of Operation and the Financial Statements and Notes thereto, included elsewhere in this prospectus. The statement of operations and balance sheet data from inception (September 30, 2011) through to June 30, 2012 are derived from our unaudited financial statements. From Inception (September 30, 2011) through September 30, 2012 (unaudited) STATEMENT OF OPERATIONS Revenues $ 0 Total Operating Expenses $ 33,876 Net Loss $ (33,876 ) As of September 30, 2012 (unaudited) BALANCE SHEET DATA Cash $ 21,120 Total Assets $ 21,120 Total Liabilities $ 13,726 Stockholders Equity $ 7,394 TABLE OF CONTENTS 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. Please note that throughout this prospectus, the words we , our or us refer to the Company and not to the selling stockholders. Risks Related to Our Business We have a limited operating history that you can use to evaluate us, and the likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company. We were incorporated in Nevada on September 30, 2011. With the exception of $21,120 in cash at September 30, 2012, we have no significant financial resources and no revenues to date. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company starting a new business enterprise and the highly competitive environment in which we will operate. Since we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to meet our expenses and support our anticipated activities. We have limited operating history and face many of the risks and difficulties frequently encountered by development stage companies. We are a development stage company, and to date, our development efforts have been focused primarily on the development and marketing of our business model. We have limited operating history for investors to evaluate the potential of our business development. We have not built our customer base and our brand name. In addition, we also face many of the risks and difficulties inherent in gaining market share as a new company: Develop an effective business plan; Meet customer standards; Attain customer loyalty; Develop and upgrade our service Our future will depend on our ability to bring our service to the market place, which requires careful planning of providing a portal that meets industry standards without incurring unnecessary cost and expense. We will require financing to achieve our current business strategy and our inability to obtain such financing could prohibit us from executing our business plan and cause us to slow down our expansion of operations. We will need to raise additional funds through public or private debt or sale of equity to achieve our current business strategy. Such financing may not be available when needed. Even if such financing is available, it may be on terms that are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. Our capital requirements to implement our business strategy will be approximately $26,000. Moreover, in addition to monies needed to continue operations over the next twelve months, we anticipate requiring additional funds in order to implement our plan of operations. No assurance can be given that such funds will be available or, if available, will be on commercially reasonable terms satisfactory to us. There can be no assurance that we will be able to obtain financing if and when it is needed on terms we deem acceptable. TABLE OF CONTENTS CALCULATION OF REGISTRATION FEE Title of Each Class Of Securities to be Registered Amount to be Registered Proposed Maximum Aggregate Offering Price per share Proposed Maximum Aggregate Offering Price Amount of Registration fee Common Stock, par value $0.001 763,400(1) $ 0.05(2) $ 38,170(2) $ 4.37(3) (1) This Registration Statement covers the resale by our selling stockholders of up to 763,400 shares of common stock previously issued to such selling stockholders. (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 on any national exchange and in accordance with Rule 457; the offering price was determined by the price stockholders were sold to our stockholders in a private placement memorandum. The price of $0.05 is a fixed price at which the selling security holders may sell their shares until our common stock is quoted on the OTC Bulletin Board at which time the shares may be sold at prevailing market prices or privately negotiated prices. There can be no assurance that a market maker will agree to file the necessary documents with the Financial Industry Regulatory Authority, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. (3) 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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE. TABLE OF CONTENTS If we are unable to obtain financing on reasonable terms, we could be forced to delay or scale back our plans for expansion. In addition, such inability to obtain financing on reasonable terms could have a material adverse effect on our business, operating results, or financial condition. Our auditor has expressed substantial doubt as to our ability to continue as a going concern. Based on our financial history since inception, our auditor has expressed substantial doubt as to our ability to continue as a going concern. From inception to September 30, 2012 we have incurred a net loss of $33,876 and an accumulated deficit of $33,876. If we cannot generate sufficient revenues from our services, we may have to delay the implementation of our business plan. Our future success is dependent, in part, on the performance and continued service of Maribel Flores, our sole officer. Without her continued service, we may be forced to interrupt or eventually cease our operations. We are presently dependent to a great extent upon the experience, abilities and continued services of Maribel Flores, our Company s Officer and Director. Our employment agreement with Ms. Flores terminates on October 19, 2015. However, Ms. Flores may terminate her contract with thirty (30) days notice and could potentially stop working for us before this date. The loss of her services could have a material adverse effect on our business, financial condition or results of operation. Our principal stockholder, Maribel Flores, has significant voting power and may take actions that may not be in the best interest of all other stockholders. Our sole officer and director, Maribel Flores, controls approximately 80% of our current outstanding shares of voting common stock. She may be able to exert significant control over our management and affairs requiring stockholder approval, including approval of significant corporate transactions. This concentration of ownership may expedite approvals of company decisions, or have the effect of delaying or preventing a change in control or be in the best interests of all our stockholders. Our sole officer and director has a full-time job which may interfere with her responsibilities to us. Maribel Flores, our sole officer and only employee will not be in a position to devote a substantial amount of her time to our company. Ms. Flores believes that she can perform her duties sufficiently on a part-time basis. It is possible that our plan of operations may be materially delayed to her limited work schedule with us. The lack of public company experience of our sole officer and director could adversely impact our ability to comply with the reporting requirements of U.S. securities laws. Maribel Flores, our sole officer, lacks public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002. Ms. Flores has never been responsible for managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Ms. Flores may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including establishing and maintaining internal controls over financial reporting. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Securities Exchange Act of 1934 which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our company. 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 is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale of these securities is not permitted. PREMLIMINARY PROSPECTUS Subject to Completion, Dated January 9, 2013 763,400 SHARES OF COUNSELING INTERNATIONAL, INC. COMMON STOCK The selling stockholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. Our common stock is presently not traded on any market or securities exchange. The 763,400 shares of our common stock will be sold by selling security holders at a fixed price of $0.05 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. There can be no assurance that a market maker will agree to file the necessary documents with The Financial Industry Regulatory Authority ( 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. THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING RISK FACTORS BEGINNING ON PAGE 3. We are an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ) and, as such, may elect to comply with certain reduced public company reporting requirements for future filings. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission ( SEC ) 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 jurisdiction where the offer or sale is not permitted. The Date of This Prospectus Is: ________________, 2013 TABLE OF CONTENTS We will direct users to services in a highly competitive market and we are unsure as to whether there will be any consumer demand for such services. We plan to compete with providers of counseling services that are more established than we are. Our competitors may be able to seize the same market opportunities that we are targeting. These competitors, either alone or with collaborative partners, may succeed in developing business models that are more effective or have greater market success than our own. The Company is especially susceptible to larger competitors that invest more money in marketing. Moreover, the market for our products is large but highly competitive and segmented. It is possible that there will be low consumer demand for our services, or that interest in our services could decline or die out, which would cause us to be unable to sustain our operations. The availability of counseling services at lower or more competitive prices may cause potential customers to purchase products elsewhere which would negatively impact our business. The ability to successfully deploy our business model is heavily dependent upon economic conditions in the United States. The ability to successfully deploy our business model is heavily dependent upon the general state of the United States economy. We cannot assure that favorable conditions will exist in the future. A general economic recession in the United States could have a serious adverse economic impact on us and our ability to obtain funding and generate projected revenues. Because the services that we intend to distribute will not be provided by us, we will be dependent upon third parties to be service providers. We will direct services to counselors who are third-party providers. We do not expect to enter into long-term contracts with these providers. Therefore, providers may not provide services in the quantity and duration that we require for customers. We may be subject to delays caused by interruption in services based on conditions outside of our control. In the event that any of our intended third-party service providers were to become unable or unwilling to continue to provide services in required volumes, we would need to identify and retain alternative providers. There is no guarantee that we would be able to obtain such alternative providers on a timely basis, if at all. An extended interruption in our ability to provide services could have an adverse effect on our results of operations, which most likely would adversely affect the value of our common stock. The Company does not evaluate the legality or professional licensure or qualifications of counselors provided by LivePerson.com. The Company directs customers who are seeking counseling services to LivePerson.com, which provides such services directly to customers. The Company does not evaluate the quality or professional licensure or qualifications of counselors provided by LivePerson.com, and does not evaluate the legality of services provided by LivePerson.com. If some of the services provided by LivePerson.com are not legal under the laws of a particular jurisdiction or if a particular counselor is considered to be unqualified, then the Company could be deemed liable if the Company directs a customer to LivePerson.com from such jurisdiction. We may be liable if third parties misappropriate information. Though we do not collect personal information about the visitors to our website, we may be deemed liable if the websites that we direct individuals, such as LivePerson.com, misappropriate information about such individuals. Such liability may include negligence claims or claims for misuse of personal information. These claims could result in litigation which could have a material adverse effect on our business, results of operations and financial condition. We are dependent on technology systems that are beyond our control. The success of the Company s services depends in part on our clients online services as well as the Internet connections of visitors to their websites, both of which are outside of our control. As a result, it may be difficult to identify the source of problems if they occur. We may experience problems related to connectivity which result in slower than normal response times to interruptions in service. Our services will rely both on the Internet and on our connectivity vendors for data transmission. Therefore, even when connectivity problems are not caused by our services, our clients or Internet users may attribute the problem to us. This could diminish our brand and harm our business, divert the attention of our technical personnel from our product development efforts or cause significant client relations problems. In addition, we will rely on third-party Web hosting service providers for Internet connectivity and network infrastructure hosting, security and maintenance. These providers may experience problems resulting in slower than normal response times and interruptions in service, which could harm our business. Our service will also depend on third parties for hardware and software, which could contain defects. Problems arising from our use of such hardware or software could require us to incur significant costs or divert the attention of our technical personnel from our product development efforts. To the extent any such problems require us to replace such hardware or software, we may not be able to do so on acceptable terms, if at all. Our reputation depends, in part, on factors which are entirely outside of our control. Our services will depend upon the services of counselors who are not our employees. As a result, we have no way of controlling the actions of these operators. In addition, an Internet user may not know that the operator is an employee or agent of our client, rather than our employee. If an Internet user were to have a negative experience with such a counselor, it is possible that this experience could be attributed to us, which could diminish our brand and harm our business. Our products and services may infringe upon intellectual property rights of third parties and any infringement could require us to incur substantial costs and may distract our sole officer and director. We are subject to the risk of claims alleging infringement of third-party proprietary rights. Substantial litigation regarding intellectual property rights exists in the internet services industry. In the ordinary course of our business, our services may be increasingly subject to third-party infringement claims as the number of competitors in our industry segment grows and the functionality of services in different industry segments overlaps. Some of our competitors in the market for real-time sales, marketing and customer service solutions or other third parties may have filed or may intend to file patent applications covering aspects of their technology. Any claims alleging infringement of third-party intellectual property rights could require us to spend significant amounts in litigation (even if the claim is invalid), distract Maribel Flores, our sole officer and director, from other tasks of operating our business, pay substantial damage awards, prevent us from deliver services, or limit our ability to use the intellectual property that is the subject of any of these claims, unless we enter into license agreements with the third parties (which may be costly, unavailable on commercially reasonable terms, or not available at all). Therefore, such claims could have a material adverse effect on our business, results of operations and financial condition. TABLE OF CONTENTS TABLE OF CONTENTS PAGE Prospectus Summary 1
\ No newline at end of file
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@@ -0,0 +1,1366 @@
+PROSPECTUS SUMMARY
+
+ 
+
+This summary highlights information
+contained elsewhere in this Prospectus and may not contain all of the information you should consider before investing in the shares. You
+are urged to read this Prospectus in its entirety, including the information under "Risk Factors", "Management s
+Discussion and Analysis of Financial Condition and Results of Operations" and the Financial Statements, before making an
+investment decision.
+
+ 
+
+Summary
+
+ 
+
+We are a holding company operating in the
+telecommunications industry which manages and develops our wholly-owned subsidiaries focused on the development of telecommunications
+networks, acting as a service and support provider and providing temporary and part-time staffing solutions. Through our wholly-owned
+subsidiary, Optos Capital Partners, LLC , a Delaware limited liability company ("Optos") , we operate the following
+wholly-owned entities:
+
+ 
+
+ 
+ 
+ Focus Fiber Solutions, LLC, a Delaware limited liability company ("Focus Fiber"), specializes in the design, engineering, installation, and maintenance of a telecommunications infrastructure network.
+
+ 
+
+ 
+ 
+ Jus-Com, Inc., an Indiana corporation ("Jus-Com"), is a telecommunication service provider providing various services including engineering consulting, design, installation and emergency response in various categories including cable rack/wiring build-outs, infrastructure build-outs, DC power installation, fiber cable splicing and security camera installation. Jus-Com also operates as a temporary and permanent staffing agency specializing in the telecommunications market.
+
+ 
+
+ 
+ 
+ MDT Labor, LLC d/b/a
+ MDT Technical, a Delaware limited liability company ("MDT"), operates as a workforce management company providing
+ temporary and permanent staffing services under the MDT Technical brand and as a telecommunication service provider providing
+ various services including engineering consulting, design, installation and emergency response in various categories including
+ cable rack/wiring build-outs, infrastructure build-outs, DC power installation, fiber cable splicing and security camera installation
+ under its Beacon Solutions brand. On December 3, 2012, the Company acquired 100% membership interest in MDT through its wholly
+ owned subsidiary, Optos from Michael D. Traina, the former owner of MDT. In consideration of the 100% membership interest
+ in MDT, we paid Mr. Traina $3,000,000, delivered a promissory note in the principal amount of $4,000,000 (the "MDT Note")
+ and delivered Mr. Traina 12,490,000 shares of common stock. The MDT Note bears interest of 6% per annum. Interest is due and
+ payable quarterly in arrears with the first interest payment due and payable on April 5, 2013, for the prior period ended
+ March 31, 2013. No portion of the principal is due before the maturity date of May 30, 2015 unless the Company receives not
+ less than $10,000,000 in gross cash proceeds from the issuance of its stock. In such case, the Company may pay $1,500,000
+ in principal. The Company may further pay monthly scheduled principal payments of $100,000 the following month if the Company
+ receives not less than $10,000,000 in gross cash proceeds from the issuance of its stock and meets the terms of certain financial
+ covenants including senior debt to EBITDA ratio and fixed charge coverage ratio. All accrued principal and interest is otherwise
+ payable at the maturity date of May 30, 2015. The MDT Note is secured by all fixtures and personal property of every kind
+ and nature. The MDT Note security interest is subordinated to the security interests held by Atalaya. 
+
+ 
+
+Acquisition Strategy
+
+ 
+
+With respect to its acquisition strategy,
+Focus intends to pursue a clearly defined telecommunications niche but may, in its discretion, pursue acquisitions outside of this
+niche although this will not be our focus. We selectively pursue acquisitions when we believe doing so is operationally and financially
+beneficial to our existing operations, although we do not rely solely on acquisitions for growth. In particular, we pursue those
+acquisitions that we believe will provide us with incremental revenue and geographic diversification while complementing our existing
+operations. We generally target companies for acquisition that have defensible leadership positions in their market niches, EBITDA
+positive which meets or exceeds industry averages, proven operating histories, sound management, and certain clearly identifiable
+cost synergies.
+
+ 
+
+Our History
+
+ 
+
+We are a Nevada corporation formed on March
+26, 2012. On May 9, 2012, we entered into a Contribution Agreement with Optos, whereby we acquired 100% of the outstanding
+membership interests of Optos in consideration of 23,980,000 shares of common stock and 100,000 shares of Series A Preferred Stock.
+As we were only formed in March 2012 and we acquired Optos in May 2012, we have included the financial statement for Optos for
+the years ended December 31, 2011 and 2010 and the nine months ended September 30, 2012 and 2011. Optos was incorporated in the
+State of Delaware on April 15, 2008. Optos is the sole member of Focus Fiber. In addition, Optos held a majority interest in CMK
+until January 1, 2012, when it acquired the remaining interest in CMK. CMK was the sole member of Townsend. We dissolved CMK and
+Townsend on December 31, 2012 and transferred all assets to Jus-Com. Jus-Com was acquired by the common management and ownership
+on September 6, 2011. Subsequently, on January 1, 2012, Jus-Com was acquired by Optos. On December 3, 2012, through Optos, we acquired
+a 100% interest in MDT, which is a wholly-owned subsidiary of Optos. Our organization structure is summarized below:
+
+ 
+
+ - 4 -
+
+ 
+
+ 
+
+ 
+
+Other Pertinent Information
+
+ 
+
+Our executive offices are located at 4647
+Saucon Creek Rd, Suite 201, Center Valley, Pennsylvania 18034 and our telephone number is telephone 1-877-633-2239. Our subsidiaries
+lease two additional office/warehouse facilities, as well as two additional office locations throughout the United States. Our
+website is www.focusventurepartners.com . Our subsidiaries each maintain separate websites including www.focusfiber.com
+, www.jus-com.com , www.mdttechnical.com , www.mdtpersonnel.com and www.ilabornetwork.com. Jus-Com offices
+are located at 9250 Corporation Drive, Indianapolis, Indiana 46256 and at 600 West Germantown Pike, Suite 400, Plymouth Meeting,
+Pennsylvania 19462. MDT s offices are located at 2325 Paxton Church Road, Harrisburg, PA 17110.
+
+ 
+
+ - 5 -
+
+ 
+
+ 
+
+ 
+
+The Offering
+
+ 
+
+ Common Stock Offered: 
+ 
+ The selling shareholders are offering a total
+ of 144,375 shares of common stock. 
+
+ 
+ 
+ 
+
+ Initial Offering Price:
+ 
+ The selling shareholders will sell our shares at $0.08 per share until our shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. This price was determined arbitrarily by us.
+
+ 
+ 
+ 
+
+ Terms of Offering:
+ 
+ The selling shareholders will determine when and how they will sell the common stock offered in this prospectus.
+
+ 
+ 
+ 
+
+ Termination of the Offering: 
+ 
+ The offering will conclude when all of the 144,375 shares of
+ common stock have been sold or we, in our sole discretion, decide to terminate the registration of the shares. We may decide
+ to terminate the registration if it is no longer necessary due to the operation of the resale provisions of Rule 144 promulgated
+ under the Securities Act of 1933. We also may terminate the offering for no reason whatsoever at the discretion of our management
+ team. 
+
+ 
+ 
+ 
+
+ Outstanding Shares of Common Stock:
+ 
+ 38,337,500 shares of common stock.
+
+ 
+ 
+ 
+
+ Use of Proceeds:
+ 
+ We will receive no proceeds from the sale of any shares by the selling shareholders.
+
+ 
+ 
+ 
+
+ Risk Factors:
+ 
+ The purchase of our common stock involves a high degree of risk. You should carefully review and consider "Risk Factors" beginning on page 10.
+
+ 
+
+ - 6 -
+
+ 
+
+ 
+
+ 
+
+Summary Financial Information
+
+ 
+
+The information for the three and nine
+months ended September 30, 2012 and 2011 has been derived from our unaudited consolidated financial statements. The recent
+acquisition of MDT is not included in this table.
+
+ 
+
+The information at December 31, 2011 and
+2010 and for the years then ended has been derived from our audited combined financial statements. Our consolidated
+financial statements appear elsewhere in this prospectus.
+
+ 
+
+Statement of Operations Information:
+
+ 
+
+ 
+ Three Months Ended September 30, 
+
+ 
+ 2012 
+ 2011 
+
+ Revenues 
+ $11,897,060 
+ 100.0% 
+ $3,669,433 
+ 100.0%
+
+ Cost of revenues 
+ 8,744,685 
+ 73.5% 
+ 3,255,791 
+ 88.7%
+
+ Gross profit 
+ 3,152,375 
+ 26.5% 
+ 413,642 
+ 11.3%
+
+ Salary, wages and payroll taxes 
+ 821,856 
+ 6.9% 
+ 197,005 
+ 5.4%
+
+ Selling, general and administrative 
+ 450,439 
+ 3.8% 
+ 168,017 
+ 4.6%
+
+ Travel expense 
+ 303,538 
+ 2.6% 
+ 356,465 
+ 9.7%
+
+ Occupancy costs 
+ 196,688 
+ 1.7% 
+ 56,416 
+ 1.5%
+
+ Depreciation and amortization 
+ 104,534 
+ 0.9% 
+ 27,691 
+ 0.8%
+
+ Operating income (loss) 
+ 1,275,320 
+ 10.7% 
+ (391,953) 
+ -10.7%
+
+ Interest expense 
+ 398,410 
+ 3.3% 
+ 935 
+ 0.0%
+
+ Gain on sale of assets 
+ - 
+ 
+ - 
+ - 
+
+ Income (loss) before income taxes 
+ 876,910 
+ 7.4% 
+ (392,888) 
+ -10.7%
+
+ Provision for income taxes 
+ 303,321 
+ 2.5% 
+ - 
+ - 
+
+ Income (loss) before non-controlling interest 
+ 573,589 
+ 4.8% 
+ (392,888) 
+ -10.7%
+
+ Less: net income (loss) attributable to non-controlling interests 
+ - 
+ - 
+ 4,715 
+ 0.1%
+
+ Net income (loss) 
+ $573,589 
+ 7.4% 
+ $(397,603) 
+ -10.8%
+
+ 
+
+ 
+ Nine Months Ended September 30, 
+
+ 
+ 2012 
+ 2011 
+
+ Revenues 
+ $31,557,374 
+ 100.0% 
+ $10,646,447 
+ 100.0%
+
+ Cost of revenues 
+ 24,433,477 
+ 77.4% 
+ 8,694,463 
+ 81.7%
+
+ Gross profit 
+ 7,123,897 
+ 22.6% 
+ 1,951,984 
+ 18.3%
+
+ Salary, wages and payroll taxes 
+ 1,930,768 
+ 6.1% 
+ 285,358 
+ 2.7%
+
+ Selling, general and administrative 
+ 1,511,306 
+ 4.8% 
+ 563,064 
+ 5.3%
+
+ Travel expense 
+ 1,109,583 
+ 3.5% 
+ 766,725 
+ 7.2%
+
+ Occupancy costs 
+ 534,697 
+ 1.7% 
+ 161,129 
+ 1.5%
+
+ Depreciation and amortization 
+ 260,038 
+ 0.8% 
+ 33,224 
+ 0.3%
+
+ Operating income (loss) 
+ 1,777,505 
+ 5.6% 
+ 142,484 
+ 1.3%
+
+ Interest expense 
+ 910,875 
+ 2.9% 
+ 12,223 
+ 0.1%
+
+ Gain on sale of assets 
+ - 
+ - 
+ (171,797) 
+ -1.6%
+
+ Income (loss) before income taxes 
+ 866,630 
+ 2.7% 
+ 302,058 
+ 2.8%
+
+ Provision for income taxes 
+ 303,321 
+ 1.0% 
+ - 
+ - 
+
+ Income (loss) before non-controlling interest 
+ 563,309 
+ 1.8% 
+ 302,058 
+ - 
+
+ Less: net income (loss) attributable to non-controlling interests 
+ - 
+ - 
+ 56,001 
+ 0.5%
+
+ Net income (loss) 
+ $563,309 
+ 1.8% 
+ $246,057 
+ 2.3%
+
+ 
+
+ - 7 -
+
+ 
+
+ 
+
+ 
+
+ 
+ Year Ended December 31, 
+
+ 
+ 2011 
+ 2010 
+
+ Revenues 
+ $15,297,926 
+ 100.0% 
+ $6,119,571 
+ 100.0%
+
+ Cost of revenues 
+ 11,140,884 
+ 72.8% 
+ 5,522,651 
+ 90.2%
+
+ Gross profit 
+ 4,157,042 
+ 27.2% 
+ 596,920 
+ 9.8%
+
+ Salary, wages and payroll taxes 
+ 1,103,817 
+ 7.2% 
+ 147,127 
+ 2.4%
+
+ Selling, general and administrative 
+ 923,027 
+ 6.0% 
+ 557,062 
+ 9.1%
+
+ Travel expense 
+ 1,217,135 
+ 8.0% 
+ 129,801 
+ 2.1%
+
+ Occupancy costs 
+ 257,288 
+ 1.7% 
+ 99,787 
+ 1.6%
+
+ Depreciation and amortization 
+ 97,400 
+ 0.6% 
+ - 
+ 0.0%
+
+ Operating income (loss) 
+ 558,376 
+ 3.7% 
+ (336,857) 
+ -5.5%
+
+ Interest expense 
+ 113,431 
+ 0.7% 
+ 18,284 
+ 0.3%
+
+ Gain on sale of assets 
+ (171,797) 
+ -1.1% 
+ - 
+ - 
+
+ Income (loss) before non-controlling interest 
+ 616,742 
+ 4.0% 
+ (355,141) 
+ -5.8%
+
+ Less: net income (loss) attributable to non-controlling interests 
+ (48,270) 
+ -0.3% 
+ 33,184 
+ 0.5%
+
+ Net income (loss) 
+ $568,472 
+ 3.7% 
+ $(321,957) 
+ -5.3%
+
+ 
+
+RISK FACTORS
+
+ 
+
+An investment in our common stock involves
+a high degree of risk. You should carefully consider the risks described below, together with all of the other information
+included in this prospectus, before making an investment decision, and you should only consider an investment in our common stock
+if you can afford to sustain the loss of your entire investment. If any of the following risks actually occurs, our business,
+financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline,
+and you may lose all or part of your investment.
+
+ 
+
+We depend upon key personnel and
+need additional personnel.
+
+ 
+
+Our success depends on the continuing services
+of Christopher Ferguson, our Chief Executive Officer and our sole director. The loss of Mr. Ferguson could have a material
+and adverse effect on our business operations. Additionally, the success of the Company s operations will largely
+depend upon its ability to successfully attract and maintain competent and qualified key management personnel. As with any company
+with limited resources, there can be no guaranty that the Company will be able to attract such individuals or that the presence
+of such individuals will necessarily translate into profitability for the Company. Our inability to attract and retain
+key personnel may materially and adversely affect our business operations.
+
+ 
+
+The adjustable feature and the put rights of our common
+stock purchase warrant issued to Atalaya Special Opportunities Fund IV (Tranche B) could require us to issue a substantially
+greater number of shares, which will cause dilution to our existing stockholders and may restrict our ability to raise equity capital
+in the future.
+
+ 
+
+On December 3, 2012, the Company entered
+into a Credit Agreement with Atalaya Special Opportunities Fund IV (Tranche B), as lender and Atalaya Administrative LLC, as agent
+("Atalaya"). Under the terms of the Credit Agreement, Atalaya agreed, among other things and subject to certain restrictions,
+to provide the Company with a revolving loan commitment of $8,500,000 and a term loan commitment of $8,000,000. The Company pursuant
+to the terms of the Credit Agreement issued to Atalaya a common stock purchase warrant ("Warrant ) to purchase 5,227,841
+shares of common stock of the Company. The exercise price per share is $0.0001 and the holder is entitled to exercise the Warrant
+on a cashless basis. The Warrant expires on December 3, 2022. The Warrant is subject to anti-dilution adjustments if certain dilutive
+transactions occur, unless specifically exempted by the Warrant, such as issuance of common stock, options, warrants or similar
+securities or a decrease in the subscription, exercise, conversion or exchange price of these securities. In the event the anti-dilution
+feature in the Warrant is triggered, shareholders may incur significant dilution. Further, potential equity investors may not elect
+to not pursue such investment in our company as a result of Atalaya s anti-dilution rights.
+
+ 
+
+ - 8 -
+
+ 
+
+ 
+
+ 
+
+ In addition, commencing on the earliest
+of (a) December 3, 2016 (b) the acceleration of obligations under the Credit Agreement (c) an event of default (d) a value event
+such as a merger, disposition, IPO other than a qualified IPO or change in control and ending the earlier of (a) a qualified IPO
+or (b) the expiration of the Warrant, Atalaya may put the Warrant on 60 days notice and the Company is obligated to repurchase
+the Warrant for cash. The value of the put price is determined by the greater of (a) the Equity Value, as defined by the Warrant,
+per common share of the Company (b) the Put Formula Value, as defined by the Warrant, per common share of the Company. In the
+event that we are required to repurchase the Warrant for cash, our financial condition may be negatively impacted, which could
+limit our ability to pursue our business plan. The below table outlines the value of the put price using the Equity Value based
+on market market prices of $0.08, $0.25, $0.50, $0.75 and $1.00 and the put price utilizing the put value method.assuming 40,000,000
+shares of common stock outstanding, a recent 12 month trailing EBITDA of $2,000,000, debt of $10,000,000, available cash of $15,000,000
+and the liquidation value of the preferred stock of $1,100,000. In each instance we have assumed that Atalaya has put the entire
+warrant. 
+
+ 
+
+ Market Price 
+ Equity Value 
+ Put Value Method 
+
+ $ 0.08 
+ $ 418,227 
+ $ 1,685,979 
+
+ $ 0.25 
+ $ 1,306,960 
+ $ 1,685,979 
+
+ $ 0.50 
+ $ 2,613,921 
+ $ 1,685,979 
+
+ $ 0.75 
+ $ 3,920,881 
+ $ 1,685,979 
+
+ $ 1.00 
+ $ 5,227,841 
+ $ 1,685,979 
+
+ 
+
+We possess a significant amount of
+accounts receivable and if we are unable to collect account receivables in a timely manner or at all our cash flow and profitability
+will be negative impacted, which such risk is heighted during unstable economic periods.
+
+ 
+
+We extend credit to our customers as a
+result of performing work under contract prior to billing our customers for that work. These customers include telephone companies,
+cable television multiple system operators and others. We had accounts receivable of approximately $ 4.0 million at December 31,
+2011 and $11.0 million for the nine months then ended September 30, 2012. We periodically assess the credit risk of our customers
+and continuously monitor the timeliness of payments. Slowdowns in the industries we serve may impair the financial condition of
+one or more of our customers and hinder their ability to pay us on a timely basis or at all. Further bankruptcies or financial
+difficulties within the telecommunications sector could hinder the ability of our customers to pay us on a timely basis or at all,
+reducing our cash flows and adversely impacting our liquidity and profitability. Additionally, we could incur losses in excess
+of current bad debt allowances.
+
+ 
+
+We must effectively manage the growth
+of our operations and effectively integrate acquisitions, or our company will suffer.
+
+ 
+
+To manage our growth and effectively integrate
+acquisitions, we believe we must continue to implement and improve our operations. We may not have adequately evaluated the costs
+and risks associated with this expansion, and our systems, procedures, and controls may not be adequate to support our operations.
+In addition, our management may not be able to achieve the rapid execution necessary to successfully offer our products and services
+and implement our business plan on a profitable basis. The success of our future operating activities will also depend upon our
+ability to expand our support system to meet the demands of our growing business. Any failure by our management to effectively
+anticipate, implement, and manage changes required to sustain our growth would have a material adverse effect on our business,
+financial condition, and results of operations.
+
+ 
+
+We derive a significant portion of
+our revenues from a limited number of customers, and the loss of one or more of these customers could adversely impact our revenues
+and profitability.
+
+ 
+
+Our customer base is highly concentrated.
+For the year ended December 31, 2011, one customer represented approximately 73.7% of revenues or 72.2% of outstanding receivables.
+For the year ended December 31, 2010, five customers represented approximately 61.5% of revenues or 74.6% of the outstanding accounts
+receivable. For the nine months ended September 30, 2012, two customers represented approximately 87.4% of revenues or 95.6% of
+the outstanding receivable balance. Our revenue may significantly decline if we were to lose one or more of our significant customers.
+In addition, revenues under our contracts with significant customers may vary from period-to-period depending on the timing and
+volume of work which those customers order or perform with their in-house service organizations. Additionally, consolidations,
+mergers and acquisitions in the telecommunications and staffing industries have occurred in the past and may occur in the future.
+The consolidation, merger or acquisition of an existing customer may result in a change in procurement strategies by the surviving
+entity. Reduced demand for our services or a change in procurement strategy of a significant customer could adversely affect our
+results of operations, cash flows and liquidity.
+
+ 
+
+There is competition for those private
+companies suitable for a merger transaction of the type contemplated by management.
+
+ 
+
+We are in a highly competitive market for
+a small number of telecommunications business opportunities which could reduce the likelihood of implementing our acquisition strategy.
+We are and will continue to be an insignificant participant in the business of seeking acquisitions in the telecommunications space.
+A large number of established and well-financed entities, including small public companies and venture capital firms, are active
+in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly
+greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive
+disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive
+factors may reduce the likelihood of implementing our business strategy.
+
+ 
+
+Failure to integrate future acquisitions
+successfully could adversely affect our business and results of operations.
+
+ 
+
+As part of our growth strategy, we may
+acquire companies that expand, complement, or diversify our business. We regularly review various opportunities and periodically
+engage in discussions regarding possible acquisitions. Future acquisitions may expose us to operational challenges and risks, including
+the diversion of management s attention from our existing business, the failure to retain key personnel or customers of an
+acquired business, the assumption of unknown liabilities of the acquired business for which there are inadequate reserves and the
+potential impairment of acquired intangible assets. Our ability to sustain our growth and maintain our competitive position may
+be affected by our ability to successfully integrate any businesses acquired.
+
+ 
+
+ - 9 -
+
+ 
+
+ 
+
+ 
+
+We may not have access in the future
+to sufficient funding to finance desired growth.
+
+ 
+
+ Using cash for acquisitions may limit
+our financial flexibility and make us more likely to seek additional capital through future debt or equity financings. On December
+3, 2012, the Company entered into a Credit Agreement with Atalaya Special Opportunities Fund IV (Tranche B), as lender and Atalaya
+Administrative LLC, as agent ("Atalaya"). Under the terms of the Credit Agreement, Atalaya agreed, among other things
+and subject to certain restrictions, to provide the Company with a revolving loan commitment of $8,500,000 and a term loan commitment
+of $8,000,000. The commitments under the Credit Agreement are restricted by the borrowing base defined as 100% of the net collectible
+amount of acceptable accounts due to the Company less reserves and allowances which Atalaya deems necessary in its reasonable
+discretion. In the addition, the Credit Agreement is subject to various financial covenants including fixed charge coverage ratio,
+tangible net worth, restrictions on capital expenditures, minimum EBITDA ratio and maximum leverage ratio. On December 3, 2012,
+the Company made an initial notice of borrowing/disbursement request. As a result, Atalaya disbursed the entire proceeds of the
+$8,000,000 term loan commitment (less an agreed-upon $330,000 original discount to Atalaya for making the term loan) and disbursed
+$3,000,000 of the revolving loan commitment resulting in an aggregate loan of $11,000,000 by Atalaya to the Company. Of the $8
+million disbursed approximately $3 million, was used in order to acquire 100% membership interests in MDT and an additional $3.8
+million to satisfy certain encumbrances of MDT, see Management Discussion and Analysis of Financial Condition and Results of Operations
+on page 25. The Credit Agreement is secured by all of the assets and personal property of the Company. Our existing debt agreement
+with Atalaya contains significant restrictions on our operational and financial flexibility, including our ability to incur additional
+debt, and if we seek more debt we may be required to agree to additional covenants that limit our operational and financial
+flexibility. If we seek additional debt or equity financings, we cannot be certain that additional debt or equity will be available
+to us on terms acceptable to us or at all. 
+
+ 
+
+There are limitations on director/officer
+liability.
+
+ 
+
+As permitted by Nevada law, our certificate
+of incorporation limits the liability of its directors for monetary damages for breach of a director s fiduciary duty except
+for liability in certain instances. As a result of our charter provision and Nevada law, stockholders may have limited rights to
+recover against directors for breach of fiduciary duty.
+
+ 
+
+We are an "emerging growth company,"
+and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock
+less attractive to investors.
+
+ 
+
+We are an "emerging growth company,"
+as defined in the Jumpstart Our Business Startups Act, or the JOBS Act. For as long as we continue to be an emerging growth company,
+we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are
+not emerging growth companies, including:
+
+ 
+
+ 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.
+
+ 
+
+ We could be an emerging growth company
+for up to five years, although circumstances could cause us to lose that status earlier. We will remain an emerging growth company
+until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the first registered
+sale of common equity securities, (b) in which we have total annual gross revenue of at least $1.0 billion, or (c) in
+which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates
+exceeds $700 million as of the prior June 30th, or (2) the date on which we have issued more than $1.0 billion in non-convertible
+debt securities during the prior three-year period. 
+
+ 
+
+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.
+
+ 
+
+Under the JOBS Act, emerging growth companies
+can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We
+have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, will not be subject
+to the same new or revised accounting standards as other public companies that are not emerging growth companies.
+
+ 
+
+ - 10 -
+
+ 
+
+ 
+
+ 
+
+Risks Relating to the Telecommunications
+Industry
+
+ 
+
+Service level agreements in
+our customer agreements could subject us to liability or the loss of revenue.
+
+ 
+
+Our contracts with customers typically
+contain service guarantees and service delivery date targets, which if not met by us, enable customers to claim credits against
+their payments to us and, under certain conditions, terminate their agreements. Our inability to meet our service level guarantees
+could adversely affect our revenue and cash flow. While we typically have carve-outs for force majeure events, many events, such
+as fiber cuts, equipment failure and third-party vendors being unable to meet their underlying commitments or service level agreements
+with us, could impact our ability to meet our service level agreements and are potentially out of our control.
+
+ 
+
+Our backlog is subject to reduction
+and/or cancellation .
+
+ 
+
+Our backlog consists of the uncompleted
+portion of services to be performed under job-specific contracts and the estimated value of future services that we expect to provide
+under master service agreements and other long-term requirements contracts. Many of our contracts are multi-year agreements, and
+we include in our backlog the amount of services projected to be performed over the terms of the contracts based on our historical
+experience with customers and, more generally our experience in procurements of this type. In many instances, our customers are
+not contractually committed to procure specific volumes of services under a contract. Our estimates of a customer s requirements
+during a particular future period may not prove to be accurate, particularly in light of the current economic conditions and the
+uncertainty that imposes on changes in our customer s requirements for our services. If our estimated backlog is significantly
+inaccurate or does not result in future profits, this could adversely affect our future growth and the price of our common stock.
+
+ 
+
+Any failure of our physical infrastructure
+or services could lead to significant costs and disruptions that could reduce our revenues, harm our business reputation, and have
+a material adverse effect on our financial results.
+
+ 
+
+Our business depends on providing customers
+with highly reliable service. The services we provide are subject to failure resulting from numerous factors, including:
+
+ 
+
+ human error;
+
+ 
+
+ power loss;
+
+ 
+
+ physical or electronic
+security breaches;
+
+ 
+
+ fire, earthquake,
+hurricane, flood, and other natural disasters;
+
+ 
+
+ water damage;
+
+ 
+
+ the effect of war,
+terrorism, and any related conflicts or similar events worldwide; and
+
+ 
+
+ sabotage and vandalism.
+
+ 
+
+Problems within our network, whether or
+not within our control, could result in service interruptions or equipment damage. In the past we have at times experienced instability
+in our equipment attributed to equipment failure and power outages. Although such disruptions have been remedied and the network
+has been stabilized, there can be no assurance that similar disruptions will not occur in the future. We have service level commitment
+obligations with substantially all of our customers. As a result, service interruptions or equipment damage could result in credits
+for service interruptions to these customers. We have at times in the past given credits to our customers as a result of service
+interruptions due to equipment failures. We cannot assume that our customers will accept these credits as compensation in the future.
+Also, service interruptions and equipment failures may expose us to additional legal liability.
+
+ 
+
+The failure of certain key suppliers
+to provide us with components could have a severe and negative impact upon our business.
+
+ 
+
+We rely on a small group of suppliers to
+provide us with components for our products and services. If these suppliers become unwilling or unable to provide components,
+there are a limited number of alternative suppliers who could provide them. Changes in business conditions, wars, governmental
+changes, and other factors beyond our control or which we do not presently anticipate could affect our ability to receive components
+from our suppliers. Further, it could be difficult to find replacement components if our current suppliers fail to provide the
+parts needed for these products and services. A failure by our major suppliers to provide these components could severely restrict
+our ability to provide our services and prevent us from fulfilling customer orders in a timely fashion.
+
+ 
+
+The telecommunications industry is
+highly competitive, and contains competitors that have significantly greater resources and a more diversified base of existing
+customers than we do.
+
+ 
+
+Many of our competitors within the telecommunications
+industry have greater financial, managerial, sales and marketing and research and development resources than we do and are able
+to promote their brands with significantly larger budgets. Many of these competitors have the added advantage of a larger, more
+diversified customer base. If we fail to develop and maintain brand recognition through sales and marketing efforts and a reputation
+for high-quality service, we may be unable to attract new customers and risk losing existing customers to competitors with better
+known brands.
+
+ 
+
+ - 11 -
+
+ 
+
+ 
+
+ 
+
+In addition, significant new competition
+could arise as a result of:
+
+ 
+
+ The growth of installation
+departments within fiber option companies;
+
+ 
+
+ consolidation in
+the contractor industry, leading to larger competitors with more expansive networks; and
+
+ 
+
+ further technological
+advances rendering fiber optic broadband and other installation services outdated.
+
+ 
+
+If we are unable to compete successfully,
+our business will be significantly affected.
+
+ 
+
+If we do not adapt to swift changes
+in the telecommunications industry, we could lose customers or market share.
+
+ 
+
+The telecommunications industry is characterized
+by rapidly changing technology, evolving industry standards, frequent new service introductions, shifting distribution channels,
+and changing customer demands. We may not be able to adequately adapt our services or acquire new services that can compete successfully.
+Our failure to obtain and integrate new technologies and applications could impact the breadth of our service portfolio resulting
+in service gaps, a less differentiated service suite and a less compelling offering to customers. We risk losing customers to our
+competitors if we are unable to adapt to this rapidly evolving marketplace.
+
+ 
+
+In addition, the introduction of new services
+or technologies, as well as the further development of existing services and technologies, may reduce the cost or increase the
+supply of certain services similar to those that we provide. As a result, our most significant competitors in the future may be
+new entrants to the telecommunications industry. These new entrants may not be burdened by an installed base of outdated equipment
+or obsolete technology. Our future success depends, in part, on our ability to anticipate and adapt in a timely manner to technological
+changes. Failure to do so could have a material adverse effect on our business.
+
+ 
+
+We are subject to significant regulation that
+could change or otherwise impact us in an adverse manner.
+
+ 
+
+Our operations are subject to various federal,
+state and local laws and regulations. Further, the telecommunications component of MDT s operations operates in Belgium,
+Switzerland, France, Germany, Hungary, Ireland, Italy, Lebanon, Netherlands, Poland, Serbia, Spain, Sweden, Austria, Portugal,
+UAE as well as the UK; and, we may be subject to certain laws and regulations in each of these countries. These laws and regulations
+include but are not limited to:
+
+ 
+
+ licensing, permitting and inspection requirements applicable to contractors, electricians and engineers;
+
+ regulations relating to worker safety and environmental protection;
+
+ permitting and inspection requirements applicable to construction projects;
+
+ wage and hour regulations;
+
+ regulations relating to transportation of equipment and materials, including licensing and permitting
+requirements; and
+
+ building and electrical codes.
+
+ 
+
+We believe that we have all the licenses
+required to conduct our operations and that we are in substantial compliance with applicable regulatory requirements. Our failure
+to comply with applicable regulations could result in substantial fines or revocation of our operating licenses, as well as give
+rise to termination or cancellation rights under our contracts or disqualify us from future bidding opportunities.
+
+ 
+
+Legislative actions and initiatives
+relating to telecommunications may not result in an increase in demand for our services.
+
+ 
+
+The American Recovery and Reinvestment
+Act of 2009 ("ARRA") originally allocated $7.2 billion in funding to accelerate broadband deployment in rural areas
+of the country that have been without high-speed infrastructure. However, we cannot predict the actual benefits to us from the
+implementation of ARRA programs. For example, significant additional contracts resulting from investments for rural broadband deployment
+under the ARRA may not be awarded to us.
+
+ 
+
+Risks Relating to the Staffing Industry
+
+ 
+
+Our business is significantly affected
+by fluctuations in general economic conditions.
+
+ 
+
+The demand for our staffing services is
+highly dependent upon the state of the economy and upon staffing needs of our customers. Any variation in the economic condition
+or unemployment levels of the United States or in the economic condition of any region or telecommunications industry in which
+we have a significant presence may severely reduce the demand for our services and thereby significantly decrease our revenues
+and profits.
+
+ 
+
+ - 12 -
+
+ 
+
+ 
+
+ 
+
+Our business is subject to extensive
+government regulation and a failure to comply with regulations could materially harm our business.
+
+ 
+
+Our business is subject to extensive regulation.
+The cost to comply, and any inability to comply, with government regulation could materially harm our business. Increased government
+regulation of the workplace or of the employer-employee relationship, or judicial or administrative proceedings related to such
+regulation, could materially harm our business.
+
+ 
+
+The Patient Protection and Affordable Care
+Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the "Health Care Reform Laws") include
+various health-related provisions to take effect through 2014, including requiring most individuals to have health insurance and
+establishing new regulations on health plans. Although the Health Care Reform Laws do not mandate that employers offer health insurance,
+beginning in 2014 penalties will be assessed on large employers who do not offer health insurance that meets certain affordability
+or benefit requirements. Unless modified by regulations or subsequent legislation, providing such additional health insurance benefits
+to our temporary workers, or the payment of penalties if such coverage is not provided, would increase our costs. If we are unable
+to raise the rates we charge our customers to cover these costs, such increases in costs could materially harm our business.
+
+ 
+
+We may incur employment related and
+other claims that could materially harm our business.
+
+ 
+
+We employ individuals on a temporary basis
+and place them in our customers' workplaces. We have minimal control over our customers' workplace environments. As the employer
+of record of our temporary workers we incur a risk of liability for various workplace events, including claims for personal injury,
+wage and hour requirements, discrimination or harassment, and other actions or inactions of our temporary workers. In addition,
+some or all of these claims may give rise to litigation including class action litigation. Although we currently believe resolving
+all of these matters, individually or in the aggregate, will not have a material adverse impact on our financial statements, the
+litigation and other claims are subject to inherent uncertainties and our view of these matters may change in the future. A material
+adverse impact on our financial statements also could occur for the period in which the effect of an unfavorable final outcome
+becomes probable and can be reasonably estimated.
+
+ 
+
+We cannot be certain that our insurance
+will be sufficient in amount or scope to cover all claims that may be asserted against us. Should the ultimate judgments or settlements
+exceed our insurance coverage, they could have a material effect on our business. We cannot be certain we will be able to obtain
+appropriate types or levels of insurance in the future, that adequate replacement policies will be available on acceptable terms,
+if at all, or that the companies from which we have obtained insurance will be able to pay claims we make under such policies.
+
+ 
+
+We are dependent on workers' compensation
+insurance coverage at commercially reasonable terms.
+
+ 
+
+We provide workers' compensation insurance
+for our temporary workers. Our workers' compensation insurance policies are renewed annually. We cannot be certain we will be able
+to obtain appropriate types or levels of insurance in the future or that adequate replacement policies will be available on acceptable
+terms, if at all. The loss of our workers' compensation insurance coverage would prevent us from doing business in the majority
+of our markets. Further, we cannot be certain that our current and former insurance carriers will be able to pay claims we make
+under such policies. These additional sources of capital may not be available on commercially reasonable terms, or at all.
+
+ 
+
+We operate in a highly competitive
+business and may be unable to retain customers or market share.
+
+ 
+
+The staffing services business is highly
+competitive and the barriers to entry are low. There are new competitors entering the market which may increase pricing pressures.
+In addition, long-term contracts form only a small portion of our revenue. Therefore, there can be no assurance that we will be
+able to retain customers or market share in the future. Nor can there be any assurance that we will, in light of competitive pressures,
+be able to remain profitable or, if profitable, maintain our current profit margins.
+
+ 
+
+Our results of operations could materially
+deteriorate if we fail to attract, develop and retain qualified employees.
+
+ 
+
+Our performance is dependent on attracting
+and retaining qualified employees who are able to meet the needs of our customers. We believe our competitive advantage is providing
+unique solutions for each individual customer, which requires us to have highly trained and engaged employees. Our success depends
+upon our ability to attract, develop and retain a sufficient number of qualified employees, including management, sales, recruiting,
+service and administrative personnel. The turnover rate in the staffing industry is high, and qualified individuals of the requisite
+caliber and number needed to fill these positions may be in short supply. Our inability to recruit a sufficient number of qualified
+individuals may delay or affect the speed of our planned growth or strategy change. Delayed expansion, significant increases in
+employee turnover rates or significant increases in labor costs could have a material adverse effect on our business, financial
+condition and results of operations.
+
+ 
+
+ - 13 -
+
+ 
+
+ 
+
+ 
+
+We may be unable to attract and retain
+sufficient qualified temporary workers.
+
+ 
+
+We compete with other temporary staffing
+companies to meet our customer needs and we must continually attract qualified temporary workers to fill positions. We have in
+the past experienced worker shortages and we may experience such shortages in the future. Further, if there is a shortage of temporary
+workers, the cost to employ these individuals could increase. If we are unable to pass those costs through to our customers, it
+could materially and adversely affect our business.
+
+ 
+
+Risks Relating to this Offering
+
+ 
+
+One shareholder owns approximately
+65.2% of our common stock providing the shareholder with the complete ability to direct the affairs of our company.
+
+ 
+
+TBK 327 Partners LLC, which is owned by
+Christopher Ferguson and his wife, owns approximately 65.2 % of our common stock. Under our Articles of Incorporation and Nevada
+law, the vote of a majority of the shares outstanding is generally required to approve most shareholder action. As a result,
+TBK 327 Partners LLC will be able to direct the outcome of shareholder votes for the foreseeable future, including votes concerning
+the election of directors, amendments to our Articles of Incorporation or proposed mergers or other significant corporate transactions.
+
+ 
+
+The Offering Price of the shares
+is arbitrary.
+
+ 
+
+The Offering Price of the shares has been
+determined arbitrarily by us and bears no relationship to the Company s assets, book value, potential earnings or any other
+recognized criteria of value.
+
+ 
+
+The offering price of the shares
+was determined based upon the price sold in our offering and should not be used as an indicator of the future market price of the
+securities. Therefore, the offering price bears no relationship to the actual value of the Company and may make our shares difficult
+to sell.
+
+ 
+
+Since our shares are not listed or quoted
+on any exchange or quotation system, the offering price of $0.08 for the shares of common stock was determined by the price shares
+were sold to our shareholders in a private placement memorandum and is a fixed price at which the selling security holders may
+sell their shares until our common stock is quoted on the OTC Bulletin Board at which time the shares may be sold at prevailing
+market prices or privately negotiated prices. The facts considered in determining the offering price were our financial condition
+and prospects, our limited operating history and the general condition of the securities market. The offering price bears no relationship
+to the book value, assets or earnings of our company or any other recognized criteria of value. The offering price should not be
+regarded as an indicator of the future market price of the securities.
+
+ 
+
+We may, in the future, issue additional common shares,
+which would reduce investors' percent of ownership and may dilute our share value.
+
+ 
+
+Our Articles of Incorporation authorizes
+the issuance of 100,000,000 shares of common stock, $0.0001 par value, of which 38,337,500 shares are issued and outstanding and
+10,000,000 shares of preferred stock, $0.0001 par value, of which 100,000 shares of Series A Preferred Stock are issued and outstanding.
+Further, the Series A Preferred Stock are convertible into 13,750,000 shares of common stock. The future issuance of common stock
+may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any
+common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other
+corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect
+on any trading market for our common stock.
+
+ 
+
+The Board of Directors, in its sole
+discretion, may issue preferred shares which could carry superior rights and preferences and, in turn, limiting the influence common
+shareholders may have on the direction of our company.
+
+ 
+
+We have authorized 10,000,000 shares of
+blank check preferred stock of which 100,000 shares of Series A Preferred Stock is currently outstanding. Upon issuance
+of any additional preferred stock in the future, the rights attached to the preferred shares could affect our ability to operate,
+which could force us to seek other financing. The Board of Directors may issue preferred stock without obtaining shareholder
+approval. Such financing may not be available on commercially reasonable terms or at all and could cause substantial
+dilution to existing stockholders.
+
+ 
+
+ - 14 -
+
+ 
+
+ 
+
+ 
+
+Currently, there is no public market
+for our securities, and we cannot assure you that any public market will ever develop and it is likely to be subject to significant
+price fluctuations.
+
+ 
+
+Currently, there is no public market for
+our stock and our stock may never be traded on any exchange, or, if traded, a public market may not materialize. Even if
+we are successful in developing a public market, there may not be enough liquidity in such market to enable shareholders to sell
+their stock.
+
+ 
+
+Our common stock is unlikely to be followed
+by any market analysts, and there may be few or no institutions acting as market makers for the common stock. Either of these
+factors could adversely affect the liquidity and trading price of our common stock. Until our common stock is fully distributed
+and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly.
+ Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth
+and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors
+referred to elsewhere in these Risk Factors, investor perception of the Company, and general economic and market conditions. No
+assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.
+
+ 
+
+As our current estimated stock price
+is $0.08, our Common Stock will be subject to "penny stock" rules which may be detrimental to investors.
+
+ 
+
+The SEC has adopted regulations which generally
+define "penny stock" to be any equity security that has a market price (as defined) of less than $5.00 per share or
+an exercise price of less than $5.00 per share. Such securities are subject to rules that impose additional sales practice
+requirements on broker-dealers who sell them as our current estimated stock price is $0.08. For transactions covered
+by these rules, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received
+the purchaser s written consent to the transaction prior to the purchase. Additionally, for any transaction involving
+a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the
+SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer
+and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the
+broker-dealer must disclose this fact and the broker-dealer s presumed control over the market. Finally, among
+other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account
+and information on the limited market in penny stocks. As the Shares immediately following this Offering will likely
+be subject to such penny stock rules, purchasers in this Offering will in all likelihood find it more difficult to sell their Shares
+in the secondary market.
+
+ 
+
+We have never paid a dividend on
+our common stock and we do not anticipate paying any in the foreseeable future.
+
+ 
+
+We have not paid a cash dividend on our
+common stock to date, and we do not intend to pay cash dividends in the foreseeable future. Our ability to pay dividends will depend
+on our ability to successfully develop one or more properties and generate revenue from operations. Notwithstanding, we will likely
+elect to retain earnings, if any, to finance our growth. Future dividends may also be limited by bank loan agreements or other
+financing instruments that we may enter into in the future. The declaration and payment of dividends will be at the discretion
+of our Board of Directors.
+
+ 
+
+We have not voluntarily implemented
+various corporate governance measures, in the absence of which, shareholders may have more limited protections against interested
+director transactions, conflicts of interest and similar matters .
+
+ 
+
+Recent U. S. legislation, including the
+Sarbanes-Oxley Act of 2002 and the Dodd Frank Wall Street Reform and Protection Act, have resulted in the adoption of various corporate
+governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures
+have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national
+securities exchanges, such as the NYSE or The NASDAQ Stock Market, on which their securities are listed. Among the corporate governance
+measures that are required under the rules of national securities exchanges and NASDAQ are those that address board of directors 
+independence, audit committee oversight and the adoption of a code of ethics. We have not yet adopted any of these corporate governance
+measures and, since our securities are not listed on a national securities exchange or NASDAQ, we are not required to do so. There
+are significant corporate governance and executive compensation-related provisions in the Dodd-Frank Act that may
+increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and may also place
+undue strain on our personnel, systems and resources.
+
+ 
+
+It is possible that if we were to adopt
+some or all of these corporate governance measures, shareholders would benefit from somewhat greater assurances that internal corporate
+decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. For
+example, in the absence of audit, nominating and compensation committees comprised of at least a majority of independent directors,
+decisions concerning matters such as compensation packages to our senior officers and recommendations for director nominees may
+be made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective investors should
+bear in mind our current lack of corporate governance measures in formulating their investment decisions. If we do adopt
+various corporate governance measures, our management and other personnel will need to devote a substantial amount of time to these
+new compliance initiatives.
+
+ 
+
+ - 15 -
+
+ 
+
+ 
+
+ 
+
+ The potential sale of 144,375
+shares pursuant to this prospectus and the potential sales under Rule 144 of an additional 723,125 shares of common stock held
+by non-affiliates, 2,870,000 shares of common stock upon exercise of a warrant held by HFP Capital Markets and 5,227,841
+shares of common stock upon exercise of a warrant by Atalaya may have a depressive effect on the price and market for our
+common stock. 
+
+ 
+
+ The potential sale of 144,375 shares
+of common stock pursuant to this prospectus and the potential sale of an additional 723,125 shares of common stock held by non-affiliates,
+of 2,870,000 shares of common stock upon exercise of a warrant held by HFP Capital Markets and 5,227,841 shares of common stock
+upon exercise of a warrant by Atalaya may have a depressive effect on our stock price and make it more difficult for us to raise
+any significant funds in the equity market if our business requires additional funding.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001553404_pacific_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001553404_pacific_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..65afbdca2421ba67ad212832f07c54f982ba961c
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001553404_pacific_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary This Prospectus, and any supplement to this Prospectus include forward-looking statements . To the extent that the information presented in this Prospectus discusses financial projections, information or expectations about our business plans, results of operations, products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as intends , anticipates , believes , estimates , projects , forecasts , expects , plans and proposes . Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These include, among others, the cautionary statements in the Risk Factors section beginning on page 7 of this Prospectus and the Management's Discussion and Analysis of Financial Position and Results of Operations section elsewhere in this Prospectus. Our Business Pacific Green Technologies Inc. (formerly known as ECash, Inc.) was incorporated in Delaware on March 10, 1994, under the name of Beta Acquisition Corp. In September 1995, we changed our name to In-Sports International, Inc. In August 2002, we changed our name from In-Sports International, Inc. to ECash, Inc. In 2007, due to limited financial resources, we discontinued our operations. Over the course of the last five years, we have sought new business opportunities. Our management, assisted by Sichel Limited, a consultant, has identified an opportunity to build a business focused on marketing, developing and acquiring technologies designed to improve the environment by reducing pollution. To this end we entered into and closed an agreement with Pacific Green Group Limited ( PGG ) for the assignment of a representation agreement and the acquisition of a company involved in the environmental technology industry (the Assignment and Share Transfer Agreement ). The Assignment and Share Transfer Agreement provides for the acquisition of 100% of the issued and outstanding shares of Pacific Green Technologies Limited, PGG s subsidiary in the United Kingdom. Additionally, PGG has assigned to the Company a ten year exclusive worldwide representation agreement with Envirotechnologies Inc., formerly EnviroResolutions, Inc. ( Enviro ) to market and sell Enviro s current and future environmental technologies (the Representation Agreement ). The Representation Agreement entitles the holder to a commission of 20% of all sales (net of taxes) generated by Enviro. Pursuant to the terms of the Assignment and Share Transfer Agreement, all rights and obligations under the Representation Agreement have been transferred to our company. We currently anticipate that sales under the Representation Agreement will be our sole source of revenue for the foreseeable future. We currently intend to complete an acquisition of Enviro, as this is a logical step in our development. However, we do not currently have any arrangements, agreements or understandings in this regard. We have only recently begun operations, have no sales or revenues, and therefore rely upon the sale of our securities to fund our operations. We have a going concern uncertainty as of the date of our most recent financial statements. We are not a shell company as described under Rule 405 of Regulation C under the Securities Act of 1933, as amended. Rule 405 of Regulation C defines a shell company as a registrant that has: (1) no or nominal operations; and (2) either (i) no or nominal assets; assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets. We are not a blank check company. Rule 419 of Regulation C under the Securities Act of 1933 defines a blank check company as a (i) 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, and (ii) is issuing a penny stock. Accordingly, we do not believe that our Company may be classified as a blank check company because we intend to engage in a specific business plan and do not intend to engage in any merger or acquisition with an unidentified company or other entity. Emerging Growth Company We are an Emerging Growth Company as defined in the Jumpstart Our Business Startups (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 registration statement under this title; (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 exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes. We have elected not to opt out of the extended transition period for complying with any new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. The Offering The 1,950,000 shares of our common stock being registered by this Prospectus represent approximately 34% of our issued and outstanding common stock as of February 14, 2013. Securities Offered: 1,950,000 shares of common stock offered by 4 selling security holders, including 500,000 shares of our common stock held by Pacific Green Group Limited, 500,000 shares by Rhumline Limited and 600,000 shares by Chris and Natasha Cuffe, who are affiliates of our company by virtue of their shareholdings. Initial Offering Price: The $1.00 per share initial offering price of our common stock was determined by our Board of Directors based on several factors, including our capital structure and the most recent placement price of 600,000 shares of our common stock in a private placement for $1.00 per share on September 14, 2012. The selling security holders will sell at an initial price of $1.00 per share until our common stock is quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. However, there can be no assurance that our common stock will ever become quoted on the OTC Bulletin Board. Minimum Number of Securities to be Sold in this Offering: None Securities Issued and to be Issued: As of February 14, 2013 we had 5,727,404 issued and outstanding shares of our common stock, and no issued and outstanding convertible securities. All of the common stock to be registered under this Prospectus will be registered by existing stockholders. There is no established market for the common stock being registered. We intend to engage a market maker to apply to have our common stock quoted on the OTC Bulletin Board. This process usually takes at least 60 days and the application must be made on our behalf by a market maker. We have not yet engaged a market maker to file our application. If our common stock becomes quoted and a market for the stock develops, the actual price of the shares will be determined by prevailing market prices at the time of the sale. The trading of securities on the OTC Bulletin Board is often sporadic and investors may have difficulty buying and selling or obtaining market quotations, which may have a depressive effect on the market price for our common stock. Proceeds: We will not receive any proceeds from the sale of our common stock by the selling security holders. Financial Summary Information All references to currency in this Prospectus are to U.S. Dollars, unless otherwise noted. The following table sets forth selected financial information, which should be read in conjunction with the information set forth in the "Management s Discussion and Analysis of Financial Position and Results of Operations" section and the accompanying financial statements and related notes included elsewhere in this Prospectus. Consolidated Statements of Operations and Comprehensive Loss Three Months Ended December 31, 2012 (unaudited) ($) Nine Months Ended December 31, 2012 (unaudited) ($) From April 5, 2011 (inception) to March 31, 2012 ($) Revenues - - - Expenses 431,338 935,436 159,387 Net Loss 431,338 935,436 159,387 Net Loss per share (0.07) (0.18) - Consolidated Balance Sheet Data March 31, 2012 ($) December 31, 2012 (unaudited) ($) Working Capital (Deficiency) (158,213) (1,466,971) Total Assets 16,247 253,741 Total Liabilities 174,460 5,290,269
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001553620_tarheel_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001553620_tarheel_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..51aa5a915f2f632b551f6a82a1c685a25094be8d
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001553620_tarheel_prospectus_summary.txt
@@ -0,0 +1 @@
+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 Tarheel Billboard, refer to Tarheel Billboard, Inc. Tarheel Billboard, Inc. is a development stage company incorporated in the State of Nevada in July of 2012. Tarheel Billboard s address and phone number is: Tarheel Billboard, Inc. 933 Poindexter Drive Charlotte, NC 28209 907-953-2000 telephone Operating History Tarheel Billboard, Inc. was incorporated in the State of Nevada on July 20, 2012. It is a development stage company with no operating results to date other than organizational activities. The purpose of the company is to place bright, electronic signs on which businesses can advertise that are visible both at night and in the day in high traffic locations throughout the Carolinas. To date, operations have been on an extremely limited basis. Company Assets Tarheel Billboard s principal assets ( Assets ) consisted of cash totaling $10,935 as of July 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 July 31,2012 the Company had Gross Revenues of $0. From inception to the period ending July 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, the Company hopes to penetrate the local digital billboard market throughout the Carolinas. Within the next twelve months, we hope to market to targeted advertisers in Charlotte, NC and to establish a business relationship with at least three such businesses over the first two to three months of operations. From there, we hope to attract local high-end advertisers for our premium pricing services which would allow us to increase our profit margins organically. The Company has yet to make its website fully functional and has not developed its marketing presence, but over the next year we will continue to develop our marketing strategy and web presence. We hope to position ourselves uniquely in the marketplace, offering superior customer service and points of contact with clients that our competitors lack and a focus on superior graphic design and software. The Company had a Net Profit of $0 for the period from inception to July 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 bring a customer-service oriented focus into the marketplace for digital billboard advertising. In addition to ensuring that we keep our clients satisfied through superior customer service, we will invest in high-end software and graphic design to provide a high-end, graphically rich display of the final product for each individual client. The Company may lose money in its first, full year of operation and it shall require raising additional capital to develop its services. The Company currently has one manager, David Temple, 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. The selling shareholders must sell at a fixed price of $.05 for the duration of this offering due to the Company s status as a shell company. 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 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 may 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. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001554594_a-c_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001554594_a-c_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..cbb9c51825692025e3b2be8023e6aadd3ab689ec
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001554594_a-c_prospectus_summary.txt
@@ -0,0 +1 @@
+prospectus summary contains a summary of information contained elsewhere in this prospectus. You should carefully read all information in the prospectus, including the financial statements and the notes to the financial statements under the Financial Statements section beginning on page F-1 prior to making an investment decision. Our Business BLVD is a developmental stage corporation that is focused on producing and developing television and film scripts for sale to television and movie studios and other entities. BLVD is currently developing several film scripts in-house. To date, the Company has fully completed four film scripts, of which three have been sold and generated a total of $20,500 for the period ending December 31, 2012 in sales and one is currently under review. We need additional capital to fully undertake our business plan. Currently, we rely on the sale of film scripts to meet the current cost and expenditures of operating the business. We believe that we will need a minimum of $27,500 in capital, including the capital raised in this Offering, in order to maintain our current and planned operations through the next 12 months. We intend to raise the capital through the sale of shares of our common stock and/or through the sale of film scripts. No assurance can be given that BLVD will be able to obtain the necessary capital. Currently, BLVD s sole officer and employee, Ms. Ann Courtney, is managing the Company s operations and undertaking all aspects of its strategic development. PRODUCT DEVELOPMENT The Company develops script content through internal development. BLVD identifies an idea or a story within a genre that is popular or gaining in popularity and develops it into a commercially viable script option. Potential ideas for scripts are subjected to a rigorous due diligence process to validate their integrity and capitalization potential. If the criteria are met, BLVD, through the efforts of Ms. Courtney, then proceeds to develop the ideas into scripts. Our President, Ms. Courtney does all content development for the Company. BLVD is currently developing several film scripts internally by utilizing the creative writing skills of Ms. Courtney. In the future, BLVD will look to develop and produce television scripts, as well as hire screenplay writers to develop both television and film scripts and other original content. At such time, Ms. Courtney, in addition to assisting in the writing and developing to scripts, will oversee all aspects of the scripts development. The Company may also accept submissions of original content from agencies representing writers, for consideration of development and production. OVERVIEW BLVD is currently an "emerging growth company" under the JOBS Act. A company loses its "emerging growth company" status on (i) the last day of the fiscal year during which it had total annual gross revenues of $1,000,000,000 or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of its first sale of common equity securities pursuant to an effective registration statement under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); (iii) the date on which it has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or (iv) the date on which it 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," BLVD is exempt from certain obligations of the Exchange Act including those found in Section 14A(a) and (b) related to shareholder approval of executive compensation and golden parachute compensation and Section 404(b) of the Sarbanes-Oxley Act of 2002 related to the requirement that management assess the effectiveness of the company s internal control for financial reporting. On June 11, 2012, BLVD Holdings, Inc. was incorporated under the laws of the State of Nevada. Our principal executive offices are located at 3500 West Olive Avenue, 3rd Floor, Burbank, CA 91505, our telephone number is (818) 381-9360 and our fax number is (818) 381-9368. BLVD is a boutique script development company with the principal business objective of creating television and film scripts capable of providing dynamic growth potential to the Company. BLVD s overall plan of operations is to develop and produce independent film/television scripts, screenplays and related content for sale, with a goal toward catering to independent producers, small film studios and other entities. Currently, the Company does not have any agreements with, or sales to, any film studios or independent producers. While in the future BLVD will attempt to capitalize on the demand for quality television and film scripts by engaging qualified individuals that BLVD will rely on for the professional development of such scripts and other related content, the Company currently depends solely on its President, Ms. Courtney for all writing, editing and sales activities. BLVD has completed four film scripts and has several projects in development. The Company has realized its first three sales. The scripts are sold on a prearranged flat-fee basis. On August 15, 2012, BLVD sold its first film script for $10,000. The film script was sold to Lusso Media, Inc., pursuant to a script purchase agreement. On September 24, 2012, BLVD sold its second film script for $5,500 to Lusso Media, Inc., pursuant to a script purchase agreement. On November 30, 2012, BLVD sold its third film script to Lusso Media, Inc. for $5,000, pursuant to a script purchase agreement. The Company also has one finished script under review with a potential buyer. BLVD hopes to sell additional film scripts in the near future. It is anticipated that as the Company grows, its management team will be expended from its current one (1) member with no significant industry experience to consist of additional members who have expertise in the television and film industries. MARKETING BLVD will market the scripts it owns to the entertainment industry worldwide. To promote and market the scripts, the Company may seek the following strategies: prepare press releases, submit scripts for selection to film festivals, create Internet advertising and engage producer s agents and publicists. Currently, our President, Ms. Courtney, markets our films scripts through multiple channels, including networking at local film festivals and online sources, as well as her growing personal connections with literary agents and independent producers. While Ms. Ann Courtney has limited experience in building clientele and marketing products, we anticipate that as the Company grows, its management will be expanded to consist of additional members with expertise in the television and film industries, as well as entrepreneurial experience, which would provide BLVD the advantage and benefit of its executives stature and all their connective networks within the industries. Currently, BLVD does not have any existing relationships with literary agents, publicists, producers or producer s agents. FILM SCRIPTS IN DEVELOPMENT Currently, BLVD has three films scripts at different stages of development. All of them are being developed internally solely utilizing the creative writing skills of our President, Ms. Courtney. One of the scripts is an adventure story of an immigrant. The script engages in the cultural conflict in a unique and exciting way. The other two are short stories in character comedy genre based on common stereotypes. Upon completion of the scripts, BLVD will embark on its marketing strategy referenced above. The Company cannot provide any assurances that the film scripts will obtain any interest from independent producers or studios or will result in sales. Regardless of the success of these scripts, BLVD will continue to develop and market film scripts within the independent film community. GROWTH STRATEGY OF THE COMPANY Our mission is to maximize shareholder value through a production and sale of prudently selected and developed television and film scripts. BLVD will operate in both the television and film industries which could result in multiple revenue generating sources including sales of film and television scripts, screenplays and related content. While currently we have to rely solely on the abilities of Ms. Ann Courtney, who has no relevant education and has only limited experience in developing scripts, we hope that as we add members to our management team, we will be able to leverage their combined talents to develop and produce well written and sellable scripts. We believe that developing strong and diversified scripts and engaging talented screenplay writers will ensure a profitable operation and solidify the pillars for BLVD to weather occasional turns in the economy for long-term success. The Terms of the Offering Securities Being Offered Up to 3,000,000 Shares of common stock Initial Offering Price: We will sell our shares at a fixed price of.03 per share. This price was determined arbitrarily by us. Compensation: No compensation will be paid to the officer and director in connection with the sale of the shares. Termination of Offering: The offering will conclude when all of the 3,000,000 shares of common stock have been sold or within 180 days, whichever occurs earlier. We may decide to terminate the offering for no reason whatsoever at the discretion of our management team. Risk Factors: The securities offered hereby involve a high degree of risk and should not be purchased by investors who cannot afford the loss
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001555365_whitewave_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001555365_whitewave_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..fbd5eec34e08097b5a946116ac423089abfcd37e
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001555365_whitewave_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary This summary highlights certain information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, especially the Risk Factors section and our financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. As used in this prospectus, the terms WhiteWave, the Company, we, us, and our may, depending on the context, refer to The WhiteWave Foods Company, to one or more of its consolidated subsidiaries, including WWF Operating Company, or to The WhiteWave Foods Company and all of its subsidiaries taken as a whole. References to WWF Operating Company refer to WWF Operating Company, which, prior to our initial public offering, was a wholly-owned subsidiary of Dean Foods and is now a wholly-owned subsidiary of The WhiteWave Foods Company. At the time of the contribution (as described below), WWF Operating Company held substantially all of the historical assets and liabilities related to the business that The WhiteWave Foods Company acquired pursuant to the contribution. References to Dean Foods refer to Dean Foods Company, the selling stockholder for purposes of U.S. federal securities laws. For purposes of this prospectus, our core brands refers to Silk, International Delight, LAND O LAKES, Horizon Organic, and Alpro. Plant-based foods and beverages refers to plant-based items that have a dairy equivalent in the consumer packaged food and beverage industry, and consists of milks, creams, desserts, and yogurts. Coffee creamers and beverages refers to non-dairy creamers, dairy creamers and half & half, and ready-to-drink iced coffee beverages. Premium dairy refers to organic and other value-added dairy products. Organic products refers to milk, cheese, yogurt, sour cream, and butter. Other value-added dairy products refers to lactose-free milk, acidophilus milk, milk with added Omega-3, grass-fed milk, fine-filtered milk and flavored milk. Our Company We are a leading consumer packaged food and beverage company focused on high-growth product categories that are aligned with emerging consumer trends. We manufacture, market, distribute, and sell branded plant-based foods and beverages, coffee creamers and beverages, and premium dairy products throughout North America and Europe. We are pioneers in these product categories, with Silk, International Delight, and Horizon Organic having #1 or #2 brand positions based on retail sales in the United States, and Alpro having a #1 brand position based on retail sales in Europe. Our widely-recognized, leading brands distributed in North America include Silk plant-based foods and beverages, International Delight and LAND O LAKES coffee creamers and beverages, and Horizon Organic premium dairy products, while our popular European brands of plant-based foods and beverages include Alpro and Provamel. Our mission is to create a food and beverage company that combines the entrepreneurship, spirit, principles, and practices of small food companies with the professionalism, resources, and scale of large food companies. We aspire to change the way the world eats for the better by providing consumers with innovative, great-tasting food and beverage choices that meet their increasing desires for nutritious, flavorful, convenient, and responsibly produced products. We have two reportable business segments: our North America segment, which offers products in the plant-based foods and beverages, coffee creamers and beverages, and premium dairy categories throughout North America, and our Europe segment, which offers plant-based foods and beverages throughout Europe. Table of Contents Table of Contents Page Industry and Market Data 1 Prospectus Summary 2
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001557716_seas_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001557716_seas_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2346659190a54c4ecd199177a518b708ade44cc2
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001557716_seas_prospectus_summary.txt
@@ -0,0 +1 @@
+THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE WILL 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 January 28, 2013 PROSPECTUS SEAS INDUSTRIES INC. 24,000,000 SHARES OF COMMON STOCK All shares offered by this prospectus are being offered by the selling stockholders named herein. This offering is not being underwritten. SEAS Industries Inc will not receive any proceeds from the sale of shares in this offering. The selling stockholders, to the extent a public market exists at such time, may offer their common stock from time to time through public transactions at prevailing market prices, at prices related to prevailing market prices, or through private transactions at privately negotiated prices. The selling stockholders will initially offer their shares at $0.001 per share until such time as the shares are quoted on the OTC Bulletin Board. Thereafter, selling stockholders will sell shares of our common stock at the prevailing market price or at privately negotiated prices. We will pay all expenses of registering this offering of securities. The selling stockholders named in this prospectus, namely Barry Weiner, Nunzio Valeri and Gabor Harsanyi, are offering 24,000,000 shares of common stock of SEAS Industries Inc. at a par value of $0.001 per common share. Gabor Harsanyi is the company s Chief Executive Officer and director who currently holds 40% of our common stock. Barry Weiner holds 20% of our common stock and Nunzio J. Valerie Jr holds 40% of our common stock. The Company will not receive any of the proceeds from the sale of these shares. The shares were acquired by the selling stockholders directly from us in a private offering of our common stock that was exempt from registration under the securities laws. The selling stockholders have set an offering price for these securities of par value $0.001 per common share and for an offering period of 120 days from the date of this prospectus. This is a fixed price for the duration of the offering. The selling stockholder is an underwriter within the meaning of Section 2(11) of the Securities Act. Any broker-dealers or agents that participate in the sale of the common stock or interests therein are also deemed to be an "underwriter" within the meaning of Section 2(11) of the Securities Act. SEAS Industries Inc (A Development Stage Company) Statements of Operations for the Years Ended March 31, 2012 and 2011 and for the Period November 24, 2009 (date of inception) to March 31, 2012 Year ended March 31, 2012 Year ended March 31, 2011 Cumulative results of operations from November 24, 2009 (inception) to March 31, 2012 Revenues $ $ $ Administration fees 7,000 5,000 12,000 Professional fees 4,500 7,500 12,000 Marketing 4,099 4,744 Website development 13,450 6,755 31,430 Office 280 917 1,615 Total operating costs 25,230 24,271 61,789 Loss from operations before other income and expenses (25,230 ) (24,271 ) (61,789 ) Exchange gain (loss) (1,082 ) (1,440 ) Loss before income taxes (25,230 ) (25,353 ) (63,229 ) Income tax expense Net loss for the years and period $ (25,230 ) $ (25,353 ) $ (63,229 ) Basic and diluted earnings (loss) per share $ (0.00 ) $ (0.00 ) Weighted average number of common shares outstanding 50,000,000 50,000,000 The accompanying notes are an integral part of these financial statements Any discounts, commissions, concessions or profit earned on any resale of the shares may be underwriting discounts and commissions under the Securities Act. The Selling stockholder, who is an "underwriter" within the meaning of Section 2(11) of the Securities Act, is subject to the prospectus delivery requirements of the Securities Act. See "Security Ownership of Certain Beneficial Owners" for more information about the selling stockholder. Please note that this registration statement covers the sale of 48% of the Company's outstanding securities. All of the outstanding shares are currently held by the selling shareholders, Barry Weiner, Nunzio J. Valerie Jr and Gabor Harsanyi and these shares were obtained after our date of inception of March 3, 2011. Our common stock is presently not traded on any market or securities exchange. The offering price at a par value $0.001 per common share may not reflect the market price of our shares after the offering. AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE REFER TO "RISK FACTORS" ON PAGE 5 OF THIS PROSPECTUS FOR DETAILS REGARDING THE RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL. 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 UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. 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 declared 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. Proceeds to the selling stockholder do not include offering costs, including filing fees, printing costs, legal fees, accounting fees, and transfer agent fees estimated at $50,690.56. SEAS Industries Inc will pay these expenses. SEAS Industries Inc (A Development Stage Company) Statements of Stockholders Equity (Deficit) From Inception November 24, 2009 to March 31, 2012 Common Stock Additional Paid-in Capital Deficit Accumulated During the Development Stage Comprehensive Income (Loss) Number of shares Amount Total Balance at inception: November 24, 2009 $ $ $ $ $ Common stock issued for Viewcom Corp 50,000,000 50,000 (49,999 ) 1 Net loss for the period ended March 31, 2010 (12,646 ) (12,646 ) Balance March 31, 2010 50,000,000 50,000 (49,999 ) (12,646 ) (12,645 ) Net loss for the year ended March 31, 2011 (25,353 ) (25,353 ) Balance March 31, 2011 50,000,000 50,000 (49,999 ) (37,999 ) (37,998 ) Net loss for the year ended March 31, 2012 (25,230 ) (25,230 ) Imputed interest on loans 267 267 Unrealized foreign exchange gain 860 860 Balance March 31, 2012 50,000,000 50,000 (49,732 ) (63,229 ) 860 (62,101 ) The accompanying notes are an integral part of these financial statements SEAS Industries Inc (A Development Stage Company) Statements of Cash Flows for the Years Ended March 31, 2012 and 2011 and for the Period November 24, 2009 (date of inception) to March 31, 2012 Year ended March 31, 2012 Year ended March 31, 2011 Cumulative results of operations from the date of inception to March 31, 2012 Operating Activities Net loss $ (25,230 ) $ (25,353 ) $ (63,229 ) Adjustments to reconcile net loss to net cash used in operating activities: Non cash expense imputed interest on related party loans 267 267 Accounts payable 24,116 24,706 61,370 Increase (decrease) in bank overdraft (60 ) 60 Net Cash Used In Operating Activities (907 ) (587 ) (1,592 ) Investing Activities Net Cash Used In Investing Activities Financing Activities Loans payable 5,250 5,250 Due to related parties 47 562 731 Proceeds from sale of common stock 1 Net Cash Provided By Financing Activities 5,297 562 5,982 Effect of foreign exchange on cash 860 860 Net Increase (Decrease) In Cash 5,250 (25 ) 5,250 Cash, Beginning Of Period 25 Cash, End Of Period $ 5,250 $ $ 5,250 Supplemental cash flow information and noncash financing activities: Interest paid $ $ $ Income taxes paid $ $ $ Common stock issued for services $ $ $ The accompanying notes are an integral part of these financial statements
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001558785_cvr_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001558785_cvr_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001558785_cvr_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001559686_gold-camp_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001559686_gold-camp_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..3300fb26d91a2fafc6ef648c8c3c7a0578676e84
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001559686_gold-camp_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 GOLD CAMP EXPLORATIONS INC. CORPORATE BACKGROUND AND INFORMATION GOLD CAMP EXPLORATIONS INC. Gold Camp Explorations Inc. was organized under the laws of the State of Nevada on June 1, 2012, to explore mineral properties in North America. Gold Camp Explorations Inc. is engaged in the exploration for gold and other minerals. The Company has acquired one MTO mineral claim totaling 497.09 hectares. The Malibu Gold II Property is located approximately 110 km northwest of Vancouver, BC, and 75 km north of Sechelt, BC. The property is situated on the south side of Queen's Reach on upper Jervis Inlet, due south of Malibu at the entrance to Princess Louisa Inlet. We refer to these mining claims as the Malibu Gold II Property. This property is without known reserves. To current date the Company has never commenced any operational/exploration activity other than issuing shares. The Malibu Gold II Property comprises one MTO mineral claim containing 24 cell claim units totaling 497.09 hectares. This claim covers 21of the original Malibu Gold II Property mining claims staked by Laird Explorations Ltd., now included in this tenure. BC Tenure # Work Due Date Units Total Area (Ha.) ----------- ------------- ----- ---------------- 904330 October 3, 2013 24 497.09 We require an estimated total of $280,000 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 Gold Camp Explorations 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 2012 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 2012 in order to conducts its operations. Our offices are located at: 64 Gainsborough Avenue, St. Albert, Alberta T8W 0W5. Telephone: 780-458-2778 THE OFFERING Securities offered 5,000,000 shares of common stock Selling stockholder Thomas Wielobob Offering price $0.002 per share Shares outstanding prior to the offering 10,000,000 shares of common stock Shares to be outstanding after the offering 10,000,000 shares of common stock Use of proceeds The Company will not receive any proceeds from the sale of the common stock by the selling stockholder. SUMMARY FINANCIAL INFORMATION The following tables set forth the summary financial information for the Company. You should read this information together with the financial statements and the notes thereto appearing elsewhere in this prospectus and the information under "Plan of Operation." CONSOLIDATED STATEMENTS OF INCOME Period Ended July 31, 2012 ------------- Revenues 0 Operating expenses 4,008 Net loss from operations 4,008 Net loss before taxes 4,008 Loss per share - basic and diluted 0.000 Weighted average shares outstanding basic 10,000,000 BALANCE SHEET DATA At July 31, 2012 ---------------- Cash and cash equivalents 19,825 Total current assets 19,825 Mineral Property 7,500 Total assets 27,325 Current liabilities accounts payable 1,333 Common stock 10,000 Additional paid-in capital 20,000 Deficit accumulated during exploration period (4,008) Total stockholders' equity 25,992 Total liabilities 27,325
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001561622_staffing_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001561622_staffing_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..12b37f5f5d718cc6fa0be9deac147cbdb6a57f66
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001561622_staffing_prospectus_summary.txt
@@ -0,0 +1,1318 @@
+Summary Financial Information 
+
+The following financial information summarizes the more complete historical financial information at the end of this prospectus.
+
+ 
+
+As of 
+
+September 30,2012
+
+(Audited)
+
+Balance Sheet 
+
+ 
+ 
+ 
+
+Total Assets 
+
+ 
+
+$
+
+ 21,721
+
+Total Liabilities 
+
+ 
+
+$
+
+ 274
+
+Stockholders Equity 
+
+ 
+
+$
+
+ 21,447
+
+ 
+
+Period from Inception (June 11, 2012) to
+
+September 30, 2012 (Audited)
+
+Income Statement 
+
+ 
+ 
+ 
+
+Revenue 
+
+ 
+
+$
+
+ -
+
+Total Expenses 
+
+ 
+
+$
+
+ 1,153
+
+Net Loss 
+
+ 
+
+$
+
+(1,153)
+
+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 could decline due to any of these risks, and you may lose all or part of your investment. 
+
+WE HAVE A LIMITED HISTORY OF OPERATIONS AND THERE IS NO ASSURANCE OUR FUTURE OPERATIONS WILL RESULT IN ADDITIONAL REVENUES OR PROFITABILITY. IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE MAY SUSPEND OR CEASE OPERATIONS.
+
+We were incorporated on June 11, 2012, and our net loss since inception is $1,153, of which $379 is for bank charges and $774 is for miscellaneous charges. We have a limited history of operations 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 and generating small revenues. Failure to generate significant revenues in the future will cause us to go out of business.
+
+7 | Page
+
+IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
+
+While on September 30, 2012, we had cash on hand of $21,721 we have accumulated a deficit of $1,153 in business development and administrative expenses. Our current cash reserves might not be 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 $5,800 and will be needed for general administrative expenses, business development, marketing costs, support materials. We have generated revenues of $2,000 from operations to date. In order to expand our business operations, we anticipate that we will have to raise additional funding of approximately $15,000. We will need additional funds to set up an office in Poland, to develop a more sophisticated and well-designed web site, to hire a part-time consulting specialist with good knowledge and broad connections to the industry, to attend trade shows in our industry to showcase our services with a view to find new customers and to expand our operations to European and North American markets. 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. 
+
+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 director.
+
+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.
+
+BECAUSE OUR AUDITORS HAVE ISSUED A GOING CONCERN OPINION, THERE IS 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.
+
+LACK OF SIGNIFICANT REVENUES TO DATE MAY CAUSE A SUBSTANTIAL DOUBT AS TO WHETHER WE WILL CONTINUE OPERATIONS. IF WE DISCONTINUE OPERATIONS, YOU COULD LOSE YOUR INVESTMENT.
+
+Aviana, Corp. was incorporated on June 11, 2012. We are a development stage company. We have earned revenues of $2,000 as of the date of this prospectus and have incurred total losses since inception of $1,153. 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, discussing the offer of our consulting services with potential customers, and the signing of the service agreement with Sp dzielnia Mieszkaniowa UDP , a Polish company. 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 significant revenues and profit will cause us to suspend or cease operations. If this happens, you could lose all or part of your investment.
+
+8 | Page
+
+WE FACE STRONG COMPETITION FROM LARGER AND WELL ESTABLISHED COMPANIES, WHICH COULD HARM OUR BUSINESS AND ABILITY TO OPERATE PROFITABLY.
+
+Our industry is competitive. There are many consulting businesses specializing in detection and protection from potentially damaging radiation including but not limited to EMF, Microwave, Electrical and Ionizing in Poland and Europe and our services are not unique to their services. 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.
+
+WE CURRENTLY HAVE IDENTIFIED ONLY ONE POTENTIAL CUSTOMER. IF WE DO NOT ATTRACT NEW CUSTOMERS, WE WILL NOT MAKE A PROFIT, WHICH ULTIMATELY WILL RESULT IN A CESSATION OF OPERATIONS. 
+
+We currently have identified only one potential customer to use our service, a Poland based company Sp dzielnia Mieszkaniowa "UDP". We have not identified any other customers and we cannot guarantee we ever will have any other customers. Even if we obtain new 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. 
+
+THE CONSULTING INDUSTRY IN DETECTION AND PROTECTION FROM POTENTIALLY DAMAGING RADIATION MIGHT BE AFFECTED BY GENERAL ECONOMIC DECLINE AND THIS COULD ADVERSELY AFFECT OUR OPERATING RESULTS AND COULD LEAD TO LOWER REVENUES THAN EXPECTED.
+
+The consulting industry in detection and protection from potentially damaging radiation might be affected by general economic decline. We expect that this could adversely affect our operating results and could lead to lower revenues than expected if economic situation does not change for better.
+
+IF WE ARE UNABLE TO BUILD AND MAINTAIN OUR BRAND IMAGE AND CORPORATE REPUTATION, OUR BUSINESS MAY SUFFER. 
+
+We are a new company, having been formed and commenced operations only in 2012. Our success depends on our ability to build and maintain the brand image for our services. We cannot assure you, however, that any additional expenditure on advertising and marketing will have the desired impact on our services brand image and on customer preferences. Our relationships with all of our customers will be new and may be terminated at any time. We need to maintain and expand our relationships with potential users of our services and effectively manage these relationships. If we fail to successfully manage our relationships with our customers, to build and maintain our brand image and corporate reputation our business may suffer.
+
+PRICE COMPETITION COULD NEGATIVELY AFFECT OUR GROSS MARGINS.
+
+Price competition could negatively affect our operating results. To respond to competitive pricing pressures, we will have to offer our services at lower prices in order to retain or gain market share and customers. If our competitors offer discounts on certain services in the future, we will need to lower prices to match the competition, which could adversely affect our gross margins and operating results. 
+
+9 | Page
+
+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 sole director, Ms. Liudmila Yuziuk, will only be devoting limited time to our operations. Ms. Yuziuk intends to devote approximately 30% (15 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. Yuziuk 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. Yuziuk may not possess sufficient time for our business if the demands of managing our business increase substantially beyond current levels. And finally, we have not adopted a policy that expressly prohibits our sole officer and director Ms. Yuziuk from having a direct or indirect financial interest in potential future opportunity or from engaging in business activities of the types conducted by us. As a result, in the future our sole officer and director Ms. Yuziuk 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. YUZIUK, 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. Yuziuk, for the future success of our business. The loss of the services of Ms. Yuziuk 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.
+
+BECAUSE OUR SOLE OFFICER AND DIRECTOR OWNS 66.52% OF OUR ISSUED AND OUTSTANDING COMMON STOCK, SHE COULD MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO MINORITY SHAREHOLDERS.
+
+Our sole officer and director, Ms. Liudmila Yuziuk, owns approximately 66.52% of issued and outstanding shares of our common stock. Accordingly, she will be able to determine the outcome of all corporate transactions or other matters that require shareholder approval, including but not limited to, the election of directors, 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 MS. YUZIUK, OUR SOLE OFFICER AND DIRECTOR, IS NOT A RESIDENT OF THE UNITED STATES IT MAY BE DIFFICULT TO ENFORCE ANY LIABILITIES AGAINST HER.
+
+Accordingly, if an event occurs that gives rise to any liability, shareholders would likely have difficulty in enforcing such liabilities because Ms. Liudmila Yuziuk, our sole officer and director resides outside the United States. If a shareholder desired to sue, the shareholder would have to serve a summons and complaint. Even if personal service is accomplished and a judgment is entered against a person, the shareholder would then have to locate assets of that person, and register the judgment in the foreign jurisdiction where assets are located.
+
+10 | Page
+
+BECAUSE THE COMPANY S HEADQUARTERS ARE LOCATED OUTSIDE THE UNITED STATES, U.S. INVESTORS MAY EXPERIENCE DIFFICULTIES IN ATTEMPTING TO AFFECT SERVICE OF PROCESS AND TO ENFORCE JUDGMENT BASED UPON U.S. FEDERAL SECURITIES LAWS AGAINST THE COMPANY AND ITS NON U.S. RESIDENT OFFICER AND DIRECTOR.
+
+While we are organized under the laws of State of Nevada, our sole officer and director is a non-U.S. resident and our headquarters are located outside the United States. Consequently, it may be difficult for investors to affect service of process in the United States and to enforce in the United States judgments obtained in United States courts based on the civil liability provisions of the United States securities laws. Since all our assets will be located in Poland it may be difficult or impossible for U.S. investors to collect a judgment against us. As well, any judgment obtained in the United States against us may not be enforceable in the United States.
+
+WE MAY BE EXPOSED TO POTENTIAL RISKS RESULTING FROM NEW REQUIREMENTS UNDER SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002.
+
+Upon the effectiveness of our registration statement, we will be newly public company. We will not need to comply with Section 404 of the Sarbanes-Oxley Act until we file our second annual report with the SEC. However, we will need to include a statement in our first annual report and we must indicate that the annual report does not include either a management s report on internal control or auditor attestation of internal control. 
+
+We have not yet completed our assessment of the effectiveness of our internal control over financial reporting, and we expect to incur additional expenses and diversion of management s time as a result of performing the system and process evaluation, testing and remediation required in order for us and our auditors to comply with the auditor attestation requirements.
+
+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. 
+
+ 
+
+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.
+
+11 | Page
+
+WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE.
+
+We have never paid any dividends on our common stock. We do not expect to pay cash dividends on our common stock at any time in the foreseeable future. The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider. Since we do not anticipate paying cash dividends on our common stock, a return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.
+
+ANY ADDITIONAL FUNDING WE ARRANGE THROUGH THE SALE OF OUR COMMON STOCK WILL RESULT IN DILUTION TO EXISTING SHAREHOLDERS.
+
+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.
+
+THERE IS NO CURRENT TRADING MARKET FOR OUR SECURITIES, AND IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, SHAREHOLDERS MAY BE UNABLE TO SELL THEIR SHARES. 
+
+There is currently no market for our common stock and we can provide no assurance that a market will develop. We plan to apply for quotation of our common stock on the Over-The-Counter Bulletin Board upon the effectiveness of this Registration Statement, of which this prospectus forms a part. However, we can provide investors with no assurance that our shares will be traded on the Over-The-Counter Bulletin Board or, if traded, that a public market will materialize. If no market is ever developed for our shares, it will be difficult for shareholders to sell their stock. In such a case, shareholders may find that they are unable to achieve benefits from their investment.
+
+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.
+
+12 | 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.
+
+FOLLOWING THE EFFECTIVE DATE OF OUR REGISTRATION STATEMENT, OF WHICH THIS PROSPECTUS IS A PART, WE WILL BE SUBJECT TO THE PERIODIC REPORTING REQUIREMENTS OF SECTION 15(D) OF THE EXCHANGE ACT THAT WILL REQUIRE US TO INCURE AUDIT FEES AND LEGAL FEES IN CONNECTION WITH THE PREPARATION OF SUCH REPORTS. THESE ADDITIONAL COSTS COULD REDUCE OR ELIMINATE OUR ABILITY TO EARN A PROFIT.
+
+Following the effective date of our registration statement of which this prospectus is a part, we will be required to file periodic reports with the SEC pursuant to the Exchange Act and the rules and regulations promulgated thereunder. In order to comply with these requirements, our independent registered public accounting firm will have to review our financial statements on a quarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel will have to review and assist in the preparation of such reports. The costs charged by these professionals for such services cannot be accurately predicted at this time because factors such as the number and type of transactions that we engage in and the complexity of our reports cannot be determined at this time and will have a major affect on the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhead requirements and earn a profit. We may be exposed to potential risks resulting from any new requirements under Section 404 of the Sarbanes-Oxley Act of 2002. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
+
+WE HAVE NO EXPERIENCE AS A PUBLIC COMPANY.
+
+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 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 adversely affected. Our inability to operate as a public company could be the basis of your losing your entire investment in us.
+
+13 | Page
+
+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 a fixed price of $0.05 per share for the duration of this offering. We determined this offering price arbitrarily, by adding a $0.03 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
+
+. Currently the company is not so listed and there is no assurance that the stock will ever be so listed. 
+
+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. 
+
+Selling Shareholders 
+
+The selling shareholders named in this prospectus are offering all of the 1,510,000 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 in an offering made outside of the United States solely to non-U.S. persons, with no directed selling efforts in the United States and where offering restrictions were implemented. 
+
+The shares include the following: 
+
+1. 960,000 shares of our common stock that the selling shareholders acquired from us in a private offering that was exempt from registration under Regulation S of the Securities Act of 1933, as amended, which offering closed on August 21, 2012; 
+
+2. 550,000 shares of our common stock that the selling shareholders acquired from us in a private offering that was exempt from registration under Regulation S of the Securities Act of 1933, as amended, which offering closed on September 27, 2012;
+
+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.
+
+14 | Page
+
+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
+
+Wioleta Nowaszczuk
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Kajetan Kowieski
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Piotr Czapski
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Mateusz Dudyk
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Mateusz Nowak
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Maciej Krac
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Daniel Pielacinski
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Bartosz Pawel Kwiatkowski
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Adrian Miciuk
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Tomasz Bobinski 
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Andrei Sevastsianuk
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Andrei Dzemyanets
+
+80,000
+
+80,000
+
+-0-
+
+-0-
+
+Miguel Elias Cruz Ortiz
+
+50,000
+
+50,000
+
+-0-
+
+-0-
+
+Elbin Ulises Tino Morales
+
+50,000
+
+50,000
+
+-0-
+
+-0-
+
+Vadzim Shakhautsou
+
+50,000
+
+50,000
+
+-0-
+
+-0-
+
+Aliaksandra Bryshtel
+
+50,000
+
+50,000
+
+-0-
+
+-0-
+
+Natalia Zydek
+
+25,000
+
+25,000
+
+-0-
+
+-0-
+
+Anna Roza Bebko
+
+25,000
+
+25,000
+
+-0-
+
+-0-
+
+Edyta Anna Zajac
+
+25,000
+
+25,000
+
+-0-
+
+-0-
+
+Magdalena Maria Bebko
+
+25,000
+
+25,000
+
+-0-
+
+-0-
+
+Marzena Jadwiga Nowaszczuk
+
+25,000
+
+25,000
+
+-0-
+
+-0-
+
+Gabriela Nowaszczuk
+
+25,000
+
+25,000
+
+-0-
+
+-0-
+
+Uladzimir Astafurau
+
+50,000
+
+50,000
+
+-0-
+
+-0-
+
+Pavel Chervaniou
+
+50,000
+
+50,000
+
+-0-
+
+-0-
+
+Jose Antonio Torres
+
+50,000
+
+50,000
+
+-0-
+
+-0-
+
+Giovanni Andres Vasques Martines
+
+50,000
+
+50,000
+
+-0-
+
+-0-
+
+Total number of shares 
+
+1,510,000
+
+1,510,000
+
+-0-
+
+-0-
+
+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 4,510,000 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 affiliate.
+
+15 | Page
+
+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 are underwriters and will sell our shares at a fixed price of $0.05 per share for the duration of this offering. We determined this offering price arbitrarily by adding a $0.03 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
+
+. Currently the company is not so listed and there is no assurance that the stock will ever be so listed.
+
+The shares may also be sold in compliance with the Securities and Exchange Commission's Rule 144, when eligible.
+
+Rule 144(d)(1) states that if the issuer of the securities is, and has been for a period of at least 90 days immediately before the sale, subject to the reporting requirements of section 13 or 15(d) of the Exchange Act, a minimum of six months must elapse between the later of the date of the acquisition of the securities from the issuer, or from an affiliate of the issuer, and any resale of such securities. 
+
+A one-year holding period is required for restricted securities of a non-reporting company.
+
+Sales under Rule 144 are also subject to notice and manner of sale requirements and to the availability of current public information and must be made in unsolicited brokers' transactions or to a market maker. 
+
+A person who is not an affiliate of the registrant under the Securities Act during the three months preceding a sale and who has beneficially owned such shares for at least six months is entitled to sell the shares under Rule 144 without regard to the volume, notice, information and manner of sale provisions.
+
+ Affiliates must comply with the restrictions and requirements of Rule 144 when transferring restricted shares even after the six month holding period has expired and must comply with the restrictions and requirements of Rule 144 in order to sell unrestricted shares.
+
+Affiliates must file a notice with the SEC on Form 144 if the sale involves more than 5,000 shares or the aggregate dollar amount is greater than $50,000 in any three-month period.
+
+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. 
+
+16 | 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. In particular, during such times as the selling shareholders
+
+ are
+
+ deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable law and
+
+must
+
+, among other things: 
+
+ 
+
+1.
+
+Not engage in any stabilization activities in connection with our common stock;
+
+ 
+
+ 
+ 
+
+ 
+
+2.
+
+Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and
+
+ 
+
+ 
+ 
+
+ 
+
+3.
+
+Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Securities Exchange Act.
+
+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 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;
+
+- 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. 
+
+17 | 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 16
+
+, 201
+
+3
+
+ there are 4,510,000 shares of our common stock issued and outstanding, held by 27 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. 
+
+18 | Page
+
+Other 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. 
+
+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. 
+
+W. Scott Lawler 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 were incorporated in the State of Nevada on June 11, 2012. To date, our business operations have been limited to primarily, the development of a business plan and the signing of the service agreement with Sp dzielnia Mieszkaniowa UDP , a Poland based company. The following work was commenced pursuant to the service agreement signed with Sp dzielnia Mieszkaniowa "UDP" on September 3, 2012:
+
+- facility check to establish areas of concerns for the building located at 3 Krysztalowa Street, Lublin Poland was incorporated; 
+
+- the radiofrequency electromagnetic field intensity levels both inside and outside of the building were measured; 
+
+- assessment surveys were prepared; 
+
+- advice on how to protect clients from potentially damaging radiation was provided; 
+
+- a written recommendation for shielding of the radiofrequency electromagnetic field levels (EMF) was prepared; 
+
+On December 2, 2012 we recognized the revenues of $2,000 pursuant to the signed service agreement. Our consulting agreement with Sp dzielnia Mieszkaniowa "UDP" was for three months and terminated on December 3, 2012. We operate a consulting business in EMF (electromagnetic field(s)), Microwave, Electrical and Ionizing detection, shielding and protection in Poland. We offer services which incorporate site checks to establish the areas of concern, measure and mitigate both the magnetic fields and the electrical fields, prepare assessment surveys, offer advice on how to protect our clients from potentially damaging radiation, EMI (electromagnetic interference) investigations, EMF consulting services, and all types of inspection and abatement in Poland. We plan to expand our services to North American market in the future if we have the available resources and growth to warrant it. We are a development stage company and cannot state with certainty whether we will achieve profitability. We have minimal assets 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. We maintain our statutory registered agent's office at 2360 Corporate Circle, Ste. 400 Henderson, Nevada 89074-7722. Our business office is located at 19 Broniewskiego St, Wlodawa Poland 22200. Our telephone number is +48918813933. 
+
+Description of Electromagnetic fields, or EMF
+
+Electromagnetic fields are by definition created by motion of elemental charges (electrons (e-)), either in free space, or constrained within a wire. When that motion or flow is relatively constant, we define it as Direct Current (DC). When it is changing with time, we define it as Alternating Current (AC).
+
+19 | Page
+
+The motion of these elemental charges is created by a difference of charge distribution wanting to come to equilibrium relative to each other, akin to two containers of water with different levels in them, connected by a tube at the bottom. (1) If the charge distributions are prevented from equalizing by any form of Electrical Resistance, then the difference is measurable as a potential difference, or Voltage. Any Voltage source will produce an Electric field in free space. Allowing a limited amount of charge flow (defined as Current) will allow the Voltage to remain fairly constant, and yet provide useful output, or work. Any path of Current will produce a Magnetic field in free space. If the Voltage is relatively constant, it is defined as DC Voltage. If the Voltage is changing with time, it is defined as AC Voltage.
+
+(1)
+
+A normal electromagnetic system exists within and around our planet that is necessary for our survival. It produces DC voltage and current. These steady-state Magnetic and Electric fields have been our normal everyday setting and have connected us to the Earth's periodic rhythms.
+
+The types of field that we are concerned about from a health effects standpoint are alternating current, or time-varying, fields whose strength and direction change regularly with time. They arise exclusively from man-made sources, specifically electric power and communications systems, and have been present in our environment for only about the past century.
+
+Alternating (changing with time) Electric Fields
+
+The alternating electric fields can be produced from power distribution wiring, structural cavity wiring, or appliance cordage. Most residential structures are transparent to alternating electric fields. When biological structures are exposed to such fields, every molecule will consistently try to align with each field variation. The same happens within a microwave oven, to such an extent that molecular friction is produced that manifests itself as heat. At power line frequency (60 or 50 cycles/second) molecular friction is quite reduced, although interference with chemical synthesis persists, because random alignment is continuously interfered with, possibly preventing certain reactions. While scientists do not exactly know what is happening, exposure continues possibly promoting a variety of diseases that cannot be associated with any other factor(s), such as chronic fatigue, fibromyalgia, sleep deprivation, general irritability. Those with environmental hypersensitivity can feel immediate relief when the source of power is turned off, eliminating the electric field presence.
+
+Alternating (changing with time) Magnetic Fields
+
+The alternating magnetic fields can be produced from power distribution wiring, grounding interconnections to mask a fire hazard, wiring errors, and locally from appliances. While those from appliances are point sources, whose level of emission drops off dramatically with increasing distance from the source, they are nonetheless important if exposure is lengthy.
+
+Most residential structures are transparent to alternating magnetic fields. The interaction, however, is more complex than from electric fields, causing strange "windowing" effects. That is, effects that manifest most easily at certain intensities or frequencies, although even for the single-frequency exposure to power line frequencies (60 or 50 cycles/second) one of the marked effects of extended exposure to more than a few milliGauss is an increase in the occurrence of Leukemia.
+
+20 | Page
+
+Electromagnetic fields, or EMF, can be problematic from two perspectives: the concern over potential health effects from human exposure, and the disruption to sensitive equipment under high field conditions. EMF testing and remediation services can address both issues.
+
+Electromagnetic fields exposure has become a topic of concern for many people and is an active area of biophysical research. Scientific studies in recent years have shown an apparent correlation between exposure to elevated magnetic field levels and the risk of adverse health effects. The same is true for radio frequency radiation from broadcast and cell phone towers. Significant controversy now exists over the degree of risk posed by this exposure, and the exact mechanisms of interaction by which electromagnetic fields may influence biological processes. Confronted with this uncertain risk, many individuals and organizations have chosen to take a cautious approach and limit their exposure where possible.
+
+Consulting Services
+
+We operate a consulting business in EMF (electromagnetic field(s)), Microwave, Electrical and Ionizing detection, shielding and protection in Poland. We offer services which incorporate site checks to establish the areas of concern, measure and mitigate both the magnetic fields and the electrical fields, prepare assessment surveys, offer advice on how to protect our clients from potentially damaging radiation, EMI (electromagnetic interference) investigations, EMF consulting services, and all types of inspection and abatement in Poland.
+
+1. EMF Measurement Surveys
+
+EMF measurement surveys are usually conducted for one of the following applications:
+
+- Evaluation of a commercial space where equipment is being adversely affected by building electrical systems or other interference (EMI) sources, or where concern about human exposure exists;
+
+- Land Use Planning - site assessment of an open tract to evaluate the impact of power lines or adjacent TV, radio, and cell site transmitters, and to provide guidance in the placement of new construction;
+
+- Evaluation of a residence from an exposure assessment perspective;
+
+- Assessment of human exposure to industrial RF (radio frequency) sources such as heat sealers, dielectric seam welders, induction heating equipment, or microwave dryers.
+
+ 
+
+1. Magnetic Field Cancellation (Active Shielding). Active magnetic shielding systems are used primarily for reducing powerline magnetic fields. They are effective for both transmission and distribution lines, overhead or underground. Within a defined area, the magnetic field can often be reduced to a very low level. While passive shielding using metal plates is commonly used for single rooms, active shielding is usually the only practical approach to power line field mitigation at the whole-building level. 
+
+2. RF (radio frequency) Exposure Measurements. We can conduct RF (radio frequency) testing and measurement for assessment of human exposure to cell tower and broadcast tower emissions.
+
+21 | Page
+
+3. EMF Shielding and Mitigation Alternatives. EMF shielding is a broad term with diverse meanings, primarily because there are many different types of EMF (electric and magnetic fields, RF electromagnetic fields, different frequencies, different sources). Power frequency magnetic shielding is what many people have in mind when they are looking for an EMF shield. It has become common in areas of commercial buildings near the power control and distribution equipment. Radio frequency shielding was the first fully developed EMF shielding application, and is widely used in many different forms. Two broad categories of utilization are recognized: (1) protection of sensitive equipment (or people) from high intensity electromagnetic fields, and (2) prevention of signal escape from secure facilities where secret or classified information is processed. Techniques and materials for reduction of the different types and frequencies of field: electric, magnetic, and electromagnetic fields are offered. Typical sources for each field type are identified.
+
+4. Electrical Wiring Problems and High Magnetic Fields. High magnetic field environments are created more frequently by electrical and grounding system problems than by any other source. This is true in both residential and commercial buildings. The problem usually results from unbalanced and improperly wired feeders and branch circuits. The elevated magnetic fields that result from this imbalance can be a source of electromagnetic interference (EMI) or concern over human health effects.
+
+Initially, our sole officer and director, Liudmila Yuziuk will be performing all consulting services. Ms. Yuziuk has direct experience performing the site checks and other planned operations of the company. To service our contract with Sp dzielnia Mieszkaniowa "UDP" we relied on electromagnetic field (EMF) and radio frequency (RF) meters/detectors to establish areas of concerns for the building located at 3 Krysztalowa Street, Lublin Poland and to measure the radiofrequency electromagnetic field intensity levels both inside and outside of the building. PCs were used to prepare assessment surveys and written recommendations for shielding of the radiofrequency electromagnetic field levels (EMF). Both EMF/RF meters and PCs are owned by our director, Ms. Liudmila Yuziuk. We anticipate relying on Ms. Yuziuk s current business resources to service future agreements until we have available funds to obtain our own PCs and equipment and tools we need to carry out our planned operations. Currently, this option is highly questionable, as no significant revenues are anticipated until we fully implement our business plan and execute additional service agreements. Once we begin to execute additional service agreements and have funds available for growth we may hire one part-time consulting specialist with good knowledge and broad connections to the industry. This individual will be an independent contractor compensated solely in the form of commissions, calculated as a percentage of net profits generated from execution of service agreements. 
+
+Potential conflict of interest may arise in future that may cause our business to fail, including conflict of interest in allocating Ms. Yuziuk 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. While our sole officer and director has verbally agreed to present business opportunities first to us, subject to any pre-existing duty she may have, we have not adopted a policy that expressly prohibits our sole officer and director Ms. Yuziuk from having a direct or indirect financial interest in potential future opportunity or from engaging in business activities of the types conducted by us. As a result, in determining to which entity particular business opportunities should be presented, our sole officer and director Ms. Yuziuk may favor her own interests and the interests of Elektro-Energetyczny Projekt Sp. z o.o over our interests and those of our shareholders, which could have a material adverse effect on our business and results of operations.
+
+Clients
+
+Our president and director, Liudmila Yuziuk will market our product and negotiate with potential customers. We intend to develop and maintain a database of potential customers who may want to use our services. We will follow up with these clients periodically and offer them free presentations and special discounts from time to time. Our methods of communication will include: phone calls, email and regular mail. We plan to attend trade shows in our industry to showcase our services with a view to find new customers. We will ask our satisfied customers for referrals. 
+
+We will market and advertise our service on our web site by showing its advantages over similar services offered by other companies. 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. The company s website has not been developed at this time. We intend to begin developing our website by June of 2013, assuming available resources and company s growth as planned.
+
+We expect that our potential clients will consist of the following:
+
+1. Residential customers, apartment complexes and property developers, public and private schools, pre-schools and day cares, city governments and various sectors in need of EMF detection, shielding and protection services in Poland;
+
+2. Residential customers, apartment complexes and property developers, public and private schools, pre-schools and day cares, city governments and various sectors in need of EMF detection, shielding and protection services in Europe, including but not limited to the Netherlands, Belgium, Germany and France. This option would be available to us only in the future, assuming available resources and growth to warrant it; and
+
+3. Residential customers, apartment complexes and property developers, public and private schools, pre-schools and day cares, city governments and various sectors in need of EMF detection, shielding and protection services in the North America. This option would be available to us only in the future, assuming available resources and growth to warrant it. Currently this option is questionable, given the small revenues and limited operations to date. 
+
+22 | Page
+
+History of electromagnetic fields or EMF
+
+Prior to 1879 there was no commercial use of electricity and no human-produced EMF in several billion years of evolution of life on this planet. 
+
+1879
+
+- First commercial use of Electricity Thomas Edison invents the lightbulb
+
+1880
+
+- Creation of Electrical Distribution
+
+1882
+
+- Electric Meter Invented
+
+1905
+
+- Electrification of US major cities begins
+
+1907
+
+- Invention and introduction of Radio Frequency when Marconi established the first commercial transatlantic radio communications service.
+
+1920s
+
+- Radio stations startup in the US and around the world using AM
+
+1928
+
+- Invention of televised images by Farnsworth
+
+1930s
+
+- Television transmissions start in Europe
+
+- Invention and introduction of Radar in Europe
+
+- 70% of all US households have electricity
+
+1933
+
+- Invention and introduction of FM Radio
+
+1940s
+
+- Television transmissions begins in North America
+
+- FM Radio service begins in Europe and the US
+
+1950s
+
+- High voltage power lines are built in the US to provide increased demand for electricity
+
+- 95% of all US households have electricity, including rural
+
+ 
+ 
+
+1960s
+
+- Microwave development
+
+1980s
+
+- First Generation (1G) commercially automated cellular networks introduced in the US
+
+1990s
+
+- Second Generation (2G) cellular networks introduced in the US using GSM
+
+2000s
+
+- Third Generation (3G) provides media streaming content to 3G handsets
+
+2009
+
+- Fourth Generation (4G) provides 10-fold increase in speed over 3G
+
+- Smart Meters with 2 way communication introduced in the US
+
+Currently, exposure to electromagnetic fields, or EMF, has become an issue of concern for a great many people and is an active area of biophysical research. Discussion over the possible biological effects of electromagnetic fields first began to surface in the late 1960s following the introduction of new, higher voltage electric power transmission lines. 
+
+The first scientific study to attract serious interest in the issue came in 1979 following the work of epidemiologist Nancy Wertheimer, who was looking for possible causes for a number of childhood leukemia cases in the Denver metropolitan area. Her research, performed with physicist Ed Leeper, found that children with leukemia were more than twice as likely to have lived in homes near high current power lines, where the electromagnetic fields were stronger. 
+
+23 | Page
+
+Over the past two decades, many hundreds of studies have been conducted with many more currently underway. Funding for EMF research in the U.S. has at various times come from the Environmental Protection Agency, the Department of Energy, the National Institute of Environmental Health Sciences, the National Cancer Institute, The National Institute of Occupational Safety and Health, the Food and Drug Administration, the Department of Defense, and a few state programs. The Electric Power Research Institute, a utility organization, has also funded a great deal of research. Some studies sponsored by the National Cancer Institute have incorporated EMF as one part of a broader epidemiological approach. Worldwide, at least 27 countries are involved in EMF research.
+
+Most work currently underway in the U.S. is a part of what has come to be known as the Research and Public Information Dissemination (RAPID) Program.
+
+Although the science is far from conclusive, a substantial base of data exists from years of research which is highly suggestive of an association between exposure to electromagnetic fields and the development of certain health problems. 
+
+ 
+
+Competition
+
+Our competitors will include Polish companies providing consulting businesses in EMF detection, shielding and protection in Poland. We will not be differentiating ourselves from the foregoing, but merely competing with them. The consulting industry in EMF detection, shielding and protection is fragmented and competitive, and may be difficult to penetrate. Our competitive position within the industry is negligible in light of the fact that we have limited operations. Older, well-established companies, companies with substantial customer bases, longer operating histories and better financial positions currently attract customers. Since we have limited operations, we cannot compete with them on the basis of reputation. We do expect to compete with them on the basis of the quality of the consulting services that we provide. There can be no assurance that we can maintain a competitive position against current or future competitors, particularly those with greater financial, client database, marketing, service, technical and other resources. Our failure to maintain a competitive position within the market could have a material adverse effect on our business, financial condition and results of operations. At this time, our principal method of competition will be through personal contact with potential clients. 
+
+Some of the additional competitive factors that may affect our business are as follows:
+
+1. Number of Competitors Increase: other companies may follow our business model of offering consulting services to the potential customers in Poland and Europe, which will reduce our competitive edge;
+
+2. Price: Our competitors may be offering similar service at a lower price forcing us to lower our prices as well and possibly offer our service at loss; 
+
+Revenues
+
+The company s revenues will be what we charge our clients for our consulting services. 
+
+The work flow for our consulting services will be as follows: 
+
+1. Customer inquiries about the services along with necessary documents, materials, plans and schemes.
+
+2. Our quote is submitted to the customer for approval. 
+
+3. Upon approval of pricing and terms service agreement is signed and the work is commenced. 
+
+4. The service is completed and delivered to the Customer. 
+
+5. An invoice for the job is submitted.
+
+6. Payment received by money order, bank to bank transfer, check, etc.
+
+24 | Page
+
+Please note that below numbers are estimated in nature and are meant to show the capacity of the company without hiring additional employees and not a guarantee of future revenues.
+
+Estimated Prices for our consulting services are:
+
+- Initial Meeting with Client - free of charge;
+
+- Consulting fees: will vary depending on size of the building, length of the project and scope of work involved, starting from USD 100 per hour.
+
+Invoicing will be on a monthly basis. Aviana, Corp. shall have discretion in selecting the dates and times it performs consulting services throughout the month giving due regard to the needs of the client s business. All actual reasonable and necessary expenditures, which are directly related to the consulting services, are to be reimbursed by the clients.
+
+We cannot guarantee that we will be able to find successful contracts with the potential customers in need of EMF detection, shielding and protection service in Poland and Europe, in which case our business may fail and we will have to cease our operations.
+
+Agreement
+
+On September 3, 2012 a Service Agreement was signed with Sp dzielnia Mieszkaniowa "UDP", a Poland based company.
+
+The agreement with Sp dzielnia Mieszkaniowa "UDP, contains the following material terms:
+
+2. Term/Termination
+
+This Agreement shall be in full force and effect as of the date hereof through and including that period which ends three (3) full months after the date of this Agreement. Either party may terminate this Agreement in the event of the bankruptcy, insolvency, or assignment for the benefit of creditors of the other party, in the event the other party fails to comply with the terms of this Agreement, or on thirty (30) days written notice. 
+
+3. Payment Terms
+
+3.1 AVIANA, CORP. shall be paid $100.00 per hour for services rendered to the Client under this Agreement. AVIANA, CORP. will invoice Client for Services performed. Client shall pay each invoice upon receipt. In the event invoices are not paid within thirty (30) days after the invoice date, Client shall pay to AVIANA, CORP. interest on the outstanding amounts at the rate equal to one and one-half percent (1.5%) per month and Client shall be liable for all of AVIANA, CORP. s costs, fees and expenses (including reasonable attorneys' fees and expert fees and expenses), incurred in connection with AVIANA, CORP. s efforts to collect any amounts due. 
+
+ 
+
+3.2. In addition to the amounts set forth above, Client shall reimburse AVIANA, CORP. for its necessary expenses (including travel, accommodation, subsistence, telecommunications and other typical expenses) incurred in the performance of the Services and the creation of the Work Product. Travel and business expenses shall be in accordance with policies and procedures applicable to Client employees. In no event shall AVIANA, CORP. incur, or be reimbursed for, charges under this Agreement in excess of one thousand United States Dollars ($1,000) unless this amount has been expressly approved in writing in a document signed by Client. 
+
+25 | Page
+
+6. LIMITATIONS ON LIABILITY
+
+AVIANA, CORP. S LIABILITY UNDER THIS AGREEMENT WITH REPSECT TO A GIVEN PROJECT SHALL BE LIMITED TO THE AMOUNT OF FEES RECEIVED BY AVIANA, CORP. UNDER THIS AGREEMENT WITH RESPECT TO SUCH PROJECT.
+
+The agreement signed with Sp dzielnia Mieszkaniowa "UDP" on September 3, 2012 was executed. The following work was commenced pursuant to the service agreement: 
+
+- facility check to establish areas of concerns for the building located at 3 Krysztalowa Street, Lublin Poland was incorporated; 
+
+- the radiofrequency electromagnetic field intensity levels both inside and outside of the building were measured; 
+
+- assessment surveys were prepared; 
+
+- advice on how to protect clients from potentially damaging radiation was provided; 
+
+- a written recommendation for shielding of the radiofrequency electromagnetic field levels (EMF) was prepared;
+
+On December 2, 2012 the revenues of $2,000 were recognized pursuant to the signed service agreement. The agreement terminated on December 3, 2012 per its terms.
+
+Initially, our director Ms. Liudmila Yuziuk will work with the current consulting agreement. In the future we also expect Ms. Yuziuk to work on potential consulting agreements with other Polish/European companies. Ms. Yuziuk intends to devote approximately 30% (15 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 significant revenues and a possible cessation of operations. It is also possible that the demands on Ms. Yuziuk from her own business 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. Yuziuk may not possess sufficient time for our business if the demands of managing our business increase substantially beyond current levels. 
+
+We cannot guarantee that we will be able to find successful contracts with Polish companies, in which case our business may fail and we will have to cease our operations.
+
+Description of property 
+
+We do not have an ownership or leasehold interest in any property.
+
+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. Liudmila Yuziuk. 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 the EMF detection, shielding and protection consulting services in any jurisdiction which we would conduct activities. We do not believe that government regulation will have a material impact on the way we conduct our business.
+
+Subsidiaries 
+
+We do not have any subsidiaries.
+
+26 | Page
+
+Patents and Trademarks 
+
+We do not own, either legally or beneficially, any patents or trademarks. 
+
+Offices
+
+Our office is currently located at 19 Broniewskiego St, Wlodawa Poland 22200. Our telephone number is +48918813933. This is the office of our Director, Ms. Liudmila Yuziuk. We do not pay any rent to Ms. Yuziuk and there is no agreement to pay any rent in the future. Such costs are immaterial to the financial statements and, accordingly have not been reflected therein. Upon the completion of our offering, we do not intend to establish an office elsewhere.
+
+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 OTC Bulletin Board upon the effectiveness of the registration statement of which this prospectus forms a part. Our common stock may never be quoted on the OTC Bulletin Board. To be quoted on the OTC Bulletin Board a market maker must file an application on our behalf to make a market for our common stock. As of the date of this Registration Statement, we have not engaged a market maker to file such an application, that there is no guarantee that a market marker will file an application on our behalf, and that even if an application is filed, there is no guarantee that we will be accepted for quotation. Our stock may become quoted, rather than traded, on the OTC Bulletin Board. When/if our shares of common stock commence trading on the OTC Bulletin Board, the trading price will fluctuate significantly and stockholders may have difficulty reselling their shares.
+
+Stockholders of Our Common Shares
+
+As of the date of this registration statement we have 27 registered shareholders. 
+
+Rule 144 Shares 
+
+A total of 3,000,000 shares of our common stock are available for resale to the public in accordance with the volume and trading limitations of Rule 144. Pursuant to Rule 144, a person who has beneficially owned restricted shares of our common stock for at least six months is entitled to sell their securities provided that (i) 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 the sale and (ii) we are subject to the Securities Exchange Act of 1934 periodic reporting requirements for at least three months before the sale. 
+
+Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or at any time during the three months preceding the sale, are subject to additional restrictions. Such person is entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following: 
+
+ 
+ 
+ 
+
+ 
+
+ 
+
+1% of the total number of securities of the same class then outstanding, which will equal 45,100 shares as of the date of this prospectus; or 
+
+ 
+
+ 
+ 
+ 
+
+ 
+
+ 
+
+the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale; 
+
+ 
+
+provided, in each case that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. 
+
+Such sales must also comply with the manner of sale and notice provisions of Rule 144. 
+
+As of the date of this prospectus, persons who are our affiliates hold all of the 3,000,000 shares that may be sold pursuant to Rule 144. 
+
+27 | 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 in the development stage of our business. As a development stage company, we have yet to earn significant revenues from operations. We may experience fluctuations in operating results in future periods due to a variety of factors, including our ability to obtain additional funding in a timely manner and on terms favorable to us, our ability to successfully develop our business model, the amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations, infrastructure and the implementation of marketing programs, key agreements and strategic alliances, general economic conditions specific to our industry. To date, our business operations have been limited to primarily, the development of a business plan and the signing of the service agreement with Sp dzielnia Mieszkaniowa UDP , a Poland based company.
+
+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. This is because we have generated revenues of $2,000 only and no significant revenues are anticipated until we implement our business plan and execute additional service agreements. 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. Liudmila Yuziuk, though we do not have an agreement from Ms. Yuziuk for such cash advances. 
+
+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.
+
+28 | Page
+
+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. 
+
+Our plan of operations for the next 12 months is as follows:
+
+November, 2012 - February, 2013: Negotiate consulting agreements with potential customers. Estimated amount of funds required: no material costs.
+
+Initially, our sole officer and director, Ms. Liudmila Yuziuk, will look for potential customers. On September 3, 2012 we signed a service agreement with Sp dzielnia Mieszkaniowa UDP , a Poland based company. On December 2, 2012 we recognized the revenues of $2,000 pursuant to the signed service agreement. During November, 2012 - February, 2013 we plan to contact and start negotiations with other potential customers in Poland through our officer and sole director, Ms. Yuziuk s network of friends and business associates in Poland. We will negotiate terms and conditions of collaboration. We will continue to search for new potential customers during the life of our operations.
+
+Even though the negotiation of additional service agreements with customers 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. 
+
+Even if we are able to obtain sufficient number of service agreements at the end of the twelve month period, there is no guarantee that we will be able to attract and more importantly retain enough customers to justify our expenditures. If we are unable to generate a significant amount of revenue and to successfully protect ourselves against those risks, then it would materially affect our financial condition and our business could be harmed.
+
+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. Liudmila Yuziuk, though we do not have an agreement from Ms. Yuziuk for such cash advances. 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.
+
+March-June, 2013: Commence Marketing Campaign. Estimated amount of funds required: $3,000
+
+We intend to use marketing strategies, such as web advertisements, direct mailing and phone calls to acquire potential customers. We also expect to get new clients from "word of mouth" advertising where our new clients will refer their colleagues to us. We also plan to attend shows and exhibitions in EMF detection, shielding and protection, which help residential customers, managers of apartment complexes and property developers, public and private schools, pre-schools and day cares, city governments and various sectors in need of EMF detection, shielding and protection services in Poland come face to face and find new business opportunities and partners. We intend to spend about $3,000 on marketing efforts during the first year. Marketing is an ongoing matter that will continue during the life of our operations.
+
+ 
+
+29 | Page
+
+June-September, 2013: Develop Website. Estimated amount of funds required: $4,000 
+
+By June of 2013, assuming available resources and company growth as planned we intend to begin developing our website. Our director, Ms. Liudmila Yuziuk will be in charge of registering our web domain. 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 the current time. The website development costs, including site design and implementation will be approximately $4,000. Updating and improving our website will continue throughout the lifetime of our operations.
+
+September-November, 2013: Hire Part-Time Consulting Specialist. Estimated Cost $3,000
+
+Initially, our director will look for potential customers. We intend to use marketing strategies, such as direct mailing, phone calls and e-mails to potential customers. Once we begin to execute service agreements and have funds available for growth we may hire one part-time consulting specialist with good knowledge and broad connections to the industry. This individual will be an independent contractor compensated solely in the form of commissions, calculated as a percentage of net profits generated from execution of service agreements. 
+
+We therefore expect to incur the following costs in the next 12 months in connection with our business operations:
+
+Marketing costs
+
+$ 3,000
+
+Website development costs
+
+ 4,000
+
+Estimated cost of this offering
+
+ 12,000
+
+Commissions of PT Specialist
+
+ 3,000
+
+Costs associated with being a publicly reporting company
+
+7,000
+
+Total
+
+ $29,000 
+
+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 revenues of $2,000 only. 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 no such arrangement has been made. 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.
+
+30 | Page
+
+Results of Operations for Period Ending September 30, 2012 
+
+We did not earn any revenues from our incorporation on June 11, 2012 to September 30, 2012. However, we recognized our first revenues of $2,000 on December 2, 2012. We incurred operating expenses in the amount of $1,153 for the period from our inception on June 11, 2012 to September 30, 2012. These operating expenses were comprised $379 for bank charges and $774 for miscellaneous fees. As of September 30, 2012 we had cash of $21,721 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.
+
+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. 
+
+31 | Page
+
+Directors, Executive Officers, Promoters and Control Persons
+
+Our executive officer and director and her age as of the date of this prospectus is as follows:
+
+ 
+
+Director: 
+
+Name of Director 
+
+ 
+
+Age 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Liudmila Yuziuk 
+
+ 
+
+50
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Executive Officers: 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Name of Officer 
+
+ 
+
+Age 
+
+ 
+
+Office 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Liudmila Yuziuk 
+
+ 
+
+50
+
+ 
+
+President, Chief Executive Officer, Treasurer, Chief Financial Officer and Chief Accounting Officer, Secretary
+
+Biographical Information 
+
+Liudmila Yuziuk has acted as our President, Treasurer, Secretary and sole Director since our incorporation on June 11, 2012. Ms. Yuziuk owns 66.52% of the outstanding shares of our common stock. As such, it was unilaterally decided that Ms. Yuziuk 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. Yuziuk s previous employments. Ms. Yuziuk s previous experience, qualifications, attributes or skills were not considered when she was appointed as our sole President, Chief Executive Officer, Treasurer, Chief Financial Officer, Chief Accounting Officer, Secretary and sole member of our board of directors.
+
+Ms. Yuziuk obtained a Bachelor s degree in Electrical Engineering from the Kharkiv National University of Radio Electronics in Kharkiv, Ukraine in 1989. After graduation Ms. Yuziuk has been working for various engineering companies in Ukraine (The Kharkiv Plant Elektropobutprybor, 1989-1993), Tajikistan (UniTex Pol, 1993-1995) and Poland (Polskie G rnictwo Naftowe i Gazownictwo SA, 1995-2001). Since 2001, she has been self-employed in the general area of engineering and consulted various Polish and European engineering companies. Her consulting services included, but were not limited to, provision of the electrical design, technical analysis and /or resolution of engineering problems; application of the design knowledge in power distribution, grounding, lighting, control systems, and equipment specification and selection; creation of the electrical drawings and specifications; measurement and mitigation of the magnetic fields and the electrical fields, preparation of the assessment surveys, electromagnetic interference investigations and electromagnetic fields consulting services. In 2006 Ms. Yuziuk opened her own company Elektro-Energetyczny Projekt Sp. z o.o., specializing in distribution of a complete range of optical sensors, signal conditioners and accessories for temperature monitoring in electromagnetic and harsh environments with the presence of EMI, RFI, MRI. Since 2006 Elektro-Energetyczny Projekt Sp. z o.o. is the only company Ms. Yuziuk has worked for. Ms. Yuziuk intends to devote close to 30% (15 hours /week) of her time to planning and organizing activities of Aviana, Corp.
+
+During the past ten years, Ms. Yuziuk has not been the subject to any of the following events:
+
+ 1. Any bankruptcy petition filed by or against any business of which Ms. Yuziuk 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 Ms. Yuziuk 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.
+
+32 | Page
+
+Term of Office 
+
+Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. No term, however, has been accorded to Ms. Yuziuk s term as a director.
+
+Significant Employees 
+
+We have no significant employees other than our officer 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. Liudmila Yuziuk, our President will be devoting approximately 30% (15 hours/week) of her time to our operations. Because Ms. Yuziuk 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 significant revenues and a cessation of operations.
+
+Potential conflict of interest may arise in future that may cause our business to fail, including conflict of interest in allocating Ms. Yuziuk 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. While our sole officer and director has verbally agreed to present business opportunities first to us, subject to any pre-existing duty she may have, we have not adopted a policy that expressly prohibits our sole officer and director Ms. Yuziuk from having a direct or indirect financial interest in potential future opportunity or from engaging in business activities of the types conducted by us. As a result, in determining to which entity particular business opportunities should be presented, our sole officer and director Ms. Yuziuk may favor her own interests and the interests of Elektro-Energetyczny Projekt Sp. z o.o over our interests and those of our shareholders, which could have a material adverse effect on our business and results of operations.
+
+Executive Compensation
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001561697_corgreen_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001561697_corgreen_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..f59c9e90fb2f452408b51b3262f7a3a63c9bbac3
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001561697_corgreen_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 5
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001561951_us-foods_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001561951_us-foods_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..05d34738c12faf2a4a732df7c8b86ed4b1723f9a
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001561951_us-foods_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/CIK0001561967_us-foods_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001561967_us-foods_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..05d34738c12faf2a4a732df7c8b86ed4b1723f9a
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001561967_us-foods_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/CIK0001561971_e-h_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001561971_e-h_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..05d34738c12faf2a4a732df7c8b86ed4b1723f9a
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001561971_e-h_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/CIK0001563699_covisint_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001563699_covisint_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..32ad4f7bd612c8867cbb5ec59cd740460d5d39eb
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001563699_covisint_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY The following summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information you should consider before investing in our common stock. You should carefully read this prospectus in its entirety before investing in our common stock, including the sections entitled Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations and our combined and consolidated financial statements and related notes included elsewhere in this prospectus. Overview Covisint provides a leading cloud engagement platform for enabling organizations to securely connect, engage and collaborate with large, distributed communities of customers, business partners and suppliers. Our platform allows global organizations with complex external business relationships to create, streamline and automate external mission-critical business processes that involve the secure exchange of and access to critical information from multiple sources. Our customers deploy our platform to deliver on current and new business initiatives, enhance competitiveness, create new revenue opportunities, increase customer retention and lower operating costs. We have been recognized as a leader in the emerging cloud engagement market due to our market share, technical capabilities and history of successful deployments. Our cloud engagement platform is offered as a service, commonly referred to as Platform-as-a-Service (PaaS), and combines robust, cloud-based identity management, portal, data exchange, integration and application development capabilities. Our platform integrates with on-premise and hosted enterprise systems, as well as other cloud-based data sources, and can be deployed quickly, scaled to millions of users, and configured to address our customers specific organizational requirements, including workflows, content and branding. We deliver our platform through industry-specific solutions that address external mission-critical business processes common to companies across our target industries. To date, we have focused our solutions on the global automotive, healthcare and energy industries, in which the secure sharing of complex and distributed data is of particular importance. We are actively working to expand our platform to a wide range of industries which we believe have a significant opportunity to leverage our platform to enable external mission-critical business processes and to improve collaboration with external parties such as customers, business partners and suppliers. We sell our solutions through our direct sales force and increasingly through our channel partner. We have over 3,000 customers that have deployed our platform to connect to over 80,000 of their customers, business partners and suppliers. This allows more than 18 million users to access the mission-critical applications and information provided by our customers. Our customers include approximately 150 core platform customers, which represented 94%, 94%, 93% and 91% of our total revenue for the three months ended June 30, 2013 and 2012 and the years ended March 31, 2013 and 2012, respectively, including 27%, 37%, 33% and 35% of our total revenue for such periods from our largest core platform customer, General Motors. Our other core platform customers include (listed alphabetically): AT&T, Blue Cross Blue Shield Association, Blue Cross Blue Shield of North Carolina, Daimler AG, Detroit Medical Center and the Vermont Blueprint for Health. Our remaining customers include a variety of organizations that pay us a relatively nominal fee to either connect to one of our core platform customers or use one of our industry-specific solutions. We are currently a wholly-owned subsidiary of Compuware Corporation, a publicly traded company founded in 1973. Our predecessor, Covisint LLC, was founded in February 2000 by a consortium of global automotive manufacturers to improve their ability to collaborate and transact with thousands of suppliers worldwide and reduce the cost of procuring components and materials. The consortium made a significant investment in the development of a robust, highly-secure cloud-based business-to-business network for automotive supply chains that included messaging, portal and web services technology. In March 2004, Compuware purchased substantially all of the assets of Covisint LLC including its name and messaging, portal and web services technology. For the three months ended June 30, 2013 and 2012 and the years ended March 31, 2013, 2012 and 2011, our total revenue was $24.1 million, $20.6 million, $90.7 million, $74.7 million and $54.2 million, respectively, our net income (loss) was $(4.7) million, $0.1 million, $(5.6) million, $(3.3) million and $(1.3) million, respectively, and our Adjusted EBITDA was 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. PRELIMINARY PROSPECTUS Subject to Completion, Dated September 20, 2013 6,400,000 Shares Covisint Corporation Common Stock We are offering 6,400,000 shares of our common stock. Prior to this offering, there has been no public market for our common stock. The initial public offering price of our common stock is expected to be between $9.00 and $11.00 per share. We have applied to list our common stock on the NASDAQ Global Market under the symbol COVS . Compuware Corporation, or Compuware, currently owns 100% of our outstanding common stock, and following this offering Compuware will continue to be our controlling shareholder. Following this offering, Compuware will own 30,003,000 shares of our common stock, representing approximately 82.4% of the total outstanding shares of our common stock. We are an emerging growth company under the federal securities laws and will be subject to reduced public company reporting requirements. Investing in shares of our common stock involves risk. See Risk Factors beginning on page 11. Price to Public Underwriting Discounts and Commissions(1) Proceeds to Covisint Per share $ $ $ Total $ $ $ (1) We refer to Underwriting beginning on page 135 of this prospectus for additional information regarding total underwriter compensation. We have granted the underwriters the right to purchase up to an additional 960,000 shares of common stock to cover over-allotments. Neither the U.S. 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. Delivery of the shares of common stock will be made on or about , 2013. Credit Suisse Pacific Crest Securities Evercore The date of this Prospectus is , 2013 Table of Contents $(4.0) million, $(1.7) million, $(10.9) million, $(5.4) million and $1.1 million, respectively. Adjusted EBITDA is a non-GAAP financial measure. For a definition of Adjusted EBITDA, an explanation of our management s use of this measure and a reconciliation of our Adjusted EBITDA to our net income (loss), see Management s Discussion and Analysis of Financial Condition and Results of Operations Key Metrics. Our Industry Cloud computing is evolving to enable more complex business processes The emergence of cloud computing over the past decade is leading to a fundamental transformation of organizations and their IT environments. As cloud computing has become more widely adopted, organizations have begun to appreciate the new ways in which it enables them to interact and engage with external parties. In particular, organizations in many industries are seeking to use cloud-based technologies to streamline and automate complex, information-intensive business processes and to implement external engagement models, such as health information exchanges, which involve the integration of data from disparate sources and the exchange of and access to sensitive information, such as private patient information, across business communities, organizations and systems. We believe organizations in a wide range of industries have a significant opportunity to leverage cloud computing to enable external mission-critical business processes and to improve collaboration with external parties such as customers, business partners and suppliers. Organizations are transforming the way they interact with their external constituents The evolution in cloud computing is accelerating a number of dramatic changes in the way that organizations interact with their customers, business partners, suppliers and other external constituents. Some of the most significant changes include: Rapidly changing end-user behavior and expectations for cloud-based collaboration and information exchange. The increasing adoption of online tools in everyday life is fundamentally changing consumer behavior and creating expectations within organizations for similar capabilities, which are driving demand for secure cloud-based information exchange and business collaboration tools. Increased demand for secure system and data integration across organizational boundaries. The need to improve and accelerate business performance is leading to a significant increase in the flow of sensitive digital information beyond traditional organizational boundaries, which raises new challenges for standardizing and integrating data in a secure manner across systems and organizations. Competitive pressures for timely, innovative external engagement processes. The current business environment requires organizations to quickly capitalize on new opportunities to strengthen their relationships with their customers and improve their competitiveness, which requires technology and domain expertise that is not readily available within most organizations. Cloud-based processes are becoming fundamental to organizations business models. Organizations are increasingly using cloud-based processes to streamline and automate their core, external-facing operations and, in many cases, to enable entirely new business models. These cloud-based processes require a high degree of security, reliability and scalability. Industry-specific trends are driving additional demand In certain industries, the need for secure information exchange and collaboration across organizations is being compounded by unique vertical-specific trends, including: Automotive. There has been a significant shift in how automotive manufacturers connect with and reach customers. Manufacturers are seeking to provide enhanced information experiences for the new connected consumer through a variety of access points, including in-vehicle systems, websites and mobile devices. Table of Contents Table of Contents Delivering the services and features of connected vehicles that consumers now expect, such as location-based information services which integrate a variety of third-party data and applications and require cloud-based identification, authentication and network security, has become increasingly more important to manufacturers marketing and sales efforts. Additionally, the highly-integrated, global and distributed nature of the automotive supply chain makes immediate and continuous visibility into the entire supply chain particularly critical for conducting business and managing risk. Vendors across the automotive industry, including dealers, financing sources and automakers, are utilizing the cloud to share information and streamline business processes across global supply chain boundaries. Healthcare. One of the primary healthcare reform initiatives designed for reducing healthcare costs and improving patient care and overall population health is a new reimbursement model that is driving the shift from fee-for-service to outcomes-based care delivery. This accountable care model requires the primary stakeholders physicians, hospitals and payers to be jointly accountable for the overall cost and quality of care, share digital information and coordinate patient care in order to reduce healthcare costs. The cloud is being used for aggregating, sharing and analyzing patient information from various systems and facilities and making that information available to provide a comprehensive view of a patient s history and condition, which can eliminate redundant testing, reduce errors in care delivery and improve overall quality of care. Energy. The global energy industry is geographically dispersed and requires significant information sharing, communication and data protection. The energy industry includes a large number of joint ventures that require the sharing of critical geological, operational and financial information among a large distributed network of joint venture partners, who are often competitors, and outside contractors. This requires making information available to, and enabling collaboration among, these constituents with appropriate identity management and access limitations. Other Industries. Organizations in many industries, such as financial services and the public sector, face similar challenges in connecting with external audiences. We believe a wide variety of organizations globally will benefit from using cloud-based technologies to meet their need to collaborate with customers, business partners and suppliers. Customer requirements are extensive and challenging The requirements for enabling cloud-based, mission-critical business processes among thousands and potentially millions of external constituents are extensive and challenging. These requirements typically include: Security. Organizations require the ability to make sensitive information easily accessible to large populations of users through a wide range of devices. Integration. Organizations must be able to seamlessly integrate with a variety of information systems and standardize disparate data formats. Flexibility. To respond to rapidly-evolving business demands and opportunities, organizations seek high-quality solutions that can be quickly implemented and broadly adopted. Reliability. Organizations require enterprise-grade reliability to bring mission-critical business initiatives to market: anything less jeopardizes an organization s ability to remain competitive. Compliance. Private and confidential data is subject to a growing number of regulations governing the tracking and auditing of, and access to, information. Table of Contents Table of Contents Our Solution Our Platform-as-a-Service offering enables global organizations to securely connect, engage and collaborate with large, extended networks of customers, business partners, suppliers and other third parties. The key benefits of our solution for our customers include: Secure access to critical information. Our platform provides simple, secure access to mission-critical information and applications at the moment of engagement through a common, branded interface; enabling secure, reliable communication and collaboration with key external audiences including customers, business partners and suppliers. Our cloud identity services layer enables organizations to simply and securely manage user identities across virtually any combination of customers, business partners, suppliers, external systems, cloud services and end-user groups. Our technology provides organizations with a centralized identity and access management platform for managing access to organizational information and applications for external constituents through a single, secure identity. Comprehensive data integration. Our platform integrates with our customers existing enterprise systems, as well as with the systems and business processes of their customers, business partners, suppliers and other third parties, to provide a unified source of critical information. Speed and agility. Our platform enables the rapid creation and deployment of new mission-critical business processes that can be configured to meet customer and industry-specific business requirements in order to support the development of timely new business models. Mission-critical scalability and reliability. Our platform provides a high degree of scalability to support large transaction volumes, while maintaining the highest levels of performance and uptime required to support mission-critical processes. Compliance. Our platform assists our customers with meeting their regulatory compliance obligations governing access to, and sharing of, private and confidential information. Our Growth Strategies We intend to extend our position as a leading integrated cloud engagement platform for creating and enabling external mission-critical business processes. Our key growth strategies include: Continued innovation and enhancement of our platform. We believe our platform provides us with significant competitive advantages by addressing the unique security, identity and access management, data exchange and compliance needs of large scale external engagement models. We intend to continue investing in research and development to expand our mobility and analytics capabilities and our AppCloud solution developer community and to develop additional industry vertical solutions that will create new entry points with customers. Expand within our current customer base. We intend to expand the adoption of our platform within our current customer base by selling additional business solutions and expanding usage of already-deployed solutions. Acquire new customers. We intend to expand our customer base by leveraging our established position in our existing markets, hiring additional sales and marketing personnel and developing and expanding strategic relationships with channel partners. Penetrate new vertical markets. We intend to leverage our core external engagement platform technology along with our experience and proven customer success within our principal automotive, healthcare and energy markets to enter into new vertical markets, such as financial services and the public sector, that have similar characteristics and business challenges. Table of Contents Table of Contents Expand channels and strategic alliances. We intend to invest in developing and expanding strategic alliances with resellers, managed services providers, telecommunication service providers, systems integrators and independent software vendors in order to complement our direct selling efforts and extend our market reach into new vertical and geographic markets. Risks Affecting Us Our business is subject to numerous risks, which are highlighted in the section entitled Risk Factors immediately following this prospectus summary. Some of these risks include: We have a history of losses, we expect to continue to incur losses and we may not achieve or sustain profitability in the future. We derive a significant percentage of our total revenue from the automotive and healthcare industries, and any downturn in these industries could harm our business. We derive a significant percentage of our total revenue from our ten largest customers. We derived approximately 27%, 37%, 33% and 35% of our total revenue in the three months ended June 30, 2013 and 2012 and the years ended March 31, 2013 and 2012, respectively, from our largest customer, General Motors Company. We cannot accurately predict subscription renewal rates and the impact these rates may have on our future revenue and operating results. We may not be able to retain and increase sales to our existing customers or to new customers, which could negatively impact our future revenue and financial results. Competition from current competitors and new market entrants, as well as from internally developed technologies, could adversely affect our ability to sell our solutions and related services. If our security measures are breached or unauthorized access to data is otherwise obtained, our solutions may be perceived as not being secure, customers may reduce the use of or stop using our solutions and we may incur significant liabilities. If we fail to remediate deficiencies in our internal controls or are unable to implement and maintain effective internal controls in the future, our ability to produce accurate and timely financial statements could be impaired. As long as Compuware controls us, your ability to influence matters requiring shareholder approval will be limited. Corporate Information We are a wholly-owned subsidiary of Compuware, and following this offering Compuware will continue to be our controlling shareholder. Effective January 1, 2013, Compuware contributed to us substantially all of the assets and liabilities related to our business. Prior to the contribution, we had been operating as a division within Compuware and this prospectus has been prepared as if the contribution had occurred at the commencement of our business. In connection with the contribution, we entered into a master separation agreement with Compuware, which we refer to in this prospectus as the master separation agreement . At that time, we also entered into various other agreements to effect the separation and provide a framework for our relationship with Compuware after the separation, including an employee benefits agreement, a Compuware services agreement, an intellectual property agreement, a shared services agreement and a tax sharing agreement. In connection with this offering, we will also enter into a registration rights agreement with Compuware. These agreements, together with the contribution Table of Contents TABLE OF CONTENTS PROSPECTUS SUMMARY 1
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+PROSPECTUS SUMMARY AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, "WE," "US," "OUR," AND "TRANSLATION GROUP INC." REFERS TO TRANSLATION GROUP 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 5 and 13, respectively. An investment in our securities presents substantial risks, and you could lose all or substantially all of your investment. General Translation Group Inc. was incorporated under the laws of the state of Nevada on August 28, 2012. Our US mailing address is located at 311 S Division street, Carson City NV 89703. Our phone number is (702) 425 3296 Business We are a development stage company formed to provide online job marketplace that connects people or companies in need of professional translation and translators around the world. We plan to conduct our operations and market our services primary to North American and European markets. Going Concern From inception until the date of this filing, we have had $1,000 of revenue and very limited operating activities. Our financial statements from inception August 28, 2012 through January 31, 2013 reports $1,000 of revenue and net loss of $5,613. In the opinion of our independent auditor on our financial statements as of October 31, 2012, our auditors have indicated that there is substantial doubt about 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 5,000,000 Common Shares Being Offered 5,000,000 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 5,000,000 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. We will require a minimum funding of approximately $25,000 to conduct our proposed operations for a minimum period of one year including costs associated with maintaining our reporting status with the SEC. 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 August 28, 2012 (date of inception) to , January 31, 2013 included on Page F-1 in this prospectus. As of January 31, 2013 ---------------- BALANCE SHEET Total Assets $ 4,057 Total Liabilities $ 4,670 Stockholders'Equity (Deficit) $ (613) Period from August 28, 2012 (date of inception) to January 31, 2013 ---------------- INCOME STATEMENT Revenue $ 1,000 Total Expenses $ 6,613 Net Loss $ 5,613
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+SUMMARY OF PROSPECTUS You should read the following summary together with the more detailed business information, financial statements and related notes that appear elsewhere in this prospectus. In this prospectus, unless the context otherwise denotes, references to we, us, our and Company refer to Boomers, Inc. .
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+As of December 31, 2012, we had $2,440 in current assets and current liabilities in the amount of $18,781. Accordingly, we had a working capital deficit of $16,341 as of December 31, 2012. Our current working capital is not sufficient to enable us to implement our business plan as set forth in this prospectus. For these and other reasons, our independent auditors have raised substantial doubt about our ability to continue as a going concern. Accordingly, we will require additional financing, including the equity funding sought in this prospectus. However, our management has retained discretion to use the proceeds of the Offering for other uses. The minimum investment amount for a single investor is $2,000 for 400,000 shares. The shares are being offered by us on a best efforts basis and there can be no assurance that all or any of the shares offered will be subscribed. If less than the maximum proceeds are available to us, our development and prospects could be adversely affected. There is no minimum offering required for this offering to close. The proceeds of this offering will be immediately available to us for our general business purposes. The Maximum Offering amount is 20,000,000 shares ($100,000). Our address is 228 Hamilton Avenue, 3rd Floor, Palo Alto, CA 94301. Our phone number is (403) 614-4441. Our fiscal year end is December 31. The Offering Securities Being Offered Up to 20,000,000 shares of our common stock. Offering Price The offering price of the common stock is $0.005 per share. There is no public market for our common stock. We cannot give any assurance that the shares 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 in our stock. Upon the effectiveness of the registration statement of which this prospectus is a part, we intend to apply through FINRA to the OTC Bulletin Board, through a market maker that is a licensed broker dealer, to allow the trading of our common stock upon our becoming a reporting entity under the Securities Exchange Act of 1934. There is no guarantee, however, that our common stock will ever be quoted on the OTC Bulletin Board. Minimum Number of Shares To Be Sold in This Offering There is no minimum number of shares required to be sold in this Offering. All funds received in connection with this Offering will be made immediately available to us. There is a minimum investment amount for a single investor of $2,000 for 400,000 shares of common stock. Maximum Number of Shares To Be Sold in This Offering 20,000,000 Securities Issued and to be Issued 41,000,000 shares of our common stock are issued and outstanding as of the date of this prospectus. Number of Shares Outstanding After The Offering If All The Shares Are Sold 61,000,000 Use of Proceeds If we are successful at selling all the shares we are offering, our proceeds from this offering less offering expenses will be approximately $85,000. We intend to use these net proceeds to execute our business plan. Offering Period The shares are being offered for a period up to 180 days after the date of this Prospectus, unless extended by us for an additional 90 days. Summary Financial Information Balance Sheet Data As of December 31, 2012 Cash $2,440 Total Assets $27,440 Liabilities $18,781 Total Stockholder s Equity $8,659 Statement of Operations From September 17, 2012 (Inception) to December 31, 2012 Revenue $0 Net Profit (Loss) for Reporting Period $(19,941) An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. Currently, shares of our common stock are not publicly traded. In the event that shares of our common stock become publicly traded, the trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. Risks Related to Our Financial Condition If we do not obtain additional financing, our business expansion plans will be delayed and we may not achieve profitable operations. We have limited cash and will require additional capital to complete the development of our business expansion plans. As of December 31, 2012, we had cash in the amount of $2,440. We have a working capital deficit of $16,341 as of December 31, 2012. Our business plan calls for ongoing expenses in staff, financing, and marketing. If no additional financing is secured, we may not be able to pay our expenses to pursue our business plan. If that is the case, our business will not grow as desired. We reserve the right to seek additional funds through private placements of our common stock and/or through debt financing. Our ability to raise additional financing is unknown. We do not have any formal commitments or arrangements for the advancement or loan of funds. If we are unable to locate suitable financing, our business expansion plans may be delayed and we may be unable to achieve profitable operations. We may require additional capital in order to achieve commercial success and, if necessary, to finance future losses from operations as we endeavor to build revenue. We do not have any commitments to obtain capital and we cannot assure you that we will be able to obtain adequate capital as and when required. The service business is labor and capital intensive and the level of operations obtainable by a service company is directly linked and limited by the amount of available capital. Although we have some cash resources on hand at this time we believe that our ability to achieve commercial success and our continued growth will be dependent on our continued access to capital either through the additional sale of our equity or debt securities, bank lines of credit, projected financing or cash generated from our operations. We will seek to obtain additional working capital through the sale of our securities. However, we have no agreements or understandings with any third parties at this time for our receipt of additional working capital. Consequently, there can be no assurance that we will be able to obtain continued access to capital as and when needed or, if so, that the terms of any available financing will be subject to commercially, reasonable terms. Since we have a limited operating history and no revenues to date, we may be unable to achieve or maintain profitability. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small emerging growth company. We have limited financial resources and no revenues to date. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small emerging growth company starting a new business enterprise and the highly competitive environment in which we will operate. Since we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to fully meet our expenses and totally support our anticipated activities. Our ability to continue as a business and implement our business plan will depend on our ability to raise sufficient debt or equity. There is no assurance such debt and/or equity offerings will be successful or that we will remain in business or be able to implement our business plan if the offerings are not successful. Since there is substantial doubt as to our ability to continue as a going concern, as noted in L.L. Bradford & Company, LLC s opinion for the period ended December 31, 2012, it may be difficult for us to effectuate our business plan. We have incurred a loss since our inception on September 17, 2012 and we have not yet been successful in establishing profitable operations. Our financial statements have been prepared on a going concern basis. Unanticipated costs and expenses, or the inability to generate revenues, could require additional financing; which would be sought through equity or debt financing. The fact that there are going concern considerations may make raising additional funds or obtaining loans more difficult. To the extent financing is not available, we may not be able to, or may be delayed in, implementing our business plan or meeting our obligations. This could result in the entire loss of any investment in shares of our common stock. We will continue to evaluate our projected expenditures relative to our available cash and to evaluate additional means of financing in order to satisfy our working capital and other cash requirements. Details regarding these concerns are included in the notes to the Financial Statements included in this filing (for the period ended December 31 , 2012). Risks Associated with Our Business Model If we are unable to successfully develop and market our products or our products do not perform as expected, our business and financial condition will be adversely affected. With the release of any new product, we are subject to the risks generally associated with new product introductions and applications, including lack of market acceptance, delays in commercial implementation, and failure of products to perform as expected. In order to introduce and market new or enhanced products successfully with minimal disruption in customer purchasing patterns, we must manage the transition from existing products in the market. There can be no assurance that we will be successful in developing and marketing, on a timely basis, product enhancements or products that respond to technological advances by others, that our new products will adequately address the changing needs of the market or that we will successfully manage product transitions. Further, failure to generate sufficient cash from operations or financing activities to develop or obtain improved products and technologies could have a material adverse effect on our results of operations and financial condition. Because of pressures from competitors with more resources, we may fail to implement our business strategy profitably. The digital and mobile technology business is highly fragmented and extremely competitive and subject to rapid change. The market for customers is intensely competitive and such competition is expected to continue to increase. We believe that our ability to compete depends upon many factors within and beyond our control, including the timing and market acceptance of new solutions and enhancements to existing businesses developed by us, our competitors, and their advisers. Level20 is an online contest platform that utilizes digital media and technology to distribute and feature local and national branded promotional campaigns. Many consumers maintain simultaneous relationships with multiple digital brands and products and can easily shift consumption from one provider to another. Our principal competitors are in segments such as the following: Websites promoting deal of the day gift certificates; and Large social media networks with deep distribution. Innovative search websites with local and national advertisers In addition, new competitors may be able to launch new businesses at relatively low cost. In addition, either existing or new competitors may develop new technologies, and our existing and potential customers may shift their mass branding campaigns to these new technologies. Therefore, we cannot be sure that we will be able to successfully implement our business strategy in the face of such competition. If our product does not achieve market acceptance, we may not have sufficient financial resources to fund our operations or further development. While we believe that a viable market exists for our products, there can be no assurance that such technology will prove to be an attractive alternative to conventional or competitive products in the markets that we have identified for exploitation. In the event that a viable market for our product cannot be created as envisaged by our business strategy or our product does not achieve market acceptance, we may need to commit greater resources than are currently available to develop a commercially viable and competitive product. There can be no assurance that we would have sufficient financial resources to fund such development or that such development would be successful. In addition, if our product does not generate sufficient revenues, or we are unable to raise additional capital, we may be unable to fund our operations. Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control. There can be no assurance that, when required, sufficient funds will be available to us on satisfactory terms. Our business will suffer if our network systems fail or become unavailable. A reduction in the performance, reliability and availability of our network infrastructure would harm our ability to distribute our products to our users, as well as our reputation and ability to attract and retain customers. Our systems and operations could be damaged or interrupted by fire, flood, power loss, telecommunications failure, Internet breakdown, earthquake and similar events. Our systems could also be subject to viruses, break-ins, sabotage, acts of terrorism, acts of vandalism, hacking, cyber-terrorism and similar misconduct. We might not carry adequate business interruption insurance to compensate us for losses that may occur from a system outage. Any system error or failure that causes interruption in availability of our product or an increase in response time could result in a loss of potential customers, which could have a material adverse effect on our business, financial condition and results of operations. If we suffer sustained or repeated interruptions, then our products and services could be less attractive to our users and our business would be materially harmed. If our clients do not meet the needs and expectations of our subscribers, our business could suffer. Our business depends on our reputation for providing high-quality contests, and our brand and reputation may be harmed by actions taken by clients that are outside our control. Any shortcomings of one or more of our clients, particularly with respect to an issue affecting the quality of the prize offered or the products or services sold, may be attributed by our subscribers to us, thus damaging our reputation, brand value and potentially affecting our results of operations. In addition, negative publicity and subscriber sentiment generated as a result of fraudulent or deceptive conduct by our clients could damage our reputation, reduce our ability to attract new subscribers or retain our current subscribers, and diminish the value of our brand. We plan on continually making efforts to improve our systems to identify suspicious activity, detect fraud and improve our defenses. However, if fraudulent or other malicious activity is perpetrated, and we are unable to detect and prevent it, the affected customers campaigns may experience or perceive a reduced return on their investment. This may lead to high levels of dissatisfaction with our advertising services, refusals to pay, refund demands or withdrawal of future business. If fraudulent or other malicious activity occurs, and we are unable to detect and prevent it, we could also experience increased costs relating to remuneration or losses as a result of these activities. Any of these occurrences could damage our brand and lead to a loss of customers and revenue and increased costs. We may be unable to protect our intellectual property rights from third-party claims and litigation, which could be expensive, divert management's attention, and harm our business. Our success is dependent in part on obtaining, maintaining and enforcing our proprietary rights and our ability to avoid infringing on the proprietary rights of others. We seek patent protection for those inventions and technologies for which we believe such protection is suitable and is likely to provide a competitive advantage to us. Because patent applications in the United States are maintained in secrecy until either the patent application is published or a patent is issued, we may not be aware of third-party patents, patent applications and other intellectual property relevant to our products that may block our use of our intellectual property or may be used in third-party products that compete with our products and processes. In the event a competitor or other party successfully challenges our products, processes, patents or licenses or claims that we have infringed upon their intellectual property, we could incur substantial litigation costs defending against such claims, be required to pay royalties, license fees or other damages or be barred from using the intellectual property at issue, any of which could have a material adverse effect on our business, operating results and financial condition. We also rely substantially on trade secrets, proprietary technology, nondisclosure and other contractual agreements, and technical measures to protect our technology, application, design, and manufacturing know-how, and work actively to foster continuing technological innovation to maintain and protect our competitive position. We cannot assure you that steps taken by us to protect our intellectual property and other contractual agreements for our business will be adequate, that our competitors will not independently develop or patent substantially equivalent or superior technologies or be able to design around patents that we may receive, or that our intellectual property will not be misappropriated. If we are unable to manage growth, our operations could be adversely affected. Our progress is expected to require the full utilization of our management, financial and other resources, which to date has occurred with limited working capital. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial and management information systems, and to recruit, train and manage sales personnel. There can be no absolute assurance that management will be able to manage growth effectively. If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. Various risks arise when companies and industries grow quickly. If our business or industry grows too quickly, our ability to meet customer demand in a timely and efficient manner could be challenged. We may also experience development delays as we seek to meet increased demand for our products. Our failure to properly manage the growth that we or our industry might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers. 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 an emerging growth company, as defined in the Jumpstart our Business Startups Act of 2012, and 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. We cannot predict if investors will find our common stock less attractive because we will 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. Until our common stock is registered under the Exchange Act, we will not be a fully reporting company. We are not yet a registered company and will not be so until this S-1 is effective. When that happens we will only be subject to the reporting requirements imposed by Section 15(d) of the Exchange Act which state that we will be required to file supplementary and periodic information, documents, and reports. However, after effectiveness of this S-1 we intend to file Form 8-A registering a class of securities under Section 12, subjecting us to the full reporting requirements. Until then, and as long as our common stock is 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 SEC a proxy statement and form of proxy complying with the proxy rules. In addition, so long as our common stock is not registered under the Exchange Act, our directors and executive officers and beneficial holders of 10% or more of our outstanding common stock will not be subject to Section 16 of the Exchange Act. Section 16(a) of the Exchange Act requires executive officers and directors, 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 thereafter. Furthermore, so long as our common stock is 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. Risks Associated with Management and Control Persons Because we are subject to additional regulatory compliance matters as a result of becoming a public company, which compliance includes Section 404 of the Sarbanes-Oxley Act of 2002, and our management has limited experience managing a public company, the failure to comply with these regulatory matters could harm our business. Our management and outside professionals will need to devote a substantial amount of time to new compliance initiatives and to meeting the obligations that are associated with being a public company and we may not successfully or efficiently manage this transition. Rob Danard, our Chief Executive Officer and Director, has no experience running a public company. For now, he will rely heavily on legal counsel and accounting professionals to help with our future SEC reporting requirements. This will likely divert needed capital resources away from the objectives of implementing our business plan. These expenses could be more costly that we are able to bear and could result in us not being able to successfully implement our business plan. We expect rules and regulations such as the Sarbanes-Oxley Act of 2002 will increase our legal and finance compliance costs and make some activities more time-consuming than in the past. We may need to hire a number of additional employees with public accounting and disclosure experience in order to meet our ongoing obligations as a public company. As a smaller reporting company, our management will be required to provide a report on the effectiveness of our internal controls over financial reporting, but will not be required to provide an auditor s attestation regarding such report and management s report need not be provided until our second annual report. Section 404 compliance efforts may divert internal resources and will take a significant amount of time and effort to complete. We may not be able to successfully complete the procedures and certification of Section 404 by the time we will be required to do so. If we fail to do so, or if in the future our management determines that our internal controls over financial reporting are not effective, we could be subject to sanctions or investigations by the SEC or other regulatory authorities. Furthermore, investor perceptions of our company may suffer, and this could cause a decline in the market price of our stock. Furthermore, whether or not we comply with Section 404, any failure of our internal controls could have a material adverse effect on our stated results of operations and harm our reputation. If we are unable to implement necessary procedures or changes effectively or efficiently, it could harm our operations, financial reporting or financial results. Because our Chief Executive Officer and Director, Rob Danard, has no experience running a public company, it is possible the business might not be successful. Rob Danard has no experience serving as an officer or director of a public company, or experience with the reporting or financial disclosure requirements which public companies are subject to. Such lack of experience may impair our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures, which may result in material misstatements to our financial statements and an inability to provide accurate financial information to our stockholders. Consequently, our operations, future earnings and ultimate financial success could suffer irreparable harm due to his ultimate lack of experience with public companies and their reporting requirements in general. We rely on key members of management, the loss of whose services could adversely affect our success and development. Our success depends to a certain degree upon certain key members of the management. These individuals are a significant factor in our growth and ability to meet our business objectives. In particular, our success is highly dependent upon the efforts of Rob Danard, our Chief Executive Officer, and Director, the loss of which could slow the growth of our business, or it may cease to operate at all, which may result in the total loss of an investor's investment. Compensation may be paid to our officers, directors and employees regardless of our profitability, which may limit our ability to finance our business plan and adversely affect our business. Rob Danard, our Chief Executive Officer will be receiving compensation and any other current or future employees of our company may be entitled to receive compensation, payments and reimbursements regardless of whether we operate at a profit or a loss. Any compensation received by Mr. Danard or any other senior executive in the future will be determined from time to time by the board of directors. Such obligations may negatively affect our cash flow and our ability to finance our business plan, which could cause our business to fail. Our business and growth may suffer if we are unable to attract and retain key employees. Our success depends on the expertise and continued service of our Chief Executive Officer, Robert Danard, and certain other key technical personnel. It may be difficult to find a sufficiently qualified individual to replace Mr. Danard or other key technical personnel in the event of death, disability or resignation, resulting in our being unable to implement our business plan and we having no operations or revenues. Furthermore, our ability to expand operations to accommodate our anticipated growth will also depend on our ability to attract and retain qualified media, management, finance, marketing, sales and technical personnel. However, competition for these types of employees is intense due to the limited number of qualified professionals. Our ability to meet our business development objectives will depend in part on our ability to recruit, train and retain top quality people with advanced skills who understand our technology and business. We believe that it will be able to attract competent employees, but no assurance can be given that we will be successful in this regard. If we are unable to engage and retain the necessary personnel, its business may be materially and adversely affected. Risks Related To Legal Uncertainty Because our Certificate of Incorporation and Bylaws and Nevada law limit the liability of our officers, directors, and others, shareholders may have no recourse for acts performed in good faith. Under our Certificate of Incorporation, Bylaws, and Nevada law, each of our officers, directors, employees, attorneys, accountants and agents are not liable to us or the shareholders for any acts they perform in good faith, or for any non-action or failure to act, except for acts of fraud, willful misconduct or gross negligence. Our articles and bylaws provide that we will indemnify each of our officers, directors, employees, attorneys, accountants and agents from any claim, loss, cost, damage liability and expense by reason of any act undertaken or omitted to be undertaken by them, unless the act performed or omitted to be performed constitutes fraud, willful misconduct or gross negligence. New legislation, including the Sarbanes-Oxley Act of 2002, may make it more difficult for us to retain or attract officers and directors. The Sarbanes-Oxley Act of 2002 was enacted in response to public concerns regarding corporate accountability in connection with recent accounting scandals. The stated goals of the Sarbanes-Oxley Act are to increase corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. The Sarbanes-Oxley Act generally applies to all companies that file or are required to file periodic reports with the SEC, under the Securities Exchange Act of 1934. Upon becoming a public company, we will be required to comply with the Sarbanes-Oxley Act. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may deter qualified individuals from accepting these roles. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. We continue to evaluate and monitor developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. Because we are subject to certain regulatory requirements in connection with our client contests, the failure to adhere to those requirements could result in having to deal with government inquiries, fines, and other actions, all of which would have the unwanted effect of harming or disrupting our business operations. Certain jurisdictions within the United States and Canada require registration of our client contests, bonding, insurance and secondary language inclusion. These do not apply to all jurisdictions and in most cases one or none of the above is mandatory. As an example, Rhode Island asks that if our client has a local presence it must register the contest; New York and Florida require bonding and registration, and Quebec, Canada requires registration, bonding and the inclusion of the French language. The failure to adhere to these government regulations could result in government inquiries, fines, and other actions that would have the unwanted effect of harming or disrupting our business. Risks Related To This Offering If a market for our common stock does not develop, shareholders may be unable to sell their shares. Prior to this offering, there has been no public market for our securities and there can be no assurance that an active trading market for the securities offered herein will develop after this offering, or, if developed, be sustained. We anticipate that, upon completion of this offering, the common stock will be eligible for quotation on the OTC Bulletin Board. If for any reason, however, our securities are not eligible for initial or continued quotation on the OTC Bulletin Board or a public trading market does not develop, purchasers of the common stock may have difficulty selling their securities should they desire to do so and purchasers of our common stock may lose their entire investment if they are unable to sell our securities. Because FINRA sales practice requirements may limit a stockholder s ability to buy and sell our stock, investors may not be able to sell their stock should they desire to do so. In addition to the "penny stock" rules described below, 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. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity in our common stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder's ability to resell shares of our common stock. Because state securities laws may limit secondary trading, investors may be restricted as to the states in which they can sell the shares offered by this prospectus. If you purchase shares of our common stock sold in this offering, you may not be able to resell the shares in any state unless and until the shares of our common stock are qualified for secondary trading under the applicable securities laws of such state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in such state. There can be no assurance that we will be successful in registering or qualifying our common stock for secondary trading, or identifying an available exemption for secondary trading in our common stock in every state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, our common stock in any particular state, the shares of 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 market for the common stock will be limited which could drive down the market price of our common stock and reduce the liquidity of the shares of our common stock and a stockholder's ability to resell shares of our common stock at all or at current market prices, which could increase a stockholder's risk of losing some or all of his investment. Because we do not expect to pay dividends for the foreseeable future, investors seeking cash dividends should not purchase our common stock. 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. Our payment of any future dividends will be at the discretion of our board of directors after taking into account various factors, including but not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. Accordingly, investors must rely on sales of their own common stock after price appreciation, which may never occur, as the only way to realize their investment. Investors seeking cash dividends should not purchase our common stock. Because we will be subject to the Penny Stock rules, the level of trading activity in our stock may be reduced. Broker-dealer practices in connection with transactions in penny stocks are regulated by penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on some national securities exchanges or quoted on Nasdaq). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer s presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer s account. In addition, broker-dealers who sell these securities to persons other than established customers and accredited investors must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser s written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security subject to the penny stock rules, and investors in our common stock may find it difficult to sell their shares. If our shares are quoted on the over-the-counter bulletin board, we will be required to remain current in our filings with the SEC and our securities will not be eligible for quotation if we are not current in our filings with the SEC. In the event that our shares are quoted on the over-the-counter bulletin board, we will be required order to remain current in our filings with the SEC in order for shares of our common stock to be eligible for quotation on the over-the-counter bulletin board. In the event that we become delinquent in our required with the SEC, quotation of our common stock will be terminated following a 30 day grace period if we do not make our required filing during that time. If our shares are not eligible for quotation on the over-the-counter bulletin board, investors in our common stock may find it difficult to sell their shares. Because purchasers in this offering will experience immediate and substantial dilution in the net tangible book value of their common stock, you may experience difficulty recovering the value of your investment. Purchasers of our securities in this offering will experience immediate and substantial dilution in the net tangible book value of their common stock from the initial public offering price. 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 in this offering and the pro forma net tangible book value per share of our common stock immediately following this offering. The dilution experienced by investors in this offering will result in a net tangible book value per share that is less than the offering price of $0.005 per share. Such dilution may depress the value of the company s common stock and make it more difficult to recover the value of your investment in a timely manner should you chose sell your shares. If we undertake future offerings of our common stock, purchasers in this offering will experience dilution of their ownership percentage. Generally, existing shareholders will experience dilution of their ownership percentage in the company if and when additional shares of common stock are offered and sold. In the future, we may be required to seek additional equity funding in the form of private or public offerings of our common stock. In the event that we undertake subsequent offerings of common stock, your ownership percentage, voting power as a common shareholder, and earnings per share, if any, will be proportionately diluted. This may, in turn, result in a substantial decrease in the per-share value of your common stock. We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing capital stock that would dilute your ownership. We expect to continue to finance our operations, acquisitions and develop strategic relationships, by issuing equity or convertible debt securities, which could significantly reduce the percentage ownership of our existing stockholders. Furthermore, any newly issued securities could have rights, preferences and privileges senior to those of our existing stock. Moreover, any issuances by us of equity securities may be at or below the prevailing market price of our common stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of stock to decline. We may also raise additional funds through the incurrence of debt or the issuance or sale of other securities or instruments senior to our shares of common stock. The holders of any debt securities or instruments we may issue would have rights superior to the rights of our common stockholders. Our common stock price may fluctuate significantly and you may lose all or part of your investment. Because we are a newly emerging company, there are few objective metrics by which our progress may be measured. Consequently, we expect that the market price of our common stock will likely fluctuate significantly. There can be no assurance whether or when we will generate revenue from the license, sale or delivery of our unique products and services. In the absence of product revenue as a measure of our operating performance, we anticipate that investors and market analysts will assess our performance by considering factors such as: announcements of developments related to our business; developments in our strategic relationships with companies; our ability to enter into or extend investigation phase, development phase, commercialization phase and other agreements with new and/or existing partners; announcements regarding the status of any or all of our collaborations or products; market perception and/or investor sentiment regarding our products and services; announcements regarding developments in the digital and mobile technology and the broadcast and entertainment industries in general; the issuance of competitive patents or disallowance or loss of our patent or trademark rights; and quarterly variations in our operating results. We will not have control over many of these factors but expect that our stock price may be influenced by them. As a result, our stock price may be volatile and you may lose all or part of your investment. The market for purchases and sales of our common stock may be very limited, and the sale of a limited number of shares could cause the price to fall sharply. Our securities are very thinly traded. Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock. Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock. Since we are controlled by current insiders and affiliates of the Company, you and our other non-management shareholders will be unable to affect the outcome in matters requiring shareholder approval. As of March 25, 2013 , 36,000,000 shares of our common stock are owned by Rob Danard and Adrian Ansell (a non-management affiliate) representing control of approximately 88% of the total voting power of our company. As a result, Danard and Ansell essentially have the ability to elect all of our directors and to approve any action requiring stockholder action, without the vote of any other stockholders. It is possible that the interests of Danard and Ansell could conflict in certain circumstances with those of other stockholders. Such concentrated ownership may also make it difficult for our shareholders to receive a premium for their shares of our common stock in the event we merge with a third party or enter into other transactions that require shareholder approval. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock. 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. The actual results could differ materially from our forward-looking statements. Our actual results are most likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in this
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+industry forecasts and projections throughout this prospectus, and in particular in the sections entitled Summary, Market Opportunity and Our Business. We have obtained substantially all of this information from a market study prepared for us in connection with this offering by John Burns Real Estate Consulting, LLC ( JBREC ), an independent research provider and consulting firm focused on the housing industry. We have agreed to pay JBREC a fee of $40,000 for that market study, plus an amount charged at an hourly rate for additional information we may require from JBREC from time to time in connection with that market study. Such information is included in this prospectus in reliance on JBREC s authority as an expert on such matters. Any forecasts prepared by JBREC are based on data (including third-party data), models and experience of various professionals, and are based on various assumptions (including the completeness and accuracy of third-party data), all of which are subject to change without notice. See Experts. In addition, certain market and industry data has been taken from publicly available industry publications. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. We have not independently verified the data obtained from these sources. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this prospectus. Table of Contents SUMMARY This summary highlights information contained elsewhere in this prospectus, but it does not contain all of the information that you should consider important in making your investment decision. Therefore, you should read this entire prospectus carefully, including, in particular, the Risk Factors section beginning on page 23 of this prospectus. As used in this prospectus, unless the context otherwise requires or indicates, references to the Company, our company, we, our and us (1) for the period prior to January 4, 2008, the date on which PICO (as defined below) acquired our business, refer to Union Community Partners, LLC, (2) for the period beginning January 4, 2008 and prior to completion of the transactions described in this prospectus under Organizational Structure, refer to UCP, LLC and its subsidiaries and (3) following the completion of the transactions described in this prospectus under Organizational Structure, refer to UCP, Inc. and its subsidiaries; and references to PICO refer to PICO Holdings, Inc., prior to this offering the sole member of UCP, LLC (together with its wholly owned subsidiaries excluding UCP, LLC). Unless otherwise indicated, market data is derived from a market study prepared for us in connection with this offering by John Burns Real Estate Consulting, LLC ( JBREC ). Unless the context otherwise requires, the information in this prospectus assumes that: (1) the transactions described in this prospectus under Organizational Structure have been completed, (2) the shares of our Class A common stock to be sold in this offering are sold at $16.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and (3) the underwriters option to purchase additional shares is not exercised. Our Company We are a homebuilder and land developer, with significant land acquisition and entitlement expertise, in growth markets in Northern California and with a growing presence in attractive markets in the Puget Sound area of Washington State. Our operations began in 2004 with the founding of Union Community Partners, LLC by Dustin L. Bogue, our President and Chief Executive Officer, and we were principally focused on acquiring land, entitling and developing it for residential construction, and selling residential lots to third-party homebuilders. In January 2008, we were acquired by PICO, a NASDAQ-listed, diversified holding company, which allowed us to accelerate the development of our business and gain access to a capital partner capable of funding our pursuit of attractive opportunities resulting from the recent residential real estate downturn. Since we were acquired by PICO, we have invested over $219.1 million acquiring ownership or control of and improving over 6,000 single-family residential lots. In 2010, we formed Benchmark Communities, LLC, or Benchmark Communities, our wholly owned homebuilding subsidiary, to design, construct and sell high quality single-family homes. As of March 31, 2013, our property portfolio consisted of 48 communities in 17 cities in Northern California and the Puget Sound area of Washington State. In Northern California, we primarily operate in three areas: the Central Valley area (Fresno and Madera counties), the Monterey Bay area (Monterey County) and the South San Francisco Bay area (Santa Clara and San Benito counties). In Washington State, we operate in the Puget Sound area (King, Snohomish, Thurston and Kitsap counties). We believe that these areas have attractive residential real estate investment characteristics, such as favorable long-term population demographics, a demand for single-family housing that often exceeds available supply, large and growing employment bases, and high home affordability levels, as discussed further in the Industry Overview section of this summary and under the heading Market Opportunity included elsewhere in this prospectus. We continue to experience significant homebuilding and land development opportunities in our current markets and are evaluating potential expansion opportunities in other markets that we believe have attractive long-term investment characteristics. 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 or other jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED JULY 8, 2013 P R E L I M I N A R Y P R O S P E C T U S 7,750,000 Shares UCP, Inc. Class A Common Stock $ per share This is the initial public offering of our Class A common stock. We are selling 7,750,000 shares of our Class A common stock. We currently expect the initial public offering price to be between $15.00 and $17.00 per share of our Class A common stock. We will be a holding company and our sole material asset will be membership interests representing 42.3% of the economic interests of UCP, LLC, assuming the underwriters do not exercise their option to purchase additional shares of our Class A common stock. After the completion of this offering, PICO Holdings, Inc., or PICO, will own a majority of the combined voting power of our common stock, will have the ability to elect a majority of our board of directors and will have substantial influence over our governance. We have granted the underwriters an option to purchase up to 1,162,500 additional shares of our Class A common stock and we intend to use the net proceeds from any exercise of the option to purchase a portion of PICO s existing interest in UCP, LLC. Our Class A common stock has been approved for listing on the New York Stock Exchange, subject to official notice of issuance, under the symbol UCP. Investing in our Class A common stock involves a high degree of risk. See Risk Factors beginning on page 23. We are an emerging growth company under the federal securities laws and are eligible for reduced reporting requirements. See Summary Implications of Being an Emerging Growth Company. 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 Discount $ $ Proceeds to Us (before expenses) $ $ The underwriters expect to deliver the shares to purchasers on or about July , 2013. Citigroup Deutsche Bank Securities Zelman Partners LLC JMP Securities July , 2013 Table of Contents Since 2008 and throughout the recent residential real estate downturn, we have been a significant acquiror of real estate for residential development and construction in our markets. We actively source land acquisition opportunities from a variety of parties, including land owners, land brokers, lenders and other land development and real estate companies. When we have elected to sell residential lots to third parties, our primary customers have been public and private homebuilders. Since 2008 and through March 31, 2013, we have sold 841 lots and 101 homes, generating revenue of $105.5 million across our markets. (1) Includes owned lots and lots that we control through purchase or option contracts. (2) Includes 35 lots purchased in December 2007. Our revenue increased from $2.4 million in 2010 to $58.1 million in 2012 and $11.8 million for the three months ended March 31, 2013. In the three months ended March 31, 2013, we sold 12 homes and 54 lots located in seven communities in California. In 2012, we sold 41 homes and 560 lots located in 10 communities in California and Washington State; and in 2011, we sold 33 homes and 118 lots located in seven communities in and around the Central Valley area, the South San Francisco Bay area and the Monterey Bay area of California. In the three months ended March 31, 2013, we generated homebuilding gross margin of $873,000, or 20.1%, and land development gross margin of $2.9 million, or 38.7%. In the year ended December 31, 2012, we generated homebuilding gross margin of $4.2 million, or 30.1%, and land development gross margin of $11.2 million, or 25.4%. In the three months ended March 31, 2013, we generated homebuilding adjusted gross margin of $935,000, or 21.6%, and land development adjusted gross margin of $2.9 million, or 38.8%. In the year ended December 31, 2012, we generated homebuilding adjusted gross margin of $4.4 million, or 30.9%, and land development adjusted gross margin of $12.5 million, or 28.4%. Homebuilding adjusted gross margin and land development adjusted gross margin are non-U.S. generally accepted accounting principles ( U.S. GAAP ) financial measures. For a discussion of these measures and a reconciliation of these measures to the most comparable U.S. GAAP financial measure, see Selected Consolidated Financial and Operating Data Consolidated Gross Margin and Consolidated Adjusted Gross Margin and U.S. GAAP Reconciliation. As of March 31, 2013, we owned or controlled 5,061 lots, which approximated an eight year supply of land based on our home and lot sales for the 12 months ended March 31, 2013, and which we believe will support our Table of Contents Table of Contents business strategy for a multi-year period. While we expect to opportunistically sell residential lots to third-party homebuilders when we believe that will maximize our returns or lower our risk, we expect that homebuilding and home sales will constitute our primary source of revenue growth. Since we were acquired by PICO in 2008, we have operated as a wholly owned subsidiary of PICO, and upon completion of this offering, PICO will hold a majority of the voting power of UCP, Inc. and of the economic interests of UCP, LLC, as described in this prospectus under Organizational Structure. John R. Hart, PICO s President and Chief Executive Officer, is a member of our board of directors and Maxim C. W. Webb, PICO s Chief Financial Officer, is also one of our directors. PICO seeks to invest in businesses using a disciplined, long-term risk-adverse investment approach that emphasizes preservation of capital. As a subsidiary of PICO, the development of our acquisition and financing strategies was influenced by PICO s substantial experience as an owner of businesses in a variety of industries. We believe that we will continue to benefit from PICO s substantial business expertise, vision, and public company experience, and that our corporate culture has benefited from the discipline of operating as a subsidiary of a public company. Upon completion of this offering, we will enter into a Transition Services Agreement with PICO, which will provide us with access to a developed public company platform for accounting, human resources and information technology functions, as we develop our own corporate infrastructure. We have operated our business through UCP, LLC under the name Union Community Partners. Upon completion of this offering, UCP, LLC will become a subsidiary of UCP, Inc. PICO will own 57.7% of the economic interests of UCP, LLC (51.4% if the underwriters exercise their option to purchase additional shares of our Class A common stock in full and the net proceeds therefrom are used to repurchase a portion of PICO s interest in UCP, LLC) and UCP, Inc. will own 42.3% of the economic interests of UCP, LLC (48.6% if the underwriters exercise their option to purchase additional shares of our Class A common stock in full and the net proceeds therefrom are used to repurchase a portion of PICO s interest in UCP, LLC). Industry Overview The U.S. housing market continues to improve from the cyclical low points reached during the 2008-2009 national recession. Between the 2005-market peak and 2011, single-family housing sales declined 76%, according to data compiled by the U.S. Census Bureau, and median home prices declined 34%, as measured by the S&P Case-Shiller Index. In 2011, early signs of a recovery began to materialize in many markets around the country as a result of an improving macroeconomic backdrop and a historically high level of housing affordability. In the twelve months ended March 31, 2013, homebuilding permits increased 30% and the median single-family home price increased 9.3% as compared to the twelve months ended March 31, 2012. Growth in new home sales outpaced growth in existing home sales over the same period, increasing 20% for new homes versus 9% for existing homes (which were impacted by foreclosure-related sales and limited resale inventory). Historically, strong housing markets have been associated with excellent affordability, a healthy domestic economy, positive demographic trends such as population growth and household formation, falling mortgage rates, increases in renters that qualify as home buyers, and locally based dynamics such as housing demand relative to housing supply. Many markets across the U.S. are exhibiting a number of these positive characteristics. Relative to long-term historical averages, the U.S. economy is creating more jobs than homebuilding permits issued, the inventory of new homes for sale and resale homes is well below average and affordability is near its best level in more than 30 years, as measured by the ratio of homeownership costs to household income. Table of Contents Table of Contents Despite recent momentum, the U.S. housing market has not fully recovered from the 2008-2009 recession as consumer confidence remains below average levels, mortgage underwriting standards have tightened and the number of delinquent homes remains elevated relative to historical averages. Additionally, real estate is a local industry and not all markets exhibit the same trends. For a detailed discussion of the residential real estate investment characteristics of the areas in which we operate, see the information included in this prospectus under the heading Market Opportunity. Our Competitive Strengths We believe the following competitive strengths will provide us with a competitive advantage in implementing our business strategy: Substantial Presence in Attractive West Coast Markets We currently focus on West Coast markets with high barriers to the development of residential real estate, such as geographic or political factors, and that we believe exhibit attractive residential real estate investment characteristics, such as improving levels of employment and population growth relative to national averages. Our extensive land holdings in select markets in California and Washington State provide us significant exposure to the current U.S. housing market recovery. We believe that we are well positioned if housing sales volumes or home price appreciation accelerate in the future and that any such trends would enhance our profit potential. Since inception, our focus has been on acquiring land at various stages of entitlement and development in the following areas of California: the Central Valley area, the Monterey Bay area and the South San Francisco Bay area. Beginning in 2011, we entered the Puget Sound area of Washington State. We believe that these residential real estate markets offer an attractive long-term investment opportunity due to favorable demographic trends and positive economic indicators. Currently, evidence of a housing recovery in our markets includes decreasing levels of existing home inventory, high affordability, an increasing volume of new home sales and increasing home prices. Furthermore, recent key housing data in our markets compare favorably to national averages. Significant Land Position Acquired at Low Cost Basis Substantially all of our real estate inventory of 5,061 lots as of March 31, 2013 was aggregated since 2008 at what we believe are attractive prices, providing us with significant opportunity, particularly if home prices and overall housing market conditions continue to improve. Throughout the housing market downturn, we continued to implement our disciplined land acquisition methodology, which emphasizes our value-oriented investment philosophy, along with attractive underlying housing market fundamentals, such as favorable long-term demographics, demand for single-family housing that exceeds available supply, desirable educational systems and institutions, high educational attainment levels, well-developed transportation infrastructure, proximity to major trade corridors and employment centers, positive employment trends, diverse employment bases, and high barriers to the development of residential real estate, such as geographic or political factors. As of March 31, 2013, we owned or controlled 5,061 lots, which approximated an eight year supply of land based on our home and lot sales for the 12 months ended March 31, 2013, and which we believe will support our business strategy for a multi-year period. We believe that our extensive land holdings may reduce our exposure to potential land shortages or increasing land prices in our markets. Growth-Focused Company with No Known Legacy Troubled Assets We believe that our strong balance sheet and absence of known legacy troubled assets enable us to focus on future growth, as opposed to diverting resources to managing troubled assets. Because our land acquisition activity accelerated in January 2008 after we were acquired by PICO, we have no known legacy assets in markets, or at acquisition costs, that we believe are no longer commercially viable, nor do we believe that we Table of Contents Table of Contents have significant liabilities related to assets that are no longer commercially viable, unlike many competitors that were negatively impacted by the recent housing downturn. Our land inventory has been underwritten at valuations that we believe remain attractive and is located in markets on which we have strategically focused since the 2007 downturn commenced. The absence of known legacy assets and liabilities has aided us in attracting and retaining experienced and talented homebuilding and real estate development personnel. We believe that we are well-positioned to achieve economies of scale as we seek to grow our business. Access to Privately Negotiated Land and Lot Acquisitions, and to Projects with Significant Value-Add Opportunities Our strong local relationships and proven land acquisition, development and homebuilding platform have allowed us to generate attractive adjusted gross margins. We benefit from the long-standing relationships our executive management team has with key land owners, brokers, lenders, and development and real estate companies in our markets that have provided us with opportunities to evaluate and privately negotiate acquisitions outside of a broader marketing process. In addition, we believe that our strong balance sheet, positive reputation in our markets among potential land sellers and brokers as a homebuilder and land developer, and track record of acquiring over 6,000 lots since 2008 provide land sellers and brokers confidence that we will consummate transactions in a highly professional, efficient and transparent manner, which in turn strengthens these relationships for future opportunities. We believe our relationships with land owners and brokers will continue to provide opportunities to source land acquisitions privately, helping us to maintain a significant pipeline of opportunities on favorable terms and prices. The land development process in our markets can be very complex and often requires highly-experienced individuals that can respond to numerous unforeseen challenges with a high degree of competency and integrity. We actively seek land acquisition opportunities where others might seek to avoid complexities, as we believe we can add significant value through our expertise in entitlements, re-entitlements, horizontal land planning and development, and by designing and selling homes to targeted home buyer segments that are attracted to our differentiated new home product. Proven Land Acquisition Underwriting Methods Our executive management team has developed a rigorous and disciplined land acquisition underwriting methodology, which has guided our land acquisition activities. Rooted in an analytical approach to decision making, our underwriting methods emphasize risk identification and mitigation, and screen for fundamental asset value with high risk-adjusted return potential. Our underwriting models help us identify, evaluate and act upon residential acquisition and development opportunities based on a variety of indicators, including demand for single-family housing that exceeds available supply, high single-family home affordability, and areas with well regarded educational systems and institutions, high educational attainment levels, accommodative transportation infrastructure, proximity to major trade corridors, positive employment trends, diverse employment bases and geographic or political barriers that limit the development of new housing. Our executive management team is closely involved in the sourcing, underwriting, negotiation and closing of our land transactions. Our rigorous diligence process entails gaining a detailed understanding of the risks and profit potential of each asset, internal and third-party analysis of local supply and demand factors, internal and third-party analysis of competitive market dynamics, and analysis of broader market conditions, such as prevailing employment and demographic information. Innovative Homebuilding Platform with Distinctive, Diverse Product Offering We build homes through our wholly owned homebuilding subsidiary, Benchmark Communities. Benchmark Communities operates under the principle that Everything Matters! This principle underlies all phases of our Table of Contents new home process including planning, construction, sales and customer service. Based on third-party surveys and realtor feedback, our Benchmark Communities brand is recognized by home buyers in markets where Benchmark Communities has built and sold homes for its high-quality construction materials and craftsmanship, cutting edge home design, and customer-centric service and warranty programs. Eliant Surveys, a third-party customer experience management company that has been surveying buyers of new homes for over twenty years, surveys our home buyers after closing on their home purchases. For the three months ended March 31, 2013, our initial quality and customer service scores were 90.7% and 97.0%, respectively, as compared to national homebuilder averages of 85.8% and 90.6% respectively. We are diversified by product offering, which we believe broadens our exposure to the housing recovery and reduces our exposure to any particular market or customer segment. Target home buyers vary by project and geographic market, in part dictated by each particular asset, its location, topography and competitive market positioning and the amenities of the surrounding area and the community in which it is located. Optionality Provided by Our Hybrid Homebuilding and Land Development Strategy As a hybrid homebuilder and land developer, we are strategically positioned to either build new homes on our lots or to sell our lots to third-party homebuilders. While our business plan contemplates building new homes on the majority of our lots, we proactively monitor market conditions and our nimble operations allow us to opportunistically sell a portion of our lots to third-party homebuilders if we believe that will maximize our returns or lower our risk. We believe our ability and willingness to opportunistically build on or sell our lots to third-party homebuilders affords us the following important advantages: exploit periods of cyclical expansion by building on our lots; manage our operating margins and reduce operating income volatility by opportunistically selling lots as operating performance and market conditions dictate; and manage operating risk in periods where we anticipate cyclical contraction by reducing our land supply through lot sales. Proven and Experienced Management Team With an average of 23 years of residential land acquisition, development and homebuilding experience, our executive management team, led by Dustin L. Bogue, our President and Chief Executive Officer, William J. La Herran, our Chief Financial Officer and Treasurer, and James W. Fletcher, our Chief Operating Officer, successfully guided our company through the deep and extensive housing depression that lasted from our inception through 2012. During this time and through March 31, 2013, our executive management team has executed over 40 land acquisition transactions valued at more than $219.1 million of invested capital and totaling over 6,000 lots. Beginning in early 2008, our executive management team developed and implemented our strategy of acquiring a significant amount of residential land, at what we believe to be meaningful discounts to its long-term value, for us to build homes upon or sell to third-party homebuilders. We believe our executive management team has positioned us to benefit significantly from any continuation of the U.S. housing recovery, with positive exposure to any related home price appreciation. Our Business Strategy We actively source, evaluate and acquire land for residential real estate development and homebuilding. For each of our real estate assets, we periodically analyze ways to maximize value by either (i) building single-family Table of Contents homes and marketing them for sale under our Benchmark Communities brand, or (ii) completing entitlement work and horizontal infrastructure development and selling finished lots to third-party homebuilders. We perform this analysis using a disciplined analytical process, which we believe is a differentiating component of our business strategy. We believe that we are well positioned to capitalize on any continuation of the prevailing housing market recovery through the disciplined execution of the following strategies: Grow Revenue by Increasing Community Count As of March 31, 2013, we owned or controlled 5,061 lots, providing us with significant lot supply, which we believe will support our business strategy for a multi-year period. We believe that our sizable inventory of well located land provides us with a significant opportunity to develop communities and design, construct, and sell homes under our Benchmark Communities brand. While we expect to opportunistically sell select residential lots to third-party homebuilders when we believe that will maximize our returns or lower our risk, we expect that homebuilding and home sales will constitute our primary means of generating revenue growth for the foreseeable future. As of March 31, 2013, we had five actively selling communities consisting of 290 lots, and we expect to open nine additional communities during the remainder of 2013. However, this is subject to market and operating conditions, and no assurance can be given that we will open these communities during this time period. Continue to Implement Return-Focused Investment and Operational Discipline When acquiring real estate assets, we focus on seeking maximum long-term risk-adjusted returns. Our underwriting and operating philosophies emphasize capital preservation, risk identification and mitigation, and risk-adjusted returns. Our investing and operating discipline have resulted in consolidated gross margin percentages of 26.5% and 5.3% for the years ended December 31, 2012 and 2011, respectively and 31.9% and 31.8% for the three months ended March 31, 2013 and 2012, respectively; and consolidated adjusted gross margin percentages of 29.0% and 30.2% for the years ended December 31, 2012 and 2011, respectively, and 32.5% and 35.0% for the three months ended March 31, 2013 and 2012, respectively. We seek to mitigate our exposure to market downturns and capitalize on market upturns through the following key strategies: identifying the risks associated with our assets and business, including market, entitlement and environmental risks, and structuring transactions to minimize the impact of those risks; maintaining high quality in our construction activities; maintaining a strong balance sheet, using a prudent amount of leverage; leveraging our purchasing power and controlling costs; attracting highly experienced professionals and encouraging them to maintain a deep understanding and ownership of their respective disciplines; maintaining a strong corporate culture that is based on integrity, honesty, transparency, value, quality and excellence; and maintaining rigorous supervision over our operations. Maximize Benefits of Hybrid Homebuilding and Land Development Model Our business model provides the flexibility to monetize the value of our land assets either by building and selling homes through Benchmark Communities or developing land and selling lots to third-party homebuilders. When evaluating monetization strategies for our land assets, we consider each asset s potential contribution to our overall performance, taking into account the time frame over which we may monetize the asset, rather than simply considering its ability to drive sales in a particular submarket over a short period of time. While we Table of Contents currently intend to monetize the majority of our land assets by building homes on our lots, we believe our hybrid homebuilding and land development model provides us with increased flexibility to seek to maximize risk-adjusted returns as market conditions warrant. Design, Construct and Develop High Quality, Innovative Homes and Communities We believe our target home buyers look for distinctive new homes; accordingly, we design homes in thoughtful and creative ways to create homes that we expect buyers will find highly desirable. We seek to accomplish this by collecting and analyzing information about our target home buyers and incorporating our analysis into new home designs. We source information about target home buyers from our experience selling new homes and through market research that enables us to identify design preferences that we believe will appeal to our customers. We target diverse buyer segments, including first-time buyers, first-time move-up buyers, second-time move-up buyers and move-down buyers. Most of our communities target multiple buyer segments within such community, enabling us to seek increased sales pace and reduce our dependence on any single buyer segment. For example, our East Garrison project in Monterey County, California is expected to ultimately include eight communities. Each of these communities will be designed, appointed and branded to appeal to a specific buyer segment that we have identified as sizable and that offer significant potential demand. We choose the targeted buyer segments based upon internal research, multiple third-party research reports and our senior management team s extensive experience. We contract with high quality architects, engineers and interior designers to assist our experienced internal product development personnel in designing homes that are intended to reflect our target customers tastes and preferences. In addition to identifying desirable design and amenities, this process includes a rigorous value engineering strategy that allows us to seek efficiencies in the construction process. Deliver Superior High-Touch Customer Service We seek to make the home buying experience friendly, effective and efficient. Our integrated quality assurance and customer care functions assign the same personnel at each community the responsibility for monitoring quality control and managing customer service. As a standard practice, we communicate with each homeowner at least seven times during their first two years of ownership in an effort to ensure satisfaction with their new home. Additionally, we monitor the effectiveness of our service efforts with third-party surveys that measure our home buyers perception of the quality of our homes and the responsiveness of our customer service. Our customer service program seeks to optimize customer care in terms of availability, response time and effectiveness, and we believe that it reduces our exposure to future liability claims. We believe that our continuing commitment to quality and customer service provides a compelling value proposition for prospective home buyers and reduces our exposure to long-term construction defect claims. Selectively Pursue Geographic Expansion Our geographic expansion strategy targets markets with favorable housing demand fundamentals, including, in particular, long-term population and employment growth. Attributes that make submarkets attractive to us include constrained lot supply, high-ranking schools, affordability, and proximity to transportation corridors and retail centers, among other factors. We avoid submarkets that are challenged by impediments such as excessive residential foreclosure, excessive lot supply and unusually high unemployment. Additionally, we may evaluate the acquisition of other homebuilders or land developers when we believe we can generate operational efficiencies or enter into new markets that may offer attractive fundamentals. We believe that our acquisition by PICO and subsequent integration into PICO s operations have provided us with first-hand knowledge of how to successfully grow through selective acquisitions. Table of Contents Recent Developments The following table sets forth our selected preliminary operating data for the three months ended June 30, 2013. Three Months Ended June 30, Increase (Decrease) 2013 2012 Amount % Homebuilding Net new home orders 59 3 56 1,866.7 % New homes delivered 57 6 51 850.0 % Average selling communities during the period 7 2 5 320.0 % Selling communities at end of period 9 1 8 800.0 % Backlog(1) at end of period, number of homes 78 4 74 1,850.0 % Land development Lots delivered 54 Backlog(1) at end of period, number of lots 60 32 28 87.5 % (1) Backlog consists of homes or lots under sales contracts that have not yet closed, and there can be no assurance that closings of such contracts will occur. We are in the process of finalizing our operating data for the three months ended June 30, 2013 and, therefore, actual data for this period is not yet available. The preliminary operating data presented above for the three months ended June 30, 2013 is subject to change pending finalization and actual data may differ. As of March 31, 2013, we owned or controlled, pursuant to purchase or option contracts, an aggregate of 5,061 lots. Subsequent to March 31, 2013, we have acquired 114 residential lots for an aggregate purchase price of $1.5 million and entered into purchase contracts to acquire 771 additional residential lots. If we complete all of these pending acquisitions, the aggregate purchase price for these lots would be $56.5 million. No assurance can be given that we will consummate these acquisitions as currently contemplated. Table of Contents Project Sales by County The following table sets forth home and lot sales revenue and units delivered by county for our projects during the three months ended March 31, 2013 and 2012 and the years ended December 31, 2012 and 2011. Three Months Ended March 31, Year Ended December 31, 2013 2012 2012 2011 Unit Sales Units Delivered Unit Sales Units Delivered Unit Sales Units Delivered Unit Sales Units Delivered (in thousands, except units delivered) Home Sales California Monterey County $ 685 3 $ 1,108 4 $ 5,588 21 $ 1,288 5 Santa Clara County 1,664 3 3,760 6 Fresno County 1,568 5 715 2 3,169 10 Madera County 425 2 665 3 3,828 18 San Benito County 416 1 3,332 9 Total Home Sales $ 4,333 12 $ 1,533 6 $ 14,060 41 $ 8,285 33 Lot Sales California Santa Clara County $ 7,470 54 $ 13,810 92 $ 11,835 70 Fresno County 20,502 356 4,058 48 Washington King County $ 2,002 26 9,754 112 Total Land Sales $ 7,470 54 $ 2,002 26 $ 44,066 560 $ 15,893 118 Total Sales $ 11,803 66 $ 3,535 32 $ 58,126 601 $ 24,178 151 Table of Contents Description of Completed Projects and Projects under Development The following table presents project information relating to each of our markets as of March 31, 2013 and includes information for all projects completed since our acquisition by PICO in January 2008 and projects with communities expected to open during the remainder of 2013. Location Actual or Projected Year of First Delivery Projected Total Number of Homes(2) Cumulative Units Closed as of March 31, 2013 Backlog at March 31, 2013(3) Owned Lots as of March 31, 2013(4) Actual or Anticipated Sales Price Range (in thousands) Home Size Range (sq. ft.) California Monterey County: SummerField, Soledad 2011 58 29 22 29 $ 205-$332 1,360-2,080 Artisan, East Garrison 2013 (1) 75 75 $ 487-$565 1,719-2,411 Heritage, East Garrison 2013 (1) 71 71 $ 555-$640 2,127-2,877 Monarch, East Garrison 2013 (1) 65 65 $ 445-$485 1,575-1,789 Santa Clara County: Jasper Hill, Morgan Hill 2011 19 9 10 10 $ 480-$600 1,392-2,335 Fairview, Gilroy 2013 (1) 23 23 $ 680-$794 2,710-3,346 Fresno County: Vintage Collection, Clovis 2011 19 10 9 $ 262-$362 2,423-4,272 Vantage, Clovis 2011 79 6 17 73 $ 317-$384 2,257-3,331 Dakota Square, Fresno 2013 (1) 169 1 17 168 $ 255-$324 1,816-2,912 Pasaro, Clovis 2013 (1) 121 121 $ 328-$386 2,298-3,331 Red Hawk, Sanger 2013 (1) 30 30 $ 380-$415 2,499-3,331 Madera County: Coronado, Madera 2011 20 20 $ 150-$300 2,047-3,510 Coronado II, Madera 2013 (1) 183 183 $ 175-$215 1,536-2,376 San Benito County: Walnut Park 2012 20 10 10 10 $ 340-$430 1,536-2,376 Washington Thurston County: Sagewood I, Tumwater 2013 (1) 97 97 $ 213-$233 1,600-2,050 Sagewood III, Tumwater 2013 (1) 45 45 $ 273-$300 2,250-2,800 Total: 1,094 85 76 1,009 (1) Projected year of first delivery is based upon management s estimates and is subject to change. (2) Projected number of homes to be built at completion is subject to change and there can be no assurance that we will build all of these homes. (3) Backlog consists of homes under sales contracts that have not yet closed, and there can be no assurance that closings of such contracts will occur. As of March 31, 2013 the value of our backlog was $21.8 million, and we expect that all of this amount should be converted to completed sales by December 31, 2013. (4) Owned lots as of March 31, 2013 include owned lots in backlog as of March 31, 2013. Table of Contents Owned and Controlled Lots As of March 31, 2013, we owned or controlled, pursuant to purchase or option contracts, an aggregate of 5,061 lots. The following table presents certain information with respect to our owned and controlled lots as of March 31, 2013. As of March 31, 2013 Owned Controlled(1) Total Central Valley Area-California 1,875 364 2,239 Monterey Bay Area-California 1,599 1,599 South San Francisco Bay Area-California 70 347 417 Puget Sound Area-Washington 711 95 806 Total 4,255 806 5,061 (1) Controlled lots are those subject to a purchase or option contract. Subsequent to March 31, 2013, we have acquired 114 residential lots for an aggregate purchase price of $1.5 million and entered into purchase contracts to acquire 771 additional residential lots. If we complete all of these pending acquisitions, the aggregate purchase price for these lots would be $56.5 million. No assurance can be given that we will consummate these acquisitions as currently contemplated. Corporate Structure Following this offering we will be a holding company and our sole material asset will be membership interests representing 42.3% of the economic interests of UCP, LLC, assuming no exercise by the underwriters of their option to purchase additional shares of our Class A common stock. See Organizational Structure for a diagram depicting our organizational structure immediately after completion of this offering and the transactions described in this prospectus. We will be the sole managing member of UCP, LLC and operate and control all of the business and affairs and consolidate the financial results of UCP, LLC and its subsidiaries. UCP, LLC is a holding company for the companies that directly or indirectly own and operate our business. Prior to this offering, there were 100 UCP, LLC membership interests issued and outstanding, all of which were owned by PICO. Immediately prior to this offering, UCP, LLC s Amended and Restated Limited Liability Company Operating Agreement will be amended and restated to, among other things, designate UCP, Inc. as the sole managing member of UCP, LLC and establish a new series of membership interests (which we refer to as the UCP, LLC Series B Units ) which will be held solely by UCP, Inc. and reclassify PICO s membership interests into UCP, LLC Series A Units which will be held solely by PICO (and its permitted transferees). The UCP, LLC Series B Units will rank on a parity with the UCP, LLC Series A Units as to distribution rights and rights upon liquidation, winding up or dissolution. Under the Second Amended and Restated Limited Liability Company Operating Agreement of UCP, LLC, any distributions generally will be made to the holders of UCP, LLC Series A Units and UCP, LLC Series B Units in proportion to the number of units owned by them. We also will enter into an Exchange Agreement pursuant to which PICO (and its permitted transferees) will have the right to cause UCP, Inc. to exchange PICO s UCP, LLC Series A Units for shares of our Class A common stock on a one-for-one basis, subject to equitable adjustments for stock splits, stock dividends and reclassifications. We expect that, as a result of these exchanges in the future, the tax basis of UCP, LLC s assets attributable to our interest in UCP, LLC will be increased. These increases in tax basis will result in a tax benefit to UCP, Inc. that would not have been available but for the future exchanges of the UCP, LLC Series A Units for shares of our Class A common stock. These increases in tax basis will reduce the amount of tax that UCP, Inc. Table of Contents would otherwise be required to pay in the future, although the Internal Revenue Service, or IRS, may challenge all or part of the tax basis increases, and a court could sustain such a challenge. The exchanges by PICO of UCP, LLC Series A Units for shares of our Class A common stock will not, except for the tax benefit generated by the exchanges and the related payments under the Tax Receivable Agreement (described below), affect our public stockholders. Exchanges of UCP, LLC Series A Units for shares of our Class A common stock or other acquisitions by us of UCP, LLC Series A Units will reduce the voting power of our Class B common stock and increase the voting power of our Class A common stock in a commensurate amount. Tax Receivable Agreement In connection with this offering, we will enter into a Tax Receivable Agreement that will provide for the payment by us to PICO of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that we actually realize as a result of any increase in tax basis caused by PICO s exchange of UCP, LLC Series A Units for shares of our Class A common stock. UCP, Inc. and its Class A common stockholders will benefit from the remaining 15% of cash savings, if any, in income tax that is realized by UCP, Inc. For purposes of the Tax Receivable Agreement, cash savings in income tax will be computed by comparing our actual income tax liability to the amount of such taxes that we would have been required to pay had there been no increase in the tax basis of the assets of UCP, LLC as a result of the exchanges and had we not entered into the Tax Receivable Agreement. The term of the Tax Receivable Agreement will commence upon consummation of this offering and will continue until all such tax benefits have been utilized or expired, unless a change of control occurs, we materially breach our obligations under the agreement or we exercise our right to terminate the Tax Receivable Agreement and, in each case, we pay PICO a required amount based on the present value of payments based on estimates of amounts remaining to be made under the agreement. For additional information regarding our Tax Receivable Agreement, see Certain Relationships and Related Party Transactions Tax Receivable Agreement.
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+++ b/parsed_sections/prospectus_summary/2013/CIK0001573059_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/CIK0001573062_eureka_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001573062_eureka_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..efc3a56bdef422ea7f2ebe4caa72341889d8888e
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001573062_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/CIK0001573066_arc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001573066_arc_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..efc3a56bdef422ea7f2ebe4caa72341889d8888e
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001573066_arc_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/CIK0001574754_np_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574754_np_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574754_np_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574785_np-gold_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574785_np-gold_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574785_np-gold_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574794_station_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574794_station_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574794_station_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574799_np_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574799_np_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574799_np_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574804_np-magic_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574804_np-magic_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574804_np-magic_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574807_np-opco_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574807_np-opco_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574807_np-opco_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574816_np-past_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574816_np-past_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574816_np-past_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574822_np-santa_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574822_np-santa_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574822_np-santa_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574839_sc-rancho_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574839_sc-rancho_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574839_sc-rancho_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574840_sc-sonoma_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574840_sc-sonoma_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574840_sc-sonoma_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574946_soellingen_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574946_soellingen_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..81fce8a5c9442b00d173c87abe104c2fd4106147
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574946_soellingen_prospectus_summary.txt
@@ -0,0 +1,585 @@
+PROSPECTUS SUMMARY
+
+ 
+
+Item 3. Summary Information, Risk Factors and Ratio of Earnings to Fixed Charges.
+
+This summary highlights certain information contained elsewhere in this prospectus. You should read the following summary together with the more detailed information regarding SOELLINGEN ADVISORY GROUP, INC. ( Us, We, Our, SAGI, the Company, or the Corporation ) and our financial statements and the related notes appearing elsewhere in this prospectus.
+
+ The Company
+
+Our Business
+
+ 
+
+SOELLINGEN ADVISORY GROUP, INC. (hereinafter SAGI ) is a development stage company incorporated in the State of Florida in March 2013. We were formed as a consultant to the environmental technologies industry. The environmental technologies industry is subject to constant change due to market trends, thereby making it extremely competitive. The environmental technologies industry is complex, because several segments are regulated by both federal and state governments. SAGI s approach assists general business operations with the growth and development, international expansion and marketing aspects of their business, allowing our potential customers to focus on the business aspects of operations. By using the services provided by SAGI, our clients are free to focus on compliance with regulations within their industry, and to complete their primary business goals.
+
+SOELLINGEN ADVISORY GROUP, INC. focuses on three main aspects of the consulting business: operations management, international expansion strategy and marketing. Assisting business owners to build strong relationships with their vendors, partners and contractors will allow our client companies to add business stability through retention of key personnel, project success and brand sustainability.
+
+Our programs will be tailored to meet the needs and requests of our clients. We will assist our clients with growth by increasing their customer base and assisting their operations and growth management in new markets. 
+
+We will provide customized business strategies, based upon client preference, which may include any or all of the following:
+
+ 
+
+International and domestic corporate development strategies;
+
+ 
+
+Strategic and financial partnering;
+
+ 
+
+Project management;
+
+ 
+
+Seminars and Special Events; and,
+
+ 
+
+Marketing.
+
+The company has consulted on a number of projects on a pro-bono basis to establish a strong corporate history toward obtaining a strong paying client base. The rate charged for our services will be dependent upon the level of consulting services the client company is interested in utilizing and the complexity of the client company business. SAGI consulting fees will be negotiated and established based upon factors such as the level of services requested by the client.
+
+ 
+
+Thus far we have marketed our services primarily to environmental and "green" technology, renewable energy, mining services and infrastructure development companies located in the United States of America (the U.S. ). SAGI has been doing business since inception, March 2013. Originally formed to do any and all legal business, the intent of the corporation was to specialize in corporate development and growth management consultation. David Haig, our president has been involved in the company since inception and is the founder. We focus on geographic areas, projects and budget levels where we believe there are significant demand for our services and the potential for attractive returns to our company and investors. We do not consider our company to be a blank check company as such term is defined in Securities and Exchange Commission Rule 419; however, we are a development stage company with minimal revenues and limited operations and our auditor has expressed substantial doubt about our ability to continue as a going concern. The company is not a blank-check company and was not formed for the purposes of a reverse merger or any other like 
+
+5
+
+transaction. The company has no present plans to be acquired or to merge with another company nor does the company, nor any of its shareholders, have plans to enter into a change of control or similar transaction. The company does now and will continue to operate as an advisory company, on a fee-based compensation basis, for independent clients requiring our expertise, experience and international contact networks. Any acquisitions that the company may make in the future, would be of companies similar in nature to our own, operating in similar or complementary industry segments or geographic location; that would provide Soellingen with new growth opportunities or competitive advantage. However, even though our business plan does contemplate potential growth through the acquisition of specialty service providers and other independent consulting services companies that would complement our business plan we are first and foremost a business consulting company. SAGI anticipates growth through the consolidation of consulting service providers, proprietary processes and small to mid-sized independent management consulting companies that operate in related industries. Our management has designed an aggressive but straightforward strategy to transition SAGI to a full service independent environmental technologies industry solutions provider in addition to our consulting with minimal risk to the existing operation.
+
+We believe that our conduct to date evidences significant, bona fide business operations and a scenario that is wholly inapposite to any attempt to create the mere appearance of a specific business plan and effort to avoid the application of Rule 419. 
+
+ Our general business strategy is to market our services to markets primarily in industry/incentive friendly regions of the United States of America. Our strategically located business development efforts are well positioned to benefit from the continuing need for our services. We recognize that current market conditions are extremely challenging. Accordingly, we have adapted our business plan and strategy with the goal of protecting liquidity, enhancing our balance sheet and positioning our Company for future growth when market conditions improve. In connection with this strategy, we have adopted a conservative approach and our principal business strategy is to utilize our sales expertise to: 
+
+ 
+
+sell consulting services throughout the United States;
+
+ 
+
+provide consistently reliable high-quality service;
+
+ 
+
+aggressively manage operating costs to maintain and improve operating margins;
+
+ 
+
+expand business by improving, enhancing and expanding sales, gaining new customers;
+
+ 
+
+pursue complementary bolt on growth opportunities having acceptable risks and returns; and
+
+ 
+
+generate consistent revenue, operating margins, earnings and cash flows.
+
+ 
+
+The following sections present an overview of our business segment, including information regarding the principal business and competitive strengths. Our results of operations and financial condition are subject to a variety of risks. For information regarding our key risk factors, see Risk Factors. 
+
+We conduct consulting services in industry/incentive friendly regions of the United States of America. Our business consists of one operation from the corporate headquarters. Our revenue will be generated from consulting services.
+
+We currently have only two employees, David Haig who is our CEO and President, and Ray Skaff who is our Vice President, Corporate Communications. 
+
+The Offering
+
+Number of Shares Being Offered:
+
+The selling security holders may sell up to 862,000 shares of common stock at $0.05 per share. Affiliated persons are not offering any shares. Issuance of these shares to the selling security holders was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended. Non-affiliated selling security holders will sell at the fixed price. Selling shareholders are underwriters as defined under the Securities Act of 1933.
+
+Number of Shares Outstanding After the Offering:
+
+20,414,000 shares of our common stock are issued and outstanding. We have no other securities issued.
+
+Selected Financial Data - Annual:
+
+March 28, 2013 (inception)
+
+June 30,
+
+2013
+
+Current assets
+
+$
+
+175,167
+
+Total Assets
+
+176,167
+
+Total current liabilities
+
+164,901
+
+Total stockholders' equity (deficit)
+
+11,266
+
+Working Capital 
+
+10,266
+
+March 28, 2013 (inception)
+
+June 30, 2013
+
+Statement of Operations
+
+Revenues
+
+$
+
+19,500 
+
+Operating expenses:
+
+68,017
+
+Interest Expense
+
+5,017
+
+Net income (loss)
+
+$
+
+(13,534)
+
+ 
+
+RISK FACTORS
+
+Before you invest in our common stock, you should be aware that there are risks, as described below. You should carefully consider these risk factors together with all of the other information included in this prospectus before you decide to purchase shares of our common stock. Any of the following risks could adversely affect our business, financial conditions and results of operations.
+
+Risks Related To the Company
+
+(1) Our Auditor Has Expressed Substantial Doubt About Our Ability To Continue As A Going Concern.
+
+These financial statements included with this registration statement have been prepared on a going concern basis. We have a working capital deficiency of $6,949, and have an accumulated deficit of $30,649 since inception as of April 30, 2013. We may not be able to generate profitable operations in the future and/or obtain the necessary financing to meet our obligations and repay liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time. These factors raise substantial doubt that we will be able to continue as a going concern. The Company to date has funded its initial operations through the sale of unregistered securities in the amount of $22,850. Management plans to continue to provide for 
+
+7
+
+its capital needs by the issuance of common stock and related party advances. Our financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.
+
+(2) Our access to credit markets may be limited, which may adversely impact our liquidity. 
+
+We may require additional capital from outside sources from time to time. Our ability to arrange financing, and the cost of such capital, is dependent on numerous factors, including: 
+
+ 
+
+ 
+
+ 
+
+ 
+
+credit availability from banks and other financial institutions; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+investor confidence in us; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+our levels of indebtedness; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+competitive, legislative and regulatory matters; 
+
+ 
+
+ 
+
+ 
+
+cash flows; and,
+
+ 
+
+ 
+
+ 
+
+provisions of tax and securities laws that may impact raising capital.
+
+In addition, volatility in the capital markets may adversely affect our ability to access any available borrowing capacity under our revolving credit facility. 
+
+(3) Our operating results and financial condition may be adversely affected by unfavorable general economic conditions. 
+
+Unfavorable economic conditions worldwide contribute to slowdowns. If global economic conditions or economic conditions in the U.S. remain uncertain or persist, spread or deteriorate further, we may experience material adverse impacts on our results of operations, cash flows and financial condition. 
+
+(4) Our profitability depends on the demand for the services we sell in the markets we serve. 
+
+Any sustained reduction in demand for our services in markets served by our midstream assets could result in a significant reduction in the volume of services that we sell, thereby adversely affecting our results of operations, cash flows and financial condition. Factors that could lead to a reduction in demand include: 
+
+ 
+
+ 
+
+ 
+
+ 
+
+an increase in the price of services; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+higher taxes, including federal excise taxes or sales taxes or other governmental or regulatory actions that increase, directly or indirectly; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+adverse economic conditions which result in lower spending by consumers and businesses on services we sell; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+higher taxes or other governmental or regulatory actions that increase the cost of the services we provide; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+effects of weather, natural phenomena, terrorism, war, or other similar acts; 
+
+ 
+
+ 
+
+ 
+
+a shift by consumers to more technological advances by manufacturers or federal or state regulations; and,
+
+ 
+
+ 
+
+ 
+
+ 
+
+decisions by our customers or suppliers to use alternate service providers for a portion or all of their needs, operate in different markets not served by us, reduce operations or cease operations entirely. 
+
+ 
+
+(5) Because of the natural decline in production in our areas of operation, our success depends on our ability to obtain new sources of business, which is dependent on factors beyond our control. 
+
+We have no control over the level of business consulting in our areas of operation. In addition, we have no control over business owners or their decisions, which are affected by, among other things, the availability and cost of capital, prevailing and projected prices, and demand for services, levels of reserves, geological considerations, environmental or other governmental regulations. 
+
+(6) Our establishment of new areas may not result in the anticipated revenue increases and is subject to unanticipated regulatory, environmental, political, legal and economic risks which could adversely affect our business. 
+
+One of the ways we intend to grow our business is through the establishment of new sales areas. The additions or modifications to our existing business and of new areas could involve a variety of regulatory, environmental, political and legal uncertainties beyond our control and may require the expenditure of significant amounts of capital. If we undertake such projects, they may not be completed on schedule or at the budgeted cost, or at all. Moreover, our revenue may not increase immediately upon the expenditure of 
+
+8
+
+funds on a particular project. For instance, if we expand into a new geographical area, the expansion may occur over an extended period of time and we will not receive any material increases in revenue until the project is completed. Moreover, we may construct facilities to capture anticipated future growth in production in a region in which such growth does not materialize. To the extent we rely on estimates of future production in our decision to expand, such estimates may prove to be inaccurate because of numerous uncertainties inherent in estimating quantities of future production. As a result, new areas may not be able to attract enough demand to achieve our expected investment return which could adversely affect our results of operations, cash flows and financial condition. 
+
+(7) We may be unable to generate sufficient or positive cash flows from the sale of services to adequately support our financial or operational results. 
+
+Our marketing results depend upon our ability to generate sufficient or positive cash flows from the purchase, sale and cost to provide our services. Our cash flows are affected by many factors beyond our control, including: 
+
+ 
+
+ 
+
+ 
+
+ 
+
+availability of parties willing to enter into purchase and sale transactions with us; 
+
+ 
+
+ 
+
+ 
+
+increases in operational or capital costs; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+availability of funds from our operations and credit facilities to support marketing activities; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+availability of counterparties willing to offer credit to us; and,
+
+ 
+
+ 
+
+ 
+
+ 
+
+reductions in demand for, and supply of, consulting services for any reason. 
+
+ 
+
+ (8) We operate in a highly competitive business environment, and competitive pressures could adversely affect our business. 
+
+We compete with similar enterprises in our areas of operation. Our competitors may expand or construct sales systems and associated infrastructure that would create additional competition for the services we provide to our customers. Our ability to renew or replace existing contracts with our customers at rates sufficient to maintain current revenue and cash flows could be adversely affected by the activities of our competitors and our customers. Uncertainty and possible adverse publicity may make us more susceptible to the loss of customers to our competitors. All of these competitive pressures could have a material adverse effect on our business, results of operations and financial condition. 
+
+(9) Because our financial statements reflect results from inception, financial information in our current and future financial statements may not be comparable to prior periods. 
+
+The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"), which require 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 reported amounts of revenues and expenses during the reporting period.
+
+(10) We have minimal revenues and limited operating history.
+
+We are a development stage company with no principal revenues and limited operations and our auditor has expressed substantial doubt about our ability to continue as a going concern. Our record of minimal revenues and a limited operating history pose specific risks that may adversely affect our business or an investment in our common stock. There can be no assurances that we will generate sufficient revenue from future operations to implement our business plan or otherwise allow management to continue to devote any time to our business operations. There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably. Our future operating results will depend on many factors, including our ability to raise adequate working capital, demand for our services, the level of our competition and our ability to attract and maintain key management and employees.
+
+ 
+
+Our prospects are subject to the risks and expenses encountered by start-up companies, such as ours, in establishing a business as consulting firm. Our limited operating history makes it difficult or impossible to predict future results of our operations. We may not establish a client base that will make us profitable, which might result in the loss of some or all of your investment in our common stock.
+
+ 
+
+You should consider our prospects in light of the risks and difficulties frequently encountered by early stage companies in the rapidly evolving consulting market. These risks include, but are not limited to, an unpredictable business environment, the difficulty of managing growth and the use of our business model among these risks. To address these risks, we must, among other things:
+
+ 
+
+ 
+
+expand our customer base;
+
+ 
+
+enhance our name recognition;
+
+ 
+
+expand our product and service offerings;
+
+ 
+
+9
+
+successfully implement our business and marketing strategy;
+
+ 
+
+provide superior customer service;
+
+ 
+
+respond effectively to competitive and technological developments; and,
+
+ 
+
+attract and retain qualified personnel.
+
+(11) Adverse developments in our existing areas of operation could adversely impact our results of operations, cash flows and financial condition. 
+
+Our operations are focused on utilizing our sales efforts which are principally located in the Midwest, Southeast and West coast region of the U.S. As a result, our results of operations, cash flows and financial condition depend upon the demand for our services in these regions. Due to our current lack of broad diversification in industry type and geographic location, adverse developments in our current segment of the midstream industry, or our existing areas of operation, could have a significantly greater impact on our results of operations, cash flows and financial condition than if our operations were more diversified. 
+
+(12) As a public company, we will be subject to additional financial and other reporting and corporate governance requirements that may be difficult for us to satisfy will raise our costs and may divert resources and management attention from operating our business. 
+
+We have historically operated as a private company. Following the effectiveness of this registration statement, we will need to file with the SEC annual and quarterly information and other reports that are specified in the Securities Exchange Act of 1934, as amended (the Exchange Act ), and SEC regulations. Thus, we will need to ensure that we have the ability to prepare, on a timely basis, financial statements that comply with SEC reporting requirements. We will also become subject to other reporting and corporate governance requirements, including the listing standards of the national securities exchange upon which we may list our Class A Common Stock, and the provisions of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), and the regulations promulgated thereunder, which will impose significant new compliance obligations upon us. As a public company, we will be required, among other things, to: 
+
+ 
+
+ 
+
+ 
+
+ 
+
+prepare and distribute reports and other stockholder communications in compliance with our obligations under the federal securities laws and the applicable national securities exchange listing rules; 
+
+ 
+
+ 
+
+ 
+
+define and expand the roles and the duties of our Board of Directors and its committees; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+institute more comprehensive compliance, investor relations and internal audit functions; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+evaluate and maintain our system of internal control over financial reporting, and report on management s assessment thereof, in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and related rules and regulations of the SEC; and, 
+
+ 
+
+ 
+
+ 
+
+ 
+
+involve and retain outside legal counsel and accountants in connection with the activities listed above.
+
+The adequacy of our internal control over financial reporting must be assessed by management for each year commencing with the year ending December 31, 2013. Our internal control over financial reporting may not currently meet the standards required by Section 404 of the Sarbanes-Oxley Act. We will incur additional costs in order to improve our internal control over financial reporting and comply with Section 404, including increased auditing and legal fees and costs associated with hiring additional accounting and administrative staff. Ultimately, our efforts may not be adequate to comply with the requirements of Section 404. If we are unable to implement and maintain adequate internal control over financial reporting or otherwise to comply with Section 404, we may be unable to report financial information on a timely basis, may suffer adverse regulatory consequences, may have violations of the applicable national securities exchange listing rules and may breach covenants under our credit facilities. There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. 
+
+The changes necessitated by becoming a public company will require a significant commitment of additional resources and management oversight that will increase our costs and might place a strain on our systems and resources. As a result, our management s attention might be diverted from other business concerns. In addition, we might not be successful in implementing and maintaining controls and procedures that comply with these requirements. If we fail to maintain an effective internal control environment or to comply with the numerous legal and regulatory requirements imposed on public companies, we could make material errors in, and be required to restate, our financial statements. Any such restatement could result in a loss of public confidence in the reliability of our financial statements and sanctions imposed on us by the SEC. 
+
+10
+
+(13) We are exposed to the creditworthiness and performance of our customers, suppliers and transactional counterparties, and any material nonpayment or nonperformance by one or more of these parties could adversely affect our financial and operational results. 
+
+There can be no assurance we have adequately assessed the creditworthiness of each of our existing or future customers, suppliers or transactional counterparties or that there will not be a rapid or unanticipated deterioration in their creditworthiness, which may have an adverse impact on our financial condition and results of operations. Nor is there certainty that our counterparties will perform or adhere to existing or future contractual arrangements. 
+
+We manage our exposure to credit risk through credit analysis and credit monitoring procedures and policies, including credit support requirements for customers and counterparties to which we extend no or limited unsecured credit, such as letters of credit, prepayments, and guarantees. Additionally, we apply a risk/reward analysis on each client to insure that their projections and business assumptions are accurate, reasonable and provide a likelihood of success.
+
+However, these procedures and policies cannot fully eliminate counterparty credit risks, and to the extent our procedures and policies prove to be inadequate, our financial and operational results may be negatively impacted. 
+
+ (14) We Are Dependent On The Services Of A Certain Key Employee And The Loss Of His Services Could Harm Our Business.
+
+Our success largely depends on the continuing services of our Chief Executive Officer and Chairman, David Haig. Our continued success also depends on our ability to attract and retain qualified personnel. We believe that Mr. Haig possesses valuable knowledge, experience and leadership abilities that would be difficult in the short term to replicate. The loss of him as a key employee could harm our operations, business plans and cash flows. Mr. Haig has agreed to dedicate approximately 20 hours per week to the development of our business. This limited amount of time that Mr. Haig is able to devote to the development of our business on a weekly basis may inhibit our ability to generate sufficient revenue to maintain our business as a going concern.
+
+Risks Related To This Offering
+
+(15) There Is No Public Market for Our Shares, and We Do Not Know If One Will Develop Due to the Limited Demand for Stocks In the Business Services We Offer.
+
+Purchasers of these shares are at risk of no liquidity for their investment. Prior to this offering, there has been no established trading market for our securities, and we do not know that a regular trading market for the securities will develop. Due to the limited services we offer, we anticipate that demand for our shares will not be very high. If a trading market does develop for the securities offered hereby, we do not know if it will be sustained. We plan to apply to have our stock quoted on the over-the-counter ( OTC ) Electronic Bulletin Board. Such application will be filed with the Financial Industry Regulatory Authority ( FINRA ). We must obtain the services of a FINRA approved broker-dealer/market maker to file an application for our company and we do not know if such market maker will be to obtain a listing or if an established market for our common stock will be developed.
+
+(16) Because it May Be Difficult to Effect a Change in Control of SOELLINGEN ADVISORY GROUP, INC. Without Current Management Consent, Management May Be Entrenched Even Though Stockholders May Believe Other Management May Be Better. 
+
+David Haig, President and CEO, currently holds approximately 19,250,000 shares of our outstanding voting stock, of which no shares are being registered in this offering. If Mr. Haig chooses to keep all of his stock (that is, he sells none of his stock during this offering), Mr. Haig could retain his status as a controlling security holder. Such concentration of ownership may have the effect of delaying, deferring or preventing a change in control of the Company and entrenching current management even though stockholders may believe other management may be better. Mr. Haig has the ability to control the outcome on all matters requiring stockholder approval, including the election and removal of directors; any merger, consolidation or sale of all or substantially all of our assets; and the ability to control our management and affairs.
+
+(17) The Possible Sale of Shares of Common Stock by Our Selling Security Holders May Have a Significant Adverse Effect on the Market Price of Our Common Stock Should a Market Develop. 
+
+Our ability to raise additional capital through the sale of our stock in a private placement may be harmed by these competing re-sales of our common stock by the selling security holders. Potential investors may not be interested in purchasing shares of our common stock if the selling security holders are selling their shares of common stock. The selling of stock by the security holders could be interpreted by potential investors as a lack of confidence in us and our ability to develop a stable market for our stock. The price of our common stock could fall if the selling security holders sell substantial amounts of our common stock. These sales may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate because the selling security holders may offer to sell their shares of common stock to potential investors for less than we do.
+
+(18) Our Lack of Business Diversification Could Result in the Devaluation of Our Stock if our Revenues From Our Primary Services Decrease.
+
+11
+
+We expect our business to solely consist of the sale of consulting services. We do not have any other lines of business or other sources of revenue if we are unable to compete effectively in the marketplace. This lack of business diversification could cause you to lose all or some of your investment if we are unable to generate additional revenues since we do not expect to have any other lines of business or alternative revenue sources.
+
+ (19) There Has Been No Independent Valuation of the Stock, Which Means That the Stock May Be Worth Less Than the Purchase Price.
+
+The per share purchase price has been determined by us without independent valuation of the shares. We established the offering price based on our recent sale of stock at par value, not based on perceived market value, book value, or other established criteria. We did not obtain an independent appraisal opinion on the valuation of the shares. The shares may have a value significantly less than the offering price and the shares may never obtain a value equal to or greater than the offering price.
+
+(20) Investors May Never Receive Cash Distributions Which Could Result in an Investor Receiving Little or No Return on His or Her Investment.
+
+Distributions are payable at the sole discretion of our board of directors. We do not know the amount of cash that we will generate, if any, once we have more productive operations. Cash distributions are not assured, and we may never be in a position to make distributions.
+
+ (21) The Penny Stock Rules Could Restrict the Ability of Broker-Dealers to Sell Our Shares Having a Negative Effect on Our Offering.
+
+The SEC has adopted penny stock regulations which apply to securities traded over-the-counter. These regulations generally define penny stock to be any equity security that has a market price of less than $5.00 per share or an equity security of an issuer with net tangible assets of less than $5,000,000 as indicated in audited financial statements, if the corporation has been in continuous operations for less than three years. Subject to certain limited exceptions, the rules for any transaction involving a penny stock require the delivery, prior to the transaction, of a risk disclosure document prepared by the SEC that contains certain information describing the nature and level of risk associated with investments in the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Monthly account statements must be sent by the broker-dealer disclosing the estimated market value of each penny stock held in the account or indicating that the estimated market value cannot be determined because of the unavailability of firm quotes. In addition, the rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and institutional accredited investors (generally institutions with assets in excess of $5,000,000). These practices require that, prior to the purchase, the broker-dealer determined that transactions in penny stocks were suitable for the purchaser and obtained the purchaser s written consent to the transaction. If a market for our common stock does develop and our shares trade below $5.00 per share, it will be a penny stock. Consequently, the penny stock rules will likely restrict the ability of broker-dealers to sell our shares and will likely affect the ability of purchasers in the offering to sell our shares in the secondary market. Trading in our common stock will be subject to the penny stock rules. Due to the thinly traded market of these shares investors are at a much higher risk to lose all or part of their investment. Not only are these shares thinly traded but they are subject to higher fluctuations in price due to the instability of earnings of these smaller companies. As a result of the lack of a highly traded market in our shares investors are at risk of a lack of brokers who may be willing to trade in these shares.
+
+ (22) If our customers are found in violation of the Environmental, Health and Safety Regulation it could negatively impact our sales if our customers operations are interrupted.
+
+General 
+
+Our customers operations have been subject to varying degrees of complex laws and regulations by multiple levels of government relating to the production, transportation, storage, processing, release and disposal of waste, products and other materials or otherwise relating to protection of the environment. Our company is not currently directly subject to such regulations. 
+
+(23) We might not be successful in achieving our objectives if there are significant changes in the economic and regulatory environment surrounding business.
+
+SAGI will be subject to risks related to national economic conditions, changes in the investment climate for business consulting governmental rules and fiscal policies, and other factors beyond the control of our management. 
+
+(24) Our business may be significantly harmed by a slowdown in the economy.
+
+ 
+
+An overall decline in the economy or the occurrence of a natural disaster could decrease the need of our services. . This could restrict our success in attracting clients and significantly harm our business, financial condition and liquidity. 
+
+(25) To the extent that we expand our operations to new markets, our business operations may suffer from our lack of experience, which may adversely affect our revenues.
+
+12
+
+Currently, SAGI operates in Florida. Depending on the market and our performance, we plan to expand our operations throughout the United States. However, we have limited experience outside of the market in which we currently operate. Any difficulties encountered by us in this regard could adversely affect our operating results, slow down our expansion plans, which may diminish our revenues. 
+
+ 
+
+(26) The issuance of additional shares of stock to obtain additional financing may dilute the holdings of our existing stockholders or reduce the market price of our stock.
+
+The 862,000 shares of common stock owned by the selling security holders will be registered with the U.S. Securities Exchange Commission. The security holders may sell some or all of their shares immediately after they are registered. In the event that the security holders sell some or all of their shares, the price of our common stock could decrease significantly. Additional equity offerings by us may dilute the holdings of our existing stockholders or reduce the market price of our common stock, or both. Any decision to issue securities in any future offering will depend on market conditions and other factors beyond our control. SAGI cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings reducing the market price of our common stock or diluting their stock holdings in us. 
+
+A NOTE CONCERNING FORWARD-LOOKING STATEMENTS
+
+This prospectus contains forward-looking statements that involve risks and uncertainties. We use words such as anticipates, believes, plans, expects, future, intends, and similar expressions to identify these forward-looking statements. Prospective investors should not place undue reliance on these forward-looking statements, which apply only as of the date of this prospectus. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by SOELLINGEN ADVISORY GROUP, INC. described in Risk Factors and elsewhere in this prospectus. For example, a few of the uncertainties that could affect the accuracy of forward-looking statements include:
+
+(a)
+
+an abrupt economic change resulting in an unexpected downturn in demand for our services;
+
+(b)
+
+governmental restrictions or excessive taxes on our services;
+
+(c)
+
+economic resources to support the development of our projects;
+
+(d)
+
+expansion plans, access to potential clients, and advances in technology; and.
+
+(e)
+
+lack of working capital that could hinder acquisitions for development of our projects.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574985_business_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574985_business_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..488d825f28f9ade594e9cab12b6e88a65cc039fd
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574985_business_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY The following 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.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001575259_fortune_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001575259_fortune_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..0518697c18f49396853cd847321095de6b448b26
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001575259_fortune_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 Financial Statements, before making an investment decision. In this Prospectus, the terms Power Gala, Company, we, us and our refer to Power Gala Corp. Overview Power Gala Corp. was incorporated under the name of Powerball Corp in the State of Delaware on February 21, 2012. On April 10, 2013, we changed our name to Power Gala Corp. because of confusion with our name. We are a start-up business and are still developing our business plan. We expect to become an event planning company and we will offer an array of services such as photographers, caterers, DJ s, bar services and other special event services. We will be a consultant and a party planner for someone looking to host a special event at a catering hall or their primary residence. We are a development stage company. We will generate revenue by charging our customers a fee for our consulting services and for making introductions to certain event professionals. We may also be able to charge a fee to certain event professional for referring their services. The Company has no present plans to be acquired or to merge with another company nor does the company, nor any of its shareholders, have plans to enter into a change of control or similar transaction. Where You Can Find Us We presently maintain our principal offices at 4515 12th Avenue, Brooklyn, New York 11219. Our telephone number is (718) 208-1889. Our website address is http://www.powergala.net. 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. Amendment Number 2 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 POWER GALA CORP. (Exact Name of Registrant in its Charter) Delaware 8742 46-2497498 (State or other Jurisdiction of Incorporation) (Primary Standard Industrial Classification Code) (IRS Employer Identification No.) 4515 12th Avenue Brooklyn, NY 11219 (718) 208-1889 (Address and Telephone Number of Registrant s Principal Executive Offices and Principal Place of Business) Copies of communications to: Gregg E. Jaclin, Esq. Szaferman Lakind Blumstein & Blader, PC 101 Grovers Mill Road Second Floor Lawrenceville, NJ 08648 Tel: 609-275-0400 Fax: 609-275-4511 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 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 of 1933, 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 of 1933, 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. Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x CALCULATION OF REGISTRATION FEE Title of Each Class Of Securities to be Registered Amount to be Registered Proposed Maximum Aggregate Offering Price per share Proposed Maximum Aggregate Offering Price Amount of Registration fee Common Stock, $0.0001 par value per share 2,006,000 $ 0.01695 $ 34,000 $ 4.64 (1) This Registration Statement covers the resale by our selling shareholders of up to 2,006,000 shares of common stock previously issued to such selling shareholders. (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 on any national exchange and in accordance with Rule 457; the offering price was determined by the price of the shares that were sold to our shareholders in a private placement memorandum. The price of $0.05 is a fixed price at which the selling security holders 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. There can be no assurance that a market maker will agree to file the necessary documents with the Financial Industry Regulatory Authority, which operates the OTC Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. 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 COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE. The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission ( SEC ) 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 jurisdiction where the offer or sale is not permitted. The Offering Common stock offered by selling security holders 2,006,000 shares of common stock. This number represents 20.5% of our current outstanding common stock (1). Common stock outstanding before the offering 9,756,000 Common stock outstanding after the offering 9,756,000 Terms of the Offering The selling security holders will determine when and how they will sell the common stock offered in this prospectus. The selling security holders will sell at a fixed price of $0.05 per share until our common stock is quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices or in transactions that are not in the public market. 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. Trading Market There is currently no trading market for our common stock. We intend to apply soon for quotation on the OTC Bulletin Board. We will require the assistance of a market-maker to apply for quotation and there is no guarantee that a market-maker will agree to assist us. Use of proceeds We are not selling any shares of the common stock covered by this prospectus. As such, we will not receive any of the offering proceeds from the registration of the shares of common stock covered by this prospectus. Risk Factors 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 investment. See Risk Factors beginning on page 4. (1) Based on 9,756,000 shares of common stock outstanding as of September 29, 2013. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION ON SEPTEMBER [ ], 2013 POWER GALA CORP. 2,006,000 SHARES OF COMMON STOCK The selling security holders named in this prospectus are offering all of the shares of common stock offered through this prospectus. The common stock to be sold by the selling shareholders as provided in the Selling Security Holders section is common stock that are shares that have already been issued and are currently outstanding. We will not receive any proceeds from the sale of the common stock covered by this prospectus. Our common stock is presently not traded on any market or securities exchange. The selling security holders have not engaged any underwriter in connection with the sale of their shares of common stock. Common stock being registered in this registration statement may be sold by selling security holders at a fixed price of $0.05 per share until our common stock is quoted on the OTC Bulletin Board ( OTCBB ) and thereafter at a prevailing market prices or privately negotiated prices or in transactions that are not in the public market. There can be no assurance that a market maker will agree to file the necessary documents with the Financial Industry Regulatory Authority ( FINRA ), which operates the OTCBB, 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 of the selling security holders. The Company has no present plans to be acquired or to merge with another company nor does the company, nor any of its shareholders, have plans to enter into a change of control or similar transaction. We are an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ) 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 4 to read about factors you should consider before buying shares of our common stock. 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: September [ ], 2013 Summary of Financial Information The following summary financial data should be read in conjunction with Management s Discussion and Analysis, Plan of Operation and the Financial Statements and Notes thereto, included elsewhere in this prospectus. The statement of operations and balance sheet data from inception (February 21, 2012) through June 30, 2013 are derived from our audited annual financial statements and unaudited interim financial statements. The data set forth below should be read in conjunction with Management s Discussion and Analysis of Financial Condition and Results of Operations, our financial statements and the related notes included in this prospectus. Statement of Operations: Six Months Ended June 30, 2013 From February 21, 2012 (inception) through December 31, 2012 From February 21, 2012 (inception) through June 30, 2013 Revenues $ - $ - $ - Operating expenses $ 36,363 $ 1,044 $ 37,407 Loss from Operations $ (36,363) $ (1,044) $ (37,407) Net Loss $ (36,363) $ (1,044) $ (37,407) Loss per common share - Basic and Diluted $ (0.00) $ (0.01) Weighted Average Number of Common Shares Outstanding - Basic and Diluted 8,627,177 7,750,000 Balance Sheet Data: As of June 30, 2013 As of December 31, 2012 Cash and cash equivalents $ 295 $ 100 Computer Software $ 5,095 Total Assets $ 5,390 $ 100 Total current liabilities 8,022 369 Total liabilities 8,022 369 Total stockholders' equity (deficit) (2,632) (269) Total Liabilities and Stockholders' Equity (Deficit) $ 5,390 $ 100 TABLE OF CONTENTS PAGE Prospectus Summary 1
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+The following summary highlights information contained elsewhere in this prospectus. It should be read together with the more detailed information and consolidated financial statements included elsewhere in this prospectus. You should read the entire prospectus, including the Risk Factors section and our consolidated financial statements and notes to those statements, before making an investment decision. Unless otherwise noted, we, us, our and the Company mean Claire s Inc. and its consolidated subsidiaries, including Claire s Stores, Inc. ( Claire s Stores ). Claire s Inc. is a holding company that conducts its business through its consolidated subsidiaries, including Claire s Stores, which is itself an intermediate holding company. As a result, the operations and management of Claire s Inc. and Claire s Stores are substantially the same. Pursuant to the terms of certain indebtedness incurred by Claire s Stores, it currently files reports with the SEC on a voluntary basis. Upon the consummation of this offering, and so long as Claire s Inc. files reports with the SEC and is not engaged in a business in any material respect other than incidental to its ownership of Claire s Stores, Claire s Stores will cease filing separate SEC reports. Who We Are We are one of the world s leading specialty retailers of fashionable jewelry and accessories for young women, teens, tweens and kids. Our vision is to inspire girls and women around the world to become their best selves by providing products and experiences that empower them to express their own unique individual styles. Our broad and dynamic selection of merchandise is unique, and over 90% of our products are proprietary. Claire s is our primary global brand that we operate in 43 countries through company-operated or franchise stores. Claire s offers a differentiated and fun store experience with a treasure hunt setting that encourages our customer to visit often to explore and find merchandise that appeals to her. We believe by maintaining a highly relevant merchandise assortment and offering a compelling value proposition, Claire s has universal appeal to teens, pre-teens and kids. Icing is our other brand which we currently operate in North America through company-operated stores. Icing offers an inspiring merchandise assortment of fashionable products that helps a young woman say something about herself, whatever the occasion. We believe Icing provides us with significant potential to reach young women in age groups beyond our Claire s core demographic. We believe Claire s represents a Girl s Best Friend and a favorite shopping destination for teens, tweens, and kids. Claire s target customer is a girl between 3-18 years old with a particular focus on a core demographic of girls between 10-14 years old. According to our estimates, we have over 95% brand awareness within this target demographic in our largest markets. As of August 3, 2013, Claire s had a presence in 43 countries through 2,710 company-operated Claire s stores in North America, Europe and China, and 414 franchised stores in numerous other geographies. Our Icing brand targets a young woman in the 18-35 year age group with a focus on our core 21-25 year olds who have recently entered the workforce. This customer is independent, fashion-conscious, and has enhanced spending ability. We believe that expansion of our Icing store base both in existing and new markets over time presents a significant opportunity to leverage our core merchandising, sourcing and marketing expertise to cater to a wider demographic. As of August 3, 2013, we operated 384 Icing stores across the United States, Canada, and Puerto Rico. We are organized by geography through our North America division, our Europe division and our China division, recently formed to operate our existing and future stores in China. In North America, our stores are located primarily in shopping malls and average approximately 985 square feet of selling space. In Europe, our Table of Contents EXHIBIT INDEX Exhibit No. Description 1.1 Form of Underwriting Agreement* 3.1 Articles of Incorporation of Claire s Inc. as currently in effect 3.2 Form of Articles of Incorporation of Claire s Inc. to be in effect upon completion of the offering* 3.3 By-laws of Claire s Inc. as currently in effect** 3.4 Form of Bylaws of Claire s Inc. to be in effect upon completion of the offering* 5.1 Opinion of Morgan, Lewis & Bockius LLP* 10.3 Senior Subordinated Notes Indenture, dated as of May 29, 2007, between Bauble Acquisition Sub, Inc. and The Bank of New York, as Trustee (1) 10.6 Senior Subordinated Notes Supplemental Indenture, dated as of May 29, 2007, by and among Claire s Stores, Inc., the guarantors listed on Exhibit A thereto and The Bank of New York, as Trustee, to the Senior Subordinated Notes Indenture, dated as of May 29, 2007, between Bauble Acquisition Sub, Inc. and The Bank of New York, as Trustee (1) 10.9 Form of 10.50% Senior Subordinated Notes due 2017 (1) 10.10 Guarantee and Collateral Agreement, dated and effective as of May 29, 2007, among Bauble Holdings Corp., Bauble Acquisition Sub, Inc., and Credit Suisse, dated as of May 29, 2007 (3) 10.11 Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of May 29, 2007 (3) 10.12 Indenture, dated as of March 4, 2011, by and between Claire s Escrow Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent (6) 10.13 Supplemental Indenture, dated as of March 4, 2011, by and between Claire s Stores, Inc., the Guarantors and The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent (6) 10.14 Form of 8.875% Senior Secured Second Lien Notes due 2019 (included in the Indenture filed as Exhibit 10.19 hereto) (6) 10.16 Collateral Agreement, dated March 4, 2011, by and among Claire s Stores, Inc., Claire s Inc., the Guarantors and The Bank of New York Mellon Trust Company, N.A, as Collateral Agent (6) 10.17 Intercreditor Agreement, dated as of March 4, 2011, by and among Claire s Stores, Inc., Claire s Inc., the Guarantors, The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent and Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Island Branch), as Credit Agreement Agent (6) 10.18 Second Lien Trademark Security Agreement, dated as of March 4, 2011, by and between CBI Distributing Corp. and The Bank of New York Mellon Trust Company, N.A., as Collateral Agent (6) 10.19 Indenture, dated as of February 28, 2012, by and between Claire s Escrow II Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent (10) 10.20 Supplemental Indenture, dated as of March 2, 2012, by and among Claire s Stores, Inc., the Guarantors and The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent (10) 10.21 Form of 9.00% Senior Secured First Lien Notes due 2019 (included in the Indenture filed as Exhibit 10.32 hereto) (10) 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 an offer to buy these securities, in any jurisdiction where the offer or sale is not permitted. Subject to Completion Preliminary Prospectus dated September 6, 2013 PROSPECTUS Shares Common Stock This is an initial public offering of shares of common stock of Claire s Inc. We are selling all of the shares being offered hereby. Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price per share will be between $ and $ . We have applied to list our common stock on the New York Stock Exchange under the symbol CLRS . Investing in our common stock involves risks. Please see Risk Factors beginning on page 12 for a discussion of factors you should consider before buying shares of our common stock. 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. Per Share Total Initial public offering price $ $ Underwriting discount (1) $ $ Proceeds, before expenses, to Claire s Inc. $ $ (1) We have agreed to reimburse the underwriters for certain FINRA-related expenses. See Underwriting (Conflicts of Interest). To the extent that the underwriters sell more than shares of common stock, the underwriters have the option to purchase up to an additional shares at the initial public offering price less the underwriting discount. They may exercise that option for 30 days from the date of this prospectus. The underwriters expect to deliver the shares of common stock against payment in New York, New York on or about , 2013. Credit Suisse J.P. Morgan Goldman, Sachs & Co. RBC Capital Markets Jefferies Wells Fargo Securities Apollo Global Securities The date of this prospectus is , 2013. Table of Contents FISCAL YEAR We operate on a retail accounting calendar. Our fiscal year ends on the Saturday closest to January 31. We refer to our fiscal year end based on the year in which the fiscal year begins. Accordingly, our fiscal years ended February 2, 2013, January 28, 2012, and January 29, 2011, are referred as Fiscal 2012 , Fiscal 2011 , and Fiscal 2010 , respectively. Fiscal 2012 consisted of 53 weeks, while Fiscal 2011 and Fiscal 2010 each consisted of 52 weeks. The second quarter of our Fiscal 2013 ended August 3, 2013 and the second quarter of our Fiscal 2012 ended July 28, 2012. INDUSTRY AND MARKET DATA We have obtained certain industry and market share data from third-party sources, and other industry publications that we believe are reliable. In many cases, however, we have made statements in this prospectus regarding our industry and our position in the industry based on estimates made from our experience in the industry and our own investigation of market conditions. We believe the industry and market data and our estimates to be true and accurate, and we use such data and estimates in the operation of our business. TRADEMARKS, SERVICE MARKS AND TRADENAMES We own or have rights to trademarks, service marks or tradenames that we use in connection with the operation of our business, including our corporate names, brands, logos and product names. Other trademarks, service marks and tradenames appearing in this prospectus are the property of their respective owners. The trademarks we own include Claire s and Icing . Solely for convenience, some of the trademarks, service marks and tradenames referred to in this prospectus are sometimes included without the and symbols, but we assert, to the fullest extent under applicable law, our rights to our trademarks, service marks and tradenames. NON-GAAP FINANCIAL MEASURES To supplement our financial information presented in accordance with U.S. generally accepted accounting principles ( U.S. GAAP ), we present Adjusted EBITDA and Adjusted EBITDA margin. A reconciliation of Adjusted EBITDA to our net income (loss) under U.S. GAAP appears in Summary Summary Historical Consolidated Financial Information and Selected Historical Financial Information and Other Data. Adjusted EBITDA represents net income (loss), adjusted to exclude income taxes, interest expense and income, depreciation and amortization, gain (loss) on early debt extinguishments, asset impairments, management fees, severance and transaction-related costs, and certain non-cash and other items. Adjusted EBITDA margin represents Adjusted EBITDA divided by net sales for the applicable period, expressed as a percentage. We use Adjusted EBITDA as an important tool to assess our operating performance. We consider Adjusted EBITDA and Adjusted EBITDA margin to be useful measures in highlighting trends in our business. We reinforce the importance of Adjusted EBITDA with our bonus eligible associates by using this metric in our annual performance bonus program. We believe that Adjusted EBITDA is effective, when used in conjunction with net income (loss), in evaluating asset performance, and differentiating efficient operators in the industry. Furthermore, Adjusted EBITDA is defined in the covenants contained in our debt agreements and it is the metric we use to communicate our financial performance to our debt investors. Adjusted EBITDA is not a measure of financial performance under GAAP, and is not intended to represent cash flow from operations under GAAP and should not be used as an alternative to net income (loss) as an indicator of operating performance or to represent cash flow from operating, investing or financing activities as a measure of liquidity. We compensate for the limitations of using Adjusted EBITDA by using it only to supplement our GAAP results to provide a more complete understanding of the factors and trends affecting our business. Adjusted EBITDA has its limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Table of Contents stores are located primarily on high streets, in shopping malls and in high traffic urban areas and average approximately 655 square feet of selling space. Despite smaller average selling square feet, our European stores average similar sales per store to our North American stores. We believe that the strength of our business model and our disciplined operating philosophy has enabled us to deliver strong financial performance: Our same store sales growth was 1.8% in Fiscal 2012, (0.1)% in the second quarter of Fiscal 2013, and 1.3% for the first six months of Fiscal 2013. We have reported positive same store sales growth for 11 out of the last 15 quarters through the end of the second quarter of Fiscal 2013, offsetting declines in same store sales during the economic downturn in Fiscal 2008 and Fiscal 2009. From the end of Fiscal 2009 through the end of the second quarter of Fiscal 2013, we have opened a total of 524 new company-operated and franchised stores. Our global store base (including franchise stores) was 3,508 stores at the end of the second quarter of Fiscal 2013. Our net sales increased to $1,557.0 million in Fiscal 2012 from $1,342.4 million in Fiscal 2009, increasing at a compound annual growth rate of 5.1%. Our Adjusted EBITDA increased to $308.0 million in Fiscal 2012 from $233.8 million in Fiscal 2009 increasing at a compound annual growth rate of 9.6%. Our net income (loss) during this same period was $6.2 million in Fiscal 2012, $15.8 million in Fiscal 2011, $7.2 million in Fiscal 2010, and $(7.8) million in Fiscal 2009. We are controlled by investment funds affiliated with, and co-investment vehicles managed by, Apollo Management VI, L.P. ( Apollo Management, as such funds are co-investment vehicles, to Apollo Funds ). The Apollo Funds are affiliates of Apollo Global Management, LLC (together with their subsidiaries, Apollo ). So long as the Apollo Funds continue to beneficially own a significant amount of our equity, even if such amount is less than 50%, they may continue to strongly influence or effectively control our decisions. Specific controls by the Apollo Funds are contained in our by-laws. Our Competitive Strengths We believe our competitive strengths include the following: Category Defining Claire s Brand According to our estimates, over 95% of our target demographic in our largest markets recognizes the Claire s brand. A Claire s store is located in approximately 88% of all major United States shopping malls across all 50 states and in 42 countries outside of the United States, including markets where we franchise. We are a Girl s Best Friend and believe we serve as an authority in jewelry and accessories for 3 18 year-olds. We believe that our reputation for providing age-appropriate merchandise and shopping experience allows parents to trust the Claire s brand for their daughters. Our Claire s brand is regularly featured in editorial coverage and relevant fashion periodicals. Preferred Shopping Destination We are recognized as a favorite shopping destination for young women, teens, tweens, and kids. We believe our customer finds our store an engaging and stimulating experience that allows her to explore and share discoveries, thereby encouraging frequency of visits. As part of our jewelry offering, our stores have pierced the ears of over 83 million customers, including 3.7 million in Fiscal 2012. We believe this seminal point of contact helps our stores establish an important long-term relationship with our core customer. We believe our store environment, product assortment and low average dollar ticket differentiate us from other retail concepts as well as pure play online platforms. Table of Contents Exhibit No. Description 10.22 Collateral Agreement, dated as of March 2, 2012, by and among Claire s Stores, Inc., the Guarantors and The Bank of New York Mellon Trust Company, N.A., as Collateral Agent (10) 10.23 Intercreditor Agreement, dated as of March 2, 2012, by and among Claire s Stores, Inc., Claire s, Inc., the Guarantors, The Bank of New York Mellon Trust Company, N.A. and Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), as Bank Collateral Agent (10) 10.24 Trademark Security Agreement, dated as of March 2, 2012, by and between CBI Distributing Corp. and The Bank of New York Mellon Trust Company, as Collateral Agent (10) 10.25 Joinder Agreement to the Second Lien Intercreditor Agreement, dated as of March 2, 2012 by and among Claire s Stores, Inc., Claire s Inc., the Guarantors, The Bank of New York Mellon Trust Company, N.A., as Trustee under the Company s outstanding 8.875% Senior Secured Second Lien Notes and Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), as Credit Agreement Agent (10) 10.26 Amendment, dated as of March 2, 2012, to the Collateral Agreement, dated as of March 4, 2011, by and among Claire s Stores, Inc., Claire s Inc., the Guarantors and The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent (10) 10.27 Second Supplemental Indenture, dated as of March 12, 2012, by and among Claire s Stores, Inc., the Guarantors and The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent (11) 10.28 Form of 9.00% Senior Secured First Lien Notes Due 2019 (included in the Indenture filed as Exhibit 10.1 hereto) (11) 10.29 Third Supplemental Indenture, dated as of September 20, 2012, by and among Claire s Stores, Inc., the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent (14) 10.30 Indenture, dated as of March 15, 2013, by and among Claire s Stores, Inc., the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent (16) 10.31 Form of 6.125% Senior Secured First Lien Notes due 2020 (included in the Indenture filed as Exhibit 4.18 hereto) (16) 10.32 Collateral Agreement, dated as of March 15, 2013, by and among Claire s Stores, Inc., the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Collateral Agent (16) 10.33 Trademark Security Agreement, dated as of March 15, 2013, by and between CBI Distributing Corp. and The Bank of New York Mellon Trust Company, as Collateral Agent (16) 10.34 Joinder No. 1, dated as of March 15, 2013, by and between The Bank of New York Mellon Trust Company, N.A., as New Agent and Credit Suisse AG, Cayman Islands Branch, as Applicable Collateral Agent (16) 10.35 Joinder Agreement No. 2, dated as of March 15, 2013, by and among the The Bank of New York Mellon Trust Company, N.A., as New Agent, Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), as Credit Agreement Agent, The Bank of New York Mellon Trust Company, N.A., as Trustee, and The Bank of New York Trust Company, N.A., as First Lien Agent (16) 10.36 Management Services Agreement, dated as of May 29, 2007, among Claire s Stores, Inc., Bauble Holdings Corp. and Apollo Management VI, L.P. and Tri-Artisan Capital Partners, LLC and TACP Investments Claire s LLC (1) Table of Contents Table of Contents Some of the limitations of Adjusted EBITDA are: Adjusted EBITDA does not reflect our cash used for capital expenditures; Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced and Adjusted EBITDA does not reflect the cash requirements for such replacements; Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital requirements; and Adjusted EBITDA does not reflect the cash necessary to make payments of interest or principal on our indebtedness. While Adjusted EBITDA is frequently used as a measure of operations and the ability to meet indebtedness service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. We also discuss store level EBITDA. For this purpose, we measure a store s four-wall EBITDA as store-level operating income before depreciation, including store wages, rent, distribution costs and other store operating expenses, adjusted to exclude corporate overhead expense. Table of Contents Attractive Unit Economics with Strong Cash Flows Our stores have relatively low build out costs and moderate inventory requirements. For a new store investment, we target a payback period of three years or less. We achieved a better than three-year payback for aggregate new stores opened during Fiscal 2010, Fiscal 2011, and Fiscal 2012. We manage our store portfolio on a store-by-store basis to optimize overall returns and minimize risk. When we choose to close a store it is generally because the store has negative or marginally positive four-wall cash flow or the store s anticipated future performance or lease renewal terms do not meet our criteria. As a result, for Fiscal 2012, approximately 95% of our stores are cash flow positive. Our cash flow is driven by our strong gross margins, efficient operating structure, low annual maintenance capital expenditures and flexible growth capital expenditure initiatives. Our moderate working capital requirements result from high merchandise margins, low unit cost of merchandise and relatively lower seasonality of our business. We are significantly leveraged, with total debt including our capital lease obligation of approximately $2.35 billion as of August 3, 2013. As a result, a large portion of our cash flow is devoted to our debt service obligations. In addition, as of August 3, 2013, we had a total accumulated deficit of $648.1 million, primarily as a result of non-cash goodwill impairment charges in Fiscal 2008. Globally Diversified with Proven Ability to Enter New Countries The Claire s concept has a global scale and proven geographic portability. As of August 3, 2013, we operated or franchised a total of 3,124 Claire s stores across all 50 states of the United States and in 42 additional countries across the world. We also operated 384 Icing Stores as of August 3, 2013. During Fiscal 2012, we entered large and high potential markets of China and Italy through company-operated stores and also entered the Latin American and Southeast Asian markets through our franchising program. During Fiscal 2011, we entered the strategically significant countries of Mexico and India through franchising relationships. Over the past 8 years, we have doubled the number of countries in which we operate or franchise. Strong and Passionate Senior Management Team with Significant Experience Our senior management team has extensive global, retail experience and complementary expertise across a broad range of disciplines in specialty retail, including merchandising, supply chain, real estate and finance. Our Chief Executive Officer Jim Fielding, who joined the Company in June 2012, was formerly President of Disney Stores, and has prior management experience at The Gap, Lands End and Dayton Hudson. Linda Hefner Filler, President of our North America Division, who joined the Company in March 2013, brings to the Company 25 years of retail and consumer products experience, including executive positions with Wal-Mart Corporation, Kraft Foods and Sara Lee Corporation. Beatrice Lafon, President of our Europe Division, who joined the Company in October 2011, brings to the Company 25 years of Pan-European retail experience, including executive positions with TJ Hughes and Animal Ltd. in the United Kingdom, Etam Group in the Netherlands, and Woolworths Group. Per Brodin, our Executive Vice President and Chief Financial Officer, has over 20 years of financial, accounting and management experience, including senior leadership positions with Centene Corporation and May Department Stores as well as working for twelve years at an international public accounting firm. Table of Contents Exhibit No. Description 10.37 Amended and Restated Credit Agreement, dated as of September 20, 2012, by and among Claire s Inc., Claire s Stores, Inc., Credit Suisse AG, as Administrative Agent, and other Lenders named therein (14) 10.38 Lease Agreement, dated as of February 19, 2010, by and between AGNL Bling, L.L.C. and Claire s Boutiques, Inc. (4) 10.39 Standard Form of Director Option Grant Letter (1) 10.40 Standard Form of Co-Investment Letter (7) 10.41 Claire s Inc. Amended and Restated Stock Incentive Plan, dated May 20, 2011 (8) 10.42 Form of Option Grant Letter under Claire s Inc. Amended and Restated Stock Incentive Plan (8) 10.43 Form of Option Grant Letter (Target Performance Option), effective July 16, 2012 (13) 10.44 Employment Agreement with Jay Friedman (7) 10.45 Contract of Employment with Beatrice Lafon (9) 10.46 Offer Letter Amendment dated August 28, 2012 with Beatrice Lafon (15) 10.47 Employment Agreement with James D. Fielding (12) 10.48 Employment Agreement with Linda Hefner Filler (17) 10.49 Indenture, dated as of May 14, 2013, by and between Claire s Stores, Inc., the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee (18) 10.50 Form of 7.750% Senior Note due 2020 (included in the indenture filed as Exhibit 10.49 hereto). (18) 10.51 Stockholders Agreement, dated as of May 29, 2007, by and among Claire s Inc and certain of its stockholders* 10.52 Employment Agreement with J. Per Brodin (19) 21.1 Subsidiaries of Claire s Inc. 23.1 Report and Consent of Independent Registered Public Accounting Firm 23.2 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.1)* 24.1 Power of Attorney** * To be filed by amendment. ** Previously filed. (1) Filed previously by Claire s Stores, Inc. as an exhibit to the Registration Statement on Form S-4 (File No. 333-148108) on December 17, 2007. (2) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on April 22, 2009. (3) Filed previously by Claire s Stores, Inc. as an exhibit to Form 10-Q on December 8, 2009. (4) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on February 25, 2010. (5) Filed previously by Claire s Stores, Inc. as an exhibit to Form 10 K/A on June 1, 2010. (6) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on March 9, 2011. (7) Filed previously by Claire s Stores, Inc. as an exhibit to Form 10-K on April 21, 2011. (8) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on May 20, 2011. (9) Filed previously by Claire s Stores, Inc. as an exhibit to Form 10-Q on December 2, 2011. (10) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on March 5, 2012. (11) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on March 14, 2012. (12) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on March 14, 2012. Table of Contents Table of Contents Business Strategy Our business strategy is designed to maximize our sales opportunities, earnings growth and cash flow: Generate Organic Growth Continue To Enhance Merchandise and In-Store Experience We are focused on enhancing the fashion-orientation and quality of our product offerings to deliver a unique, proprietary assortment that is highly relevant to our target customers. We believe we can drive growth through intensifying key merchandise categories, especially in higher margin and higher productivity products such as jewelry. We believe we can drive increased frequency of visits through our unique and compelling in-store environment. We aim to provide a consistent, engaging and brand-right customer experience across all of our owned and franchised stores worldwide. Additionally, we focus on improving ease of shopping and increasing sales productivity by enhancing store layout and merchandise displays. We will continue to develop our store management teams and sales associates emphasizing in-store operational excellence. Deepen Customer Relationship & Loyalty We will continue to drive brand awareness and deepen customer relationships with our branding efforts conducted through in-store marketing collateral and ongoing social media, email, and text campaigns. Maintaining and improving our leadership in ear piercing also allows us to solidify the customer s experience with Claire s and establish brand loyalty early. We believe we can leverage our online community and proprietary customer database to drive increased customer engagement for Claire s and Icing . Expand and Upgrade Company-Operated Store Base We have demonstrated a consistent track record of expanding our company-operated store base, opening 82, 157 and 110 new company-operated stores in Fiscal 2010, Fiscal 2011 and Fiscal 2012, respectively. Of our 110 new stores opened in Fiscal 2012, 79 were in Europe, 28 were in North America and three were in China. We plan to open approximately 140 company-operated new stores in Fiscal 2013 across all of our markets in Europe, North America and China. We recently entered the countries of China and Italy and believe these countries present significant growth opportunities. In North America, the Claire s brand has significant penetration but we continue to opportunistically pursue additional locations. We also believe there is a compelling opportunity to remodel key locations in both North America and Europe in order to create a more contemporary ambience and a visually appealing display of our innovative product offerings, and to further enhance our customer s in-store experience. Historically, our remodel capital expenditures have produced increased sales and returns similar to our new store expenditures. We believe the Icing brand has significant long-term growth potential in North America and plan up to 35 new store openings in Fiscal 2013. Over time, we plan to launch Icing internationally to countries where we can leverage the existing Claire s expertise and infrastructure. Franchise in New International Countries Developing a robust franchising model has allowed us to gain a foothold in multiple international geographies and we believe that significant high potential white space opportunities remain. In 2012, we entered Latin America and Southeast Asia, and have partnered with a single franchisee in each region to open stores in multiple countries. We are currently studying our brand introduction strategy for Brazil, Russia, and Table of Contents (13) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on July 17, 2012. (14) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on September 25, 2012. (15) Filed previously by Claire s Stores, Inc. as an exhibit to Form 10-Q on November 30, 2012. (16) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on March 19, 2012. (17) Filed previously by Claire s Stores, Inc. as an exhibit to Form 10-K on April 3, 2013. (18) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on May 16, 2013. (19) Filed previously by Claire s Stores, Inc. as an exhibit to Form 8-K on July 3, 2013. Table of Contents Table of Contents Australia via our franchise model. In 2011, under our franchise model, we entered into the countries of Mexico and India which we believe offer high growth opportunities. We will continue to evaluate new countries for franchised stores. In addition, we believe the Icing brand represents an additional opportunity for franchise growth. Grow Our E-Commerce Sales We believe that the increasing penetration of internet enabled devices within our customer base offers an opportunity to better connect with our customer and complement our in-store experience. In addition, our on-line channel allows us to expand product offerings to include complementary products not available in our stores. We believe that, over time, our digital platform represents a valuable tool for engaging with our customer, gathering feedback on her preferences and enhancing our product testing capabilities, all of which should drive higher sales productivity both in-store and online. Equity Sponsor Founded in 1990, Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, Houston, London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong Kong. As of June 30, 2013, Apollo had assets under management of approximately $113.1 billion in its private equity, credit and real estate businesses. Apollo and its affiliates have extensive experience investing in retail-oriented companies. Apollo s current retail portfolio includes investments in CKE Restaurants and Sprouts Farmers Markets. Apollo s past successful retail investments include General Nutrition Centers, Zale Corporation, AMC Entertainment, Rent-A-Center, Dominick s Supermarkets, Ralphs Grocery Company, Smart & Final and Proffitt s Department Stores. Indebtedness Our May 2007 acquisition by the Apollo Funds was financed by equity contributions from the Apollo Funds and through the incurrence by Claire s Stores of a significant amount of indebtedness under a bank credit facility (the Former Credit Facility ) and senior and senior subordinated notes (the Merger Notes ). At the time of the acquisition we did not have any material indebtedness. Since 2011, the Former Credit Facility and a significant amount of the Merger Notes have been refinanced with the proceeds of additional note issuances. The following table summarizes the amounts and maturities of the remaining outstanding Merger Notes and additional note issuances (collectively, the Notes ) as of August 3, 2013: Note Series Maturity Amount (in millions) 9.0% Senior Secured First Lien Notes 2019 $ 1,140.3 * 6.125% Senior Secured First Lien Notes 2020 210.0 8.875% Senior Secured Second Lien Notes 2019 450.0 7.75% Senior Notes 2020 320.0 10.5% Senior Subordinated Notes 2017 215.9 * Includes unamortized premium of approximately $15.3 million. In addition, we have a $115.0 million senior secured revolving credit facility that terminates in 2017 (the Credit Facility ), which was undrawn as of August 3, 2013, and a capital lease obligation of approximately $17.3 million. See Capitalization and Management s Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources for further information regarding our Credit Facility and Notes. Table of Contents
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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" in this prospectus. Unless otherwise indicated herein, the terms "Mirati," "we," "our," "us" or "the Company" refer to Mirati Therapeutics, Inc. and its subsidiaries on a consolidated basis. Mirati Therapeutics, Inc. Overview We are a clinical-stage biopharmaceutical company focused on developing a pipeline of targeted oncology products. We focus our development programs on drugs intended to treat specific subsets of cancer patients with unmet needs. Our pipeline consists of three product candidates: MGCD265, MGCD516 and mocetinostat. MGCD265 and MGCD516 are orally-bioavailable, multi-targeted kinase inhibitors with distinct target profiles that are in development to treat patients with non-small cell lung cancer, or NSCLC, and other solid tumors. MGCD265 is in Phase 1/2 clinical development and MGCD516 is in advanced preclinical development, with Phase 1 clinical development anticipated to begin in the first half of 2014. Mocetinostat is an orally-bioavailable, spectrum-selective histone deacetylase, or HDAC, inhibitor for the first line treatment of patients with myelodysplastic syndromes, or MDS. We are planning to initiate a Phase 3 clinical trial of mocetinostat in the second half of 2014. We believe that an increased understanding of the genomic factors that drive tumor cell growth can lead to the development of cancer drugs with increased efficacy while reducing side effects. We are leveraging this knowledge to develop targeted cancer therapies to address unmet needs in selected cancer patient populations. Our novel kinase inhibitors target specific mutations present only in cancer cells, and mocetinostat acts through epigenetic mechanisms important in treating certain cancers. We plan to identify additional opportunities by leveraging our deep scientific understanding of molecular drug targets and mechanisms of resistance and potentially in-licensing promising, early-stage novel drug candidates. The following table summarizes key information about our three product candidates: PRODUCT CANDIDATE INDICATION TARGETS COMMERCIAL RIGHTS STAGE OF DEVELOPMENT AND ANTICIPATED MILESTONES MGCD265 Solid Tumors Met, Axl, VEGFRs Mirati: Global Initiate expansion cohorts Q1 2014 Initiate Phase 2 Q4 2014 MGCD516 Solid Tumors RET, TRK, DDR, EphRs, Met, Axl, VEGFRs Mirati: Global Planned IND submission and initiate Phase 1 1H 2014 Initiate expansion cohorts Q4 2014 Mocetinostat MDS HDACs 1, 2, 3, 11 Taiho: Certain Asian Territories Mirati: All Other Territories Initiate dose confirmation trial Q4 2013 Obtain SPA for Phase 3 1H 2014 Initiate Phase 3 2H 2014 Mirati Therapeutics, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) YEARS ENDED DECEMBER 31, 2012 2011 Operating activities Net loss for the year $ (20,286 ) $ (9,778 ) Non-cash adjustments reconciling net loss to operating cash flows Depreciation of property and equipment 123 197 Write-off of property and equipment 77 Gain on disposal of property and equipment (30 ) Reversal of provision for lease resiliation (52 ) Stock-based compensation expense 2,009 940 License and up-front fees (2,333 ) Lease incentive 85 28 Changes in operating assets and liabilities Interest and other receivables (331 ) 150 Other current assets 45 (553 ) Accounts payable and accrued liabilities 1,434 (353 ) Change in provision for lease abandonment costs (346 ) Unbilled revenue 409 Cash flows used for operating activities (16,921 ) (11,644 ) Investing activities Purchase of property and equipment (230 ) (110 ) Purchases of marketable securities and term deposits (29,431 ) (44,670 ) Security deposit (12 ) 61 Restricted cash equivalents and marketable securities 283 604 Disposal and maturities of marketable securities and term deposits 29,716 24,827 Proceeds from disposal of property and equipment 77 Cash flows provided by/(used for) investing activities 326 (19,211 ) Financing activities Issuance of common stock 20,966 29,032 Common stock issuance costs (1,080 ) (1,632 ) Issuance of warrants 5,180 6,619 Warrant issuance costs (238 ) (372 ) Costs of reorganization (15 ) (33 ) Cash flows provided by financing activities 24,813 33,614 Increase in cash and cash equivalents 8,218 2,759 Effect of exchange rate changes on cash and cash equivalents 303 (278 ) Cash and cash equivalents, beginning of year 9,882 7,401 Cash and cash equivalents, end of year $ 18,403 $ 9,882 Income taxes paid $ 34 $ Interest paid 6 AMENDMENT NO. 1 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents In this prospectus, unless otherwise specified or the context otherwise requires, all dollar amounts are expressed in U.S. dollars. As of June 30, 2013, the exchange rate for the conversion of Canadian dollars, or "CND$," into U.S. dollars, or "US$," was 0.9508, based on the Federal Reserve Bank of New York's noon buying rate for one U.S. dollar. Except as otherwise noted, all amounts referred to in this prospectus as "US$ , as converted" shall mean the U.S. dollar amount applying the conversion rate from Canadian dollars as of June 30, 2013. Table of Contents MGCD265 MGCD265 is an orally-bioavailable, potent, small molecule multi-targeted kinase inhibitor of Met, Axl and VEGFRs. MGCD265 is in development for the treatment of solid tumors, with an initial focus on NSCLC and squamous cell carcinoma of the head and neck, or HNSCC. We have conducted single agent and combination dose escalation trials in 252 patients, with acceptable tolerability and promising early signs of clinical efficacy in patients with advanced solid tumors who have failed standard therapies. Our preclinical studies, in a variety of in vivo tumor models, have suggested that MGCD265 has relatively low toxicity and appears more potent than some of the leading approved kinase inhibitors, including Nexavar, Sutent and Xalkori. We have developed new formulations of MGCD265 designed to increase plasma exposure, improve the degree of target inhibition and increase the likelihood of seeing single agent clinical activity. Assuming one or more of the new formulations achieve sufficient patient exposure in ongoing studies, we intend to select one of the new formulations for introduction into ongoing dose escalation trials with the goal of identifying the maximum tolerated dose, or MTD, by early 2014. Following identification of the MTD, we plan to initiate dose expansion cohorts in patients selected for certain biomarkers. MGCD516 MGCD516 is an orally-bioavailable, potent, small molecule multi-targeted kinase inhibitor of RET, TRK, DDR and EphRs, as well as Met, Axl and VEGFRs, in development for the treatment of solid tumors. We plan to focus on solid tumors expressing RET, TRK and DDR, initially in NSCLC, and we plan to evaluate other tumor types where the profile of MGCD516 would suggest activity. MGCD516 is in advanced preclinical development. We plan to file an investigational new drug application, or IND, with the U.S. Food and Drug Administration, or FDA, and initiate a Phase 1 clinical trial of this product candidate in the first half of 2014, and identify the MTD and initiate expansion cohorts in patients selected for certain biomarkers by the end of 2014. Mocetinostat Mocetinostat is an orally-bioavailable, spectrum-selective HDAC inhibitor for which we plan to conduct a dose confirmation trial starting in the fourth quarter of 2013, with the goal of initiating a Phase 3 clinical trial in the second half of 2014. We have completed 13 clinical trials which enrolled 437 patients with a variety of hematologic malignancies and solid tumors. We intend to seek a Special Protocol Assessment, or SPA, from the FDA prior to the initiation of our planned Phase 3 trial. This trial will evaluate mocetinostat for the first line treatment of patients with MDS in combination with Vidaza, a hypomethylating agent, or HMA. We believe that mocetinostat has the potential to be the first HDAC inhibitor to market for this indication. Our Strategy Our goal is to be a leading developer of targeted cancer therapies for selected patient populations. The key components of our strategy include: develop a pipeline of targeted cancer therapies; employ efficient and flexible approaches to accelerate clinical development; advance our two lead kinase inhibitors; advance mocetinostat, our later-stage product candidate; and leverage partnerships to develop our product candidates. Management Our management team has extensive experience in leading the discovery and development of targeted oncology therapies. Our President and Chief Executive Officer, Charles M. Baum, M.D., Ph.D., was Senior Vice President for Biotherapeutic Clinical Research within Pfizer Inc.'s Worldwide Research and Development division and previously Head of Oncology Development for Pfizer. Prior to Pfizer, he was also responsible for the development of several oncology compounds at Schering-Plough Corporation (acquired by Mirati 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) 46-2693615 (I.R.S. Employer Identification Number) 9363 Towne Centre Drive Suite 200 San Diego, California 92121 (858) 332-3410 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) Charles M. Baum, M.D., Ph.D. President and Chief Executive Officer Mirati Therapeutics, Inc. 9363 Towne Centre Drive Suite 200 San Diego, California 92121 (858) 332-3410 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Table of Contents Merck & Co., Inc.). Our Chief Medical and Development Officer, Isan Chen, M.D., was Chief Medical Officer of Aragon Pharmaceuticals, Inc., which was acquired by Johnson & Johnson in 2013. At Aragon Pharmaceuticals, Dr. Chen was responsible for the clinical development strategy of all of the company's programs, including prostate and breast cancer. Our Vice President of Research, James Christensen, Ph.D., was previously the Senior Director of Oncology Precision Medicine at Pfizer, where he was responsible for strategy and translational research for the entire Pfizer oncology portfolio. The collective experience of our research and development team includes direct involvement in the development and approval of a number of oncology drugs including Inlyta, Sutent, Temodar and Xalkori. In addition, our Executive Vice President and Chief Operations Officer, Mark J. Gergen, has experience in operations, finance, strategy and corporate development and was previously Senior Vice President of Corporate Development at Amylin Pharmaceuticals, Inc. until its acquisition by Bristol-Myers Squibb Inc. in 2012. Risks Associated with Our Business Our business and ability to execute our business strategy are subject to a number of risks of which you should be aware before you decide to buy our common stock. In particular, you should consider the following risks, which are discussed more fully in the section entitled "Risk Factors" in this prospectus, as well as the other risks described in
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001578932_oci_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001578932_oci_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001581316_colorado_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001581316_colorado_prospectus_summary.txt
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+PROSPECTUS SUMMARY Except as otherwise indicated, as used in this prospectus, references to the Company, Colorado Income Holdings, we, us, or our refer to Colorado Income Holdings, 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 Colorado Income Holdings, Inc. was incorporated under the laws of the State of Colorado on May 23, 2013. Colorado Income Holdings was created to fund equity-based notes on commercial and residential property, equipment, accounts receivable and other business assets and to make loans on the purchase of real estate backed promissory notes and other asset backed loans. The Company enters into promissory notes (the Notes that are registered herein) with investors and then uses those borrowed funds to make asset-backed loans to third parties. All investment funds loaned by the Company will be secured by a real asset of the debtor. Company financings may be made in collaboration with other investment companies and individuals or on an entirely independent basis. The Company s objective is to make financing arrangements that produce rates of return that are higher than the interest rates of the Notes. If the Company achieves this objective, all of the revenue that exceeds the sum of amounts payable by the Company on the Notes will belong solely to the Company. The Company will use all funds from Notes in this offering to finance asset-backed, non-traditional hard money loans to third parties. These loans are short term in nature with the focus on terms of between 2 and 6 months and loan to values in the 50 to 70% range. The Company intends to limit all loans to third parties through the Company s operations to a term of six months with most loans falling within two to four months and to further to limit it s transactions where the loan to value ranges from 50% to a maximum of 70% . The company believes these two criteria will further minimize risk while opening up opportunities for quality investments. The fund will only lend on loans with business intent and never on a personal residence or on a personal finance need. The loans are used typically for needs of funds for a quick closing and bridging the borrower to permanent finance or a quick sale for profit. The fund is not a permanent finance source. . All funds received from the Notes offered herein will be used to make asset-backed loans to third parties secured by a real asset. Where You Can Find Us Our offices are currently located at Colorado Income Holdings, Inc. headquarters, located at 7899 South Lincoln Court, Suite 205, Littleton, Colorado 80122. Our telephone number is 303-539-3000 SUMMARY OF THE OFFERING Issuer Securities being registered by the Selling Security Holders: Minimum Note Amount Maturity Date: Interest Rate: Colorado Income Holdings, Inc. $3,000,000 aggregate principal amount of 10% to 13% Notes due sixty months from date of execution $25,000 (unless otherwise approved by the Company at its sole discretion) Sixty months from the date of execution. The notes will bear interest from the date of execution at a rate between 10% and 13% per annum. Interest Payment Dates: Ranking Interest on the Notes is payable quarterly on or before January 15, April 15, July 15, and September 15. The notes will be our senior unsecured obligations and will rank equally in right of payment with all of our existing and future senior unsecured indebtedness. Use of proceeds: We intend to use the net proceeds from the sale of the offered notes to issue asset-backed loans to third parties. Please see Our Business and Use of Proceeds . Governing Law: The notes will be governed by, and construed in accordance with the laws of the State of Colorado.
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+S-1/A 1 d580473ds1a.htm FORM S-1/A Form S-1/A Table of Contents As filed with the Securities and Exchange Commission on October 25, 2013 Registration No. 333-191534 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 2 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Arc Logistics Partners LP (Exact Name of Registrant as Specified in Its Charter) Delaware 5171 36-4767846 (State or Other Jurisdiction of Incorporation or Organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 725 Fifth Avenue, 19th Floor New York, NY 10022 (212) 993-1290 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant s Principal Executive Offices) Vincent Cubbage 725 Fifth Avenue, 19th Floor New York, NY 10022 (212) 993-1290 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Copies to: Michael Swidler Brenda Lenahan Vinson & Elkins L.L.P. 666 Fifth Avenue, 26th Floor New York, New York 10103 Tel: (212) 237-0000 Fax: (212) 237-0100 William J. Cooper Andrews Kurth LLP 1350 I Street, NW Suite 1100 Washington, DC 20005 (202) 662-2700 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 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, 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, 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(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 (Do not check if a smaller reporting company) 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(1)(2) Amount of Registration Fee(3) Common units representing limited partner interests 6,900,000 $21.00 $144,900,000 $18,664 (1) Estimated pursuant to Rule 457(a) under the Securities Act of 1933, as amended. Includes common units issuable upon exercise of the underwriters option to purchase additional common units. (2) Estimated solely for the purpose of calculating the registration fee. (3) The Registrant previously paid $12,880 of the total registration fee in connection with the previous filing of this Registration Statement. 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 Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Table of Contents You should rely only on the information contained in this prospectus, any free writing prospectus prepared by or on behalf of us or any other information to which we have referred you in connection with this offering. We have not, and the underwriters have not, authorized any other person to provide you with information different from that contained in this prospectus. Neither the delivery of this prospectus nor sale of our common units means that information contained in this prospectus is correct after the date of this prospectus. This prospectus is not an offer to sell or solicitation of an offer to buy our common units in any circumstances under which the offer or solicitation is unlawful. TABLE OF CONTENTS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001585755_arias_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001585755_arias_prospectus_summary.txt
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+PROSPECTUS SUMMARY AMERICAN RIDING TOURS The following summary highlights selected information contained in this Prospectus. This summary does not contain all the information that may be important to you. You should read the more detailed information contained in this prospectus, including but not limited to, the risk factors beginning on page 3. References to "we," "us," "our," "American Riding Tours, Inc.," or the "Company" mean American Riding Tours. 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. You should not place too much reliance on these 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.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001586160_dtlr_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001586160_dtlr_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights certain information about us and this offering contained elsewhere in this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in shares of our common stock and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. Before you decide to invest in our common stock, you should read the entire prospectus carefully, including "Risk Factors" beginning on page 13 and the consolidated financial statements and related notes included in this prospectus. Unless the context indicates otherwise, as used in this prospectus, the terms "DTLR," "we," "us," "our," "our company" and "our business" refer to DTLR Holding, Inc. and its subsidiary, DTLR, Inc. Our Company We are a fast-growing, lifestyle retailer of street-inspired footwear, apparel and accessories. Our stores offer a distinctive, high-energy shopping experience and are designed to look and feel like independent, locally-managed specialty stores. We believe we are uniquely positioned due to our constantly evolving merchandise assortment, wide selection of aspirational brands, energized sales associates, music-inspired retail atmosphere and strong connections with the local communities in which we operate. Our differentiated business model and community-centric culture reinforce our authentic brand image and position us as a leading destination retailer of street-inspired fashion footwear, apparel and accessories. As a result, we believe the DTLR brand, which is characterized by our trademarked motto "Your Fashion...Your Lifestyle!", is well recognized and generates loyalty and preference among our core consumers. We currently operate 99 stores in 12 states and Washington, D.C. and sell products through our e-commerce website, www.dtlr.com. We provide a one-stop shopping experience that addresses our consumers' desire to dress "from the shoe up." We offer regular releases of limited-availability merchandise from Nike and Brand Jordan as well as merchandise from other sought-after brands including Adidas, Levi's, New Balance, Timberland and UGG Australia. Up-and-coming brands available in our stores include Akoo, Filthy Dripped, Hudson Outerwear and Pink Dolphin. Although our core consumer is an image-conscious male between the ages of 14 and 24, we believe our distinctive product offering appeals to a broader consumer group that seeks to emulate a street-inspired lifestyle. In addition, we have a meaningful and growing kid's footwear business that expands our addressable market, drives store traffic and helps us cultivate the next generation of DTLR consumers. We believe a significant portion of our core consumers are African Americans who, according to the U.S. Bureau of Labor Statistics, spend a disproportionate amount of their disposable income on footwear. We believe our core consumer attributes wearing the latest fashion footwear to status and positive self-image. We successfully operate our stores in a variety of urban and suburban settings in large and small markets across multiple real estate formats including street locations, malls and neighborhood centers. Our energetic sales associates typically live in neighborhoods surrounding our stores and have a strong understanding of current and evolving fashion trends in those neighborhoods. As a result, they are able to quickly establish an authentic connection with our core consumer that enhances our ability to deliver a personalized shopping experience. We believe our emphasis on building relationships with our consumers encourages loyalty and drives more frequent store visits. We also engage our consumers outside of our stores through integrated grassroots marketing initiatives that are focused on the neighborhoods in which our consumers live, work and play. We believe the strength of our differentiated business model, community-centric culture and disciplined operating philosophy provide us with key competitive advantages that have contributed to our strong financial performance and growth. In recent years, we have made significant investments in infrastructure to support our future growth. We have grown our store base from 68 at the end of fiscal 2009 to 99 stores currently. Our comparable store sales increased 4.3%, 7.3%, and 3.9% in fiscal 2010, fiscal 2011 and fiscal 2012, respectively. Our net sales increased from $135.0 million in fiscal 2009 to $181.5 million in fiscal 2012, representing a compound annual growth rate of PRE-EFFECTIVE AMENDMENT No. 2 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents Certain differences in the numbers in the tables and text throughout this prospectus may exist due to rounding. Comparable store sales is a metric used throughout this prospectus. Comparable store sales are net sales from stores that have been open at least 12 full fiscal months as of the end of the applicable period. For purposes of computing comparable store sales, a remodeled or relocated store is included in comparable store sales, both during and after construction, if the square footage of the store was not changed by more than 20% and the store was not closed for more than 15 days in any fiscal month. Comparable store sales exclude gift card breakage income and e-commerce shipping and handling revenue. E-commerce sales will be included in comparable store sales beginning in December 2013. The comparable store sales change for the period ended February 2, 2013 excludes the 53rd week in fiscal 2012. Table of Contents 10.4%. Over the same period, our operating income increased from $7.5 million to $13.4 million, representing a compound annual growth rate of 21.4%. Our Market Opportunity According to Euromonitor International's August 2013 "Apparel in the U.S." report, sales of footwear and apparel in the United States totaled $430.7 billion in 2012, which represents an increase of 2.7% from $419.6 billion in 2011. We focus our efforts primarily within the growing street-inspired footwear, apparel and accessories category, which is a sub-sector of the overall footwear and apparel market. We believe this market category is growing at a faster rate than the overall footwear and apparel market and remains highly fragmented, consisting primarily of small regional retail chains and single store operators. In addition, we believe the core consumer in this market category is overlooked and underserved by mainstream retailers. We believe Nike and Brand Jordan are two of the most important fashion brands in this market category. Although we offer a variety of brands in our stores, we devote significant resources to cultivate our relationships with Nike and Brand Jordan, and often consult with their teams on many aspects of our business. Importantly, we believe the strength of our brand, merchandise sophistication and infrastructure scale provide a strong platform for an expanded role with Nike, Inc., or Nike, over time. Our Competitive Strengths We believe the following strengths differentiate us from our competitors and provide a solid foundation for future growth: Destination Retailer Providing a Distinctive Shopping Experience. We believe we deliver a unique shopping experience that engages our consumers and reflects an authentic street image with the look and feel of an independent, locally-managed specialty store. We bring our consumers' passion for fashion, entertainment and music together in a vibrant and energetic environment, exemplifying our motto "Your Fashion...Your Lifestyle!". To provide an exciting and multi-sensory experience, each of our stores plays on-trend music and celebrity interviews from our in-house DTLR internet radio station, which is broadcast from our studio at corporate headquarters. We also host frequent in-store appearances with popular music artists and sell tickets to music and entertainment events in the local communities in which we operate. In addition, we employ associates who embody the street lifestyle and are knowledgeable and passionate about our products. We believe our engaging store environment creates a retail destination that promotes purchases as well as a social destination that encourages our consumers to return to our stores frequently. Dynamic Merchandise Model. We carry a collection of footwear, apparel and accessory brands most relevant to our core consumer. Our one-stop shopping experience allows him to dress "from the shoe up," purchasing footwear first followed by coordinating apparel and accessories. Our exclusive focus on the street-inspired lifestyle fosters a strong relationship with our consumers, providing us with deep insights into our target market, including purchase motivations and emerging fashion trends. Real-time feedback collected from our consumers and sales associates allows us to offer the most current and on-trend brands and products, and also enables us to customize a portion of our merchandise to address local preferences and styles. Our ability to respond quickly by actively managing inventory, customizing merchandise at the store level and delivering fresh product to our stores three to five times per week, creates a shopping experience that encourages repeat visits. Strong Relationships with Marquee and Up-and-Coming Brands. We view our vendor relationships as collaborative partnerships based on mutual respect and a common goal of offering our consumers an extensive selection of the most relevant, sought-after and emerging brands in the street-inspired market. We have long-term relationships with marquee brands, such as Nike, Brand Jordan, Adidas, Levi's, New Balance, Timberland and UGG Australia. We have an initiative in place to showcase Nike and Brand Jordan through prominent placement in store windows and in premium retail space at the front of each store. In each of our new stores and in select existing stores we have created Nike and Brand Jordan shop-in-shops that highlight our extensive offering of street-inspired merchandise from each brand. Nike and Brand Jordan represented 47.3% of our net sales in fiscal 2012. We identify and carry up-and-coming DTLR Holding, Inc. (Exact name of registrant as specified in its charter) Table of Contents brands, such as Akoo, Filthy Dripped, Hudson Outerwear and Pink Dolphin and believe that surrounding our marquee brands with emerging brands creates credibility among both our vendors and our consumers. High Impact Grassroots Marketing Strategies. We utilize an innovative, neighborhood-based approach to building brand awareness, consumer loyalty and authenticity. Our primary marketing programs target our consumers where they live, work and play, and include employing street teams that promote our brand at hundreds of social events per year, partnering with top club and radio DJ celebrities, hosting in-store appearances by popular music artists and sponsoring local events. We also serve as a prime destination for purchasing local event tickets, which further drives store traffic and enhances our connection to the community. Many of these programs are sponsored by our vendors as a way for them to target our core consumers. DTLR Radio, sponsored by Converse, is an example of how we leverage relationships with our key vendors to advance our marketing efforts in a mutually beneficial way. We believe our sponsorship arrangements and grassroots marketing strategies generate "street cred" and authenticity. Community-Centric Culture. We endeavor to be a good corporate citizen and to have a positive influence on the neighborhoods in which we operate. We often contribute resources to help the development of local communities, and our employees are motivated and encouraged to participate in community service. In fiscal 2012, our employees performed over 3,000 hours of community service. In addition, we sponsor book clubs at local schools and community sports camps, as well as host our trademarked Basketball Buc$ and Homeroom Huddle programs. We also raise money and donations for charitable organizations such as Soles4Souls and St. Jude's. We believe our values-based approach resonates with our employees and generates substantial goodwill with local communities and our consumers. Versatile Store Model with Compelling Economics. We have a proven track record of opening new stores and delivering consistent results across the diverse geographic and socio-economic segments where our consumers live, work and play. We currently operate stores in a variety of urban and suburban settings in large and small markets across multiple real estate formats throughout the Mid-Atlantic, Southeastern and Midwestern United States, including shopping malls, street locations and neighborhood centers. We believe our flexible real estate model enhances our growth profile and enables us to adapt quickly to available locations and store footprints at an attractive initial investment. We target net sales of $1.7 million and a cash-on-cash return of 70% from an average new store by the third operating year. In addition, we target a cash-on-cash payback period of approximately 18-24 months based on a target net investment of $450,000 to $550,000 to open a new store. Infrastructure in Place to Support Growth. In recent years, we have increased our investments in systems and distribution infrastructure, including fully developing our new corporate headquarters and distribution center, upgrading our point-of-sale and merchandising systems, completing selective store remodels, re-designing our website and launching our e-commerce platform. Our upgraded distribution and allocation capabilities allow us to quickly sort, process and deliver merchandise to our stores three to five times per week in a floor-ready format for immediate display. In addition, we have made concurrent investments in personnel to further build out the depth and breadth of talent on our team. With the benefit of these investments, we believe we can support a retail footprint of 250-300 stores with minimal incremental investment and we are positioned for a sustained period of accelerated growth. Experienced Management Team. Our senior management team has an average of over 25 years of industry experience and is led by Glenn Gaynor, Chief Executive Officer, Scott Collins, Chief Merchandise Officer, and Phil Villari, Chief Financial Officer. Our team has successfully implemented numerous strategic initiatives that have been critical to our strong business and financial performance. Our senior management has extensive knowledge and experience across a range of disciplines, including store operations, merchandising, distribution, real estate and finance. Delaware 5661 20-3606513 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 1300 Mercedes Drive Hanover, Maryland 21076 (410) 850-5911 (Address, including zip code and telephone number, including area code, of registrant's principal executive offices) Table of Contents Our Growth Strategies We believe the infrastructure investments made in recent years have paved the way for accelerated sales growth and enhanced profitability. Expand Our Store Base. Since February 2, 2013, we have opened 15 new stores. We expect to open 10-12 stores in fiscal 2014 and will target an approximately 12% annual store count growth rate over the next several years. We plan to open stores in existing markets, as well as new markets, focused on the Mid-Atlantic and Southeastern United States. Based upon our operating experience and research conducted for us by The Buxton Company, a customer analytics research firm, we believe the U.S. market can support at least 600 stores. We target net sales of $1.7 million and a cash-on-cash return of 70% from an average new store by the third operating year. In addition, we believe there are near-term opportunities to augment our organic store growth and accelerate the growth of our store base through acquisition. Given our recent infrastructure investments and strong relationships with marquee and up-and-coming brands, we believe we are well positioned to execute a disciplined expansion strategy through the acquisition of select, highly complementary competitors that serve the street-inspired market in targeted geographies. Drive Comparable Store Sales. We expect to continue to drive our comparable store sales by regularly offering new, on-trend and locally-relevant merchandise. In conjunction with our grassroots marketing strategies and our high level of customer service, the close relationships we maintain with our consumers result in frequent store visits and repeat purchasing opportunities. Additionally, our comparable store performance will benefit from a built-in sales ramp for new stores as they mature and brand awareness increases. Expand Our E-Commerce Business. Launched in November 2012, we believe our e-commerce business is an extension of our brand and in-store experience. We see continued opportunity to grow our e-commerce business through an expanded brand offering, focused marketing efforts, online merchandising initiatives, social networking activities and an intuitive and engaging online shopping experience. We believe our e-commerce business is complementary to our retail presence and facilitates frequent contact with our core consumers, builds brand awareness and provides access to consumers not served by our current retail footprint. Our e-commerce sales represented less than 1.0% of our net sales in fiscal 2012. We believe e-commerce sales growth will outpace our net sales growth in the near-term. Increase Our Operating Margins. We believe we have an opportunity to drive margin expansion as we grow our store base by optimizing our infrastructure and leveraging scale efficiencies and growing purchasing power. In recent years, we have made significant investments in our systems and distribution infrastructure to support our long-term growth, including the opening of our new corporate headquarters and distribution center, as well as continuing upgrades to our point-of-sale, merchandise allocation and merchandise planning systems. In addition, we expect to benefit from our supply chain initiatives and the consolidation and streamlining of our existing real estate function. We expect to leverage these investments and cost-saving initiatives to further realize operating efficiencies and improve margins. Risk Factors There are a number of risks and uncertainties that may affect our financial and operating performance and our growth prospects. You should carefully consider all of the risks discussed in "Risk Factors", which begins on page 13, before investing in our common stock. These risks include, but are not limited to, the following: we may not be able to identify and respond to changing consumer fashion preferences and fashion-related trends; our industry is highly competitive, and we may not be able to compete effectively; Glenn P. Gaynor President and Chief Executive Officer DTLR Holding, Inc. 1300 Mercedes Drive Hanover, Maryland 21076 (410) 850-5911 (Name, address, including zip code and telephone number, including area code, of agent for service) Copies to: Derek M. Winokur, Esq. Derick S. Kauffman, Esq. Dechert LLP 1095 Avenue of the Americas New York, New York 10036 (212) 698-3500 Christopher D. Lueking Latham & Watkins LLP 233 South Wacker Drive Suite 5800 Chicago, Illinois 60606 (312) 876-7700 Table of Contents we rely on relationships with our key vendors, in particular Nike and Brand Jordan, and we may not be able to maintain these relationships, which allow us to obtain sufficient quantities of high-demand merchandise and expand our store base; we may not be able to execute on our growth strategy if we are unable to locate suitable locations that are supported by our vendors or attract customers to our stores; we may not be able to successfully expand into new geographic markets in the United States; our continued expansion may strain our existing resources; we may experience disruptions to our operations as a result of future acquisitions; and we may not be able to maintain and enhance our strong brand image. Company Information We were formed in 2005 as Levtran Enterprises Holding, Inc., a corporation organized under the laws of the State of Delaware. In October 2012, Levtran Enterprises Holding, Inc. changed its name to DTLR Holding, Inc. Our operating subsidiary, DTLR, Inc., was incorporated as a Maryland corporation under the name Levtran Enterprises, Inc. in 1983. Our primary executive offices are located at 1300 Mercedes Drive, Hanover, Maryland 21076, and our telephone number is (410) 850-5911. Our website address is www.dtlr.com. The information contained in, or that can be accessed through, our website is not part of this prospectus. We have registered several U.S. trademarks, including "DTLR," "Basketball Buc$," "Homeroom Huddle," and "Your Fashion...Your Lifestyle!". All other trademarks, trade names or service marks referred to in this prospectus are the property of their respective owners. Recent Developments Set forth below is selected preliminary, unaudited consolidated financial data as of November 2, 2013 and for the thirteen weeks ended November 2, 2013. The selected financial data is unaudited and has been prepared by, and is the responsibility of, our management. Our financial statements for this period have not yet been completed and are not yet available. Our financial statements as of, and for the thirteen weeks ended November 2, 2013 will be included in our first periodic report filed with the Securities and Exchange Commission following this offering. This summary is not meant to be a comprehensive presentation of our unaudited consolidated financial position as of November 2, 2013 and results of operations for the thirteen weeks then ended. Our actual results may change from those set forth below as a result of the completion of our consolidated financial statements, financial adjustments and other developments that may arise between now and the time the financial results for this period are finalized. Preliminary Results for the Thirteen Weeks Ended November 2, 2013 Our net sales for the thirteen weeks ended November 2, 2013 are expected to be approximately $48.1 million, or an expected increase of approximately $8.5 million, or 21.5%, compared to net sales of $39.6 million for the corresponding period in 2012. Sales growth was primarily driven by an increase in comparable store sales of $5.5 million and $3.0 million from non-comparable stores. Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement. Table of Contents Comparable store sales increased 16.8% for the thirteen weeks ended November 2, 2013 following a decrease of 2.3% in the corresponding period in 2012. Comparable store sales were positively impacted by strong performance in both footwear and apparel. Income from operations for the thirteen weeks ended November 2, 2013 is expected to be between $2.7 million and $3.0 million, compared to income from operations of $0.5 million in the corresponding period in 2012. The expected increase in income from operations was primarily the result of improvement in gross margin on higher sales volume, partially offset by costs of approximately $0.1 million related to management fee and related expenses and $0.1 million related to expenses associated with refinancing of debt. Income from operations for the thirteen weeks ended November 3, 2012 was impacted by costs of approximately $1.1 million related to management bonuses, $0.2 million related to expenses associated with refinancing of debt and $0.1 million related to management fee and related expenses. As of November 2, 2013, we operated 97 stores. Two additional stores have subsequently opened in the fourth fiscal quarter, bringing the total to 99 stores currently. Exchange of Preferred Stock We expect that each of our current stockholders will enter into an exchange agreement with us pursuant to which, subject to certain exceptions, all of the outstanding shares of our Series A preferred stock will (x) receive a dividend to be declared prior to and in connection with the consummation of this offering and (y) be cancelled in exchange for the right to receive shares of our common stock issuable immediately following the consummation of this offering at a rate of conversion equal to the liquidation preference of such shares of Series A preferred stock divided by the initial public offering price of our common stock in this offering; provided, that with respect to the amount issuable (if any) to our current stockholders in respect of the cancellation of Series A preferred stock held by such stockholders with an aggregate liquidation preference of approximately $11.25 million (representing the maximum dollar value of shares that could be sold pursuant to the underwriters' option to purchase additional shares of common stock in connection with this offering, assuming an initial offering price of $13.00 per share, which amount we refer to as the Delayed Payment Obligation), such amount (less the amount of any Delayed Dividend (as defined in this prospectus)) shall be issuable immediately following the first business day that is at least 31 days following the consummation of this offering. We refer to the transactions described above as the Exchange Transactions. See "Exchange Transactions." Our Sponsor Bruckmann, Rosser, Sherrill & Co. Management, L.P., or BRS Management, is a New York-based private equity firm with previous investments and remaining committed capital totaling $1.2 billion. BRS Management partners with management teams to create financial and operational value over the long-term for the benefit of its investors, focusing on investments in middle market consumer goods and services businesses. BRS Management and its principals have extensive experience in the retail industry, having completed 12 retail investments to date, including add-on acquisitions. Since 1996, BRS Management has purchased over 40 portfolio companies for an aggregate consideration of over $6.4 billion. Implications of Being an Emerging Growth Company We are an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Act, or the JOBS Act. As such, we are eligible to take advantage of 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; 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, as amended (the "Securities Act"), 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 Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Table of Contents being permitted to present only two years of audited financial statements and only two years of related results of operations in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of this prospectus; reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; not being required to 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; 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. We may take advantage of some or all of the available exemptions. We have taken advantage of some of the reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. We do not know if investors will find our shares less attractive as a result of our utilization of these or other exemptions. The result may be a less active trading market for our shares, and our share 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 have irrevocably elected not to avail ourselves of 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. We will remain an "emerging growth company" until the earliest of (a) the last day of the first fiscal year in which our annual net sales exceed $1.0 billion, (b) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, (c) the date on which we have issued more than $1.0 billion in nonconvertible debt during the preceding three-year period or (d) the last day of our fiscal year containing the fifth anniversary of the date on which shares of our common stock become publicly traded in the United States. CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Amount to be Registered(1) Proposed Maximum Offering Price Per Share Proposed Maximum Aggregate Offering Price(2) Amount of Registration Fee(3) Common Stock, $0.01 par value per share 6,634,615 $14.00 $92,884,610 $11,964 (1)Includes 865,384 shares of common stock issuable upon exercise of an option to purchase additional shares granted to the underwriters. (2)Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended, based on an estimate of the proposed maximum aggregate offering price. (3)$9,660 was previously paid on November 1, 2013. 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 this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. (1)Fiscal 2012 included 53 weeks. Fiscal 2011 and fiscal 2010 each included 52 weeks. (2)For a discussion of net (loss) income per share of common stock, basic and diluted, see note 12 to the audited consolidated financial statements and note 10 to the unaudited consolidated financial statements, in each case included elsewhere in this prospectus. 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 jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED DECEMBER 2, 2013 PRELIMINARY PROSPECTUS DTLR Holding, Inc. 5,769,231 Shares of Common Stock This is an initial public offering of common stock by DTLR Holding, Inc., a Delaware corporation. We are selling 5,769,231 shares of common stock. Prior to this offering, there has been no public market for our common stock. We currently expect the initial public offering price to be between $12.00 and $14.00 per share of common stock. We have applied to list our common stock on the NASDAQ Global Market under the symbol "DTLR." Investing in our common stock involves risks. See "Risk Factors" beginning on page 13 for a description of various risks you should consider in evaluating an investment in our common stock. Per Share Total Initial public offering price $ $ Underwriting discounts and commissions(1) $ $ Proceeds, before expenses, to us $ $ (1)Comparable store sales are net sales from stores that have been open at least 12 full fiscal months as of the end of the applicable reporting period. E-commerce sales will be included in comparable store sales beginning in December 2013. The comparable store sales change for the period ended February 2, 2013 excludes the 53rd week in fiscal 2012. Fiscal 2012 included 53 weeks, therefore for comparison purposes, the reported comparable store sales changes compare the 52 weeks ended January 26, 2013 vs. the 52 weeks ended January 28, 2012 and the 26 weeks ended August 3, 2013 vs. the 26 weeks ended August 4, 2012. (2)The number of stores and the amount of gross square footage reflect stores open 12 full fiscal months in the respective period end. (3)Average net sales per store is calculated by dividing net store sales for comparable stores by the applicable number of comparable stores. (4)Dollars not in thousands. Average net sales per gross square foot is calculated by dividing net store sales for comparable stores by total gross square footage for the applicable comparable stores. (5)EBITDA represents earnings before interest, income taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA adjusted to exclude the management fee and related expenses that we pay to BRS Management, one-time incentive payments to key executives in lieu of formal equity awards, loss from disposal of property and equipment and certain debt refinancing costs. The terms EBITDA and Adjusted EBITDA are not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA have limitations as analytical tools, and when assessing our operating performance, you should not consider EBITDA and Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. We compensate for these limitations by relying primarily on our U.S. GAAP results and using EBITDA and Adjusted EBITDA only supplementally. Some of these limitations include, but are not limited to: EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; EBITDA and Adjusted EBITDA do not reflect income taxes or the cash requirements for any tax payments; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and other companies may calculate EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. (1)We refer you to "Underwriting" beginning on page 111 for additional information regarding underwriting compensation. The underwriters have a 30-day option to purchase up to 865,384 additional shares on the same terms set forth above. We are an "emerging growth company" under applicable Securities and Exchange Commission rules and will be eligible for reduced public company reporting requirements. See "Prospectus Summary Implications of Being an Emerging Growth Company." 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 underwriters expect to deliver the shares of our common stock to purchasers on or about , 2013. (1)Fiscal 2012 included 53 weeks. Fiscal 2011 and fiscal 2010 each included 52 weeks. (2)Includes the annual management fee and other miscellaneous fees paid to BRS Management. We expect the Amended and Restated Management Services Agreement under which the annual management fee is owed will be terminated upon consummation of this offering. (3)In fiscal 2012, we made one-time incentive payments to key executives in lieu of formal equity awards. (4)Includes third party professional fees and fees paid to BRS Management in connection with the refinancing of our credit facilities. (6)Gives effect on a pro forma as adjusted basis to (i) the Exchange Transactions, which includes the payment of the $5.8 million preferred dividend and redemption payment and conversion of the shares of Series A preferred stock into approximately 3,770,000 shares of common stock at $13.00 per share, the midpoint of the price range set forth on the cover of this prospectus (approximately $49.1 million), (ii) the sale by us of 5,769,231 shares of our common stock in this offering and payment of related expenses of $3.2 million, (iii) the issuance of 410,020 shares of common stock to certain members of management upon the consummation of this offering pursuant to our 2013 Equity Incentive Compensation Plan along with $5.2 million in bonus payments to certain members of management to cover the tax liability resulting from the receipt of shares of common stock, (iv) payment of a previously accrued bonus of approximately $0.8 million to certain members of management, (v) and payment of a $2.25 million termination fee to BRS Management under the Amended and Restated Management Services Agreement. Baird Piper Jaffray Stifel Canaccord Genuity SunTrust Robinson Humphrey , 2013 Table of Contents The Offering Common stock offered by us 5,769,231 Shares Common stock to be outstanding after this offering 16,475,551 Shares (whether or not the underwriters exercise any or all of their option to purchase additional shares of common stock; this number remaining constant as a result of the Exchange Transactions. See "Exchange Transactions."). Use of proceeds We estimate that the net proceeds to us from this offering will be approximately $66.55 million, assuming an initial public offering price of $13.00 per share, which is the midpoint of the price range set forth on the cover of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We expect to use the proceeds of this offering to pay a dividend on our Series A preferred stock, pay bonuses to certain members of management and other employees to cover the tax liability resulting from the receipt of shares of our common stock under our 2013 Equity Incentive Compensation Plan in connection with this offering, pay a termination fee (in lieu of a transaction fee) due to BRS Management under the Amended and Restated Management Services Agreement (such fee to include accrued management fees due to BRS Management), repay loans outstanding under our term loan facility, including any accrued and unpaid interest and related breakage costs and other fees, and for general corporate purposes. We intend to use the net proceeds from any shares sold pursuant to the underwriters' option to purchase additional shares of common stock plus cash on hand to satisfy the Delayed Payment Obligation to each of our current stockholders pursuant to the Exchange Transactions. See "Exchange Transactions." See "Use of Proceeds" for a more complete description of the intended use of proceeds from this offering. Directed share program The underwriters have reserved for sale, at the initial public offering price, up to approximately 5% of the shares of our common stock being offered. These shares will be offered for sale to our directors and director nominees; officers; existing stockholders and their affiliates and employees of both; and business associates, as well as certain friends and family members of our directors and officers. We will offer these shares to the extent permitted under applicable regulations in the United States. The number of shares available for sale to the general public in this offering will be reduced to the extent these persons purchase reserved shares. Any reserved shares not purchased will be offered by the underwriters to the general public on the same terms as the other shares. Dividend policy We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business and we do not intend to pay cash dividends on our common stock for the foreseeable future. Unless otherwise noted, the information in this prospectus assumes: the implementation of a proposed 6.26941-for-1 stock split of our common stock, which was effected on December , 2013; no exercise by the underwriters of their option to purchase up to 865,384 additional shares of common stock; and the exchange of all outstanding shares of our Series A preferred stock in the Exchange Transactions. The number of shares of common stock to be outstanding after this offering is based on 10,706,320 shares of common stock outstanding as of August 3, 2013, after giving effect to the Exchange Transactions and the issuance of 410,020 shares of common stock to be granted to certain members of management upon the consummation of this offering pursuant to our 2013 Equity Incentive Compensation Plan, in each case assuming an initial public offering price of $13.00 per share, which is the midpoint of the price range set forth on the cover of this prospectus, and excludes as of that date 2,144,038 shares of common stock reserved for future issuances under our 2013 Equity Incentive Compensation Plan. Table of Contents RISK FACTORS Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained in this prospectus, including our consolidated financial statements and the related notes appearing at the end of this prospectus, before making your decision to invest in shares of our common stock. We cannot assure you that any of the events discussed in the risk factors below will not occur. These risks could have a material and adverse impact on our business, financial condition and results of operations and if any of the following risks actually occur, our future prospects could be materially and adversely affected. If that were to happen, the trading price of our common stock could decline, and you could lose all or part of your investment. Risks Related to this Offering and Ownership of Our Common Stock We do not know whether an active, liquid and orderly trading market will develop for our common stock or what the market price of our common stock will be and as a result it may be difficult for you to sell your shares of our common stock. Prior to this offering there has been no market for shares of our common stock. An active trading market for our shares may never develop or be sustained following this offering. The initial public offering price for our common stock will be determined through negotiations with the underwriters, and the negotiated price may not be indicative of the market price of our common stock after this offering. The market value of our common stock may decrease from the initial public offering price. As a result of these and other factors, you may be unable to resell your shares of our common stock at or above the initial public offering price. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. Further, an inactive market may also impair our ability to raise capital by selling shares of our common stock and may impair our ability to acquire companies by using our shares of common stock as consideration. The trading price of our common stock following this offering is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. In addition to the factors discussed in this "Risk Factors" section and elsewhere in this prospectus, these factors include: our quarterly or annual earnings or those of other companies in our industry; changes in laws or regulations, or new interpretations or applications of laws and regulations, that are applicable to our business; the public's reaction to our press releases, our other public announcements and our filings with the U.S. Securities and Exchange Commission, or the SEC; changes in accounting standards, policies, guidance, interpretations or principles; additions or departures of our senior management personnel; sales of common stock by our directors and executive officers; sales or distributions of common stock by our sponsor, BRS Management; adverse market reaction to any indebtedness we may incur or securities we may issue in the future; actions by stockholders; Table of Contents the level and quality of research analyst coverage for our common stock, changes in financial estimates or investment recommendations by securities analysts following our business or failure to meet such estimates; the financial disclosure we may provide to the public, any changes in such disclosure or our failure to meet such disclosure; various market factors or perceived market factors, including rumors, whether or not correct, involving us, our distributors or vendors or our competitors; introductions of new offerings or new pricing policies by us or by our competitors; acquisitions or strategic alliances by us or our competitors; short sales, hedging and other derivative transactions in the shares of our common stock; the operating and stock price performance of other companies that investors may deem comparable to us; and other events or factors, including changes in general conditions in the United States and global economies or financial markets (including those resulting from Acts of God, war, incidents of terrorism or responses to such events). In addition, in recent years, the stock market has experienced extreme price and volume fluctuations. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance. The realization of any of these risks or any of a broad range of other risks, including those described in these "Risk Factors," could have a material adverse effect on the market price of our common stock and you could lose all or part of your investment. Upon the listing of our shares on the NASDAQ Global Market we may be a "controlled company" within the meaning of the rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements. Depending on the actual number of shares of common stock sold in this offering, including whether the underwriters exercise their option to purchase additional shares, our private equity sponsor, BRS Management, may continue to control a majority of the voting power of our outstanding common stock through its affiliate, Bruckmann, Rosser, Sherrill & Co. II, L.P., or BRS II. As a result, we may be a "controlled company" within the meaning of the corporate governance standards of the NASDAQ Global Market. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including the requirements that, within one year of the date of the listing of our common stock: we have a Board of Directors that is composed of a majority of "independent directors," as defined under NASDAQ Global Market rules; and we have a compensation committee and a nominating and governance committee that is composed entirely of independent directors. If we are a controlled company following this offering, we intend to utilize certain of these exemptions. Accordingly, you would not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NASDAQ Global Market. Table of Contents Upon the completion of this offering, the concentration of our capital stock ownership with our sponsor and other insiders will likely limit an investor's ability to influence corporate matters. Upon completion of this offering, BRS II will own or control approximately 53.1% of our outstanding common stock or 48.9% if the underwriters exercise their option to purchase additional shares in full, and, collectively, BRS II, executive officers and directors will together beneficially own or control approximately 57.5% of our outstanding common stock or 53.0% if the underwriters exercise their option to purchase additional shares in full. As a result, these stockholders, acting individually or together, will have substantial influence and control over management and matters that require approval by our stockholders, including amendments to our certificate of incorporation and bylaws and approval of significant corporate transactions, including mergers and sales of substantially all of our assets. This concentration of ownership may delay or prevent a change in control of our company and make the execution of some transactions more difficult or impossible without the support of these stockholders. It is possible that the interests of BRS II and other insider stockholders may in some circumstances conflict with our interests or the interests of our other stockholders, including you. Certain of our directors are also officers or control persons of BRS II and/or its affiliates. Although these directors owe a fiduciary duty to manage us in a manner beneficial to us and our stockholders, these individuals also owe fiduciary duties to these other entities and their stockholders, members and limited partners. Because BRS II and its affiliates have such interests in other companies and engage in other business activities, certain of our directors may experience conflicts of interest in allocating their time and resources among our business and these other activities. Furthermore, these individuals could make substantial profits as a result of investment opportunities allocated to entities other than us. As a result, these individuals could pursue transactions that may not be in your best interest as a stockholder, which could have a material adverse effect on our operations and your investment. If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the book value of your shares. The initial public offering price is substantially higher than the net tangible book value per share of our common stock. Investors purchasing common stock in this offering will pay a price per share that substantially exceeds the book value of our tangible assets after subtracting our liabilities. As a result, investors purchasing common stock in this offering will incur immediate dilution of $10.30 per share, based on an assumed initial public offering price of $13.00 per share, which is the midpoint of the price range set forth on the cover of this prospectus. Further, investors purchasing common stock in this offering will contribute approximately 59% of the total amount invested by stockholders since our inception, but will own, as a result of such investment, only approximately 35% of the shares of common stock outstanding immediately following this offering. As a result of the dilution to investors purchasing shares in this offering, investors may receive significantly less than the purchase price paid in this offering, if anything, in the event of our liquidation. Further, because we may need to raise additional capital, we may in the future sell substantial amounts of common stock or securities convertible into or exchangeable for common stock. These future issuances of equity or equity-linked securities, together with any additional shares issued in connection with acquisitions or employee benefit plans, if any, may result in further dilution to investors. We are an "emerging growth company" and we intend to take advantage of reduced disclosure and governance requirements applicable to emerging growth companies, which could result in our common stock being less attractive to investors. We are an "emerging growth company," as defined in the JOBS Act, and 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 Table of Contents 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. Because of the exemptions from various reporting requirements provided to us as an "emerging growth company" we may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it. If we are unable to raise additional capital as and when we need it, our business, financial condition and results of operations may be materially and adversely affected. Additionally, investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. We cannot predict if investors will find our common stock less attractive because we will 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. We may take advantage of these reporting exemptions until we are no longer an emerging growth company, which in certain circumstances could be for up to five years. See "Prospectus Summary Implications of Being an Emerging Growth Company." If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our business, financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock. The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures. Commencing with our annual report on Form 10-K for the year ending January 31, 2015, we will be required, under Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting that results in more than a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. Section 404 of the Sarbanes-Oxley Act also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. However, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of the exemption permitting us not to comply with the independent registered public accounting firm attestation requirement. 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 hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge, and compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begin its Section 404 reviews, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the NASDAQ Global Market, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets. Table of Contents Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. Upon consummation of this offering, we will become subject to the periodic reporting requirements of the Exchange Act. Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected. We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company, and these expenses may increase even more after we are no longer an "emerging growth company." We will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Protection Act, as well as rules adopted, and to be adopted, by the SEC and the NASDAQ Global Market. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, we expect these rules and regulations to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. The increased costs will decrease our consolidated net income. For example, we expect the increased potential liability related to these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain sufficient coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert management's attention from implementing our growth strategy, which could prevent us from improving our business, financial condition and results of operations. Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain. While we paid a one-time cash dividend on our capital stock in December 2012, we currently intend to retain all of our future earnings, if any, to finance the future growth and development of our business. In addition, the terms of our current credit facilities, and any future debt agreements may, preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future. Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall. Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. After this offering, we will have outstanding 16,475,551 shares of common stock based on the number of shares outstanding as of August 3, 2013. This includes the shares that we are selling in this offering, which may be resold in the public market immediately without restriction, unless purchased by our affiliates. Of the remaining shares, 10,631,036 shares of our common stock will be restricted as a result of securities Table of Contents laws or lock-up agreements but will be able to be sold after the offering as described in the "Shares Eligible for Future Sale" section of this prospectus. We also intend to register all shares of common stock that we may issue under our 2013 Equity Incentive Compensation Plan. Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up agreements described in the "Underwriting" section of this prospectus. Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our 2013 Equity Incentive Compensation Plan, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. We expect that significant additional capital will be needed in the future to continue our planned operations. To raise capital, we may sell substantial amounts of common stock or securities convertible into or exchangeable for common stock. These future issuances of common stock or common stock-related securities, together with any additional shares issued in connection with acquisitions or employee benefit plans, if any, may result in material dilution to our investors. Such sales may also result in material dilution to our existing stockholders. Pursuant to our 2013 Equity Incentive Compensation Plan, we expect our compensation committee will be authorized to grant equity-based incentive awards to our directors, executive officers and other employees and consultants, including officers, employees and consultants of our subsidiary and affiliates. The number of shares of our common stock available for future grant under our 2013 Equity Incentive Compensation Plan, which will become effective upon approval by our stockholders, is 2,144,038. Future option grants and issuances of common stock under our 2013 Equity Incentive Compensation Plan may have a material adverse effect on the market price of our common stock. We have broad discretion in the use of certain proceeds from this offering and may not use them effectively. We currently intend to use the net proceeds we receive from this offering to redeem a portion of our Series A preferred stock, repay indebtedness and make certain payments to our management and BRS Management, as described in "Use of Proceeds" elsewhere in this prospectus. Our management will have broad discretion in the allocation of the remaining net proceeds we receive from this offering and could spend such proceeds in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the market price of our common stock to decline and delay the development of our new stores. Pending their use, we may invest the net proceeds we receive from this offering in a manner that does not produce income or that loses value. If we do not invest the net proceeds we receive from this offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause the price of our common stock to decline. Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders and may prevent attempts by our stockholders to replace or remove our current management. Provisions in our amended and restated certificate of incorporation, or certificate of incorporation, and amended and restated bylaws, or bylaws, that will each become effective in connection with consummation of this offering, as well as provisions of the Delaware General Corporation Law, as amended, or the DGCL, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management. These include provisions that will: permit our board of directors to issue up to 5,000,000 shares of preferred stock, with rights, preferences and privileges as they may designate; Table of Contents provide that all vacancies on our board of directors, including as a result of newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; limit the ability of stockholders to remove directors only "for cause" if BRS II and its affiliates collectively cease to own more than 40% of our common stock and require any such removal to be approved by a super-majority vote of our stockholders; establish a classified board of directors so that not all members of our board of directors are elected at one time; require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent, if BRS II and its affiliates collectively cease to own more than 30% of our common stock; provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing and also meet specific requirements as to the form and content of a stockholder's notice; provide that certain provisions of our amended and restated certificate of incorporation and bylaws can only be amended by a super-majority vote of our stockholders, if BRS II and its affiliates collectively cease to own more than 30% of our common stock; place limitations on the removal of directors; not provide for cumulative voting rights, thereby allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election; and provide that special meetings of our stockholders may be called only by the board of directors or by such person or persons requested by a majority of the board of directors to call such meetings, if BRS II and its affiliates collectively cease to own more than 30% of our common stock. These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, who are responsible for appointing the members of our management. Because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the DGCL, which may discourage, delay or prevent someone from acquiring us or merging with us whether or not it is desired by or beneficial to our stockholders. Under Delaware law, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the board of directors has approved the transaction. Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock. We may be subject to securities litigation, which is expensive and could divert management attention. The market price of our common stock may be volatile, and in the past companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. 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. Table of Contents If securities analysts do not publish research or reports about our company and our industry, or if they issue unfavorable commentary about us or our industry or downgrade our common stock, the price of our common stock could decline. The trading price for our common stock will be influenced by research or reports that industry or financial analysts publish about us and our business, our industry or retailers in general. If any of the analysts who cover us or may cover us in the future change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, our stock price could decline. If any analyst who covers us or may cover us in the future were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Risks Related to Our Business and Industry Our business depends upon identifying and responding to changing consumer fashion preferences and fashion-related trends. If we cannot identify trends in advance or we select the wrong fashion trends, our sales could be adversely affected. Fashion trends in the footwear, apparel and accessories industry can change rapidly. We need to anticipate, identify and respond quickly to changing trends and consumer demands in order to provide the merchandise our consumers seek and maintain our brand image. We must actively manage our purchase of inventory. Generally, we order merchandise months in advance of it being received and offered for sale. If we cannot identify changing trends in advance, fail to react to changing trends or misjudge the market for a trend, our reputation with our target consumers may be damaged, our sales could be adversely affected and we may be faced with a substantial amount of excess inventory. As a result, we may be forced to mark down our merchandise or conduct promotional sales in order to dispose of slow moving inventory, which may result in lower profit margins, thereby negatively impacting our business, financial condition and results of operations. Our industry is highly competitive and we may not be able to compete effectively. The retail market for street-inspired footwear, apparel and accessories is highly competitive with relatively low barriers to entry. We currently compete with national athletic and apparel chains, such as Foot Locker and Finish Line, as well as regional and local street-inspired apparel retailers, including Villa, Jimmy Jazz and locally-owned and operated stores. In addition, we compete with department stores, such as Macy's, that sell various street-inspired brands and lifestyle apparel retailers such as Zumiez. Competition with some or all of these retailers could require us to lower our prices or risk losing consumers. In addition, significant or unusual promotional activities by our competitors may cause us to respond in-kind and may adversely impact our operating cash flow. Because of these factors, current and future competition could have a material adverse effect on our business, financial condition and results of operations. Furthermore, some of our competitors have greater financial, marketing and other resources than we currently do, and therefore may be able to devote greater resources to the marketing and sale of their products, generate national brand recognition or adopt more aggressive pricing policies than we can, which could put us at a competitive disadvantage. Moreover, we do not possess exclusive rights to many of the elements that comprise our in-store experience and most of our products are sold to us on a non-exclusive basis. As a result, our current and future competitors may be able to duplicate or improve on some or all of our in-store experience or product offerings that we believe are important in differentiating our stores and our consumers' shopping experience. If our competitors were to duplicate or improve on some or all of our in-store experience or product offerings, our competitive position and our business could suffer. Although we sell merchandise via the internet, e-commerce sales currently represent only a small portion of our business. Therefore, a significant shift in consumer buying patterns to purchasing street-inspired footwear, apparel and accessories via the internet could have a material adverse effect on our business, financial condition and results of Table of Contents operations. In addition, many of our significant vendors distribute products directly to consumers through the internet and others may follow. Some of these vendors also operate retail stores and some have indicated that further retail stores and venues will open. Should this continue to occur, and if our consumers decide to purchase directly from our vendors, it could have a material adverse effect on our business, financial condition and results of operations. A change in the relationship with any of our key vendors, in particular Nike and Brand Jordan, or the unavailability of our key products at competitive prices could affect our business, financial condition and results of operations. To a significant degree, our business is dependent upon our ability to obtain limited-availability merchandise and the ability to purchase brand-name merchandise at competitive prices from a limited number of vendors. We have no long-term supply agreements with vendors and, therefore, our success depends on maintaining good relationships with our vendors. In addition, certain of our key vendors provide volume discounts, cooperative advertising and markdown allowances, as well as the ability to negotiate returns of excess or unneeded merchandise. We cannot be certain that such assistance from our vendors will continue in the future. We purchased approximately 65.3% of our merchandise in fiscal 2012 from our top five vendors and expect to continue to obtain a significant percentage of our product from these vendors in future periods. We purchased approximately 47.5% of our merchandise in fiscal 2012 from Nike and Brand Jordan, our top vendors. Merchandise that is high profile and in high demand is allocated by our vendors based upon their internal criteria. Although we have generally been able to purchase sufficient quantities of this merchandise in the past, we cannot be certain that our vendors will continue to allocate sufficient amounts of such merchandise to us in the future. We believe we have strong relationships with Nike and Brand Jordan and any adverse changes in these relationships could affect our ability to obtain sufficient quantities of high demand products. Our inability to obtain merchandise in a timely manner from major vendors (particularly Nike and Brand Jordan), as a result of business decisions by our vendors or any disruption in our or our vendors' supply chain, could have a material adverse effect on our business, financial condition and results of operations. Because of our strong dependence on Nike and Brand Jordan, any adverse development in Nike's or Brand Jordan's reputation, business, financial condition or results of operations or the inability of Nike and Brand Jordan to develop and manufacture products that appeal to our target consumers could also have an adverse effect on our business, financial condition and results of operations. We cannot be certain that we will be able to acquire merchandise at competitive prices or on competitive terms in the future. These risks could have a material adverse effect on our business, financial condition and results of operations. Our continued growth depends upon our ability to successfully open a significant number of new stores, which is influenced by our vendors and which could strain our resources, cause the performance of our existing stores to suffer and damage our brand image. We have grown our store count significantly in recent years and that has contributed to our sales growth. However, we must continue to open and operate new stores to help maintain this growth. We opened six stores in fiscal 2011 and six stores in fiscal 2012. Since February 2, 2013, we have opened 15 new stores and plan to open 10-12 new stores during fiscal 2014. However, there can be no assurance that we will open the planned number of new stores in fiscal 2014 or thereafter or that any new stores will be successful. Like most vendors, Nike has the right to approve locations that sell its products. Given the large percentage of our sales attributed to Nike and Brand Jordan products (47.3% of our net sales in fiscal 2012) we do not believe it would be profitable for us to open or acquire a store that could not sell Nike or Brand Jordan products and therefore would not open or acquire any proposed new store without the ability to sell Nike and Brand Jordan products. Our ability to successfully open and operate new stores is also subject to a variety of additional risks and uncertainties, such as: identifying suitable store locations, the availability of which is beyond our control; obtaining acceptable lease terms; Table of Contents sourcing sufficient levels of inventory; selecting the appropriate merchandise that appeals to our consumers; hiring and retaining sales associates; assimilating new store employees into our corporate culture; effectively marketing new store locations; initiating marketing efforts in advance of new store openings in particular regions; avoiding construction delays and cost overruns in connection with the build-out of new stores; managing and expanding our infrastructure to accommodate growth; and integrating new stores with our existing buying, distribution and other support operations. Our failure to successfully address these challenges could have a material adverse effect on our business, financial condition and results of operations. In addition, our proposed expansion will place increased demands on our operational, managerial and administrative resources. We may be required to expand our sales functions, distribution capacity, marketing, support services, management information systems and administrative personnel. Our failure to upgrade and expand our infrastructure on a timely basis to keep pace with our anticipated growth in store count could strain our existing resources, causing operational difficulties in hiring, obtaining adequate levels of merchandise, delayed shipments and decreased customer service levels. These difficulties could cause our brand image to deteriorate and may have a material adverse effect on our business, financial condition and results of operation. Expanding into new geographic markets may present challenges that are different from those we currently encounter. Failure to effectively adapt to these new challenges could adversely affect our ability to profitably operate those stores and maintain our brand image. As we expand store locations, we may face challenges that are different from those we currently encounter. Our expansion into new geographic markets could result in increased competitive, merchandising, distribution and other challenges. Our vendors have the right to approve locations that sell their products, which may limit our ability to open stores in those markets. There can be no assurance that any newly opened stores will be received as well as, or achieve net sales or profitability levels consistent with, our projected targets or comparable to those of, our existing stores in the time periods estimated by us, or at all. If our stores fail to achieve, or are unable to sustain, acceptable net sales and profitability levels, our business, financial condition and results of operations may be materially harmed and we may incur significant costs associated with closing those stores and our brand image may be negatively impacted. We may engage in future acquisitions that could disrupt our business, cause dilution to our stockholders and harm our business, financial condition and results of operations. While we currently have no specific plans to acquire any businesses, we may, in the future, make acquisitions of or investments in, companies that we believe offer opportunities for growth. In connection with these acquisitions or investments, we may: issue stock that would dilute our existing stockholders' percentage of ownership; incur debt and assume liabilities; or incur amortization expenses related to intangible assets or incur large and immediate write-offs. Table of Contents Moreover, if we complete an acquisition, we cannot assure you that it will ultimately strengthen our competitive position or that it will be viewed positively by consumers, financial markets or investors. Furthermore, future acquisitions could pose numerous additional risks to our operations, including: problems integrating stores or businesses, including facilities, personnel, financial systems, distribution systems and operations; increases to our expenses; the failure to discover undisclosed liabilities of the acquired asset or company; diversion of management's attention from their day-to-day responsibilities; harm to our business, financial condition or results of operations; entrance into geographic markets in which we have limited or no prior experience; or potential loss of key employees, particularly those of the acquired entity. Our business largely depends on our strong brand image, and if we are not able to maintain and enhance our brand, particularly in new markets where we have limited brand recognition, we may be unable to increase or maintain our level of sales. We believe that our brand image and brand awareness have contributed significantly to the success of our business. We believe that maintaining and enhancing our brand image, particularly in new markets where we have limited brand recognition, is important to maintaining and expanding our consumer base. As we execute our growth strategy, our ability to successfully integrate new stores into their surrounding communities, to expand into new markets or to maintain the strength and distinctiveness of our brand image in our existing markets will be adversely impacted if we fail to connect with our target consumer. Maintaining and enhancing our brand image may require us to make substantial investments in areas such as merchandising, marketing, store operations, community relations and employee training, which could adversely affect our business, financial condition and results of operations and which may not ultimately be successful. Failure to successfully market our brand in new and existing markets could harm our business, financial condition and results of operations. Use of social media may adversely impact our reputation or subject us to fines or other penalties. There has been a substantial increase in the use of social media platforms, including blogs, social media websites, and other forms of internet-based communications, which allow individuals access to a broad audience of consumers and other interested persons. Negative commentary regarding us or the brands we sell may be posted on social media platforms and similar devices at any time and may be adverse to our reputation or business. Consumers value readily available information concerning retailers and their goods and services and often act on such information without further investigation and without regard to its accuracy. The harm may be immediate without affording us an opportunity for redress or correction. In addition, social media platforms provide users with access to such a broad audience that collective action against our stores, such as boycotts or vandalism, can be more easily organized. If such actions were organized, we could suffer reputational damage as well as physical damage to our stores and merchandise. We also use social medial platforms as marketing tools. For example, we maintain Facebook, Instagram and Twitter accounts. As laws and regulations rapidly evolve to govern the use of these platforms and devices, the failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations in the use of these Table of Contents platforms and devices could adversely impact our business, financial condition and results of operations or subject us to fines or other penalties. Our marketing programs may not be successful. We use a variety of media in our marketing efforts, including social media platforms. For example, we employ street teams that promote our brand at social events, host in-store appearances by popular music artists, broadcast our in-house internet radio station in our stores and sponsor local entertainment events. We expect to continue to conduct brand awareness programs and guest initiatives to attract and retain consumers. These initiatives may not be successful, resulting in expenses incurred without the benefit of higher net sales. Additionally, some of our competitors have greater financial resources, which enable them to purchase significantly more advertising than we are able to purchase. Should our competitors increase their spending on advertising and promotions or should our advertising funds decrease for any reason, or should our advertising and promotions be less effective than our competitors, there could be a material adverse effect on our business, financial condition and results of operations. Our sales could be adversely impacted by declines in consumer confidence and decreases in consumer spending. Our sales are driven by strong consumer confidence and the willingness of our consumers to spend their discretionary income on our product offerings. Therefore, we depend upon consumers feeling confident to spend discretionary income on our product offerings to drive our sales. Consumer spending may be adversely impacted by economic conditions such as consumer confidence in future economic conditions, interest and tax rates, employment levels, salary and wage levels, general business conditions, the availability of consumer credit and the level of housing, energy and food costs. These risks may be exacerbated for retailers like us who focus on specialty footwear, apparel and accessories. Our financial performance is susceptible to economic and other conditions in regions or states where we have a significant number of stores, such as the Mid-Atlantic region. If periods of decreased consumer spending persist, our sales could decrease and could cause a material adverse effect on our business, financial condition and results of operations. Instability in the financial markets may adversely affect our business. Past disruptions in the United States and global credit and equity markets made it difficult for many businesses to obtain financing on acceptable terms. We currently have a revolving credit facility and a term loan facility in place. Tightening of credit markets could make it increasingly difficult for us to access funds, refinance our existing indebtedness, enter into agreements for new indebtedness or obtain funding through the issuance of our securities. In addition, we rely on a few key vendors for a majority of our merchandise purchases. The inability of key vendors to access liquidity, or the insolvency of key vendors, could lead to their failure to deliver merchandise to us. Our inability to obtain merchandise in a timely manner from major vendors could have a material adverse effect on our business, financial condition and results of operations. Our sales can fluctuate, which may cause our operating results to fluctuate disproportionately on a quarterly basis, and may not be indicative of future performance. Our sales may fluctuate significantly between quarters and are typically higher in the first and fourth fiscal quarters than they are in the second and third fiscal quarters. This fluctuation between quarters may result from a variety of factors, including, among other things: the timing of new store openings; the timing of our consumers' receipt of personal income tax refunds; Table of Contents
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. It does not contain all of the information that may be important to you and your investment decision. You should carefully read this entire prospectus, including the matters set forth under Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations and our financial statements and related notes included elsewhere in this prospectus. In this prospectus, unless the context otherwise requires or where otherwise indicated, (i) references to Five Below, the Company, we, us and our refer to Five Below, Inc. and its subsidiary as a combined entity and (ii) references to Merchandising Subsidiary refers to Five Below Merchandising, Inc., our wholly-owned subsidiary. Numbers may not sum due to rounding. We purchase products in reaction to existing marketplace trends and, hence, refer to our products as trend-right. We use the term dynamic merchandise to refer to the broad range and frequently changing nature of the products we display in our stores. We use the term power shopping center to refer to an unenclosed shopping center with 250,000 to 750,000 square feet of gross leasable area that contains three or more big box retailers (large retailers with floor space over 50,000 square feet) and various smaller retailers with a common parking area shared by the retailers. We use the term lifestyle shopping center to refer to a shopping center or commercial development that is often located in suburban areas and combines the traditional retail functions of a shopping mall with leisure amenities oriented towards upscale consumers. We use the term community shopping center to refer to a shopping area designed to serve a trade area of 40,000 to 150,000 people with a minimum of 430,500 square feet (10 acres) in area, where the lead tenant is a variety discount or junior department store. We use the term trade area to refer to the geographic area from which the majority of a given retailer s customers come from. Trade areas vary by market based on geographic size, population density, demographics and proximity to alternative shopping opportunities. Overview Five Below is a rapidly growing specialty value retailer offering a broad range of trend-right, high-quality merchandise targeted at the teen and pre-teen customer. We offer a dynamic, edited assortment of exciting products, all priced at $5 and below, including select brands and licensed merchandise across a number of categories, which we refer to as worlds : Style, Room, Sports, Media, Crafts, Party, Candy and Now (also known as Seasonal ). We believe we are transforming the shopping experience of our target demographic with a unique merchandising strategy and high-energy retail concept that our customers consider fun and exciting. Based upon management s experience and industry knowledge, we believe our compelling value proposition and the dynamic nature of our merchandise offering appeal to teens and pre-teens, as well as customers across a variety of age groups beyond our target demographic. Five Below was founded in 2002 by our Executive Chairman, David Schlessinger, and our President and Chief Executive Officer, Thomas Vellios, who recognized a market need for a fun and affordable shopping destination aimed at our target customer. We opened the first Five Below store in 2002 and have since been expanding across the eastern half of the U.S. As of May 4, 2013, we operated a total of 258 locations across 18 states. Our stores average approximately 7,500 square feet and are typically located within power, community and lifestyle shopping centers across a variety of urban, suburban and semi-rural markets. We plan to open a total of approximately 60 net new stores in fiscal 2013, and we believe we have the opportunity to grow our store base to more than 2,000 locations over time. Table of Contents The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. Subject to Completion, Dated June 13, 2013. 8,563,172 Shares Five Below, Inc. Common Stock This is a public offering of 8,563,172 shares of common stock of Five Below, Inc. The selling shareholders identified in this prospectus, some of whom are our affiliates, are offering all of the shares. We will not receive any of the proceeds from the sale of the shares sold in this offering. We will bear all of the offering expenses other than the underwriting discounts and commissions. Our common stock is listed on The NASDAQ Global Select Market under the symbol FIVE. The last reported sales price of our common stock on June 12, 2013 was $35.40 per share. Five Below is an emerging growth company as that term is used in the Jumpstart Our Business Startups (JOBS) Act of 2012; however, the Company has not, and does not intend to, take advantage of any of the reduced public company reporting requirements afforded by the JOBS Act. See Risk Factors beginning on page 10 to read about factors you should consider before buying shares of our common stock. Neither the Securities and Exchange Commission nor any other regulatory body 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. Per Share Total Initial price to public $ $ Underwriting discount(1) $ $ Proceeds, before expenses, to the selling shareholders $ $ (1) See Underwriting. To the extent that the underwriters sell more than 8,563,172 shares of common stock, the underwriters have the option to purchase up to an additional 1,284,475 shares from the selling shareholders at the initial price to the public less the underwriting discount. We will not receive any proceeds from the sale of any of the additional shares. The underwriters expect to deliver the shares against payment in New York, New York on , 2013. Goldman, Sachs & Co. Barclays Jefferies Credit Suisse Deutsche Bank Securities UBS Investment Bank Wells Fargo Securities Prospectus dated , 2013. Table of Contents We believe our business model has resulted in strong financial performance irrespective of the economic environment: We have achieved positive comparable store sales during each of the last 28 fiscal quarters. For the thirteen weeks ended May 4, 2013, our comparable store sales increased by 4.2%. For the same period in the prior year, our comparable store sales increased by 10.4%. Our net sales for the thirteen weeks ended May 4, 2013 were $95.6 million, an increase of 33%, from $71.8 million for the thirteen weeks ended April 28, 2012. Our operating income was $3.2 million for the thirteen weeks ended May 4, 2013 compared to an operating loss of $2.0 million for the thirteen weeks ended April 28, 2012. Our comparable store sales increased by 15.6% in fiscal 2010, 7.9% in fiscal 2011, and 7.1% in fiscal 2012 with positive comparable store sales performance across all geographic regions and store-year classes. We expanded our store base from 142 stores at the end of fiscal 2010 to 244 stores at the end of fiscal 2012, representing a compound annual growth rate of 31.1%. Between fiscal 2010 and 2012, our net sales increased from $197.2 million to $418.8 million, representing a compound annual growth rate of 45.7%. Over the same period, our operating income increased from $11.8 million to $37.7 million, representing a compound annual growth rate of 78.6%. Our Competitive Strengths We believe the following strengths differentiate Five Below from competitors and are the key drivers of our success: Unique Focus on the Teen and Pre-Teen Customer. We target an attractive customer segment of teens and pre-teens with trend-right merchandise at a differentiated price point of $5 and below. Our brand concept, merchandising strategy and store ambience work in concert to create an upbeat and vibrant retail experience that is designed to appeal to our target audience. We monitor trends in the ever-changing teen and pre-teen markets and are able to quickly identify and respond to those that become mainstream. We believe our price points enable teens and pre-teens to shop independently and exercise self-expression, using their own money to make frequent purchases of items geared primarily to them. Broad Assortment of Trend-Right, High-Quality Merchandise with Universal Appeal. We deliver an edited assortment of trend-right, everyday products that changes frequently to create a sense of anticipation and freshness. Our unique approach encourages frequent customer visits and limits the cyclical fluctuations experienced by many other specialty retailers. The breadth, depth and quality of our product mix and the diversity of our category worlds attract shoppers across a broad range of age and socio-economic demographics. Exceptional Value Proposition for Customers. We believe we offer a clear value proposition to our customers with our price points of $5 and below. We are able to deliver on this value proposition through sourcing products in a manner that is designed to minimize cost, accelerate response times and maximize sell-through. We have collaborative relationships with our vendor partners and also employ an opportunistic buying strategy, which allows us to capitalize on select excess inventory opportunities. This unique and flexible sourcing strategy allows us to offer high-quality products at exceptional value across all of our category worlds. Differentiated Shopping Experience. We have created an in-store atmosphere that we believe our customers find easy-to-shop, fun and exciting. While we refresh our products frequently, we maintain a consistent floor layout with an easy-to-navigate racetrack flow and sight-lines across the entire store Table of Contents Table of Contents enabling customers to easily identify our category worlds. All of our stores feature a sound system playing popular music throughout the shopping day. We employ colorful and stimulating in-store fixtures and signage and also utilize dynamic product displays, which encourage hands-on interaction. We have developed a unique culture that emanates from our employees, driving a higher level of connectivity with customers. Additionally, we believe the combination of our price points and merchandising create an element of discovery, driving customer engagement and repeat visits while insulating us against e-commerce cannibalization trends. Powerful and Consistent Store Economics. We have a proven store model that generates strong cash flow, consistent store-level financial results and high level returns on investment. Our stores have been successful in varying geographic regions, population densities and real estate settings. Each of our stores was profitable on a four-wall basis in fiscal 2012 and our new stores have achieved average payback periods of less than one year. We believe our robust store model, reinforced by our rigorous site selection process and in-store execution, drives the strength and consistency of our comparable store sales financial performance across all geographic regions and store-year classes. Highly Experienced and Passionate Senior Management Team with Proven Track Record. Our senior management team has extensive experience across a broad range of disciplines, including merchandising, real estate, finance, store operations, supply chain management and information technology. Our co-founders, David Schlessinger and Thomas Vellios, have approximately 66 combined years of retail experience and have set the vision and strategic direction for Five Below. Our management team drives our operating philosophy, which is based on a relentless focus on providing high-quality merchandise at exceptional value and a superior shopping experience utilizing a disciplined, low-cost operating and sourcing structure. Growth Strategy We believe we can grow our net sales and earnings by executing on the following strategies: Grow Our Store Base. We believe we have the potential to grow our store base in the U.S. from 258 locations, as of May 4, 2013, to more than 2,000 locations over time. Based upon our strategy of store densification in existing markets and expanding into adjacent states and markets, we expect most of our near-term growth will occur within our existing markets. We opened 50 net new stores in fiscal 2011, 52 new stores in fiscal 2012, and plan to open a total of approximately 60 net new stores in fiscal 2013. Drive Comparable Store Sales. We expect to continue driving comparable store sales growth by maintaining our dynamic merchandising offering, supported by our flexible sourcing strategy and differentiated in-store shopping experience. We intend to increase our brand awareness through cost-effective marketing efforts and enthusiastic customer engagement. Increase Brand Awareness. We intend to leverage our cost-effective marketing strategy to increase awareness of our brand. Our strategy includes the use of newspaper circulars, local media and grassroots marketing to support existing and new market entries. We believe we have an opportunity to leverage our growing social media and online presence to drive brand excitement and increased store visits within existing and new markets. These platforms allow us to continue to build brand awareness and expand our new customer base. Enhance Operating Margins. We believe we have further opportunities to drive margin improvement over time. A primary driver of our expected margin expansion will come from leveraging our cost structure as we continue to increase our store base and drive our average net sales per store. We intend to capitalize on opportunities across our supply chain as we grow our business and achieve further economies of scale. Table of Contents Table of Contents Our Market Opportunity As a result of our unique merchandise offering and value proposition, we believe we have effectively targeted the teen and pre-teen markets. According to the U.S. Census Bureau, there were over 63 million people in the U.S. between the ages of 5 and 19, which represented over 20% of the U.S. population as of April 1, 2010. Based on management s experience and industry knowledge, we believe that this segment of the population has a significant amount of disposable income as the vast majority of this age group s basic needs are already met. Risks Associated with our Business There are a number of risks and uncertainties that may affect our financial and operating performance and our growth prospects. You should carefully consider all of the risks discussed in Risk Factors, which begins on page 10, before investing in our common stock. These risks include the following: we may not be able to successfully implement our growth strategy if we are unable to identify suitable sites for store locations, obtain favorable lease terms, attract customers to our stores, hire and retain personnel and maintain sufficient levels of cash flow and financing to support our expansion; we may not be able to effectively anticipate changes in trends or in spending patterns or shopping preferences of our customers, which could adversely impact our business; we may face disruptions in our ability to select, obtain, distribute and market merchandise attractive to customers at prices that allow us to profitably sell such merchandise; our business is seasonal and we may face adverse events during the holiday season, which could negatively impact our business; we may not be able to effectively expand and improve our operations, including our distribution center capacity, or manage our existing resources to support our future growth; we may not be able to maintain or improve levels of our comparable store sales; we may lose key management personnel, which could adversely impact our business; we may face increased competition, which could adversely impact our business; our cash flows from operations may be negatively affected if we are not successful in managing our inventory balances; and our profitability is vulnerable to inflation, cost increases and energy prices. Principal Shareholders Following the closing of this offering, funds managed by Advent International Corporation, or Advent, are expected to own approximately 18.9% of our outstanding common stock, or 16.9%, if the underwriters option to purchase additional shares is fully exercised. As a result, Advent will be able to exert significant voting influence over fundamental and significant corporate matters and transactions. See Risk Factors Risks Related to This Offering and Ownership of Our Common Stock and Principal and Selling Shareholders. Certain of our principal shareholders, including Advent, may acquire or hold interests in businesses that compete directly with us, or may pursue acquisition opportunities which are complementary to our business, making such an acquisition unavailable to us. Our second amended and restated shareholders agreement, as amended, contains provisions renouncing any interest or expectancy held by our directors affiliated with Advent in certain corporate opportunities. For further information, see
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+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information that should be considered before investing in our common stock. Investors should read the entire prospectus carefully, including the more detailed information regarding our business, the risks of purchasing our common stock discussed in this prospectus under Risk Factors beginning on page 8 of this prospectus, Management s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 37 of this prospectus, and our consolidated financial statements and the accompanying notes beginning on page F-1 of this prospectus. As used in this prospectus, unless the context requires otherwise, the Company , we , us , and our refer to Imprimis Pharmaceuticals, Inc., a Delaware corporation. Our Company We are a specialty pharmaceutical company developing non-invasive, topically delivered products. Our innovative patented Accudel cream formulation technology is designed to enable highly targeted site specific treatment. Impracor, our lead pain product candidate, utilizes the Accudel platform technology to deliver the active drug, ketoprofen, a non-steroidal anti-inflammatory drug, through the skin directly into the underlying tissues where the drug exerts its localized anti-inflammatory and analgesic effects. Through our strategic relationship with Professional Compounding Centers of America, Inc. ( PCCA ), one of the largest drug compounding organizations in the world, we expect to facilitate our future selection, formulation and development of potential product candidates. Our relationship with PCCA is exclusive and provides us with the opportunity to develop new products using PCCA s proprietary drug formulations and drug delivery technologies, as well as access to an extensive database of market-oriented information related to specific drug development candidates. We plan to use our proprietary Accudel drug delivery technology, coupled with these licensed technologies, formulations and market data, to identify pharmaceutical development opportunities where there is a significant unmet need for a new drug product. We are currently considering potential product candidates in the muscle relaxant and neuropathic pain fields, and we expect those areas may be our next avenues for additional product development. To better enable us to analyze the myriad of PCCA and PCCA-related development opportunities, we have designed a comprehensive drug development selection methodology. In determining the viability of a potential opportunity, we group all development candidates according to delivery modality and health category. We review intellectual property related to a respective opportunity, as well as manufacturing considerations, various market-related criterion and other clinical development issues. We believe that our review process will aid us in identifying viable development candidates and assist us in determining whether to internally develop a program or seek an appropriate commercialization partner. Our common stock has been quoted in the over-the-counter market since March 2007 and is currently quoted on OTC Markets Group s OTCQB tier under the symbol IMMY . Our executive offices are located at 437 S. Hwy 101, Suite 209, Solana Beach, CA 92075 and our telephone number is (858) 433-2800. Our website address is www.imprimispharma.com. Information contained on our website is not deemed part of this prospectus. Reverse Stock Split and NASDAQ Listing Application On April 25, 2012, our Board of Directors (the Board of Directors or the Board ) and stockholders holding a majority of our outstanding voting power approved a resolution authorizing our Board of Directors to effect a reverse split of our common stock at an exchange ratio of (i) one-for-three, (ii) one-for-four, (iii) one-for-five, or (iv) one-for-six, with our Board of Directors retaining the discretion as to whether to implement the reverse split and which exchange ratio to implement. The action by written consent of the stockholders became effective on May 31, 2012, following our compliance with certain notice requirements under the Securities Exchange Act of 1934 (the Exchange Act ). We anticipate that immediately following the effectiveness of the registration statement of which this prospectus forms a part, and prior to the closing of this offering, our Board of Directors will effect a reverse stock split at a ratio of one-for-five (the reverse stock split ). The reverse stock split is intended to allow us to meet the minimum share price requirement of The NASDAQ Capital Market. We have applied for listing of our common stock on The NASDAQ Capital Market, which listing we expect to occur at the closing of this offering. If the application is not approved, we will not complete this offering or effect the reverse stock split, and the shares of our common stock will continue to be traded on the OTC Markets Group s OTCQB tier. Other than as otherwise indicated and except in our consolidated financial statements, all information regarding share amounts of common stock and prices per share of common stock contained in this prospectus assume the consummation of the one-for-five reverse stock split to be effected following effectiveness of the registration statement of which this prospectus forms a part and prior to the closing of this offering. Impracor Impracor, our lead drug candidate, is comprised of a transdermal formulation of ketoprofen, a non-steroidal anti-inflammatory drug (NSAID). Impracor is formulated using our proprietary Accudel drug delivery system and is being developed for the treatment of acute musculoskeletal pain. Impracor penetrates the skin barrier to reach the targeted underlying tissues where it exerts its localized anti-inflammatory and analgesic effect. The topical delivery of the drug may minimize systemic exposure, which may in turn lead to fewer concerns pertaining to gastrointestinal, hepatic, cardiovascular and other adverse systemic effects, which are associated with orally administered NSAIDs. We believe that this product may be considered for patients with site specific localized pain and who also (i) have a history of gastrointestinal, cardiovascular, kidney or liver problems, (ii) are geriatric or pediatric and/or (iii) are at risk for drug interactions. Completed Clinical Studies for Impracor In June 2008, we initiated a Phase 3 clinical trial designed as a randomized, double-blind, placebo-controlled, multi-center study that enrolled a total of 364 patients with acute soft tissue injuries of the upper or lower extremities in 26 centers in the United States. As we reported in October 2009, the top-line results showed that the study demonstrated statistical significance in its primary endpoint in the per protocol analysis and was favorable for Impracor in the Intent-To Treat ("ITT") analysis. Impracor also demonstrated a safety and tolerability profile similar to the placebo used in the study. Of the over 180 patients treated with Impracor, there were no treatment related gastrointestinal, cardiovascular, hepatic or other clinically relevant adverse events reported. Furthermore, Impracor was observed to be well absorbed through the skin and only minimal blood concentrations of ketoprofen were detected in a subset of patients who underwent blood sampling for pharmacokinetic analyses following repeated topical applications. In January 2010, we reported on further in-depth analyses of the ITT data from the Impracor Phase 3 study. For the modified ITT analysis we identified 35 patients who did not meet study entry criteria at the time of randomization. Excluding the data from these patients who should not have been randomized into the study based on information that was not known at the time of enrollment, the study demonstrated statistical significance (p<0.038) on the primary efficacy endpoint. This post-hoc analysis was confirmed by a third-party statistical expert. In February 2012, our management conducted an additional analysis of the ITT data and a body weight adjusted modified per protocol ( mPP ) analysis of those participants who completely complied with the Phase 3 Study protocol, including taking the recommended therapeutic quantity of the study drug. This analysis excluded 52 participants from the ITT group who did not take a minimum therapeutic quantity of the study drug, and 20 patients who did not have a valid Day 3 primary endpoint assessment and 4 patients who were misdiagnosed. This mPP analysis on 250 patients demonstrated statistical significance of the primary endpoint (p=0.034). We believe that the weight of evidence of a treatment effect in this study is further strengthened by a key secondary endpoint (pain intensity recorded three times daily on patient diary cards) that supports the primary endpoint. The patient diary data which yield pain curves over time show consistent separation between treatment groups reaching statistical significance in favor of Impracor using both the original and modified ITT population. Furthermore, the physician's global assessment, using a 7 Point Likert Scale, on day 3 produced statistically significant results (p=0.037), and a later exploratory analysis of the patient's global assessment of treatment satisfaction, using a binomial method, produced statistically significant results (p=0.023). Proposed Clinical Program for Impracor For Impracor to be approved by the U.S. Food and Drug Administration ("FDA"), two confirmatory Phase 3 trials with exposure of at least 300 to 500 patients and supportive dermal safety studies are required. We plan to commence two adequate and well-controlled Phase 3 trials of Impracor in patients experiencing pain from osteoarthritis flare in their knees. We plan to discuss the clinical development program for those trials, which has been endorsed by our scientific and regulatory advisory board, with the FDA at a Type C meeting scheduled to occur in April 2013. Also as required by the FDA, we recently completed a clinical study that measured the amount of ketoprofen found in the bloodstream following topical application of two different doses of the anti-inflammatory cream under different conditions, including normal activities, heat exposure to the application site and standardized exercise, as well as the amount of the drug in the bloodstream after taking an oral dose of ketoprofen (the relative oral bioavailability). The study included a total of 40 healthy volunteers (36 of which completed the study) assigned to one of two cohorts (2g or 4g applications). Subjects were dosed according to a four-sequence, four-treatment randomization schedule in which they received topical Impracor applications under each of the three conditions and an oral ketoprofen dose in weekly intervals. Overall the pharmacokinetic parameters were observed to be consistent between the two different dose cohorts. The application of an occlusive knee bandage with either heat or exercise following topical administration showed faster initial, but lower overall plasma exposure of ketoprofen relative to non-occluded topical administration with no heat or exercise. The extent of bioavailability over 48 hours as measured by the area under the concentration curve from time zero to the time of last measurable concentration (AUC0-t) was 2% or less in cohort 1 (2 g single dose applied to one knee) and 4% or less in cohort 2 (2 g single dose applied to each knee) for the topical treatments relative to the oral treatment. All treatments were observed to be well tolerated. We also expect to initiate a routine supportive trial in healthy subjects related to the potential of contact sensitization. We expect that all of our planned clinical studies for Impracor will be executed with the professional help of clinical research organizations ( CROs ) with experience in clinical trials of similar design. We are in the process of selecting and negotiating arrangements with potential CROs and other third parties in order to initiate our Phase 3 clinical trials. Following completion of our clinical trials, we expect to file a New Drug Application for marketing authorization for Impracor under Section 505(b)(2) of the Hatch-Waxman Act of 1984, a regulatory route towards U.S. approval that leverages previously established safety and/or effectiveness of already approved ketoprofen products in other dosage forms. This regulatory path also improves the chances of success over a completely new drug chemical entity. The timing of Phase 3 trials and the other supportive studies will be dependent on obtaining adequate financing to support the execution of these activities and for other working capital expenditures. Upon receipt of such financing, we anticipate initiating the supportive studies and Phase 3 trials in mid and late 2013, respectively. Assuming successful timely completion and outcome of the additional Phase 3 trials, we would expect to file the New Drug Application for Impracor in the second half of 2014. We expect that Impracor, if approved by the FDA, could become one of the first NSAID cream products available by prescription in the United States for the topical treatment of acute musculoskeletal pain. The Accudel Technology Accudel is our proprietary transdermal cream drug delivery platform which can facilitate the transdermal penetration of drugs, thus enabling the avoidance of first pass metabolism by the liver and minimizing systemic exposure. The following diagram provides a schematic of the Accudel drug delivery system: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________ Amendment No. 5 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ___________________________ IMPRIMIS PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter) ___________________________ Delaware 2834 45-0567010 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 437 S. Hwy 101, Suite 209 Solana Beach, CA 92075 (858) 433-2800 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) ___________________________ Mark L. Baum Chief Executive Officer 437 S. Hwy 101, Suite 209 Solana Beach, CA 92075 (858) 433-2800 (Name, address, including zip code, and telephone number, including area code, of agent for service) ___________________________ Copies to: Steven G. Rowles, Esq. Jeannette V. Filippone, Esq. Morrison & Foerster LLP 12531 High Bluff Drive, Suite 100 San Diego, California 92130 Tel: (858) 720-5100 Fax: (858) 720-5125 Kevin Friedmann, Esq. Marc A. Jones, Esq. Richardson & Patel LLP 750 Third Avenue, 9th Floor New York, New York 10017 Tel: (212) 561-5559 Fax: (917) 591-6898 Approximate date of commencement of proposed sale to the public: As soon as possible 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. 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 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 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 Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Accudel has the following properties, which make it a highly versatile vehicle for topical drug administration: utilizes a pluronic lecithin organogel based matrix which is known to penetrate the stratum corneum and aid in the diffusion of active ingredients through the skin; helps solubilize various types of drugs and its components (lipophilic, hydrophilic and amphiphilic); uses penetration enhancers in a synergistic combination; can incorporate compounds of various molecular sizes; contains biocompatible components which are generally regarded as safe by the FDA; is thermodynamically stable, insensitive to moisture and resistant to microbial contamination; potentially results in decreased safety concerns associated with oral or intravenous drugs; avoids certain limitations associated with transdermal patches; is easy to apply, aesthetically acceptable and odorless; and potentially produces patentable new products when combined with established or new drugs. Product Development Program We believe that the clinical success of Impracor will facilitate the use of the Accudel delivery technology in other products. We have identified development opportunities for potential products in pain management and other therapeutic areas utilizing the Accudel platform technology and we are exploring potential commercial relationships for these identified product candidates. In particular, we are currently considering potential new drug candidates in the muscle relaxant and neuropathic pain fields, and we expect those to be our next avenues for new product development. We estimate that pre-Phase 3 clinical studies for these two potential product candidates could each be completed approximately 18 to 24 months after their commencement, and that costs for such development would range from approximately $2 million to $2.5 million for each proposed drug candidate. In addition, we expect our new relationship with PCCA to facilitate our future selection, development and formulation of potential product candidates. We plan to use our proprietary Accudel drug delivery technology, coupled with these licensed technologies, formulations and market data, to identify pharmaceutical development opportunities where there is a significant unmet need for a new drug product. We are currently considering potential product candidates in the muscle relaxant and neuropathic pain fields, and we expect those areas may be our next avenues for additional product development. In the past our product development program has included cosmetic and cosmeceutical products utilizing our patented transdermal delivery system technology, Accudel. Our lead product candidate was an anti-cellulite formulation, for which we have initial clinical information supporting the beneficial effects of this cosmetic product on skin appearance. Our potential pipeline of cosmetic products includes hyperpigmentation and anti-aging formulations. We remain interested in pursuing this business opportunity and continue to consider entering into new relationships with third parties. We may also pursue the out-licensing of our Accudel drug delivery technology for the development and commercialization of additional innovative drug and cosmeceutical products. Market and Opportunity According to Wolters-Kluwer PHAST, the U.S. pain market was approximately $39.8 billion in 2011. Of that total, the NSAID market made up approximately $13.5 billion from approximately 155 million written prescriptions. The topical NSAID market in 2011 was over $500 million, averaging an approximately 28% compound annual growth rate since 2007. According to the Archives of Internal Medicine, NSAIDs are regularly used by more than 60 million Americans. Approximately 70% of people aged 65 or older take NSAIDs weekly. As a result of the widespread usage of oral NSAIDs, according to Bandolier, there are over 100,000 hospitalizations annually and 16,500 deaths in the U.S. due to gastro-intestinal complications annually. In the United Kingdom, there are approximately 12,000 hospitalizations and an estimated 2,600 deaths annually related to GI complications following oral NSAID use per year. One study published in 1998 in the American Journal of Medicine found that NSAID-related gastro-intestinal side effects cause almost as many deaths as asthma, cervical cancer and malignant melanona combined, and another 1999 study published in the Journal of Rheumatology found that death resulting from gastro-intestinal complications was the 15th most common cause of death in the U.S. According to Singh G, Triadafilopoulos G., Epidemiology of NSAID induced gastrointestinal complications, J Rheumatol. 1999, the hospitalizations and deaths related to systemic NSAID use has a financial impact of more than $2 billion per year in the U.S. Therefore, we believe there is a significant demand from physicians and patients for topical pain management products such as Impracor, especially with respect to the treatment of localized, acute musculoskeletal pain, which we believe is driven primarily by the concern of possible negative systemic effects of orally administered NSAIDs. For more information regarding our business, see Management s Discussion and Analysis of Financial Condition and Results of Operations and Business, included elsewhere in this prospectus. Recent Developments All information regarding share amounts of common stock and prices per share of common stock described below assume the consummation of the one-for-five reverse stock split to be effected following the effectiveness of the registration statement of which this prospectus forms a part and prior to the closing of this offering. PCCA Transaction On August 30, 2012, we entered into a License Agreement (the PCCA License Agreement") and a Stock Purchase Agreement (the PCCA Purchase Agreement ) in a strategic transaction with PCCA (the PCCA Transaction ). Pursuant to the terms of the PCCA License Agreement, effective August 30, 2012, PCCA has granted to us and our affiliates certain exclusive rights under PCCA s proprietary formulations, other technologies and data, and we have agreed to pay to PCCA certain royalties on net sales relating to the sale of certain future products, which royalties range from 4.5% to 9% for each product, subject to certain minimum royalty payments. PCCA may terminate the PCCA License Agreement if we fail to commence efforts to research and develop future products within certain time periods. Pursuant to the terms of the PCCA Purchase Agreement, closed on August 31, 2012, we issued and sold to PCCA 832,683 shares of our common stock at a per share purchase price of $4.8038, for aggregate gross proceeds to us of $4,000,000. The PCCA Purchase Agreement does not grant to PCCA any registration rights with respect to the shares purchased and sold thereunder. The shares sold to PCCA were sold in reliance on the exemption from the registration requirements of the Securities Act of 1933 (the Securities Act ) afforded by Section 4(2) thereof. April Private Placement On April 20, 2012, we entered into a Securities Purchase Agreement with certain accredited investors relating to the sale and issuance of an aggregate of 2,011,691 shares of our common stock and warrants to purchase up to 502,928 shares of common stock at an exercise price of $5.925 per share, for an aggregate purchase price of approximately $7.95 million (the April Private Placement ). We closed the April Private Placement on April 25, 2012. The securities sold in the April Private Placement were sold in reliance on the exemption from the registration requirements of the Securities Act afforded by Section 4(2) thereof and Rule 506 of Regulation D. The investors are not entitled to any registration rights with respect to the common stock and warrants issued in the April Private Placement. The warrants have a term of three years and are exercisable any time after April 25, 2012. We may require that the investors exercise the warrants in whole, but not in part, at any time within 20 business days after all of the following conditions have been satisfied: (i) the volume weighted average price of the our common stock for 10 consecutive trading days is equal to or greater than the exercise price of the warrants; (ii) we have received a Filing Review Notification from the FDA regarding the status of Impracor; and (iii) sufficient shares of common stock are authorized and reserved for issuance upon full exercise of the warrants. Conversion of Convertible Note and Balance Under Line of Credit Effective immediately following the effective time of the Certificate of Amendment to our Certificate of Incorporation increasing the number of authorized shares of our common stock on February 28, 2012, the entire outstanding balance and all accrued but unpaid interest owing under our $1,000,000 7.5% Convertible Promissory Note issued on April 5, 2010, as well as certain outstanding accounts payable held by DermaStar International, LLC ( DermaStar ), were converted into 1,835,830 shares of common stock, and the convertible promissory note was terminated. DermaStar was the holder of 80% of the convertible promissory note. On April 25, 2012, the entire outstanding principal balance and all accrued and unpaid interest under our line of credit with DermaStar, an aggregate of $762,534, was converted into 193,047 shares of common stock and warrants to purchase 48,262 shares of our common stock pursuant to a conversion agreement we entered into with DermaStar on April 20, 2012. The warrants have substantially the same terms as the warrants issued in the April Private Placement. The line of credit was terminated upon the completion of the conversion. Director and Chief Executive Officer Mark L. Baum and the Chairman of our Board of Directors, Robert J. Kammer, were the Managing Members of DermaStar prior to its dissolution in July 2012. The conversion agreement was unanimously approved by the Company s disinterested directors, with Mr. Baum and Dr. Kammer abstaining. Written Consent of the Stockholders Approving Increase in Option Plan Reserve On June 29, 2012, stockholders holding a majority of our outstanding voting power approved an amendment to our 2007 Incentive Stock and Awards Plan (the 2007 Plan ) to increase the number of shares available for issuance under the 2007 Plan from 750,000 to 2,400,000. The stockholder approval of the increase became effective upon our compliance with certain notice requirements under the Exchange Act. Going Concern Our independent registered public accounting firm issued an unqualified opinion with an explanatory paragraph to the effect that there is substantial doubt about our ability to continue as a going concern in its report included in our consolidated financial statments for the fiscal year ended December 31, 2011. This unqualified opinion with an explanatory paragraph could have a material adverse effect on our business, financial condition, results of operations and cash flows. See Management s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources and Note 2 to our consolidated financial statements for the fiscal year ended December 31, 2011 included elsewhere in this prospectus. We experienced net losses of $(953,936) and $(2,531,228) for the years ended December 31, 2011 and 2010, respectively. As of September 30, 2012, our accumulated deficit was $(22,651,240). Unless and until we execute an underwriting agreement with the underwriters in connection with this offering, we have no committed sources of capital and do not know whether additional financing will be available when needed on terms that are acceptable, if at all. The going concern statement from our independent registered public accounting firm may discourage some investors from purchasing our stock or from providing alternative capital financing to us. The failure to satisfy our capital requirements would adversely affect our business, financial condition, results of operations and prospects. Unless we raise additional funds, either through the sale of equity securities such as through this offering or one or more collaborative arrangements, we will not have sufficient funds to continue operations. Even if we take these actions, the funds we raise may be insufficient, particularly if our costs are higher than projected or unforeseen expenses arise. Risks Related to Our Business
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diff --git a/parsed_sections/prospectus_summary/2013/KINS_kingstone_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/KINS_kingstone_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..f59c9e90fb2f452408b51b3262f7a3a63c9bbac3
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@@ -0,0 +1 @@
+Prospectus Summary 5
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diff --git a/parsed_sections/prospectus_summary/2013/MMI_marcus_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/MMI_marcus_prospectus_summary.txt
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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/NTIP_network-1_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/NTIP_network-1_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..6c0484c09c68724e0a1c8bd73c17b57b4634317b
--- /dev/null
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@@ -0,0 +1 @@
+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 (Do not check if a smaller reporting company) Smaller reporting company x PURSUANT TO RULE 429 UNDER THE SECURITIES ACT, THE PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT RELATES TO SHARES OF COMMON STOCK OF THE REGISTRANT NOT PREVIOUSLY REGISTERED AND TO SHARES OF COMMON STOCK OF THE REGISTRANT PREVIOUSLY REGISTERED UNDER REGISTRATION STATEMENT ON FORM SB-2 (NO. 333-143710) AND REGISTRATION STATEMENT ON FORM S-2 (NO. 333-126013) AND CONSTITUTES A POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION STATEMENTS. THIS POST EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN ACCORDANCE WITH SECTION 8 OF THE SECURITIES ACT. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________ Explanatory Note: The purpose of this Registration Statement on Form S-1 is (i) register 2,500,000 shares of common stock underlying warrants issued to two holders in connection with the Registrant s acquisition of the patent portfolio and other assets of Looking Glass LLC (formerly Mirror Worlds, LLC) and an additional 500,000 shares of common stock issued to two shareholders in connection with the exercise of warrants issued with respect to the above referenced acquisition of assets and (ii) to file a post-effective amendment with respect to the registration of 3,324,661 shares of common stock previously registered pursuant to Registrant s Registration Statement on Form SB-2 (File No. 333-143710 ), as amended, which was filed on July 13, 2007 and Registrant s Registration Statement on Form S-2 (File No. 333-126013), as amended, which was filed on June 21, 2005. 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. AMENDMENT NO. 2 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 NETWORK-1 TECHNOLOGIES , INC. (Exact Name of Registrant as Specified in its Charter) DELAWARE 6794 11-3027591 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.) 445 Park Avenue, Suite 1020 New York, New York 10022 (212) 829-5770 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) Corey M. Horowitz Chairman and Chief Executive Officer 445 Park Avenue, Suite 1020 New York, New York 10022 (212) 829-5770 (Address, including zip code, and telephone number, including area code, of registrant s principal executive officers) Copies to: Sam Schwartz, Esq. Eiseman Levine Lehrhaupt & Kakoyiannis, P.C. 805 Third Avenue New York, New York 10022 (212) 752-1000 Approximate date of proposed sale to 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 1993, 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 SUBJECT TO COMPLETION, DATED OCTOBER 15 , 2013 PROSPECTUS NETWORK-1 TECHNOLOGIES , INC. 6,324,661 shares of Common Stock This Prospectus covers the resale by the selling stockholders listed on pages 32 to 33 of this Prospectus of up to 6,324,661 shares of our common stock, $.01 par value, which include: 2,500,000 shares of common stock issuable upon exercise of warrants and 500,000 shares of common stock (issued as a result of exercise of a warrant) issued to four holders in connection with our acquisition of the patent portfolio and certain other assets of Looking Glass LLC (formerly Mirror Worlds, LLC) on May 21, 2013; and 3,074,661 shares of common stock and 250,000 shares of our common stock issuable upon exercise of warrants owned by our Chairman and Chief Executive Officer and related parties. We will not receive any proceeds from the sale of these shares of common stock. We will, however, receive proceeds if warrants to purchase common stock are exercised and those proceeds will be used for our general corporate purposes. This offering is not being underwritten. The selling stockholders may sell the shares of common stock on the Over-the-Counter (OTC) Bulletin Board with the methods and on the terms described in the section of this Prospectus entitled Plan of Distribution on pages 34 to 35. Our common stock is traded on the OTC Bulletin Board under the symbol NSSI . Our common stock is not traded on any national securities exchange. On October 10 , 2013, the closing price of our common stock, as reported on the OTC Bulletin Board, was $1.65 per share. The securities offered in this Prospectus involve a high degree of risk. You should carefully consider the factors described under the heading Risk Factors beginning on page 7 of this Prospectus. The information in this Prospectus is not complete and may be changed. The selling stockholders named in this Prospectus 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 neither we nor the selling stockholders named in this Prospectus are soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted. 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 TABLE OF CONTENTS PAGE PROSPECTUS SUMMARY 2
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diff --git a/parsed_sections/prospectus_summary/2013/OMF_onemain_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/OMF_onemain_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
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@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/PARR_par_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/PARR_par_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2013/PREM_premier_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/PREM_premier_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..68b63605e64b9e46fde1bd70e047caab81e6c632
--- /dev/null
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, WE, US, OUR, AND ALTAIR INTERNATIONAL CORP. REFERS TO ALTAIR INTERNATIONAL 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. ALTAIR INTERNATIONAL CORP. We are a development stage company and intend to commence operations in the field of concept architectural, interior design projects and related areas in Ecuador. Altair International Corp. was incorporated in Nevada on December 20, 2012. 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 $30,000 for the next twelve months as described in our Plan of Operations. The amount of funds necessary to implement our plan of operations cannot be predicted with any certainty and may exceed any estimates we set forth. 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. As of October 8 , 2013 we have cash reserves of approximately $1,451. Being a development stage company, we have very limited operating history. After twelve months period we may need additional financing. If we do not generate any revenue we may need 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 Conjunto Sierra Morena Casa D9, Tumbaco, Ecuador. Our phone number is (702) 605-0043. From inception until the date of this filing, we have had limited operating activities. Our financial statements from inception (December 20, 2012) through June 30, 2013, reports no revenues and a net loss of $6,649. Our independent registered public accounting firm has issued an audit opinion for Altair International 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, dated July 1, 2013. 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. The company is publicly offering its shares to raise funds in order for our business to develop its operations and increase its likelihood of commercial success. Our sole officer and director will only be devoting approximately 20 hours a week to our operations. As a result, our operations may be sporadic and occur at times which are convenient to our sole officer and director. THE OFFERING The Issuer: ALTAIR INTERNATIONAL CORP. Securities Being Offered: 3,000,000 shares of common stock. Price Per Share: $0.02 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 3,000,000 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 3,000,000 shares registered under the Registration Statement of which this Prospectus is part. Gross Proceeds $60,000 Securities Issued and Outstanding: There are 3,000,000 shares of common stock issued and outstanding as of the date of this prospectus, held by our sole officer and director, Homero Giovanni Penaherrera Zavala Subscriptions All subscriptions once accepted by us are irrevocable. Registration Costs We estimate our total offering registration costs to be approximately $7,000.
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diff --git a/parsed_sections/prospectus_summary/2013/PRTA_prothena_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/PRTA_prothena_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/PRTA_prothena_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/RH_rh_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/RH_rh_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/RH_rh_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/RMAX_re-max_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/RMAX_re-max_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/RMAX_re-max_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/SSTK_shuttersto_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/SSTK_shuttersto_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..427fb0cebbe9dd076ba5d1df156fd63ff7938a26
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/SSTK_shuttersto_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY The following 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 consolidated financial statements and the related notes and the information set forth in the sections of this prospectus titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Some of the statements in this prospectus constitute forward-looking statements. See the section of this prospectus titled "Special Note Regarding Forward-Looking Statements" for more information. SHUTTERSTOCK, INC. Overview Shutterstock operates an industry-leading global marketplace for commercial digital imagery. Commercial digital imagery consists of licensed photographs, illustrations and video clips that companies use in their visual communications, such as websites, digital and print marketing materials, corporate communications, books, publications and video content. Demand for commercial digital imagery comes primarily from businesses, marketing agencies and media organizations. We estimate that the market for pre-shot commercial digital imagery will grow from approximately $4 billion in 2011 to approximately $6 billion in 2016, based on a study conducted on our behalf by L.E.K. Consulting LLC. There has been a significant increase in the demand for commercial digital imagery as rapid technological advances have reduced the cost and effort required to create, license and use images. Our global online marketplace brings together users of commercial digital imagery with image creators from around the world. More than 750,000 active, paying users contributed to revenue in 2012. More than 40,000 approved contributors make their images and video clips available in our collection, which has grown to more than 28 million images and more than 1 million video clips. This makes our collection one of the largest of its kind, and, in the twelve months ended December 31, 2012, we delivered more than 76 million paid downloads (including both commercial and editorial images) to our customers. Our online marketplace provides a freely searchable collection of commercial digital imagery (i.e., stock photography, illustrations, vectors and video clips) that our users can pay to license, download and incorporate into their work. We compensate contributors for each of their images or video clips that is downloaded. This marketplace model allows us to offer users a disruptive, low-cost and easy-to-use alternative to the time-consuming and expensive traditional methods of obtaining commercial imagery. It enables millions of small and medium-sized businesses, or SMBs, to affordably access commercial digital imagery, and allows larger enterprises and media agencies to more easily and efficiently satisfy their increasing image needs. We are the beneficiaries of significant network effects. As we have grown, our broadening audience of paying users has attracted more imagery from contributors. This increased selection of imagery has in turn helped to attract more paying users. The success of this network effect is facilitated by the trust that users place in Shutterstock to maintain the integrity of our branded marketplace. Every contributor in our marketplace and every image we make available must pass our proprietary screening process and meet our standards of quality. In addition, and unlike the significant majority of free images available online, our rigorous vetting process enables us to provide confidence and indemnification to our users that the content in our collection has been appropriately licensed for commercial or editorial use. We make the licensing of images and video clips affordable, simple and easy in order to encourage a high volume of purchases and downloads. Our customers' average cost per download was $2.23 in 2012. We are a pioneer of the subscription-based usage model in our industry, whereby subscribers can download and use a large number of images in their creative process without concern for the incremental cost of each download. A significant majority of our downloads come from subscription-based users, who contribute approximately half of our revenue. We also offer simple and easy-to-use On Demand purchase options for Amendment No. 2 to FORM S-1 REGISTRATION STATEMENT Under The Securities Act of 1933 Table of Contents users who purchase imagery when and as needed. As a result of our simple and affordable licensing models, we believe that we achieved the highest volume of commercial image downloads of any single brand in our industry in 2012. In addition to generating revenue, this high volume of download activity allows us to continually improve the quality and accuracy of our search algorithms, as well as to encourage the creation of new content to meet our users' needs. Our revenue is diversified and predictable. More than 750,000 customers from more than 150 countries contributed to our revenue in 2012, with our top 25 customers in the aggregate accounting for less than 3% of our revenue. We have historically benefitted from a high degree of revenue retention from both subscription-based and On Demand customers. For example, in 2010, 2011 and 2012, we experienced year-to-year revenue retention of 96%, 102% and 100%, respectively. This means that customers that contributed to our revenue in 2011 contributed, in the aggregate, 100% as much revenue in 2012 as they did in 2011. Customers typically pay us upfront and then use their downloads in a predictable pattern over time, which results in favorable cash flow characteristics and has historically added predictability and stability to our financial performance. We have achieved significant growth since our marketplace was launched in 2003. In 2011 and 2012, we generated revenue of $120.3 million and $169.6 million, respectively, representing year-over-year growth of 45.0% and 41.0%, respectively. In 2011 and 2012, we generated Adjusted EBITDA of $26.5 million and $34.9 million, respectively, Non-GAAP Net Income of $23.9 million and $28.0 million, respectively, and Free Cash Flow of $36.1 million and $41.8 million, respectively. See "Summary Consolidated Financial Data Non-GAAP Financial Measures." In 2011 and 2012, our net income was $21.9 million and $47.5 million, respectively. In 2012, net income included a one-time tax benefit of $28.8 million related to our conversion to a Delaware C-corporation on October 5, 2012. We are a global business; in 2012, 35% of our revenue came from North America, 37% came from Europe and 28% came from the rest of the world. Industry Overview: Commercial Digital Imagery Images help businesses to communicate and engage with customers, market products and differentiate their brands. Companies invest in imagery for the same reasons they invest in marketing, advertising and media production: to increase the impact, engagement and differentiation of their communications. From the smallest start-ups to the largest multinationals, companies pay to license photographs, video clips and illustrations for use in print and digital marketing materials, corporate communications, external and internal websites, social networking sites, mobile applications, games and videos. Imagery is also widely used in publishing books, eBooks, magazines and news articles. The demand for paid imagery in a commercial context comes primarily from: Businesses: Large corporations, small and medium-sized businesses and sole proprietorships that have marketing, communications and design needs; Marketing Agencies: Creative service providers such as advertising agencies, media agencies, graphic design firms, web design firms and freelance design professionals; and Media Organizations: Creators of print and digital content, from large publishers and broadcast companies to professional bloggers. These professional users of imagery are very selective about where they source their images; images must be of high quality and must fulfill the licensing obligations necessary for use in a commercial context. These requirements were historically fulfilled by commissioning images for specific purposes, or licensing pre-shot images from a catalog or database. This typically cost hundreds or thousands of dollars per image, which made licensing imagery affordable only for larger companies with significant marketing or creative budgets. Shutterstock, Inc. (Exact name of Registrant as specified in its charter) Table of Contents Rapid technological changes have caused a significant shift in the economics of demand and supply for commercial digital imagery. The rise of digital marketing and increases in the type and frequency of visual communications employed by businesses has caused a dramatic increase in demand for licensed imagery. At the same time, affordable, high-quality cameras and video cameras, as well as high performance photo and video-editing software, are enabling millions of people around the world to create commercial-quality digital imagery at a very low cost. Online marketplaces use the disruptive power of the internet to bring these highly fragmented groups together so that businesses of all sizes can quickly search for, find, and download affordable visual content to enhance their communications. We estimate that the market for pre-shot commercial imagery was approximately $4 billion in 2011 and that it will grow to approximately $6 billion by 2016, based on a study conducted on our behalf in August 2012 by L.E.K. Consulting LLC, or L.E.K. Within this market, the "traditional stock photography" segment, which has historically served larger businesses, is expected to remain stable at approximately $2.3 billion between 2011 and 2016. The stock photography marketplace segment along with the market for all other commercial digital imagery (i.e., stock illustrations, vectors and video clips) is expected to grow 15-20% annually during that same period to a total of more than $3.5 billion in 2016. Challenges in the Market for Commercial Digital Imagery Even with the advent of websites capable of sourcing and providing commercial digital imagery, significant challenges remain for users of many online marketplaces, including limited selection, difficulties in finding images quickly, high or complex pricing, poor image quality, and a lack of appropriate licensing and legal protection. At the same time, the creators of commercial digital imagery face obstacles to easily upload, market and distribute their images to a large audience. They also lack tools for discovering the kinds of content that customers demand. The Shutterstock Solution Key Benefits for Our Users Millions of high-quality images and video clips available for commercial use We currently provide a licensable digital collection of more than 28 million images and more than 1 million video clips, one of the largest collections of its kind. We source our content from over 40,000 approved contributors in more than 100 countries. Superior search results We consider our proprietary search interface and algorithms to be intuitive and efficient, allowing users with widely ranging search queries to quickly find the most suitable image for their needs. We believe that, with one of the highest volumes of downloads of commercial content in 2012, we have the data to power the best search experience in our industry. Delaware (State or other jurisdiction of incorporation or organization) 7389 (Primary Standard Industrial Classification Code Number) 80-0812659 (I.R.S. Employer Identification Number) 60 Broad Street, 30th Floor New York, NY 10004 (646) 419-4452 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Jonathan Oringer Chief Executive Officer Shutterstock, Inc. 60 Broad Street, 30th Floor New York, NY 10004 (646) 419-4452 (Name, address including zip code, and telephone number including area code, of agent for service) Table of Contents Low cost of content Our affordable pricing models enable users to download content for as little as $0.28 per download. Across our pricing plans, customers paid an average of $2.23 per download in 2012. We believe that our disruptive pricing models increase the number of businesses that can participate in the market for commercial imagery and that they increase the number of downloads that we deliver. Creative freedom through simple pricing Our subscription-based pricing model makes the creative process easier. Subscription users can download any image in our collection at any resolution we offer for use in their creative process without worrying about incremental cost. For users who need less content, we offer simple, affordable, On Demand pricing, which is presented as a flat rate across all content and sizes that we offer. 100% vetted, commercial-quality content We are highly focused on maintaining the quality of our collection. Our content has been vetted by a member of our review team for standards of quality and relevance. We also leverage proprietary review technology to pre-filter images and video clips and enhance the productivity of our reviewers. Less than 20% of contributor applicants who applied in 2012 were approved as contributors to shutterstock.com, and less than 70% of content uploaded by approved contributors in 2012 satisfied our rigorous acceptance requirements. Appropriately licensed content Our review process is designed to ensure that every image and video clip is appropriately licensed for its intended use. The strength of our review process enables us to offer $10,000 of indemnification protection to every customer to cover legal costs or damages that may arise from their use of Shutterstock content. In certain cases, we offer greater indemnification levels through custom contracts. Copies to: Brian B. Margolis, Esq. Stephen C. Ashley, Esq. Orrick, Herrington & Sutcliffe LLP 51 West 52nd Street New York, NY 10019 (212) 506-5000 Gregory B. Astrachan, Esq. Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, NY 10019 (212) 728-8000 Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. Table of Contents Key Benefits for Our Contributors Distribution to the largest, global audience In 2012, shutterstock.com received an average of approximately 10 million monthly unique visitors and more than 65 million monthly page views according to comScore Media Metrix, and we delivered more than 76 million paid downloads. According to industry surveys, contributors who have images available on our site generate more income through Shutterstock than through any other sites with which they are registered. Global ecommerce capabilities Our global ecommerce platform allows us to process payments from across the world in 10 currencies, and our users can currently transact on our flagship website in 20 languages. Efficient uploading, tagging and review process Based on user feedback and competitive benchmarking, we believe that we have the most efficient upload, tagging and review process of all of the major competitors in our industry. Robust feedback, tools and information Our contributors can monitor download activity by image and geography, as well as by self-defined image themes. We also provide data on search trends, allowing content creators to see which images and subjects are popular on our site, and to plan new content themes accordingly. Specialized community We operate a forum for the photographers, videographers and illustrators that make up our contributor community, allowing them to share tips with one another and to showcase their work. Shutterstock's Competitive Strengths In addition to the compelling value propositions that we offer to users and contributors, we believe that the following competitive advantages separate us from our competitors: A Leading Global Marketplace with Strong Network Effects. Our content collection is currently one of the largest in the commercial digital imagery industry, with over 28 million images and more than 1 million video clips, from more than 40,000 contributors. We believe that the growth of our content collection and the growth in our site traffic support one another through a strong network effect a broader selection of images and video clips from our contributors attracts more image and video users; this larger audience of paying users increases the amount spent in our marketplace and attracts more content submissions from a greater number of contributors. Extensive Data and Superior Search. We believe that we have achieved one of the highest volumes of commercial image downloads of any company in our industry. In 2012 alone, we delivered more than 76 million paid downloads. The number of contributor-generated image tags in our collection is currently more than 995 million. This user-generated data, coupled with our investments in technology and our many years of experience in developing search algorithms for our industry, have enabled us to create what we believe is the best search experience available. 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. 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 (Do not check if a smaller reporting company) 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(1)(2) Amount of Registration Fee(3) Common Stock, par value $0.01 per share 4,600,000 $60.075 $276,345,000 $37,694 (1)Includes 600,000 shares of Common Stock issuable upon exercise of the Underwriters' option to purchase additional shares. (2)Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act, based upon the average of the high and low sales prices of the Registrant's Common Stock as reported by the New York Stock Exchange on September 18, 2013. (3)$26,892 has previously been 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 this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Table of Contents Simple, Flexible and Low-Cost Pricing. Our customers' average cost per download was $2.23 in 2012. Our subscription plans, which we pioneered in the industry, generate an important sense of creative freedom for our professional users. Additionally, we offer simple and cost-effective On Demand purchase options for less frequent users. The simplicity and affordability of these plans have allowed us to broaden our existing and potential user base, and deliver a high volume of paid downloads for our contributors. Trusted, Actively Managed Marketplace. We are committed to providing a trusted online marketplace for appropriately licensed, high-quality commercial imagery and video. Our rigorous review process for new images ensures the integrity and quality of content in our collection. Each image and video clip is individually examined by our team of trained reviewers to meet our high standards of quality and commercial viability. This review process is designed to minimize the legal risk to our users from inappropriately licensed imagery. Shutterstock's Growth Strategies Acquire More Users and Contributors. Our active user base of SMBs currently represents a very small fraction of the global total of SMBs. We view this as a marketing opportunity. A significant portion of our growth to date has been driven by word of mouth recommendations; we plan to continue to foster word of mouth by continuing to grow our collection and deliver exceptional service. Additionally, we expect to increase our investments in online and offline marketing to help raise awareness in our core customer and contributor communities as well as in additional market segments and geographies. Lead Innovation in User and Contributor Experience. With one of the largest collections of images in the industry, and one of the highest volumes of site traffic and commercial image downloads, we believe that we have more information on the marketplace and user needs than any of our competitors. We intend to use this data to continue to improve the quality of our search algorithms and user experience. We also plan to enhance the tools we offer contributors to help them easily establish their portfolios on our site, track their performance and explore opportunities to create content that customers need. Furthermore, we intend to roll out new product offerings and product extensions that we believe will create deeper relationships with our core communities and attract new users to our sites. Increase Localization. We are a global company, with users in more than 150 countries, contributors in more than 100 countries and a website that is available in 20 languages. We plan to deepen our global penetration among users and contributors by improving the quality of the Shutterstock experience, regardless of language or location. There is significant unmet demand for localized content, such as images with locally relevant themes, customs, objects and ethnicities. We plan to increase the geographical diversity of our contributor community so that we can provide the images demanded by our increasingly global user base. Increase Our Penetration of Media Agencies and Large Enterprises. To date, the majority of our revenue has been generated from small and medium-sized businesses purchasing online. Currently, less than 15% of our revenue is generated through direct sales to large organizations. We believe that we have a strong value proposition for large media agencies and enterprises, which have historically purchased commercial imagery via sales-driven relationships. We are working to increase our revenue from these companies through a direct sales approach and by offering tailored purchase options. Pursue Emerging Content Types. Alternative content types such as video footage represent significant opportunities for growth. Given the convergence of photography and video tools, we believe that our network effects in still image licensing will help propel our efforts in the video market. In addition to video, we see opportunities in other emerging digital content areas that may be relevant to our customers. Table of Contents The information in this prospectus is not complete and may be changed. We and 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 we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted. PROSPECTUS (Subject to Completion) Issued September 19, 2013 4,000,000 Shares COMMON STOCK Table of Contents Risks Associated with Our Business 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 in the section of this prospectus titled "Risk Factors," and include but are not limited to: our ability to identify, attract and retain customers and contributors to our online marketplace; our ability to maintain repeat purchase and subscription revenue; our new and rapidly changing market; the competitive nature of and anticipated growth in our markets; our ability to maintain our competitive position in a highly competitive industry; our ability to protect our intellectual property and protect against infringement claims made by third parties; and our ability to successfully navigate the risks related to our international operations and expansion. Company Information Our principal office is located at 60 Broad Street, 30th Floor, New York, New York 10004, and our telephone number is (646) 419-4452. Our corporate website address is www.shutterstock.com. We do not incorporate the information contained in, or that can be accessed through, our corporate website into this prospectus, and you should not consider it part of this prospectus. After launching our marketplace in 2003, we organized in the State of New York as Shutterstock, Inc. in December 2004, and we became Shutterstock Images LLC in June 2007. On October 5, 2012, we reorganized from Shutterstock Images LLC, a New York limited liability company, or the LLC, to Shutterstock, Inc., a Delaware corporation, referred to as the "Reorganization." In this prospectus, "we," "us," "our," "Company" and "Shutterstock" refer to Shutterstock, Inc. and its subsidiaries. "Shutterstock", "Offset", "Skillfeed", "Bigstock" and "Big Stock Photo" are registered trademarks or logos appearing in this prospectus and are the property of Shutterstock, Inc. or one of our subsidiaries. All other trademarks, service marks and trade names appearing in this prospectus are the property of their respective owners. Shutterstock, Inc. is offering 1,000,000 shares of its common stock and the selling stockholders are offering 3,000,000 shares of our common stock. We will not receive any proceeds from the sale of shares by the selling stockholders. Table of Contents
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+PROSPECTUS SUMMARY This summary highlights information contained in other parts of this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in shares of our common stock and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. You should read the entire prospectus carefully, especially "Risk Factors" and our financial statements and the related notes, before deciding to buy shares of our common stock. Unless the context requires otherwise, references in this prospectus to "Xencor," "we," "us" and "our" refer to Xencor, Inc. Overview We are a clinical-stage biopharmaceutical company focused on discovering and developing engineered monoclonal antibodies to treat severe and life-threatening diseases with unmet medical needs. We use our proprietary XmAb technology platform to create next-generation antibody product candidates designed to treat autoimmune and allergic diseases, cancer and other conditions. In contrast to conventional approaches to antibody design, which focus on the portion of antibodies that interact with target antigens, we focus on the portion of the antibody that interacts with multiple segments of the immune system. This portion, referred to as the Fc domain, is constant and interchangeable among antibodies. Our engineered Fc domains, the XmAb technology, can be readily substituted for natural Fc domains. We believe our Fc domains enhance antibody performance by, for example, increasing immune inhibitory activity, improving cytotoxicity or extending circulating half-life, while typically maintaining over 99.5% identity in structure and sequence to natural antibodies. By improving over natural antibody function, we believe that our XmAb-engineered antibodies offer innovative approaches to treating disease and potential clinical advantages over other treatments. Our business strategy is based on the plug-and-play nature of the XmAb technology platform to modify features of natural antibodies and create numerous differentiated antibody product candidates. We have internally generated a pipeline that has allowed us to selectively partner certain development programs while maintaining full ownership of other programs. We also have a number of technology licenses under which we have licensed the XmAb technology platform to pharmaceutical and biotechnology companies for use in a limited number of programs, providing multiple revenue streams that require no further resources from Xencor. There are currently five antibody product candidates in clinical trials that have been engineered with XmAb technology, including four candidates being advanced by licensees and development partners. As of September 30, 2013, our XmAb technology platform is protected by 21 issued U.S. patents and 44 U.S. patent applications, in addition to foreign counterparts. Our internally-generated pipeline includes the following three lead XmAb-engineered antibodies that are currently in development: XmAb5871 is being developed for the treatment of autoimmune diseases, including rheumatoid arthritis and lupus. It uses our Immune Inhibitor Fc Domain and targets B cells, an important component of the immune system. We believe XmAb5871 has the potential to address a key unmet need in autoimmune therapies due to its combination of potent B-cell inhibition without B-cell depletion. We are currently conducting a Phase 1b/2a clinical trial for XmAb5871 in rheumatoid arthritis patients with active disease on stable non-biologic disease modifying anti-rheumatic drug (DMARD) therapy. We expect to report preliminary data from this trial in the second half of 2014. Our partner, Amgen Inc. (Amgen), has an option to acquire an exclusive worldwide license for XmAb5871, exercisable at any time before completion of a data review period following our planned subsequent Phase 2b proof-of-concept clinical trial. Until the option exercise, we lead research, development and manufacturing activities for XmAb5871 with collaborative input and development support from Amgen. According to the American College AMENDMENT NO. 4 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 *Currently enrolling Phase 2a portion of Phase 1b/2a clinical trial. In addition, we have licensed our XmAb technology to pharmaceutical and biotechnology companies for use in a limited number of their programs. These licensees include Boehringer Ingelheim, CSL, Janssen, Merck and Alexion, and collectively these licensees have three Phase 1 clinical development-stage programs and four pre-clinical development-stage programs. Xencor, Inc. (Exact Name of Registrant as Specified in Its Charter) Table of Contents Antibody Structure and Fc Domain Function Antibodies are Y-shaped proteins that are produced by B cells and used by the immune system to target and neutralize foreign objects known as antigens. These objects may include tumor cells, bacteria and viruses. Antibodies are composed of two structurally independent parts, the variable domain (the Fv domain) and the constant domain (the Fc domain and the CH1 domain). The Fv domain is responsible for targeting a specific antibody to a specific antigen, and is different for every type of antibody. The Fc domain interacts with various receptors on immune cells and other cells and, rather than binding antibodies to target antigens, it endows antibodies with properties beyond simple binding, such as immune response regulation and cytotoxicity. Importantly, Fc domains are the same and interchangeable from antibody to antibody. Our Fc Domain Focused Approach The global market for antibody therapeutics was estimated to be approximately $45.0 billion in 2011, of which the U.S. market was estimated to be $20.0 billion. Intense competition drives companies to develop differentiated antibody drugs, often because of the common pursuit of the same antigen Fv targets across the industry. Industry efforts have focused on engineering Fv domains since the mid-1980s to enhance performance. More recently, many efforts at differentiation have attempted to improve upon antibody performance by drastically changing the antibody structure or substituting new molecules altogether, for example, new antibody-like scaffolds, bi-specific antibodies and antibody-drug conjugates. A challenge to these efforts has been making these new drug molecules replicate the beneficial features of natural antibodies, including ease of production, safety, efficacy and simplicity. These efforts, however, have largely ignored the Fc domain. In contrast, in the last decade Xencor has focused on Fc engineering. Fc engineering involves additional complexities, particularly consideration of simultaneous interactions with multiple Fc receptors and immune cell types and requires significant expertise in structural biology and immunology. Our XmAb Fc domain technology is a platform of patented antibody components that enable the creation of therapeutic antibody candidates that have novel interactions with the human immune and antibody regulation systems. Each XmAb Fc domain consists of a naturally occurring Fc domain with a small number of amino acid changes found to be critical for modulating interactions with the desired Fc receptors. We have identified a set of Fc domains, each of which is engineered with particular amino acid changes to augment a specific naturally-occurring antibody function based on its Fc receptor binding profile, including: Immune Inhibitor Fc Domain selective immune inhibition and rapid target clearance, targeting the receptor FcgRIIb; Cytotoxic Fc Domain increased cytotoxicity, targeting the receptors FcgRIIIa on natural killer (NK) cells and FcgRIIa on other immune system cells; and Xtend Fc Domain extended antibody half-life, targeting the receptor FcRn on endothelial cells. With such limited modifications of the natural Fc domain, XmAb-engineered antibodies are typically over 99.5% identical in structure and sequence to natural antibodies, simplifying product Delaware (State or Other Jurisdiction of Incorporation or Organization) 2834 (Primary Standard Industrial Classification Code Number) 20-1622502 (I.R.S. Employer Identification Number) 111 West Lemon Avenue Monrovia, California 91016 (626) 305-5900 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) Table of Contents development yet enhancing function. A summary of the Fc domain properties improved by our XmAb technology and the associated product candidates and targeted indications are summarized below: Our Strategy Our goal is to become a leading biopharmaceutical company focused on developing and commercializing engineered monoclonal antibodies to treat severe and life-threatening diseases with unmet medical needs. Key elements of our strategy are to: Advance the clinical development of our lead Immune Inhibitor Fc Domain product candidates. We are developing XmAb5871, in partnership with Amgen, for the treatment of autoimmune diseases and are developing XmAb7195 independently for the treatment of asthma and allergic diseases. Continue to monetize and expand the use of our XmAb technology platform. We are seeking additional licensing and partnering opportunities, similar to our partnerships with Amgen and with MorphoSys for XmAb5574/MOR208, with leading pharmaceutical and biotechnology companies. Build a large and diversified portfolio of product candidates. We aim to create new XmAb-engineered antibody product candidates that exploit the novel properties of our XmAb technology platform. Broaden the functionality of our XmAb technology platform. We are conducting further research into the function and application of antibody Fc domains in order to expand the scope of our XmAb technology platform. Continue to expand our patent portfolio protecting our XmAb technology platform. We seek to expand and protect our development programs and product candidates by filing and prosecuting patent applications in the United States and other countries. Bassil I. Dahiyat, Ph.D. President and Chief Executive Officer Xencor, Inc. 111 West Lemon Avenue Monrovia, California 91016 (626) 305-5900 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Table of Contents Risks Associated with Our Business
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+Prospectus Summary 1
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+PROSPECTUS SUMMARY You should read the following summary together with the more detailed information and the financial statements appearing elsewhere in this Prospectus. This Prospectus contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under Risk Factors and elsewhere in this Prospectus. Unless the context indicates or suggests otherwise, references to we, our, us, the Company, or the Registrant refer to Issuer Direct Corporation, a Delaware corporation. Our Business Issuer Direct Corporation ( Issuer Direct , the Company , ISDR , we us or our ), a Delaware corporation, is a disclosure management and targeted communications company. Our integrated platform provides tools, technologies and services that enable our clients to disclose and disseminate information through our network. Business Acquisition & Recent Developments On August 22, 2013, the Company, and PrecisionIR Group Inc. ( PIR or PrecisionIR ) consummated an Agreement and Plan of Merger (the Acquisition Agreement ). Under the terms of the Acquisition Agreement, the Company paid $3,450,000 to certain creditors of PIR as full consideration to acquire all of the outstanding shares of PIR. Businesses The Company strives to be a market leader and innovator of disclosure management solutions and cloud based compliance technologies. With a focus on corporate issuers and mutual funds, the Company alleviates the complexity of maintaining compliance with its integrated portfolio of products and services that enhance companies' ability to efficiently produce and distribute their financial and business communications both online and in print. We work with a diverse client base in the financial services industry, including brokerage firms, banks, mutual funds, corporate issuers, shareholders and professional firms such as accountants and the legal community. Corporate issuers utilize our cloud-based technologies and services from document creation all the way to dissemination to regulatory bodies and shareholders. We generate revenue from all of our services during the lifecycle. In 2013, we consolidated our revenue into three revenue streams: disclosure management, shareholder communications and software licensing. Historically, we had reported our revenues in five streams compliance and reporting services, printing and financial communications, fulfillment and distribution, software licensing, and transfer agent services. As a result of the acquisition of PIR on August 22, 2013, we determined the reclassification of revenues from the combined companies was needed to reflect both our core services as well as the newly acquired business of PrecisionIR. Disclosure management Our core disclosure business consists of our traditional Edgarization, document management, typesetting and pre-press design services, as well as our XBRL tagging services. In addition we have blended our stock transfer business into our disclosure management to better reflect the businesses that are regulated by the Securities and Exchange Commission. We continue to see moderate gains in this business, specifically with the frequency of work from our corporate issuer clients. Additionally, we are experiencing growth in the larger cap market space and a retraction in the more competitive small cap space where we tend to generate less margins. As we focus our direct efforts upstream to the larger cap clients we anticipate this trend to continue. In contrast, we continue to operate our reseller business, Issuer Services, whereby we manage the back office functions for our partner s clients. This is where we anticipate seeing the some attrition in the smaller cap clients that we currently serve. However, this reseller business is responsible for the better portion of our mutual fund tagging engagements. This is a growth driver for this business unit, generating both higher margins and higher than normal revenues. Shareholder communications As part of the revenue stream realignment we have moved our core press release distribution, investor relation systems, market data cloud business with the services of PrecisionIR (Investor Outreach, Annual Report Service, Investor Hotline and Webcasting), and our proxy and printing business. These products and services represent our shareholder communications business. By having our own market data cloud system for our press releases and investor relations systems, our products have been able to outperform our expectations. During fiscal 2014, we intend to begin licensing portions of our data business and application programming interfaces ( API s ) to other providers and disseminators that are seeking a competitive replacement in the market. We are committed to continuing to expand revenue from this business. Additionally, our shareholder communications business offers additional cloud-based product suites that provide both corporate issuer and market data distribution partners the ability to connect to our market data cloud to access virtually hundreds of customizable data sets for thousands of public companies, as well as the compliance driven modules of whistleblower, Profile+ and our e-Notify request system. Software licensing Revenues from this business still tend to be directly tied to our core businesses, disclosure management and shareholder communications. Specifically, when corporate issuers conduct an annual meeting, purchase or upgrade their investor relations system, or annual or quarterly earnings season, we tend to license our technology platforms for each of these examples. Although revenues from this business remain relatively small, we expect them to grow significantly over the next fiscal year as we begin to productize some of our shareholder communications and disclosure management system. We continue to believe there is a significant demand for better quality datasets. We are one of the only companies in this industry utilizing the core financial data of XBRL to power our fundamentals for our Stock Charting & Fundamentals system. Today, we house over 20,000 companies in our data-cloud, which encompasses stock information, profile data, financial data and reports, fundamentals, news, videos and presentations. During fiscal 2013, we have continued to build these data sets into our Disclosure Management System (DMS). This disclosure system allows corporate issuers, and their constituents the ability to create, edit and publish information from one interface to regulators, markets and shareholders. Our Technology Platform - Disclosure Management System (DMS) Our DMS is a secure cloud-based business process reporting and automation solution that gives users the ability to disclose, manage, and communicate their respective messages from our enterprise SaaS network. Our unique disclosure process aims to create efficiencies not previously possible in areas of normal regulatory business functions of the public markets, where we can clearly improve processes, streamline complexities, while reducing expenditures, generally associated with reporting and disclosure. Our DMS is the only secure workflow technology available today that allows officers, directors, compliance and investor relations professionals the ability to manage the entire back-office functions of their respective companies from one interface. The industry as a whole has chosen to focus their solutions and platforms on one single business process or in some cases are dependent on a complex ERP or accounting system integration, in hope of providing a clear ROI over a long-term period. Unfortunately this approach requires companies to invest deeply in enterprise wide systems, for the promise of efficiencies and cost savings. Our approach has been to focus on a collection of business processes that typically overlap service organizations, that have either been cumbersome, costly or broken; then, integrate, streamline and improve the flow of information in a more transparent and accurate manner, putting the control back in the hands of our clients. The result is better controls, improved processes, efficient disclosure and increased communication. Today, the platforms that make up our disclosure management system are used by over 1,400 issuers, and mutual funds and by thousands of officers, directors and compliance and communication professionals. The systems include the following: - Regulatory compliance (Edgar & EBRL) - Real-time Financial Reviewers Guide - Investor Relation content management (CMS - content management system) - News Distribution - Webcasting / earnings calls - Annual Meeting planning and real-time proxy voting system - Stock issuances, and shareholder reporting - Social integration and investor outreach communications - Print on Demand & digital document library - Company Spotlight and Annual Report Content Management Our Brands & Subsidiaries - Issuer Direct - PrecisionIR Group, Inc., and its subsidiaries - Direct Transfer (Wholly owned subsidiary Direct Transfer, LLC.) - QX Interactive (Wholly owned subsidiary QX Interactive, LLC.) - Issuer Services - iProxyDirect - iRDirect - Annual Report Service (ARS) - Company Spotlight - XBRL Check - XAS Cloud Transfer Agent Our transfer agent is Direct Transfer, LLC, and is located at 500 Perimeter Park Drive, Suite D, Morrisville, North Carolina 27560 and is our wholly-owned subsidiary. The agent s telephone number is (919) 481-4000. Recent Developments In connection with and to partially fund the PrecisionIR Group, Inc. merger and simultaneously with the closing of the merger, the Company entered into a Securities Purchase Agreement (the Purchase Agreement ) relating to the sale of $2,500,000 aggregate principal amount of the Company s 8% convertible secured promissory note ( 8% Notes ) with Red Oak Partners LP ( Red Oak ). The 8% Note will pay interest on each of March 31, June 30, September 30 and December 31, beginning on September 30, 2013, at a rate of 8% per year. The 8% Notes will mature on August 22, 2015. If event of default occurs pursuant to the terms of the 8% Note, the interest rate immediately increases to 18%. The 8% Notes are secured by all of the assets of the Company and are subordinated to the Company s obligations to its primary financial institution. Beginning immediately upon the date of issuance, Red Oak or its assigns may convert the 8% Notes into shares of the Company s common stock at a conversion price of $3.99 per share. The conversion price will be adjusted for certain events, such as stock dividends and stock splits. Additionally, as part of the Purchase Agreement, the Company granted Red Oak certain registration rights. Specifically, the Company has agreed, within six months following the closing of the purchase and sale of the 8% Notes ( Closing Date ), to file with the Securities and Exchange Commission ( SEC ) this registration statement covering the resale of certain of the shares issuable upon conversion of the 8% Notes. The Company agreed to use its best efforts to have the registration statement declared effective by the SEC no later than eight months following the Closing Date. If the Company fails to satisfy the filing deadline or the effectiveness deadline, the Company will pay to Red Oak or its assigns an amount of cash equal to 0.75% of the amount paid for such holder s 8% Note on (i) the date of the filing failure and on every thirtieth day thereafter until the filing failure is cured and (ii) the date of the effectiveness failure and on every thirtieth day thereafter until the effectiveness failure is cured. The Offering As of January 27, 2014, there were 1,999,435 shares of our common stock outstanding, of which 913,217 shares were held by non-affiliates. Although the Purchase Agreement provides that we may issue up to 626,566 of our common stock to Red Oak, only 300,652 shares of our common stock are being offered under this prospectus. If all of the 300,652 shares offered under this prospectus were issued and outstanding as of January 27, 2014, such shares would represent approximately 15% of the total number of shares of our common stock outstanding and 33% of the total number of outstanding shares of our common stock held by non-affiliates, in each case as of January 27, 2014. Common stock offered by Selling Stockholder 300,652 shares of common stock that we may issue to Red Oak upon conversion of the Convertible Note: Common stock outstanding before the offering 1,999,435 shares of common stock. Common stock outstanding after the offering 2,300,087 shares of common stock. Use of proceeds We will not receive any proceeds from the sale of shares by the selling stockholder. However, we have received gross proceeds of $2,500,000 from the sale of the Convertible Note to Red Oak. OTCBB Trading Symbol ISDR Risk Factors 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 investment. See Risk Factors. SUMMARY OF FINANCIAL INFORMATION The following selected financial information is derived from the Company s Financial Statements appearing elsewhere in this Prospectus and should be read in conjunction with the Company s Financial Statements, including the notes thereto, appearing elsewhere in this Prospectus. Statement of Operations Data: Years Ended December 31, Nine Months Ended September 30, 2012 2011 2013 2012 Revenues $ 4,305,566 $ 3,228,099 $ 5,238,244 $ 3,120,544 Cost of services 1,501,158 1,391,967 1,539,244 1,106,966 Gross profit 2,804,408 1,836,132 3,699,000 2,013,578 Operating expenses 2,247,275 1,587,767 2,373,964 1,700,823 Operating income 557,133 248,365 1,325,036 312,755 Interest income (expense) (401 ) 12,711 (151,778 ) 3,348 Net income before taxes 556,732 261,076 1,173,258 316,103 Income tax expense (251,000 ) (21,800 ) 475,294 123,500 Net income $ 305,732 $ 239,276 $ 697,964 $ 192,603 Income per share -basic $ 0.16 $ 0.14 $ 0.36 $ 0.10 Income per share -diluted $ 0.15 $ 0.14 $ 0.34 $ 0.10 Weighted average common shares outstanding - basic 1,902,921 1,757,329 1,954,314 1,892,703 Weighted average common shares outstanding - diluted 1,978,617 1,770,078 2,056,995 1,956,262 Balance Sheet Data As of December 31, As of September 30, 2012 2011 2013 2012 Cash $ 1,250,643 $ 862,386 $ 1,926,674 $ 1,099,088 Total Assets $ 2,541,246 $ 1,731,490 $ 10,572,325 $ 2,345,397 Total liabilities 695,099 519,885 6,411,623 558,257 Total stockholders' equity 1,846,147 1,211,605 4,160,702 1,787,140 Total liabilities and stockholders equity $ 2,541,246 $ 1,731,490 $ 10,572,325 $ 2,345,397 Cash Flow Information Years Ended December 31, Nine Months Ended September 30, 2012 2011 2013 2012 Cash flows provided by operating activities $ 754,171 $ 478,158 $ 1,150,722 $ 356,693 Cash flows provided by (used in) investing activities (299,849 ) (83,940 ) 3,218,843 290,065 Cash flows provided by (used in) financing activities $ (66,065 ) $ (36,545 ) $ 2,783,399 $ 170,074
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+S-1/A 1 d629509ds1a.htm AMENDMENT NO. 4 TO FORM S-1 Amendment No. 4 to Form S-1 Table of Contents As filed with the Securities and Exchange Commission on March 17, 2014 Registration No. 333-193969 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 AKEBIA THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 2834 20-8756903 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 245 First Street, Suite 1100 Cambridge, MA 02142 (617) 871-2098 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) John P. Butler President and Chief Executive Officer Akebia Therapeutics, Inc. 245 First Street, Suite 1100 Cambridge, MA 02142 (617) 871-2098 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Christopher D. Comeau, Esq. Ropes & Gray LLP Prudential Tower 800 Boylston Street Boston, MA 02199 (617) 951-7000 Nicole R. Hadas, Esq. General Counsel and Secretary Akebia Therapeutics, Inc. 245 First Street, Suite 1100 Cambridge, MA 02142 (617) 871-2098 Peter N. Handrinos, Esq. Latham & Watkins LLP John Hancock Tower, 20th Floor 200 Clarendon Street Boston, MA 02116 (617) 948-6060 Approximate date of commencement of proposed sale to public: As soon as practicable after this Registration Statement is declared 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, 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 Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company 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 Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Table of Contents Table of Contents Page Summary 1
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+F-1/A 1 a2221221zf-1a.htm F-1/A Use these links to rapidly review the document TABLE OF CONTENTS TABLE OF CONTENTS 2 TABLE OF CONTENTS 3 Table of Contents As filed with the Securities and Exchange Commission on September 8, 2014 Registration No. 333-197823 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Table of Contents Table of contents Page Presentation of financial and other information iv Summary 1
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+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 to: we, us, company or our company are to Hennessy Capital Acquisition Corp.; public shares are to shares of our common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); public stockholders are to the holders of our public shares, including our initial stockholders and members of our management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder s and member of our management team s status as a public stockholder shall only exist with respect to such public shares; management or our management team are to our executive officers and directors; sponsor are to Hennessy Capital Partners I LLC, a Delaware limited liability company, an affiliate of Daniel J. Hennessy, our Chairman and Chief Executive Officer; founder earnout shares refer to up to 625,000 shares of our common stock (or 718,750 shares in the event the overallotment option is exercised) purchased by our sponsor in a private placement prior to this offering which are subject to forfeiture subsequent to four years following our initial business combination in the event a certain price target is not met, as further described herein; founder shares refer to shares of our common stock initially purchased by our sponsor in a private placement prior to this offering; private placement warrants are to the warrants issued to our sponsor in a private placement simultaneously with the closing of this offering; and initial stockholders are to holders of our founder shares prior to this offering. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. General We are a newly organized blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not identified any potential business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any potential business combination target. While we may pursue an acquisition opportunity in any business industry or sector, we intend to focus on industries that complement our management team s background, and to capitalize on the ability of our management team to identify, acquire and operate a business, focusing on the diversified industrial manufacturing and distribution sector in the United States (which may include a business based in the United States which has operations or opportunities outside the United States). Our acquisition and value creation strategy will be to identify, acquire and, after our initial business combination, to build, a diversified industrial manufacturing or distribution business. Diversified Table of Contents industrial manufacturers and distributors are companies that either manufacture or distribute a broad range of products for various customers and end use markets. Our strategy is based on our management s belief that an industrial renaissance is now underway in the United States. Our management believes that this resurgence is primarily the result of three critical cost factors: labor, natural gas energy (as represented by natural gas prices) and logistics, each of which we believe is quite favorable to the United States when compared with advanced manufacturing nations and increasingly competitive when compared with emerging manufacturing nations such as China. According to BCG, the United States has a labor cost advantage compared to other major manufacturing economies and becoming increasingly competitive with emerging economies such as China: Productivity-adjusted labor costs in the United States are 50% to 80% of those in other major manufacturing economies such as Japan, Germany, France, the U.K., and Italy. In China, the average wage has increased by 15-20% annually compared to the United States at only 2%. The average American worker is also 3x more productive than their Chinese counterpart driving an even further deterioration of China s advantage on a productivity-adjusted basis. We believe that energy costs in the United States will become comparatively cheaper, especially with the recent discoveries of abundant shale gas and new technologies in oil and gas extraction: The United States has a significant energy cost advantage over other advanced economies which can result in lower utility and energy bills and raw material input prices for certain industries. In addition to increased manufacturing costs, shipping costs globally, as represented by the Baltic Dry Index (BDI), have almost tripled since their relatively low levels in 2012, and just-in-time inventory requirements and shorter product life cycles necessitate that production and end-markets be co-located. We believe these factors come together and leave the United States with an advantage on a total landed cost basis, as represented by Average Manufacturing Cost Structures: According to BCG, taking into account items such as increased productivity-adjusted wage costs, energy costs and supply chain costs, the United States is expected to have lower manufacturing costs than other advanced manufacturing nations and become increasingly competitive with China. By 2015, it is estimated that China will retain only a 6% cost advantage over the United States. Hennessy Capital is the managing member of our sponsor and was founded by Daniel J. Hennessy, our Chairman and Chief Executive Officer in 2013. Mr. Hennessy is also a partner at Code Hennessy & Simmons (n/k/a CHS Capital or CHS ) a middle market private equity investment firm he co-founded in 1988. Over a 25 year period, CHS invested $2.8 billion in 395 operating companies with aggregate revenues of approximately $15 billion. Mr. Hennessy serves as a member of CHS s Investment Committee, and served as the lead partner for a number of CHS s industrial, infrastructure and energy industry platform company investments. Most recently he originated and co-led the portfolio company acquisitions of Thermon Group Holdings (NYSE: THR), or Thermon, in 2010 and Dura-Line Holdings, or Dura-Line, in 2012 for CHS Private Equity V LP. He continues to serve as Chairman of Dura-Line. Thermon designs and manufactures electric heat-tracing and thermal control systems for energy and process industries. Dura-Line manufactures high density polyethylene (HDPE) conduit and pressure pipe solutions for telecom, datacom, water infrastructure and upstream energy and natural gas distribution markets. Mr. Hennessy has over 25 years of middle-market private equity investment experience, dedicated almost entirely to investments in industrial manufacturing and distribution operating companies. He has initiated and overseen numerous add-on acquisitions, divestitures, IPO s and debt capital markets issues for CHS-owned companies and is well known by the most active middle-market investment banks and debt financing sources that will be called upon to assist us in executing on its strategy. We have assembled a group of independent directors that will bring us public company governance, executive leadership, operations oversight, private equity investment management and capital markets experience. Our Board members have extensive experience, having served as UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Table of Contents directors, CEO s, CFO s or in other executive and advisory capacities for numerous publicly-listed and privately-owned companies. Our directors have experience with acquisitions, divestitures and corporate strategy and implementation, which we believe will be of significant benefit to us as we evaluate potential acquisition or merger candidates as well as following the completion of our initial business combination. We believe our management team is well positioned to take advantage of the growing set of investment opportunities focused on diversified industrial manufacturing and distribution companies in the United States, to create value for our stockholders, and that our contacts and sources, ranging from owners of private and public companies, private equity funds, investment bankers, attorneys, accountants and business brokers will allow us to generate attractive acquisition opportunities. Our management team is led by Daniel J. Hennessy, who has 25 years of experience in the private equity investment business. Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that Mr. Hennessy or any other members of our management will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process. Initial Business Combination The Nasdaq rules require that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, with respect to the satisfaction of such criteria. We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires 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 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. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. Consistent with this strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and Amendment No. 4 to Form S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. Middle-Market Business. We will seek to acquire one or more businesses with an enterprise value of approximately $200,000,000 to $500,000,000, determined in the sole discretion of our officers and directors according to reasonably accepted valuation standards and methodologies. We believe that the middle market segment provides the greatest number of opportunities for investment and is the market consistent with our sponsor s previous investment history. This segment is where we believe we have the strongest network to identify opportunities. Established Companies with Proven Track Records. We will seek to acquire established companies with consistent historical financial performance. We will typically focus on companies with a history of strong operating and financial results and strong fundamentals. We do not intend to acquire start-up companies or companies with recurring negative free cash flow. Companies with, or with the Potential for, Strong Free Cash Flow Generation. We will seek to acquire one or more businesses that already have, or have the potential to generate, consistent, stable and increasing free cash flow. We will focus on one or more businesses that have predictable revenue streams. Strong Competitive Position. We intend to focus on targets that have a leading, growing or niche market position in their respective industries. We will analyze the strengths and weaknesses of target businesses relative to their competitors. We will seek to acquire a business that demonstrates advantages when compared to their competitors, which may help to protect their market position and profitability. Experienced Management Team. We will seek to acquire one or more businesses with a complete, experienced management team that provides a platform for us to further develop the acquired business s management capabilities. We will seek to partner with a potential target s management team and expect that the operating and financial abilities of our executive team and board will complement their own capabilities. Companies with Revenue and Earnings Growth or Potential for Revenue and Earnings Growth. We will seek to acquire one or more businesses that have achieved or have the potential for significant revenue and earnings growth through a combination of organic growth, new product markets and geographies, increased production capacity, expense reduction, synergistic add-on acquisitions and increased operating leverage. Sectors Exhibiting Secular Growth or with Potential for Cyclical Uptick. We intend to focus on targets in sectors which exhibit positive secular growth or potential for near-term cyclical uptick. We plan to identify sectors that have demonstrated strong positive growth in recent years, possess drivers for continued growth and are strategically positioned to benefit from upswings in their respective industry cycles. Benefit from Being a Public Company. We intend to acquire a company that will benefit from being publicly traded and can effectively utilize the broader access to capital and public profile that are associated with being a publicly traded company. These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. Over the course of their careers, the members of our management team and board of directors have developed a broad network of contacts and corporate relationships that we believe will serve as a Hennessy Capital Acquisition Corp. (Exact name of registrant as specified in its charter) Delaware 6770 46-3891989 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 10 South Wacker Drive Suite 3175 Chicago, IL 60606 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Table of Contents useful source of investment opportunities. This network has been developed through our management team s: experience in sourcing, acquiring, operating, developing, growing, financing and selling businesses; and experience in executing transactions under varying economic and financial market conditions. This network has provided our management team with a flow of referrals that have resulted in numerous transactions. We believe that the network of contacts and relationships of our management team will provide us with an important source of investment opportunities. In addition, we anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment banking firms, consultants, accounting firms and large business enterprises. Certain members of our management team have spent significant portions of their careers working with businesses in the diversified industrial manufacturing and distribution sector, and have developed a wide network of professional services contacts and business relationships in that industry. The members of our board of directors also have significant executive management and public company experience with diversified industrial manufacturing and distribution companies. In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial and other information which will be made available to us. We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA that our initial business combination is fair to our company from a financial point of view. Members of our management team may directly or indirectly own common stock and warrants following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. We do not believe, however, that the fiduciary duties or contractual obligations of our executive officers will materially affect our ability to complete our business combination. Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written letter agreement, not to participate in the formation of, or become an officer or director of, any other blank check company until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within 21 (or 24) months after the closing of this offering. None of our officers or directors has been involved with any blank check companies or special purpose acquisition corporations in the past. Table of Contents Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our business combination. We are an emerging growth company, as defined in Section 2(a) of the Securities Act of 1933, as amended, 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. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities 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 will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to emerging growth company shall have the meaning associated with it in the JOBS Act. Our executive offices are located at 10 South Wacker Drive, Suite 3175, Chicago, IL 60606 and our telephone number is (312) 876-1956. Copies to: Douglas S. Ellenoff, Esq. Stuart Neuhauser, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, New York 10105 Telephone: (212) 370-1300 Facsimile: (212) 370-7889 Gregg A. Noel Thomas J. Ivey Skadden, Arps, Slate, Meagher & Flom LLP 525 University Avenue, Suite 1400 Palo Alto, CA 94301 Telephone: (650) 470-4500 Facsimile: (888) 329-3302 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. 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 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 Table of Contents The Offering In making your decision 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 27 of this prospectus. Securities offered 10,000,000 units, at $10.00 per unit, each unit consisting of: one share of common stock; and one warrant to purchase one-half of one share of common stock. Proposed NASDAQ symbols Units: HCACU Common Stock: HCAC Warrants: HCACW Trading commencement and separation of common stock and warrants The units will begin trading on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Deutsche Bank Securities Inc. informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of common stock and warrants. Separate trading of the common stock and warrants is prohibited until we have filed a Current Report on Form 8-K In no event will the common stock and warrants be traded separately until we have filed a Current Report on Form 8-K with the SEC containing an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering, which is anticipated to take place three business days from the date of this prospectus. If the underwriters over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters over-allotment option. (1) Assumes no exercise of the underwriters over-allotment option and the forfeiture by our sponsor of 375,000 founder shares. (2) This number includes up to 375,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters over-allotment option is exercised, and between 625,000 and 718,750 founder earn out shares that are subject to forfeiture in the future by our initial stockholders, as described under Founder shares below. Exercisability Each warrant offered in this offering is exercisable to purchase one-half of one share of our common stock. Warrants may be exercised only for a whole number of shares of common stock. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of common stock to be issued to the warrant holder. We structured each warrant to be exercisable for one-half of one share of our common stock, as compared to warrants issued by some other similar blank check companies which are exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of a business combination as compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Exercise price $5.75 per half share ($11.50 per whole share), subject to adjustments as described herein. Exercise period The warrants will become exercisable on the later of: 30 days after the completion of our initial business combination, and 12 months from the closing of this offering; Table of Contents provided in each case that we have an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement). We are not registering the shares of common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than fifteen (15) business days after the closing of our initial business combination, we will use our best efforts to file with the SEC and have an effective registration statement covering the shares of common stock issuable upon exercise of the warrants, to maintain a current prospectus relating to those shares of common stock until the warrants expire or are redeemed; provided, that if our common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement. The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account. Redemption of warrants Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants): in whole and not in part; at a price of $0.01 per warrant; upon a minimum of 30 days prior written notice of redemption, which we refer to as the 30-day redemption period; and if, and only if, the last sale price of our common stock equals or exceeds $24.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders. Table of Contents Table of Contents We will not redeem the warrants unless an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. If we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a cashless basis. In determining whether to require all holders to exercise their warrants on a cashless basis, our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of common stock issuable upon the exercise of our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the fair market value (defined below) by (y) the fair market value. The fair market value shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Please see the section entitled Description of Securities Warrants Public Stockholders Warrants for additional information. None of the private placement warrants will be redeemable by us so long as they are held by the initial purchasers of the private placement warrants or their permitted transferees. Founder shares In September 2013, our sponsor purchased an aggregate of 2,875,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per share. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20.0% of the outstanding shares upon completion of this offering. Prior to the initial 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, as amended, 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 investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued. In October 2013, our sponsor transferred 35,000 founder shares to each of Messrs. Bell, Burns, Shea and Tabet, our independent director nominees, 10,000 to Mr. Lowrey, our Executive Vice President, Chief Financial Officer and Secretary, and 50,000 to Mr. Charlton, our President and Chief Operating Officer. These 200,000 founder shares will not be subject to forfeiture in the event the underwriter s overallotment option is not exercised, however, they will be subject to the forfeiture as founder earnout shares described below. If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering. Our initial stockholders will collectively own 20.0% of our issued and outstanding shares after this offering (assuming they do not purchase any units in this offering). Up to 375,000 founder shares will be subject to forfeiture by our sponsor (or its permitted transferees) depending on the extent to which the underwriters over-allotment option is exercised. In addition, a portion of the founder shares in an amount equal to 25% of the founder shares, or 5% of our issued and outstanding shares after this offering and any exercise of the underwriters over-allotment option, which we refer to as the founder earnout shares, will be subject to forfeiture by our initial stockholders (or their permitted transferees) on the fourth anniversary of our initial business combination, unless prior to such date the last sale price of our common stock equals or exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period or the company completes a liquidation, merger, stock exchange or other similar transaction that results in all of its stockholders having the right to exchange their shares of common stock for consideration in cash, securities or other property which equals or Table of Contents exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like). The number of founder earnout shares will be between 625,000 and 718,750, depending on the exercise of the underwriters over-allotment option. The founder shares are identical to the shares of common stock included in the units being sold in this offering, except that: the founder shares are subject to certain transfer restrictions, as described in more detail below, and our initial stockholders, officers, directors and director nominees have entered into letter agreements with us, pursuant to which they have agreed (i) to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination and (ii) to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 21 months (or 24 months, as applicable) from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our business combination within the prescribed time frame). If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. Transfer restrictions on founder shares Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination or (B) the date on which we complete a liquidation, merger, stock exchange or other similar transaction after our initial business combination that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property (except as described herein under Principal Stockholders Transfers of Common Stock and Warrants ). We refer to such transfer restrictions throughout this prospectus as the lock-up. Notwithstanding the foregoing, if the last sale price of our common stock equals or 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 the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED JANUARY 16, 2014 PRELIMINARY PROSPECTUS HENNESSY CAPITAL ACQUISITION CORP. $100,000,000 10,000,000 Units Table of Contents exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (2) if we consummate a transaction after our initial business combination which results in our stockholders having the right to exchange their shares for cash or property worth at least $12.00 per share, the founder shares will be released from the lock-up. Notwithstanding the foregoing, the founder earnout shares will remain subject to the lockup restrictions described above until the earlier of their forfeiture or the conditions to their release from forfeiture (as described elsewhere in this prospectus) are met. Private placement warrants Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 11,000,000 private placement warrants (or 12,125,000 if the over-allotment option is exercised in full), each exercisable to purchase one-half of one share of our common stock at $5.75 per half share, at a price of $0.50 per warrant ($5,500,000 in the aggregate or $6,062,500 in the aggregate if the over allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. The purchase price of the private placement warrants will be added to the proceeds from this offering to be held in the trust account. If we do not complete our initial business combination within 21 months from the closing of this offering (or 24 months, as applicable), the proceeds of the sale of the private placement warrants will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the private placement warrants will expire worthless. The private placement warrants will be non-redeemable so long as they are held by the sponsor or its permitted transferees (except as described below under Principal Stockholders Transfers of Founder Shares and Private Placement Warrants ). If the private placement warrants are held by holders other than the sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Our sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis. Hennessy Capital Acquisition Corp. is a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one share of our common stock and one warrant. Each warrant entitles the holder thereof to purchase one-half of one share of our common stock at a price of $5.75 per half share, subject to adjustment as described in this prospectus. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of common stock to be issued to the warrant holder. The warrants will become exercisable on the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering, and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation, as described in this prospectus. We have also granted the underwriters a 45-day option to purchase up to an additional 1,500,000 units to cover over-allotments, if any. We will provide our stockholders with the opportunity to redeem all or a portion of their shares of our common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account described below as of two business days prior to the consummation of our initial business combination, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding shares of common stock that were sold as part of the units in this offering, which we refer to collectively as our public shares, subject to the limitations described herein. If we are unable to complete our business combination within 21 months from the closing of this offering, or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period, we will redeem 100% of the public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $50,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable) divided by the number of then outstanding public shares, subject to applicable law and as further described herein. Our sponsor, Hennessy Capital Partners I LLC (which we refer to as our sponsor throughout this prospectus) has committed to purchase an aggregate of 11,000,000 warrants (or 12,125,000 warrants if the over-allotment option is exercised in full) at a price of $0.50 per warrant ($5,500,000 in the aggregate, or $6,062,500 if the over-allotment option is exercised in full) in a private placement that will close simultaneously with the closing of this offering. We refer to these warrants throughout this prospectus as the private placement warrants. Each private placement warrant is exercisable to purchase one-half of one share of our common stock at $5.75 per half share. Currently, there is no public market for our units, common stock or warrants. We have applied to list our units on the NASDAQ Capital Market, or NASDAQ, under the symbol HCACU on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on NASDAQ. The common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Deutsche Bank Securities Inc. informs us of its decision to allow earlier separate trading, subject to our filing a Current Report on Form 8-K with the Securities and Exchange Commission, or the SEC, containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin. Once the securities comprising the units begin separate trading, we expect that the common stock and warrants will be listed on NASDAQ under the symbols HCAC and HCACW, respectively. We are an emerging growth company under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See Risk Factors beginning on page 27 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. 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. Per Unit Table of Contents Transfer restrictions on private placement warrants The private placement warrants (including the common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business. Proceeds to be held in trust account The rules of Nasdaq provide that at least 90% of the gross proceeds from this offering and the private placement be deposited in a trust account. Of the $105.5 million in proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, or approximately $121.1 million if the underwriters over-allotment option is exercised in full, $100.0 million ($10.00 per unit), or approximately $115.0 million ($10.00 per unit) if the underwriters over-allotment option is exercised in full, will be deposited into a segregated trust account located in the United States at JP Morgan Chase Bank, N.A. with Continental Stock Transfer & Trust Company acting as trustee, and $1.750 million will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. The proceeds to be placed in the trust account include approximately up to $3,250,000 (or approximately up to $3,737,500 if the underwriters over-allotment option is exercised in full) in deferred underwriting commissions. Except for the withdrawal of interest to pay taxes, if any, our amended and restated certificate of incorporation, as discussed below and subject to the requirements of law and stock exchange rules, provides that none of the funds held in the trust account will be released from the trust account until the earlier of (i) the completion of our initial business combination and (ii) the redemption of 100% of our public shares if we are unable to complete our initial business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period). Based on current interest rates, we do not expect that interest earned on the trust account will be sufficient to pay taxes. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders. Total Table of Contents Anticipated expenses and funding sources Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except for the withdrawal of interest to pay taxes. Based upon current interest rates, we expect the trust account to generate approximately $20,000 of interest annually (assuming an interest rate of 0.02% per year). Unless and until we complete our initial business combination, we may pay our expenses only from: the net proceeds of this offering not held in the trust account, which will be approximately $1,000,000 in working capital after the payment of approximately $750,000 in expenses relating to this offering; and any loans or additional investments from our sponsor, members of our management team or their affiliates or other third parties, although they are under no obligation to advance funds or invest in us, and provided any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of a business combination. Conditions to completing our initial business combination There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. The Nasdaq rules require that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking or accounting firm that is a member of FINRA. We will complete our initial business combination only if the post-transaction company in which our public stockholders own shares will own or acquire 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 Public offering price $ 10.00 $ 100,000,000 Underwriting discounts and commissions(1) $ 0.70 $ 7,000,000 Proceeds, before expenses, to us $ 9.30 $ 93,000,000 (1) Includes $0.325 per unit, or approximately $3,250,000 (or up to approximately $3,737,500 if the underwriters over-allotment option is exercised in full) in the aggregate payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the underwriters only on completion of an initial business combination, in an amount equal to $0.325 multiplied by the number of shares of common stock sold as part of the units in this offering, as described in this prospectus. Does not include certain fees and expenses payable to the underwriters in connection with this offering. See also Underwriting beginning on page 127 for a description of compensation and other items of value payable to the underwriters. Of the proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $100.0 million or approximately $115.0 million if the underwriters over-allotment option is exercised in full ($10.00 per unit), will be deposited into a trust account with Continental Stock Transfer & Trust Company acting as trustee. Except for the withdrawal of interest to pay taxes, our amended and restated certificate of incorporation provides that none of the funds held in trust will be released from the trust account until the earlier of (i) the completion of our initial business combination or (ii) the redemption of our public shares if we are unable to complete our business combination within 21 months from the closing of this offering (or 24 months, as applicable), subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders. The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the purchasers on or about ________, 2014. Deutsche Bank Securities , 2014 Table of Contents post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. 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, provided that in the event that the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. Permitted purchases of public shares by our affiliates If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares in such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Subsequent to the consummation of this offering, we will adopt an insider trading policy which will require insiders to: (i) refrain from purchasing shares during certain blackout periods and when they are in possession of any material nonpublic information and (ii) to clear all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either enter make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if Table of Contents the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Our initial stockholders, directors, executive officers, advisors or their affiliates will not make any purchases if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Redemption rights for public stockholders upon completion of our initial business combination We will provide our stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares they may acquire during or after this offering in connection with the completion of our business combination. Manner of conducting redemptions We will provide our stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20.0% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. We Table of Contents 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. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus. HENNESSY CAPITAL ACQUISITION CORP. TABLE OF CONTENTS Page Table of Contents intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirement or we choose to seek stockholder approval for business or other legal reasons. If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation: conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. Upon the public announcement of our business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act. In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC s penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination. If, however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder Table of Contents approval for business or other legal reasons, we will: conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and file proxy materials with the SEC. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. In such case, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. Each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. Our amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC s penny stock rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders thereof. Limitation on redemption rights of stockholders holding 10% or more of the shares sold in this offering if we hold stockholder vote Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant Table of Contents to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 10% of the shares sold in this offering. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 10% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder s shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders ability to redeem to no more than 10% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders ability to vote all of their shares (including all shares held by those stockholders that hold 10% or more of the shares sold in this offering) for or against our business combination. Redemption Rights in connection with proposed amendments to our certificate of incorporation Some other blank check companies have a provision in their charter which prohibits the amendment of certain charter provisions. Our amended and restated certificate of incorporation provides that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock. In all other instances, our amended and restated certificate of Table of Contents incorporation may be amended by holders of a majority of our common stock, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our initial stockholders, who will collectively beneficially own up to 20.0% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period), unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares. Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination. Release of funds in trust account on closing of our initial business combination On the completion of our initial business combination, all amounts held in the trust account will be released to us. We will use these funds to pay amounts due to any public stockholders who exercise their redemption rights as described above under Redemption rights for public stockholders upon completion of our initial business combination, to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using stock or debt Table of Contents securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. Redemption of public shares and distribution and liquidation if no initial business combination Our sponsor, executive officers, directors and director nominees have agreed that we will have only 21 months from the closing of this offering to complete our initial business combination (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period). If we are unable to complete our initial business combination within such 21-month period (or 24-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 the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $50,000 of interest to pay dissolution expenses) divided by the number of then 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 each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our business combination within the 21-month time period (or 24-month time period, as applicable). Our initial stockholders have entered into letter agreements with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder Table of Contents shares if we fail to complete our initial business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period). However, if our initial stockholders acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 21-month (or 24-month, as applicable) time frame. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination within 21 months from the closing of this offering (or 24 months, as applicable) and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares. Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 21 months from the closing of this offering (or 24 months, as applicable), unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC s penny stock rules). Limited payments to insiders There will be no finder s fees, reimbursements or cash payments made to our sponsor, officers or directors, or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering Table of Contents held in the trust account prior to the completion of our initial business combination: Repayment of an aggregate of $121,000 in loans and advances made to us by Hennessy Capital LLC, an affiliate of our sponsor to cover offering-related and organizational expenses; Payment to an affiliate of our sponsor of a total of $10,000 per month for office space, utilities and secretarial support; Reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and Repayment of loans which may be made by our sponsor 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. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or their affiliates. Audit Committee We have established and will maintain an audit committee, which will be composed entirely of independent directors to, among other things, monitor compliance with the terms described above and the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled Management Committees of the Board of Directors Audit Committee. Table of Contents 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 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. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, 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 of This Offering to Those 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 27 of this prospectus. (1) The as adjusted calculation includes $100,000,000 cash held in trust from the proceeds of this offering and the sale of the private placement warrants plus $1,000,000 in cash held outside the trust account, plus $25,000 of actual shareholder s equity at December 31, 2013, less $3,250,000 of deferred underwriting commissions. (2) The as adjusted calculation equals $100,000,000 cash held in trust from the proceeds of this offering and the sale of the private placement warrants, plus $1,000,000 in cash held outside the trust account, plus $25,000 of actual shareholders equity at December 31, 2013. (3) The as adjusted calculation includes $3,250,000 of deferred underwriting commissions. (4) The as adjusted calculation equals the as adjusted total assets, less the as adjusted total liabilities, less the as adjusted stockholders equity, which is set to approximate the minimum net tangible assets threshold of at least $5,000,001. (5) Excludes 9,277,499 shares of common stock purchased in the public market which are subject to redemption in connection with our initial business combination. The as adjusted calculation equals the as adjusted total assets, less the as adjusted total liabilities, less the value of common shares that may be redeemed in connection with our initial business combination (approximately $10.00 per share). The as adjusted information gives effect to the sale of the units in this offering, the sale of the private placement warrants, repayment of an aggregate of $121,000 in loans and advances made to us by Hennessy Capital LLC, an affiliate of our sponsor and the payment of the estimated expenses of this offering. The as adjusted total assets amount includes the $100.0 million held in the trust account ($115.0 million if the underwriters over-allotment option is exercised in full) for the benefit of our public stockholders, which amount, less deferred underwriting commissions, will be available to us only upon the completion of our initial business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period). The as adjusted working capital and as adjusted total assets include up to $3,250,000 being held in the trust account (up to approximately $3,737,500 if the underwriters over-allotment option is exercised in full) representing deferred underwriting commissions. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions. If no business combination is completed within 21 months from the closing of this offering (or 24 months, as applicable), the proceeds then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $50,000 of interest to pay dissolution expenses) will be used to fund the redemption of our public shares. Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within such 21-month time period (or 24-month period, as applicable). 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, 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. We are a newly formed development stage company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. We are a recently formed development stage company with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our business combination. If we fail to complete our business combination, we will never generate any operating revenues. Our public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination. We may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder approval under applicable state law or the rules of Nasdaq or if we decide to hold a stockholder vote for business or other reasons. For instance, the Nasdaq rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our outstanding shares, we would seek stockholder approval of such business combination. However, except for as required by law, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may consummate our initial business combination even if holders of a majority of the outstanding shares of our common stock do not approve of the business combination we consummate. Please see the section entitled Proposed Business Stockholders May Not Have the Ability to Approve Our Initial Business Combination for additional information. If we seek stockholder approval of our initial business combination, our initial stockholders have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote. Unlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our initial stockholders have agreed to vote their founder shares, as well as any public shares purchased during or after this offering, in favor of our initial business combination. Our initial stockholders will own up to 20.0% of our outstanding shares of common stock immediately following the completion of this offering. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case if our initial stockholders agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders. Table of Contents Units: Number outstanding before this offering 0 Number outstanding after this offering 10,000,000(1) Common stock: Number outstanding before this offering 2,875,000(2) Number outstanding after this offering 12,500,000(1) Warrants: Number of private placement warrants to be sold in a private placement simultaneously with this offering 11,000,000(1) Number of warrants to be outstanding after this offering and the private placement 21,000,000(1) Table of Contents Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of the business combination. At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination. The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target. We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC s penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us. The ability of our stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure. At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure. The ability of our stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock. If our business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business Table of Contents combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market. The requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our business combination on terms that would produce value for our stockholders. Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period). Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation. We may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate Our sponsor, executive officers, directors and director nominees have agreed that we must complete our initial business combination within 21 months from the closing of this offering (or 24 months, as applicable). We may not be able to find a suitable target business and complete our initial business combination within such time period. If we have not completed our initial business combination within such time 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 the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $50,000 of interest to pay dissolution expenses) divided by the number of then 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 each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. If we seek stockholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce the public float of our common stock. If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our Table of Contents sponsor, directors, executive officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our business combination that may not otherwise have been possible. In addition, if such purchases are made, the public float of our common stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed. We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. See Proposed Business Business Strategy Tendering stock certificates in connection with a tender offer or redemption rights. You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss. Our public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with those shares of our common stock that such stockholder properly elected to redeem, subject to the limitations described herein, and (ii) the redemption of our public shares if we are unable to complete an initial business combination within 21 months from the closing of this offering (or 24 months, as applicable), subject to applicable law and as further described herein. In addition, if our plan to redeem our public shares if we are unable to complete an initial business combination within 21 months (or 24 months, as applicable) from the closing of this offering is not completed for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond 21 months (or 24 months, as applicable) from the closing of this offering before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss. Table of Contents NASDAQ may delist our securities from trading on its exchange, which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions. We have applied to have our units listed on NASDAQ on or promptly after the date of this prospectus and our common stock and warrants listed on or promptly after their date of separation. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in the NASDAQ listing standards, we cannot assure you that our securities will be, or will continue to be, listed on NASDAQ in the future or prior to our initial business combination. In order to continue listing our securities on NASDAQ prior to our initial business combination, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 round-lot holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with NASDAQ s initial listing requirements, which are more rigorous than NASDAQ s continued listing requirements, in order to continue to maintain the listing of our securities on NASDAQ. For instance, our stock price would generally be required to be at least $4 per share and our stockholders equity would generally be required to be at least $5 million. We cannot assure you that we will be able to meet those initial listing requirements at that time. If NASDAQ delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including: a limited availability of market quotations for our securities; reduced liquidity for our securities; a determination that our common stock is a penny stock which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; a limited amount of news and analyst coverage; and a decreased ability to issue additional securities or obtain additional financing in the future. The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as covered securities. Because we expect that our units and eventually our common stock and warrants will be listed on NASDAQ, our units, common stock and warrants will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the state of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on NASDAQ, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities. You will not be entitled to protections normally afforded to investors of many other blank check companies. Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an 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, because we will have net tangible assets in excess of $5,000,000 upon the successful Table of Contents completion of this offering and the sale of the private placement warrants 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 in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see Proposed Business Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419. If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a group of stockholders are deemed to hold in excess of 10% of our common stock, you will lose the ability to redeem all such shares in excess of 10% of our common stock. If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 10% of the shares sold in this offering, which we refer to as the Excess Shares. However, we would not be restricting our stockholders ability to vote all of their shares (including Excess Shares) for or against our business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our business combination. And as a result, you will continue to hold that number of shares exceeding 10% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss. Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, on our redemption, and our warrants will expire worthless. We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, if we are obligated to pay cash for the shares of common stock redeemed and, in the event we seek stockholder approval of our business combination, we make purchases of our common stock, potentially reducing the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully Table of Contents negotiating a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. If the net proceeds of this offering not being held in the trust account are insufficient to allow us to operate for at least the next 21 months (or 24 months, as applicable), we may be unable to complete our initial business combination. The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the next 21 months (or 24 months, as applicable), assuming that our initial business combination is not completed during that time. We believe that, upon the closing of this offering, the funds available to us outside of the trust account, will be sufficient to allow us to operate for at least the next 21 months (or 24 months, as applicable); however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a no-shop provision (a provision in letters of intent designed to keep target businesses from shopping around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. If the net proceeds of this offering not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our business combination. Of the net proceeds of this offering, only approximately $1,000,000 will be available to us initially outside the trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $750,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $750,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public stockholders may only receive approximately $10.00 per share on our redemption of our public shares, and our warrants will expire worthless. Subsequent to our completion of our initial business combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment. Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues through a customary Table of Contents amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the tender offer materials or proxy statement relating to the business combination contained an actionable material misstatement or material omission. If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share. 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, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors. Mr. Hennessy has agreed that he will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of Table of Contents the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, Mr. Hennessy will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether Mr. Hennessy has sufficient funds to satisfy their indemnity obligations and, therefore, Mr. Hennessy may not be able to satisfy those obligations. We have not asked Mr. Hennessy to reserve for such eventuality. We believe the likelihood of Mr. Hennessy having to indemnify the trust account is limited because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our directors may decide not to enforce the indemnification obligations of Mr. Hennessy, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders. In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share or (ii) other than due to the failure to obtain such waiver such lesser amount per share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and Mr. Hennessy asserts that he is unable to satisfy his obligations or that he has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against Mr. Hennessy to enforce his indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against Mr. Hennessy to enforce his indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share. If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages. If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that 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. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced. If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition 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. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced. Table of Contents If we are deemed to be an investment company under the Investment Company Act, 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 business combination. If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including: restrictions on the nature of our investments, and restrictions on the issuance of securities, each of which may make it difficult for us to complete our business combination. In addition, we may have imposed upon us burdensome requirements, including: registration as an investment company; adoption of a specific form of corporate structure; and reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. We do not believe that our anticipated principal activities will subject us to the Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in United States government treasury bills with a maturity of 180 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate a business combination. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. 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. Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares. Under the Delaware General Corporation Law, or DGCL, 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 our public shares in the event we do not complete our initial business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial Table of Contents business combination within such 21-month period) may be considered a liquidation distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL 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. However, it is our intention to redeem our public shares as soon as reasonably possible following the 21st month from the closing of this offering (or 24th month, as applicable) in the event we do not complete our business combination and, therefore, we do not intend to comply with those procedures. Because we will not be complying with Section 280, Section 281(b) of the DGCL 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 10 years following our dissolution. 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. If our plan of distribution complies with Section 281(b) of the DGCL, 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 likely be barred after the third anniversary of the dissolution. We cannot assure you that we will 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 beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 21 months from the closing of this offering (or 24 months, as applicable) 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 DGCL, 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. We do not currently intend to hold an annual meeting of stockholders until after our consummation of a business combination and you will not be entitled to any of the corporate protections provided by such a meeting. We do not currently intend to hold an annual meeting of stockholders until after we consummate a business combination (unless required by Nasdaq), and thus may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for the purposes of electing directors in accordance with a company s bylaws unless such election is made by written consent in lieu of such a meeting. Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of a 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 DGCL. We are not registering the shares of common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless. We are not registering the shares of common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed, as soon as practicable, but in no event later than fifteen (15) business Table of Contents days after the closing of our initial business combination, to use our best efforts to file a registration statement under the Securities Act covering such shares and maintain a current prospectus relating to the common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, unless an exemption is available. Notwithstanding the above, if our common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares under blue sky laws. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state securities laws. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of common stock included in the units. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of common stock for sale under all applicable state securities laws. The grant of registration rights to our initial stockholders and holders of our private placement warrants may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our common stock. Pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, our initial stockholders and their permitted transferees can demand that we register the founder shares, holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants and the shares of common stock issuable upon exercise of the private placement warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our common stock that is expected when the securities owned by our initial stockholders, holders of our private placement warrants or their respective permitted transferees are registered. Because we are not limited to a particular industry or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business s operations. We will seek to complete a business combination with an operating company in the diversified industrial manufacturing and distribution sector in the United States (which may include a company based in the United States which has operations or opportunities outside the United States), but may also pursue acquisition opportunities in other industries, except that we will not, under our amended Table of Contents and restated certificate of incorporation, be permitted to effectuate our business combination with another blank check company or similar company with nominal operations. Because we have not yet identified or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the tender offer materials or proxy statement relating to the business combination contained an actionable material misstatement or material omission. We may seek investment opportunities in industries outside of the diversified industrial manufacturing and distribution sector (which industries may or may not be outside of our management s area of expertise). Although we intend to focus on identifying business combination candidates in the diversified industrial manufacturing and distribution sector in the United States (including candidates based in the United States which may have operations or opportunities outside the United States), and we will not initially actively seek to identify business combination candidates in other industries (which industries may be outside our management s area of expertise), we will consider a business combination outside of the diversified industrial manufacturing and distribution sector if a business combination candidate is presented to us and we determine that such candidate offers an attractive investment opportunity for our company or we are unable to identify a suitable candidate in the diversified industrial manufacturing and distribution sector after having expended a reasonable amount of time and effort in an attempt to do so. Although our management will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a business combination candidate. In the event we elect to pursue an investment outside of the diversified industrial manufacturing and distribution sector, our management s expertise may not be directly applicable to its evaluation or operation, and the information contained herein regarding the diversified industrial manufacturing and distribution sector would not be relevant to an understanding of the business that we elect to acquire. Although we identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines. Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business Table of Contents combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. We may seek investment opportunities with a financially unstable business or an entity lacking an established record of revenue or earnings. To the extent we complete our initial business combination with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We are not required to obtain an opinion from an independent investment banking or accounting firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view. Unless we complete our business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking or accounting firm that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination. We may issue additional common or preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination, which would dilute the interest of our stockholders and likely present other risks. Our amended and restated certificate of incorporation authorizes the issuance of up to 29,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 6,000,000 (assuming that the underwriters have not exercised their over-allotment option) authorized but unissued shares of common stock available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants. We may issue a substantial number of additional shares of common or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination, however our amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination. The issuance of additional shares of common or preferred stock: Table of Contents may significantly dilute the equity interest of investors in this offering; may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; could cause a change in control if a substantial number of common stock is 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 units, common stock and/or warrants. Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. We anticipate 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 we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial 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. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. We are dependent upon our executive officers and directors and their departure could adversely affect our ability to operate. Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our executive officers and directors, at least until we have completed our business combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, 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 an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us. 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. The loss of key personnel could negatively impact the operations and profitability of our post-combination business. Our ability to successfully effect our business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements. 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 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 may be able to remain with the company after the completion of our business combination only 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 such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of our business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination. We may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company. When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the tender offer materials or proxy statement relating to the business combination contained an actionable material misstatement or material omission. Our executive 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 complete our initial business combination. Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive officers and directors other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business Table of Contents combination. For a complete discussion of our executive officers and directors other business affairs, please see Management Directors and Executive Officers. Certain of our executive officers and directors are now, and all of them may in the future become, affiliated 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. Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Our executive officers and directors are, or may in the future become, affiliated with entities that are engaged in a similar business. Our officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. For a complete discussion of our executive officers and directors business affiliations and the potential conflicts of interest that you should be aware of, please see Management Directors and Executive Officers, Management Conflicts of Interest and Certain Relationships and Related Transactions. Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests. We have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours. We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our executive officers, directors or existing holders which may raise potential conflicts of interest. In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers and directors. Our directors also serve as officers and board members for other entities, including, without limitation, those described under Management Conflicts of Interest. Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in Proposed Business Effecting our initial business combination Selection of a target business and structuring of our initial business combination and such transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our executive officers, directors or existing holders, Table of Contents potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest. Since our sponsor, executive officers and directors will lose their entire investment in us if our business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. In September 2013, our sponsor purchased an aggregate of 2,875,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per share. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20.0% of the outstanding shares upon completion of this offering. In October 2013, our sponsor transferred 35,000 founder shares to each of Messrs. Bell, Burns, Shea and Tabet, our independent director nominees, 10,000 to Mr. Lowrey, our Executive Vice President, Chief Financial Officer and Secretary, and 50,000 to Mr. Charlton, our President and Chief Operating Officer. These 200,000 founder shares will not be subject to forfeiture in the event the underwriter s overallotment option is not exercised, however, they will be subject to the forfeiture as founder earnout shares described below. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed to purchase an aggregate of 11,000,000 (or 12,125,000 if the over-allotment option is exercised in full) private placement warrants, each exercisable for one-half of one share of our common stock at $5.75 per half share, for a purchase price of $5,500,000 (or $6,062,500 if the over-allotment option is exercised in full), or $0.50 per warrant, that will also be worthless if we do not complete a business combination. In addition, between 625,000 and 718,750 founder earnout shares (depending on the extent to which the underwriters over-allotment option is exercised) will be subject to forfeiture as described elsewhere in this prospectus. The founder s shares are identical to the shares of common stock included in the units being sold in this offering. However, the holders have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to redeem any shares in connection with a stockholder vote to approve a proposed initial business combination. The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. Since our sponsor, executive officers and directors will not be eligible to be reimbursed for their out-of-pocket expenses if our business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. At the closing of our initial business combination, our sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities on our behalf. These financial interests of our sponsor, executive officers and directors may influence their motivation in identifying and selecting a target business combination and completing an initial business combination. We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders investment in us. Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete our business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount Table of Contents available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including: default and foreclosure on our assets if our operating revenues after an 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; 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; our inability to pay dividends on our common stock; using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability. The net proceeds from this offering and the private placement of warrants will provide us with approximately $96.75 million (or approximately $111.262 million if the underwriters over-allotment option is exercised in full) that we may use to complete our business combination (excluding up to $3,250,000, or up to approximately $3,737,500 if the over-allotment option is exercised in full, of deferred underwriting commissions being held in the trust account). We may effectuate our business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. 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, property or asset, or dependent upon the development or market acceptance of a single or limited number of products, processes or services. Table of Contents 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 business combination. We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our business combination and give rise to increased costs and risks that could negatively impact our operations and profitability. If we determine to simultaneously acquire several businesses that 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 our initial 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. We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all. In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. By definition, very little public information exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all. 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 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 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. 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, so only balance sheet data is presented. December 31, 2013 Table of Contents We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority of our stockholders do not agree. Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we are not subject to the SEC s penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination. The exercise price for the public warrants is higher than in many similar blank check company offerings in the past, and, accordingly, the warrants are more likely to expire worthless. The exercise price of the public warrants is higher than is typical in many similar blank check companies in the past. Historically, the exercise price of a warrant was generally a fraction of the purchase price of the units in the initial public offering. The exercise price for our public warrants is $5.75 per half share, or $11.50 per whole share. As a result, the warrants are less likely to ever be in the money and more likely to expire worthless. In order to effectuate our initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our initial business combination that our stockholders may not support. In order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. For example, blank check companies have amended the definition of business combination, increased redemption thresholds and changed industry focus. We cannot assure you that we will not seek to amend our charter or governing instruments in order to effectuate our initial business combination. The provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation to facilitate the completion of an initial business combination that some of our stockholders may not support. Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company s pre-business combination activity, without approval by a certain percentage of the company s stockholders. In those companies, amendment of these provisions requires approval by between 90% and 100% of the company s public stockholders. Our amended and restated certificate of incorporation provides that Actual Table of Contents any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock. In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our common stock, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our initial stockholders, who will collectively beneficially own up to 20.0% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete a business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation. Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period), unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of the interest which may be withdrawn to pay taxes) divided by the number of then outstanding public shares. These agreements are contained in letter agreements that we have entered into with our sponsor, executive officers, directors and director nominees. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers, directors or director nominees for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law. We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination. Although we believe that the net proceeds of this offering and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, because we have not yet identified any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the sale of the private placement warrants prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. The current economic environment has made it especially difficult for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an As Adjusted Table of Contents alternative target business candidate. In addition, even if we do not need additional financing to complete our business combination, we may require such financing to fund the operations or growth 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 business combination. If we are unable to complete our initial business combination, our public stockholders may only receive approximately $10.00 per share on the liquidation of our trust account, and our warrants will expire worthless. Our initial stockholders control a substantial interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support. Upon the closing of this offering, our initial stockholders will own 20.0% of our issued and outstanding shares of common stock (assuming they do not purchase any units in this offering). Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation. If our initial stockholders purchase any units in this offering or if our initial stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our common stock. In addition, our board of directors, whose members were elected by our sponsor, is and will be divided into two classes, each of which will generally serve for a term of two years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors prior to the completion of our business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual meeting, as a consequence of our staggered board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because of their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will continue to exert control at least until the completion of our business combination. Our sponsor paid an aggregate of $25,000, or approximately $0.009 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of our common stock. The difference between the public offering price per share (allocating all of the unit purchase price to the common stock and none to the warrant included in the unit) and the pro forma net tangible book value per share of our common stock after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon the closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public stockholders will incur an immediate and substantial dilution of approximately 84.5% (or $8.45 per share, assuming no exercise of the underwriters over-allotment option), the difference between the pro forma net tangible book value per share of $1.55 and the initial offering price of $10.00 per unit. We may amend the terms of the warrants in a manner that may be adverse to holders with the approval by the holders of at least 65% of the then outstanding public warrants. Our warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then Balance Sheet Data: Working capital (deficiency)(1) $ (321,000 ) $ 97,775,000 Total assets(2) $ 348,000 $ 101,025,000 Total liabilities(3) $ 323,000 $ 3,250,000 Value of common stock that may be redeemed in connection with our initial business combination ($10.00 per share)(4) $ $ 92,774,990 Stockholders equity(5) $ 25,000 $ 5,000,010 Table of Contents outstanding public warrants to make any change that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the warrants with the consent of at least 65% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant. We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless. We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our common stock equals or exceeds $24.00 per share for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by their initial purchasers or their permitted transferees. Our warrants may have an adverse effect on the market price of our common stock and make it more difficult to effectuate our business combination. We will be issuing warrants to purchase 5,000,000 shares of our common stock (or up to 5,750,000 shares of common stock if the underwriters over-allotment option is exercised in full) as part of the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement an aggregate of 11,000,000 (or up to 12,125,000 if the underwriters over-allotment option is exercised in full) private placement warrants, each exercisable to purchase one-half of one share of common stock at $5.75 per half share. To the extent we issue shares of common stock to effectuate a business transaction, the potential for the issuance of a substantial number of additional shares of common stock upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding shares of our common stock and reduce the value of the shares of common stock issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business. The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, (ii) they (including the common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the sponsor until 30 days after the completion of our initial business combination and (iii) they may be exercised by the holders on a cashless basis. Because each warrant is exercisable for only one-half of one share of our common stock, the units may be worth less than units of other blank check companies. Each warrant is exercisable for one-half of one share of common stock. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole Table of Contents number the number of shares of common stock to be issued to the warrant holder. This is different from other offerings similar to ours whose units include one share of common stock and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for half of the number of shares compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if it included a warrant to purchase one whole share. The determination of the offering price of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company. Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representatives of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units, including the common stock and warrants underlying the units, include: the history and prospects of companies whose principal business is the acquisition of other companies; prior offerings of those companies; our prospects for acquiring an operating business at attractive values; a review of debt to equity ratios in leveraged transactions; our capital structure; an assessment of our management and their experience in identifying operating companies; general conditions of the securities markets at the time of this offering; and other factors as were deemed relevant. Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results. 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. Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses. 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 Table of Contents statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. 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 financing 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 because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. We are an emerging growth company within the meaning of the Securities Act, as modified by the JOBS Act, and we may 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 shareholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities 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, can adopt the new or revised standard at the time private companies 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. Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition. Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2015. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be Table of Contents required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target company with which we seek to complete our business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition. Provisions in our amended and restated certificate of incorporation 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 contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and issue new series of preferred shares, which 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. 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. If we effect our initial business combination with a company located in the United States but with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively impact our operations. If we effect our initial business combination with a company located in the United States but with operations or opportunities outside of the United States, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following: costs and difficulties inherent in managing cross-border business operations rules and regulations regarding currency redemption; complex corporate withholding taxes on individuals; laws governing the manner in which future business combinations may be effected; 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; rates of inflation; challenges in collecting accounts receivable; cultural and language differences; employment regulations; Table of Contents 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 were unable to do so, our operations might suffer, which may adversely impact our results of operations and financial condition. We face risks related to diversified industrial manufacturing and distribution companies. Business combinations with diversified industrial manufacturing and distribution companies entail special considerations and risks. If we are successful in completing a business combination with such a target business, we will be subject to, and possibly adversely affected by, the following risks: the markets we may serve may be subject to general economic conditions and cyclical demand, which could lead to significant shifts in our results of operations from quarter to quarter that make it difficult to project long-term performance; we may be subject to the negative impacts of catastrophic events; we may face competition and consolidation of the specific sector of the industry within which the target business operates; we may be subject to volatility in costs for strategic raw material and energy commodities (such as natural gas, including exports of material quantities of natural gas from the United States) or disruption in the supply of these commodities could adversely affect our financial results; we may be unable to obtain necessary insurance coverage for the target business operations; we may incur additional expenses and delays due to technical problems, labor problems (including union disruptions) or other interruptions at our manufacturing facilities after our initial business combination; we may experience work-related accidents that may expose us to liability claims; our manufacturing processes and products may not comply with applicable statutory and regulatory requirements, or if we manufacture products containing design or manufacturing defects, demand for our products may decline and we may be subject to liability claims; we may be liable for damages based on product liability claims, and we may also be exposed to potential indemnity claims from customers for losses due to our work or if our employees are injured performing services; our products may be are subject to warranty claims, and our business reputation may be damaged and we may incur significant costs as a result; we may be unable to protect our intellectual property rights; our products and manufacturing processes will be subject to technological change; we may be subject to increased government regulations, including with respect to, among other matters, increased environmental regulation and worker safety regulation, and the costs of compliance with such regulations; and the failure of our customers to pay the amounts owed to us in a timely manner. Any of the foregoing could have a negative adverse impact on our operations following a business combination. However, our efforts in identifying prospective target businesses will not be limited to the industrial manufacturing and distribution industry. Accordingly, if we acquire a target business in another industry, these risks will likely not affect us and we will be subject to other risks attendant with the specific industry in which we operate or target business which we acquire, none of which can be presently ascertained. 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 team 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, intends, 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; our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; our 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; our potential ability to obtain additional financing to complete our initial business combination; our pool of prospective target businesses; the ability of our officers and directors to generate a number of potential investment opportunities; our public securities potential liquidity and trading; the lack of a market for our securities; the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; or our 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. There can be no assurance that future developments affecting us will 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 beginning on page 27. 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. (1) Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination. (2) In addition, a portion of the offering expenses have been paid from the proceeds of loans and advances from an affiliate of our sponsor (Hennessy Capital LLC) of $121,000 as described in this prospectus. These loans and advances will be repaid upon completion of this offering out of the $750,000 of offering proceeds that has been allocated for the payment of offering expenses other Table of Contents than underwriting commissions. In the event that offering expenses are less than set forth in this table, any such amounts will be used for post-closing working capital expenses. (3) The underwriters have agreed to defer underwriting commissions equal to 3.25% of the gross proceeds of this offering. Upon completion of our initial business combination, up to $3,250,000, which constitutes the underwriters deferred commissions (or up to $3,737,500 if the underwriters over-allotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account, and the remaining funds will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions. (4) 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 a business combination based upon the level of complexity of such business combination. In the event we identify an acquisition target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. 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 not be available for our expenses. The amount in the table above does not include interest available to us from the trust account,. Based on the current interest rate environment, we would expect approximately $20,000 to be available to us from interest earned on the funds held in the trust account over 21 months following the closing of this offering; however, we can provide no assurances regarding this amount. This estimate assumes an interest rate of 0.02% per annum based upon current yields of securities in which the trust account may be invested. (5) Includes estimated amounts that may also be used in connection with our business combination to fund a no shop provision and commitment fees for financing. The rules of the Nasdaq Capital Market provide that at least 90% of the gross proceeds from this offering and the private placement be deposited in a trust account. Of the net proceeds of this offering and the sale of the private placement warrants, approximately $100,000,000 (or approximately $115,000,000 if the underwriters over-allotment option is exercised in full), including up to $3,250,000 (or up to $3,737,500 if the underwriters over-allotment option is exercised in full) of deferred underwriting commissions, will be placed in a trust account with Continental Stock Transfer & Trust Company acting as trustee and will be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. We estimate that the interest earned on the trust account will be approximately $20,000 per year, assuming an interest rate of 0.02% per year. We will not be permitted to withdraw any of the principal or interest held in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earlier of (i) the completion of our initial business combination or (ii) the redemption of 100% of our public shares if we are unable to complete a business combination within 21 months (or 24 months, as applicable) from the closing of this offering (subject to the requirements of law). Based on current interest rates, we do not expect that interest earned on the trust account will be sufficient to pay taxes. The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our business combination. If our initial business combination is paid for using stock or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our business combination, we Table of Contents may apply the balance of the cash released from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. We believe that amounts not held in trust will be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of a business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, members of our management team or their affiliates, but such persons are not under any obligation to advance funds to, or invest in, us. We have entered into an Administrative Services Agreement pursuant to which we will pay an affiliate of our sponsor a total of $10,000 per month for office space, utilities and secretarial support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. Prior to the closing of this offering, Hennessy Capital LLC, an affiliate of our sponsor has loaned and advanced us $121,000 to be used for a portion of the expenses of this offering. These loans and advances are non-interest bearing, unsecured and are due at the earlier of March 31, 2014 or the closing of this offering. These loans and advances will be repaid upon the closing of this offering out of the $750,000 of offering proceeds that has been allocated to the payment of offering expenses. In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our 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 to repay such loaned amounts. Up to $750,000 of such loans may be convertible into warrants of the post business combination entity at a price of $0.50 per warrant at the option of the lender. The warrants would be identical to the placement warrants issued to the initial holder. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may also purchase shares in privately negotiated transactions either prior to or following the completion of our initial business combination. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. We may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC s penny stock rules) and the agreement Table of Contents for our business combination may require as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights so that we cannot satisfy the net tangible asset requirement or any net worth or cash requirements, we would not proceed with the redemption of our public shares or the business combination, and instead may search for an alternate business combination. A public stockholder will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with those shares of our common stock that such stockholder properly elected to redeem, subject to the limitations described herein or (ii) the redemption of our public shares if we are unable to complete our business combination within 21 months following the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period), subject to applicable law and as further described herein and any limitations (including but not limited to cash requirements) created by the terms of the proposed business combination. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account. Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination. In addition, our initial stockholders have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our business combination within the prescribed time frame. However, if our sponsor or any of our officers, directors or affiliates acquires public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time frame. Table of Contents DIVIDEND POLICY We have not paid any cash dividends on our 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 cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. 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 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 the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering. Further, if we incur any indebtedness in connection with our business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. Table of Contents DILUTION The difference between the public offering price per share of common stock, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per share of our common stock after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public stockholders to be higher, particularly where a cashless exercise is utilized. 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 common stock which may be redeemed for cash), by the number of outstanding shares of our common stock. At December 31, 2013, our net tangible book value was $(321,000), or approximately $(0.11) per share of common stock. After giving effect to the sale of 10,000,000 shares of common stock included in the units we are offering by this prospectus, the sale of the private placement warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at December 31, 2013 would have been $5,000,010 or $1.55 per share, representing an immediate increase in net tangible book value (as decreased by the value of the approximately 9,277,499 shares of common stock that may be redeemed for cash and assuming no exercise of the underwriters over-allotment option) of $8.56 per share to our initial stockholders as of the date of this prospectus and an immediate dilution of $10.00 per share or 100% to our public stockholders not exercising their redemption rights. Total dilution to public stockholders from this offering will be $8.45 per share. The dilution to new investors if the underwriter exercises the over-allotment option in full would be an immediate dilution of $8.63 per share or 86.3%. The following table illustrates the dilution to the public stockholders on a per-share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants: Public offering price $ 10.00 Net tangible book value before this offering $ (0.11 ) Increase attributable to public stockholders 8.56 Decrease attributable to public shares subject to redemption (10.00 ) Pro forma net tangible book value after this offering and the sale of the private placement warrants $ 1.55 Dilution to public stockholders $ 8.45 For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters over-allotment option) by $92,774,990 because holders of up to approximately 92.8% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per-share redemption price equal to the amount in the trust account as set forth in our tender offer or proxy materials (initially anticipated to be the aggregate amount held in trust two days prior to the commencement of our tender offer or stockholders meeting, including interest (which interest shall be net of taxes payable) divided by the number of shares of common stock sold in this offering. (1) Assumes an aggregate of 375,000 shares held by our sponsor have been forfeited. The pro forma net tangible book value per share after the offering is calculated as follows: Numerator: Net tangible book value before this offering $ (321,000 ) Proceeds from this offering and sale of the private placement warrants, net of expenses 101,000,000 Offering costs excluded from net tangible book value before this offering 346,000 Less: deferred underwriters commissions payable (3,250,000 ) Less: amount of common stock subject to redemption to maintain net tangible assets of $5,000,001 (92,774,990 ) $ 5,000,010 Denominator: Shares of common stock outstanding prior to this offering 2,875,000 Shares forfeited if over-allotment is not exercised (375,000 ) Shares of common stock included in the units offered 10,000,000 Less: shares subject to redemption to maintain net tangible assets of $5,000,001 (9,277,499 ) 3,222,501 (1) Includes the $5,500,000 we will receive from the sale of the private placement warrants. Assumes the over-allotment option has not been exercised and the resulting forfeiture of 375,000 founder shares held by our sponsor has occurred. (2) Upon the completion of our initial business combination, we will provide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable) subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination. Table of Contents MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with respect to identifying any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the private placement warrants, our capital stock, debt or a combination of cash, stock and debt. The issuance of additional shares of our stock in a business combination: may significantly dilute the equity interest of investors in this offering; may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; could cause a change of control if a substantial number of shares of our 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; may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and may adversely affect prevailing market prices for our common stock and/or warrants. Similarly, if we issue debt securities, it could result in: default and foreclosure on our assets if our operating revenues after an 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; 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; our inability to pay dividends on our common stock; using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. Table of Contents As indicated in the accompanying financial statements, at December 31, 2013, we had approximately $2,000 in cash and deferred offering costs of $346,000. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful. Results of Operations and Known Trends or Future Events We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering. Liquidity and Capital Resources Our liquidity needs have been satisfied to date through receipt of $25,000 from the sale of the founder shares to our sponsor. We estimate that the net proceeds from (i) the sale of the units in this offering, after deducting offering expenses of approximately $750,000, underwriting commissions of $3,750,000 ($4,312,500 if the underwriters over-allotment option is exercised in full) (excluding deferred underwriting commissions of $3,250,000 (or up to $3,737,500 if the underwriters over-allotment option is exercised in full)), and (ii) the sale of the private placement warrants for a purchase price of $5,500,000 (or $6,062,500 if the over-allotment option is exercised in full), will be $100.0 million (or $115.0 million if the underwriters over-allotment option is exercised in full). Approximately $100.0 million (or $115.0 million if the underwriters over-allotment option is exercised in full) will be held in the trust account, which includes up to $3,250,000 (or up to $3,737,500 if the underwriters over-allotment option is exercised in full) of deferred underwriting commissions. The remaining approximately $1,000,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $750,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $750,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (which interest shall be net of taxes payable and excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay taxes, if any. We estimate our annual franchise tax obligations, based on the number of shares of our common stock authorized and outstanding after the completion of this offering, to be $39,200. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We do not expect the interest earned on the amount in the trust account will be sufficient to pay our taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. Prior to the completion of our initial business combination, we will have available to us the approximately $1,000,000 of proceeds held outside the trust account. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of Table of Contents prospective target businesses, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our 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. Up to $750,000 of such loans may be convertible into warrants of the post business combination entity at a price of $0.50 per warrant at the option of the lender. The warrants would be identical to the placement warrants issued to the initial holder. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We expect our primary liquidity requirements during that period to include approximately $400,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $150,000 for legal and accounting fees related to regulatory reporting requirements; $55,000 for NASDAQ and other regulatory fees; $210,000 for office space, administrative and support services; $50,000 as a reserve for liquidation expenses and approximately $135,000 for general working capital that will be used for miscellaneous expenses and reserves. These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a no-shop provision (a provision designed to keep target businesses from shopping around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a no-shop provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses. 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, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our business combination. Moreover, we may need to obtain additional financing either to complete our business combination or because we become obligated to redeem a significant number of our public shares upon completion of our 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 complete such financing simultaneously with the completion of our business combination. In the current economic environment, it has become especially difficult to obtain acquisition financing. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations. 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, 2015. Only in the Table of Contents event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, 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 independent registered public accounting firm attestation requirement. Prior to the closing of this offering, 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. Many small and mid-sized target businesses we may consider for our 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. 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 expenses 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 and the sale of the private placement warrants held in the trust account will be invested in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk. Related Party Transactions In September 2013, our sponsor purchased 2,875,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per share. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20.0% of the outstanding shares upon completion of this offering. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued. In October 2013, our sponsor transferred 35,000 founder shares to each of Messrs. Bell, Burns, Shea and Tabet, 10,000 to Mr. Lowrey and 50,000 to Mr. Charlton. These 200,000 founder shares will not be subject to forfeiture in the event the underwriter s overallotment option is not Table of Contents exercised, however, they will be subject to the forfeiture as founder earnout shares described below. If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or a share contribution back to capital, as applicable immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering. We have entered into an Administrative Services Agreement pursuant to which we will also pay an affiliate of our sponsor a total of $10,000 per month for office space, utilities and secretarial support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. As of the date of this prospectus, Hennessy Capital LLC, an affiliate of our sponsor, advanced and loaned an aggregate of $121,000 to our company to be used for a portion of the expenses of this offering. These loans and advances are non-interest bearing, unsecured and are due at the earlier of March 31, 2014 or the closing of this offering. These loans and advances will be repaid upon the closing of this offering out of the $750,000 of offering proceeds that has been allocated to the payment of offering expenses. In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our 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. Up to $750,000 of such loans may be convertible into warrants of the post business combination entity at a price of $0.50 per warrant at the option of the lender. The warrants would be identical to the placement warrants issued to the initial holder. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. Our sponsor has committed to purchase an aggregate of 11,000,000 (or 12,125,000 if the underwriters over-allotment option is exercised in full) private placement warrants at a price of $0.50 per warrant ($5,500,000 in the aggregate or $6,062,500 if the underwriters over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant entitles the holder to purchase one-half of one share of our common stock at $5.75 per share. Our sponsor will be permitted to transfer the private placement warrants held by them to certain permitted transferees, including our executive officers and directors and other persons or entities affiliated with or related to them, but the transferees receiving such securities will be subject to the same agreements with respect to such securities as the sponsor. Otherwise, these warrants will not, subject to certain limited exceptions, be transferable or salable until 30 days after the completion of our business combination. The private placement warrants will be non-redeemable so long as they are held by our sponsor or its permitted transferees (except as described below under Principal Stockholders Transfers of Founder Shares and Private Placement Warrants ). The private placement warrants may also be exercised by the sponsor or its permitted transferees for cash or on a cashless basis. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering. Pursuant to a registration rights agreement we will enter into with our initial stockholders and initial purchasers of the private placement warrants on or prior to the closing of this offering, we may be required to register certain securities for sale under the Securities Act. These holders are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until the securities covered thereby are released from their lock-up restrictions, as Table of Contents described herein. We will bear the costs and expenses of filing any such registration statements. See Certain Relationships and Related Party Transactions. Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results As of December 31, 2013, 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 may 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 a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an emerging growth company , we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) 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. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an emerging growth company, whichever is earlier. Table of Contents PROPOSED BUSINESS Introduction We are a newly organized blank check company incorporated on September 24, 2013 as a Delaware Corporation formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with respect to identifying any business combination target. While we may pursue an acquisition opportunity in any business industry or sector, we intend to focus on industries that complement our management team s background, and to capitalize on the ability of our management team to identify, acquire and operate a business, focusing on the diversified industrial manufacturing and distribution sector in the United States (which may include a business based in the United States which has operations or opportunities outside the United States). Business Opportunity Overview Our acquisition and value creation strategy will be to identify, acquire and, after our initial business combination, to build, a diversified industrial manufacturing or distribution business. Diversified industrial manufacturers and distributors are companies that either manufacture or distribute a broad range of products for various customers and end use markets. Our strategy is based on our management s belief that an industrial renaissance is now underway in the United States. Our management believes that this resurgence is primarily the result of three critical cost factors: labor, natural gas energy (as represented by natural gas prices) and logistics, each of which we believe is quite favorable to the United States when compared with advanced manufacturing nations and increasingly competitive when compared with emerging manufacturing nations such as China. According to BCG, the United States has a labor cost advantage compared to other major manufacturing economies and becoming increasingly competitive with emerging economies such as China: Productivity-adjusted labor costs in the United States are 50% to 80% of those in other major manufacturing economies such as Japan, Germany, France, the U.K., and Italy. In China, the average wage has increased by 15-20% annually compared to the United States at only 2%. The average American worker is also 3x more productive than their Chinese counterpart driving an even further deterioration of China s advantage on a productivity-adjusted basis. Table of Contents Source: Made in America Again... The New Economics of Global Manufacturing , BCG (January 16th, 2013). We believe that energy costs in the United States will become comparatively cheaper, especially with the recent discoveries of abundant shale gas and new technologies in oil and gas extraction: The United States has a significant energy cost advantage over other advanced economies which can result in lower utility and energy bills and raw material input prices for certain industries. In addition to increased manufacturing costs, shipping costs globally, as represented by the Baltic Dry Index (BDI), have almost tripled since their relatively low levels in 2012, and just-in-time inventory requirements and shorter product life cycles necessitate that production and end-markets be co-located. World LNG Landed Prices (USD / MMBtu) Source: World LNG Prices Federal Energy Regulatory Commission (FERC) Market Oversight, Oct 2013 Note: Prices estimated for November 2013; U.S. price estimates are an average of Cove Point and Lake Charles price estimates. Table of Contents We believe these factors come together and leave the United States with an advantage on a total landed cost basis, as represented by Average Manufacturing Cost Structures: According to BCG, taking into account items such as increased productivity-adjusted wage costs, energy costs and supply chain costs, the United States is expected to have lower manufacturing costs than other advanced manufacturing nations and become increasingly competitive with China. By 2015, it is estimated that China will retain only a 6% cost advantage over the United States. Major Exporting Nation Average Manufacturing Costs: 2015 Projections (Index U.S. = 100) Source: US Census; Bureau of Labor Statistics; Bureau of Economic Analysis; ILO; Made in America Again... The New Economics of Global Manufacturing , BCG (January 16th, 2013). Notes: 1. No difference assumed in Other costs (e.g., raw material inputs etc.). Differences in values a function of the industry mix of each export country. U.S. figures represent costs in a set of select lower-cost states as defined in BCG publications. 2. Chinese figures represent Yangtze River Delta region. Table of Contents Business Strategy Summary The chart below summarizes the origination, investment management and value creation strategy that our Chairman and Chief Executive Officer, Daniel J. Hennessy, has developed for Hennessy Capital, an affiliate of our sponsor, and which we would seek to replicate: Competitive Strengths Mr. Daniel J. Hennessy. Hennessy Capital is the managing member of our sponsor and was founded by Daniel J. Hennessy, our Chairman and Chief Executive Officer in 2013. Mr. Hennessy is also a partner at Code Hennessy & Simmons (n/k/a CHS Capital or CHS ) a middle market private equity investment firm he co-founded in 1988. Over a 25 year period, CHS invested $2.8 billion in 395 operating companies with aggregate revenues of approximately $15 billion. Mr. Hennessy serves as a member of CHS s Investment Committee, and served as the lead partner for a number of CHS s industrial, infrastructure and energy industry platform company investments. Most recently he originated and co-led the portfolio company acquisitions of Thermon Group Holdings (NYSE: THR), or Thermon, in 2010 and Dura-Line Holdings, or Dura-Line, in 2012 for CHS Private Equity V LP. He continues to serve as Chairman of Dura-Line. Thermon designs and manufactures electric heat-tracing and thermal control systems for energy and process industries. Dura-Line manufactures high density polyethylene (HDPE) conduit and pressure pipe solutions for telecom, datacom, water infrastructure and upstream energy and natural gas distribution markets. Mr. Hennessy has over 25 years of middle-market private equity investment experience, dedicated almost entirely to investments in industrial manufacturing and distribution operating companies. He has initiated and overseen numerous add-on acquisitions, divestitures, IPO s and debt capital markets issues for CHS-owned companies and is well known by the most active middle-market investment banks and debt financing sources that will be called upon to assist us in executing on its strategy. Our board of directors. We have assembled a group of independent directors that will bring us public company governance, executive leadership, operations oversight, private equity investment management and capital markets experience. Our Board members have extensive experience, having served as directors, CEO s, CFO s or in other executive and advisory capacities for numerous Table of Contents publicly-listed and privately-owned companies. Our directors have experience with acquisitions, divestitures and corporate strategy and implementation, which we believe will be of significant benefit to us as we evaluate potential acquisition or merger candidates as well as following the completion of our initial business combination. Our network of third party advisors. We intend to utilize what our management believes is an accomplished and proven network of third party advisors to help assist with target company evaluation, due diligence and implementation of value creation programs and activities following our initial business combination. This network has assisted Mr. Hennessy in executing on human capital, performance improvement, strategic growth and equity capital markets initiatives. We believe this combination of resources is unique and provides us with a truly differentiated value proposition for investors, sellers, target companies and their management teams. Initial Business Combination The Nasdaq rules require that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, with respect to the satisfaction of such criteria. We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires 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 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. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. Consistent with this strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. Middle-Market Business. We will seek to acquire one or more businesses with an enterprise value of approximately $200,000,000 to $500,000,000, determined in the sole discretion of our officers and directors according to reasonably accepted valuation standards and methodologies. We believe that the middle market segment provides the greatest number of opportunities for Table of Contents investment and is the market consistent with our sponsor s previous investment history. This segment is where we believe we have the strongest network to identify opportunities. Established Companies with Proven Track Records. We will seek to acquire established companies with consistent historical financial performance. We will typically focus on companies with a history of strong operating and financial results and strong fundamentals. We do not intend to acquire start-up companies or companies with recurring negative free cash flow. Companies with, or with the Potential for, Strong Free Cash Flow Generation. We will seek to acquire one or more businesses that already have, or have the potential to generate, consistent, stable and increasing free cash flow. We will focus on one or more businesses that have predictable revenue streams. Strong Competitive Position. We intend to focus on targets that have a leading, growing or niche market position in their respective industries. We will analyze the strengths and weaknesses of target businesses relative to their competitors. We will seek to acquire a business that demonstrates advantages when compared to their competitors, which may help to protect their market position and profitability. Experienced Management Team. We will seek to acquire one or more businesses with a complete, experienced management team that provides a platform for us to further develop the acquired business s management capabilities. We will seek to partner with a potential target s management team and expect that the operating and financial abilities of our executive team and board will complement their own capabilities. Companies with Revenue and Earnings Growth or Potential for Revenue and Earnings Growth. We will seek to acquire one or more businesses that have achieved or have the potential for significant revenue and earnings growth through a combination of organic growth, new product markets and geographies, increased production capacity, expense reduction, synergistic add-on acquisitions and increased operating leverage. Sectors Exhibiting Secular Growth or with Potential for Cyclical Uptick. We intend to focus on targets in sectors which exhibit positive secular growth or potential for near-term cyclical uptick. We plan to identify sectors that have demonstrated strong positive growth in recent years, possess drivers for continued growth and are strategically positioned to benefit from upswings in their respective industry cycles. Benefit from Being a Public Company. We intend to acquire a company that will benefit from being publicly traded and can effectively utilize the broader access to capital and public profile that are associated with being a publicly traded company. These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. Over the course of their careers, the members of our management team and board of directors have developed a broad network of contacts and corporate relationships that we believe will serve as a useful source of investment opportunities. This network has been developed through our management team s: experience in sourcing, acquiring, operating, developing, growing, financing and selling businesses; and experience in executing transactions under varying economic and financial market conditions. This network has provided our management team with a flow of referrals that have resulted in numerous transactions. We believe that the network of contacts and relationships of our management team will provide us with an important source of investment opportunities. In addition, we anticipate Table of Contents that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment banking firms, consultants, accounting firms and large business enterprises. Certain members of our management team have spent significant portions of their careers working with businesses in the diversified industrial manufacturing and distribution sector, and have developed a wide network of professional services contacts and business relationships in that industry. The members of our board of directors also have significant executive management and public company experience with diversified industrial manufacturing and distribution companies. In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial and other information which will be made available to us. We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA, that our initial business combination is fair to our company from a financial point of view. Members of our management team may directly or indirectly own common stock and warrants following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. We do not believe, however, that the fiduciary duties or contractual obligations of our executive officers will materially affect our ability to complete our business combination. Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written letter agreement, not to participate in the formation of, or become an officer or director of, any other blank check company until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within 21 (or 24) months after the closing of this offering. None of our officers or directors has been involved with any blank check companies or special purpose acquisition corporations in the past. Our executive offices are located at 10 South Wacker Drive, Suite 3175, Chicago, IL 60606 and our telephone number is (312) 876-1956. 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 Table of Contents specific needs of the sellers. Although there are various costs and obligations associated with being a public company, we believe target businesses will 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, road show and public reporting efforts that may not be present to the same extent in connection with a business combination with us. Furthermore, once a proposed business combination is completed, 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, which 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 stockholders interests. It can offer further benefits by augmenting a company s profile among potential new customers and vendors and aid in attracting talented employees. We are an emerging growth company, as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. Financial Position With funds available for a business combination initially in the amount of $96,750,000 assuming no redemptions and after payment of up to $3,250,000 of deferred underwriting fees (or $111,262,500 after payment of up to $3,737,500 of deferred underwriting fees if the underwriters over-allotment option is exercised in full), we offer a target business a variety of options such as creating a liquidity event for its owners, 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 complete our 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, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us. Effecting our Initial Business Combination General We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the private placement warrants, our capital stock, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses. If our initial business combination is paid for using stock or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our business combination or used for redemptions of purchases of our common stock, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. Table of Contents We have not identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions with respect to identifying any business combination target. From the period prior to our formation through the date of this prospectus, there have been no communications or discussions between any of our officers, directors or our sponsor and any of their potential contacts or relationships regarding a potential initial business combination. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly, to locate or contact a target business. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely impact a target business. We may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account. Subject to compliance with applicable securities laws, we would complete such financing only simultaneously with the completion of our business combination. In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise. Origination and Sourcing of Target Business Opportunities We believe our management team s extensive private equity investment and transaction experience, along with relationships with intermediaries and companies, will provide us with a substantial number of potential business combination targets. Over the course of their careers, the members of our board and management team have developed a broad network of contacts and corporate relationships around the world. This network has been developed over the course of 25 years, in the case of our Chairman and Chief Executive Officer. Specifically our Chairman and Chief Executive Officer has evaluated hundreds of industrial sector targets in the last three years on behalf of CHS Capital, which has led to two platform company acquisitions: Thermon and Dura-Line. In addition, numerous add-on acquisition targets have been sourced for those two platform companies with three successfully closed and several more pending, all at valuations substantially lower than the original platform company valuation. However, you should not rely on these valuations as indicative of our future performance. We expect that the management team s network of existing contacts and relationships will be able to deliver a flow of potential platform and add-on acquisition opportunities which are proprietary or where a limited group of established, credentialed buyers have been invited to participate in the sale process. In addition, we anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest non-core assets or divisions. We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, executive officers or directors, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking or accounting firm that is a member of FINRA that such an Table of Contents initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context. As more fully discussed in Management Conflicts of Interest, if any of our executive officers 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 or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. All of our executive officers currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us. We anticipate that target business candidates will also be brought to our attention from various unaffiliated sources, including investment bankers, private investment funds and other intermediaries. 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. 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. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the track record and business relationships of our officers and directors. Selection of a target business and structuring of our initial business combination The Nasdaq rules require that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from independent investment banking firm that is a member of FINRA with respect to the satisfaction of such criteria. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations. In any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be valued for purposes of the 80% of net assets test. There is no basis for investors in this offering to evaluate the possible merits or risks of any target business with which we may ultimately complete our business combination. To the extent we effect our business combination with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors. Table of Contents In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial and other information which will be made available to us. The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. Lack of business diversification For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our 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 on the particular industry in which we operate after our initial business combination, and cause us to depend on the marketing and sale of a single product or limited number of products or services. Limited ability to evaluate the target s management team Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our business combination with that business, our assessment of the target business s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following our business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination. Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management. Stockholders may not have the ability to approve our initial business combination We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented in Table of Contents USE OF PROCEEDS We are offering 10,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private placement warrants will be used as set forth in the following table. Without Over- Allotment Option Purchase of assets No Purchase of stock of target not involving a merger with the company No Merger of target into a subsidiary of the company No Merger of the company with a target Yes Under NASDAQ s listing rules, stockholder approval would be required for our initial business combination if, for example: we issue common stock that will be equal to or in excess of 20% of the number of shares of our common stock then outstanding; any of our directors, officers or substantial shareholders (as defined by NASDAQ rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common shares or voting power of 5% or more; or the issuance or potential issuance of common stock will result in our undergoing a change of control. Permitted purchases of our securities In the event we seek stockholder approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares in such transactions. They will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. Subsequent to the consummation of this offering, we will adopt an insider trading policy which will require insiders to: (i) refrain from purchasing shares during certain blackout periods and when they are in possession of any material nonpublic information and (ii) to clear all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either enter make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary. In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Over- Allotment Option Exercised Table of Contents The purpose of such purchases would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our business combination that may not otherwise have been possible. In addition, if such purchases are made, the public float of our common stock may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. Our sponsor, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against the business combination. Our sponsor, officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M and the other federal securities laws. Any purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Redemption rights for public stockholders upon completion of our initial business combination We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares they may hold in connection with the completion of our business combination. Manner of Conducting Redemptions We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of common stock upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our Gross proceeds Gross proceeds from units offered to public(1) $ 100,000,000 $ 115,000,000 Gross proceeds from private placement warrants offered in the private placement 5,500,000 6,062,500 Total gross proceeds $ 105,500,000 $ 121,062,500 Offering expenses(2) Underwriting commissions (3.75% of gross proceeds from units offered to public, excluding deferred portion)(3) $ 3,750,000 $ 4,312,500 Legal fees and expenses 250,000 250,000 Printing and engraving expenses 45,000 45,000 Accounting fees and expenses 45,000 45,000 SEC Expenses 14,812 14,812 FINRA Expenses 17,750 17,750 Travel and road show 20,000 20,000 Directors and officers insurance 125,000 125,000 NASDAQ listing and filing fees 50,000 50,000 Miscellaneous expenses 182,438 182,438 Total offering expenses (other than underwriting commissions) $ 750,000 $ 750,000 Proceeds after offering expenses $ 101,000,000 $ 116,000,000 Held in trust account(3) $ 100,000,000 $ 115,000,000 % of public offering size 100 % 100 % Not held in trust account $ 1,000,000 $ 1,000,000 The following table shows the use of the approximately $1,000,000 of net proceeds not held in the trust account(4). Amount Table of Contents outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirement or we choose to seek stockholder approval for business or other legal reasons. If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation: conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. Upon the public announcement of our business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act. In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares which are not purchased by our sponsor, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC s penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination. If, however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation: conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and file proxy materials with the SEC. In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. In such case, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. Each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. In addition, our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of a business combination. % of Total Table of Contents Our amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC s penny stock rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders thereof. Limitation on redemption upon completion of our initial business combination if we seek stockholder approval Notwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 10% of the shares sold in this offering could threaten to exercise its redemption rights if such holder s shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders ability to redeem no more than 10% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders ability to vote all of their shares (including Excess Shares) for or against our business combination. Tendering stock certificates in connection with a tender offer or redemption rights We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials, 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 tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares. Legal, accounting, due diligence, travel, and other expenses in connection with any business combination(5) $ 400,000 40.0 % Legal and accounting fees related to regulatory reporting obligations 150,000 15.0 % Payment for office space, administrative and support services 210,000 21.0 % Reserve for liquidation expenses 50,000 5.0 % Nasdaq continued listing fees 55,000 5.5 % Other miscellaneous expenses (including franchise taxes) 135,000 13.5 % Total $ 1,000,000 100.0 % Table of Contents There is a nominal cost associated with the above-referenced 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 $35.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated. The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies 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 or her redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an option window after the completion of the business combination during which he or she could monitor the price of the company s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become option rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder s election to redeem is irrevocable once the business combination is approved. Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the stockholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our business combination. If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares. If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period). Redemption of public shares and liquidation if no initial business combination Our sponsor, executive officers, directors and director nominees have agreed that we will have only 21 months from the closing of this offering to complete our initial business combination (or 24 months, as applicable). If we are unable to complete our business combination within such 21-month period (or 24-month period, as applicable), 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 the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $50,000 of interest to pay dissolution expenses (which interest shall be net of taxes payable) divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders Table of Contents (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 each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our business combination within the 21-month time period (or 24-month time period if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period). Our initial stockholders have entered into letter agreements with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period). However, if our initial stockholders acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 21-month (or 24-month, as applicable) time period. Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 21 months from the closing of this offering (or 24 months, as applicable), unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC s penny stock rules). We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $1,000,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $50,000 of such accrued interest to pay those costs and expenses. If we were to expend all of the net proceeds of this offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors claims. Although we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the Table of Contents benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust account, Mr. Hennessy has agreed that he will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets other than due to the failure to obtain such waiver, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then Mr. Hennessy will not be responsible to the extent of any liability for such third-party claims. We cannot assure you, however, that Mr. Hennessy would be able to satisfy those obligations. None of our other officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses. In the event that the proceeds in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets other than due to the failure to obtain such waiver, in each case net of the amount of interest which may be withdrawn to pay taxes, and Mr. Hennessy asserts that he is unable to satisfy his indemnification obligations or that he has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against Mr. Hennessy to enforce their indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against Mr. Hennessy to enforce his indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be substantially less than $10.00 per share. We will seek to reduce the possibility that Mr. Hennessy will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Mr. Hennessy will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to approximately $1,000,000 from the proceeds of this offering with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $50,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who Table of Contents received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $750,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $750,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. Under the DGCL, 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 our public shares in the event we do not complete our business combination within 21 months (or 24 months, as applicable) from the closing of this offering may be considered a liquidation distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL 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 our public shares in the event we do not complete our business combination within 21 months from the closing of this offering (or 24 months, as applicable), 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 DGCL, 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 our business combination within 21 months from the closing of this offering (or 24 months, as applicable), 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 the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of the amount of interest which may be withdrawn to pay taxes and less up to $50,000 of interest to pay dissolution expenses), , divided by the number of then 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 each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 21st month (or 24th month, as applicable) 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, Section 281(b) of the DGCL 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. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. Table of Contents As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, Mr. Hennessy may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets other than due to the failure to obtain such waiver, in each case net of the amount of interest withdrawn to pay taxes and less any per-share amounts distributed from our trust account to our public stockholders in the event we are unable to complete our business combination within 21 months (or 24 months, as applicable) from the closing of this offering and will not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, Mr. Hennessy will not be responsible to the extent of any liability for such third-party claims. If we file a bankruptcy petition or an involuntary bankruptcy petition 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. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that 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, our board may be viewed as having breached its fiduciary duty 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. We cannot assure you that claims will not be brought against us for these reasons. Our public stockholders will be entitled to receive funds from the trust account only in the event of the redemption of our public shares if we do not complete our business combination within 21 months (or 24 months, as applicable) from the closing of this offering or if they redeem their respective shares for cash upon the completion of the initial business combination. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder s voting in connection with the business combination alone will not result in a stockholder s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights described above. 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 stockholders rights or pre-business combination activity, we will provide dissenting public stockholders with the opportunity to redeem their public shares in connection with any such vote. Our initial stockholders have agreed to waive any redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination. Specifically, our amended and restated certificate of incorporation provides, among other things, that: prior to the consummation of our initial business combination, we shall either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account, including interest(which interest shall be net of taxes payable) or (2) provide our stockholders with the opportunity to tender their shares to us by Table of Contents means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) in each case 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, solely if we seek stockholder approval, a majority of the outstanding shares of common stock voted are voted in favor of the business combination; if our initial business combination is not consummated within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period), then our existence will terminate and we will distribute all amounts in the trust account; and prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination. These provisions cannot be amended without the approval of holders of 65% of our common stock. In the event we seek stockholder approval in connection with our initial business combination, our amended and restated certificate of incorporation provides that we may consummate our initial business combination only if approved by a majority of the shares of common stock voted by our stockholders at a duly held stockholders meeting. Comparison of redemption or purchase prices in connection with our initial business combination and if we fail to complete our business combination. The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we are unable to complete our business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period). Calculation of redemption price Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per share), including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination. If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following completion of our initial business combination. Such purchases will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. None of the funds in the trust account will be used to purchase shares in such transactions. If we are unable to complete our business combination within 21 months from the closing of this offering (or 24 months, as applicable), we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account (which is initially anticipated to be $10.00 per share), including interest (less up to $50,000 of interest to pay dissolution expenses, which interest shall be net of taxes payable) divided by the number of then outstanding public shares. Table of Contents The following table sets forth information with respect to our initial stockholders and the public stockholders: Shares Purchased Escrow of offering proceeds The rules of the Nasdaq Capital Market provide that at least 90% of the gross proceeds from this offering and the private placement be deposited in a trust account. Approximately $100,000,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee. Approximately $88,650,000 of the offering proceeds, representing the gross proceeds of this offering less allowable underwriting commissions, expenses and company deductions under Rule 419, 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 Approximately $100,000,000 of the net offering proceeds and the sale of the private placement warrants held in trust will be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States. Total Consideration Receipt of interest on escrowed funds Interest on proceeds from the trust account to be paid to stockholders is reduced by (i) any taxes paid or payable and (ii) in the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $50,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation. Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination. Limitation on fair value or net assets of target business The Nasdaq rules require that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds. Trading of securities issued The units will begin trading on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Deutsche Bank Securities Inc. informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. We will file the Current Report on Form 8-K promptly after the closing of this offering, which is anticipated to take place three business days from the date of this prospectus. If the over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option. No trading of the units or the underlying common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account. Number Exercise of the warrants The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination or 12 months from the closing of this offering. The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account. Election to remain an investor We will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest, which interest shall be net of taxes payable, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by law to hold a stockholder vote. If we are not required by law and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC s proxy rules. If, however, we hold a stockholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. A prospectus containing information pertaining to the business combination 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 a post-effective amendment to the company s registration statement, to decide if he, she or it elects to remain a stockholder of the company or require the return of his, her or its 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 are automatically returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued. Percentage Business combination deadline If we are unable to complete an initial business combination within 21 months from the closing of this offering (or 24 months, as applicable), 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 public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable and less up to $50,000 of interest to pay dissolution expenses) divided by the number of then 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 each case 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 completed within 21 months after the effective date of the company s registration statement, funds held in the trust or escrow account are returned to investors. Release of funds Except for the withdrawal of interest to pay taxes, none of the funds held in trust (including the interest on such funds) will be released from the trust account until the earlier of (i) the completion of our initial business combination or (ii) the redemption of 100% of our public shares if we are unable to complete a business combination within the required time frame (subject to the requirements of applicable law). The proceeds held in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time. Competition In identifying, evaluating and selecting a target business for our business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources Amount Table of Contents than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination. Facilities We currently maintain our executive offices at 10 South Wacker Drive, Suite 3175, Chicago, IL 60606. The cost for this space is included in the $10,000 per month fee that we pay an affiliate of our sponsor for office space, utilities and secretarial and administrative services. We consider our current office space adequate for our current operations. Employees We currently have three executive officers. Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that Mr. Hennessy or any other members of our management will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process. Periodic Reporting and Financial Information We will register our units, common stock and warrants 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 reports will contain financial statements audited and reported on by our independent registered public auditors. We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with GAAP. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance with GAAP. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material. We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2015 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control procedures audited. 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. Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our business transaction. Percentage Table of Contents We are an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by 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, 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. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities 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 will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to emerging growth company shall have the meaning associated with it in the JOBS Act. Legal Proceedings There is no material litigation, arbitration or governmental proceeding currently pending 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 12 months preceding the date of this prospectus. Average Price per Share Daniel J. Hennessy 56 Chairman of the Board of Directors & Chief Executive Officer Kevin Charlton 47 President, Chief Operating Officer and Director Charles B. Lowrey II 49 Executive Vice President, Chief Financial Officer and Secretary Bradley Bell 61 Director Nominee and Chairman of the Audit Committee Peter Shea 62 Director Nominee and Chairman of the Compensation Committee Richard Burns 60 Director Nominee Joseph Tabet 50 Director Nominee Daniel J. Hennessy, our Chairman and Chief Executive Officer since September 2013, is also the Chairman and Chief Executive Officer of Hennessy Capital LLC, a private equity investment firm he established in 2013. He was a founding partner of Code Hennessy & Simmons LLC (n/k/a CHS Capital LLC or CHS ) in 1988, a Chicago-based middle market private equity investment firm, and remains a partner with CHS. Over a 25 year period, CHS invested $2.8 billion in 395 operating companies with aggregate revenues of approximately $15 billion. He serves as a member of CHS s Investment Committee and served as the lead partner for a number of CHS s industrial, infrastructure and energy industry platform company investments. Mr. Hennessy has served as Chairman of the Board and Director of CHS portfolio companies that manufacture and distribute a broad array of products serving the diversified industrial, energy and packaging sectors including Dura-Line Holdings, a communications and energy infrastructure company from January 2012 to the present, Thermon Group Holdings (NYSE: THR), a heat tracing company focused on the external application of heat to pipes, tanks and instrumentation from April 2010 to May 2011, Penhall International, a provider of concrete cutting, breaking, excavation and highway grinding services, from July 2006 to November 2010, GSE Environmental (NYSE: GSE), a supplier of geosynthetic liners and products, from May 2004 to December 2011, WNA, a designer of upscale disposable items, from 2002 to 2007 and Kranson Industries, a supplier of glass and plastic containers, from 1999 to 2004. In 2009, EDH Properties, LLC, a family investment vehicle for which Mr. Hennessy was the managing member, filed a petition for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code. A plan of reorganization was confirmed by the court in 2010 and the lender received payment of the full principal amount. Prior to forming CHS, Mr. Hennessy was employed by Citicorp from 1984 to 1988 as head of the Midwest Region for Citicorp Mezzanine Investments and Vice President and Team Leader with Citicorp Leveraged Capital Group. He began his career in 1981 in the oil and gas lending group at Continental Illinois National Bank (now Bank of America) where he was a Banking Officer. Mr. Hennessy holds a B.A. degree, magna cum laude, from Boston College and an M.B.A. from the University of Michigan Ross School of Business. Mr. Hennessy is well qualified to serve as director due to his experience in private equity and public and private company board governance, as well as his background in finance. Kevin M. Charlton, our President and Chief Operating Officer since October 2013 and one of our directors as of the effective date of the registration statement of which this prospectus forms part, is also is the Managing Partner of River Hollow Partners, a private equity firm he founded in July 2013 to focus on the lower mid-market. Prior to that, from August 2009 to June 2013, Mr. Charlton was a Managing Director in the Principal Transactions Group of Macquarie Capital (USA) Inc., and led a team that oversaw its existing portfolio of North American investments. Prior to joining Macquarie Capital (USA) Inc. in August 2009, Mr. Charlton worked as Managing Director at Investcorp International, a mid-market private equity firm, from August 2002 to June 2009. Prior to joining Investcorp International in August 2002, he worked for JPMorganChase and McKinsey & Company and as a contractor in the Astrophysics Division at NASA Headquarters. Mr. Charlton has served on the boards of over 15 private companies and their subsidiaries in a variety of roles, with significant industrial experience in businesses Initial Stockholders(1) 2,500,000 20.00 % $ 25,000 0.02 % $ 0.01 Public Stockholders 10,000,000 80.00 100,000,000 99.98 $ 10.00 12,500,000 100.0 % $ 100,025,000 100.0 % Table of Contents such as Neptune Technologies, a manufacturer of water meters and metering systems, Synthetic Industries, a manufacturer of industrial fabrics, and Brek Manufacturing, an aerospace components manufacturer. Since January 2010 he has been a member of the Board of Directors of Spirit Realty Corporation (NYSE: SRC), a triple-net real estate investment trust that went public in September 2012, where he is a member of the Compensation and Governance Committees. He received a Masters in Business Administration with honors from the Kellogg School of Management at Northwestern University in June 1995, a Masters of Science in Aerospace Engineering with Distinction from the University of Michigan in June 1990, and a Bachelors of Science in Engineering Cum Laude from Princeton University in June 1988. Mr. Charlton is well qualified to serve as director due to his experience in private equity and public and private company governance, as well as his background in industrial business. Charles B. Lowrey II, our Chief Financial Officer, Executive Vice President and Secretary, has served in such role since October 2013. From January 2013 to September 2013, he served as Chief Financial Officer of The Scooter Store, a provider of mobility products, where he worked with a new Chief Executive Officer to develop a restructuring and business model overhaul plan to drive the restructuring and re-capitalization of The Scooter Store. In April 2013, The Scooter Store filed for bankruptcy protection in Delaware and in September 2013, The Scooter Store completed its liquidation plan. Prior to this, from January 2012 to January 2013, he served as Chief Financial Officer and Interim President of Marlin Midstream, LLC, a midstream energy company offering natural gas gathering, compression, dehydration, treating, processing, and marketing services, which he helped to restructure and make ready for its initial public offering. From November 2004 to February 2012, Mr. Lowrey a Managing Director at Alvarez & Marsal Business Consulting, LLC, and a National Practice Leader in their Private Equity Services division, where he was responsible for both interim and advisory roles in crisis situations. Mr. Lowrey specialized at A&M in interim CFO and other leadership roles, finance and accounting process and controls improvement, merger integration, liquidity and cash management, and business intelligence. Mr. Lowrey has a BS in Economics and Computer Information Systems from Houston Baptist University, as well as an MBA with a concentration in accounting from the University of Houston. Bradley Bell, one of our independent directors as of the effective date of the registration statement of which this prospectus forms part, who will serve as the chairman of our audit committee, also currently serves (since 2001) as a director of IDEX Corporation (NYSE:IEX) a global industrial company with key growth platforms in Fluid Metering Technology and Health & Science Technology segments, where since April 2010 he chairs the Nominating and Corporate Governance Committee and since April 2011 serves on the Compensation Committee, Compass Minerals Corporation (NYSE:CMP) an international mining company with operations in salt and specialty fertilizers where he has been a director since 2003 and chair of the Compensation Committee since May 2010 and a member of the Nominating and Corporate Governance Committee since May 2009, Coskata Company, a pre-revenue biomass startup with proprietary technology for the production of fuels and chemicals utilizing anaerobic microorganisms where he has been chairman of the audit committee since September 2009, and as a director of Virent Corporation, a pre-revenue company deriving fuels and chemicals from bio-materials and plant sugars utilizing catalytic processes, since January 2012. From November 2003 to December 2010, Mr. Bell served as Executive Vice President of Nalco Corporation, an industrial water treatment and energy services company. Mr. Bell has over 30 years combined experience as an executive in the technology and manufacturing industries, including positions at Rohm and Haas Company, Whirlpool Corporation and Bundy Corporation. Through his experience, Mr. Bell has developed financial expertise and experience in mergers and acquisitions, private equity and capital markets transactions. He has held directorships at publicly traded companies for over 20 years, during which he chaired governance, audit and compensation committees. Through his executive experience and board memberships, Mr. Bell has acquired training and experience in corporate governance and executive compensation. Mr. Bell received a bachelor of science degree in finance with high honors from the University of Illinois and a master of business administration degree with distinction from Harvard University. Mr. Bell is well qualified to serve as director due to his experience in public and private company governance and accounting, including his service on audit, nominating and corporate governance and compensation committees. Table of Contents Peter Shea will be one of our independent directors as of the effective date of the registration statement of which this prospectus forms part, and will serve as the chairman of our compensation committee. From January 2010 to the present, Mr. Shea has been a private equity advisor. He has been a director of Viskase Companies, a supplier of cellulose and fibrous casings, from October 2006 to the present, where he is currently a member of the Audit Committee and previously served as chairman of the Compensation Committee. He has also serves as a director of Sitel Worlwide Corporation, a customer care solutions provider, since October 2011 and Give and Go Prepared Foods, a bakery manufacturer, since January 2012. He was a Director of CTI Foods, a processor of protein and soup products for quick serve restaurant chains from May 2010 to July 2013. Mr. Shea was President of Icahn Enterprises (IEP:NYSE) from October 2006 to June 2009 and during the same period led Portfolio Company Operations for Icahn Associates, Carl Icahn s private portfolio. Mr. Shea served as a director of each of the following companies from October 2006 to May 2009: XO Holdings, a telecommunications services provider, American Railcar, a manufacturer of covered hopper and tank railcars, WestPoint International, a home textiles manufacturer and PSC Metals, a national operator of scrap yards. From 2002 to 2006 Mr. Shea was an independent consultant to various companies, an advisor to private equity firms and a director of Sabert Company, a packaging company. Mr. Shea has also served as a director, Chairman, Executive Chairman, Chief Executive Officer, President or Managing Director of a variety of companies including H.J. Heinz Company in Europe, a manufacturer and marketer of a broad line of food products across the globe, John Morrell & Company, Specialty Meats Company, each aninternational meat processing firm, Grupo Polymer United in Latin America, a plastics manufacturer, Roncadin GmbH, a food processor operating across Europe, Premium Standard Farms, New Energy Company of Indiana and United Brands Company where he was Head of Global Corporate Development. He has an MBA from the University of Southern California and a BBA from Iona College. Mr. Shea is well qualified to serve as a director due to his experience in public and private company governance and private equity, including his service on numerous corporate boards and on audit and compensation committees. Richard Burns, one of our independent directors as of the effective date of the registration statement of which this prospectus forms a part (and who will serve as the chairman of our corporate governance and nominating committee if such committee is constituted) also serves as a Senior Advisor to McKinsey & Company, consulting with telecom service providers, suppliers, and private equity investors, and has done so since April 2008. He also serves on the boards of GeorgiasOwn Credit Union, a consumer retail financial services firm, since 2002, where he has headed the most recent CEO search committee, Unison Site Management, a cell site management firm, since March 2010 and Dura-Line Holdings, an international manufacturer and distributor of communications and energy infrastructure products, since January 2012, where he also chairs the Compensation Committee, and serves as a member of the corporate governance committee. Mr. Burns has over 35 years of combined executive experience in telecommunications, including landline, telnet and wireless networks. He served as an officer of BellSouth from 2002 to 2006, holding a number of positions including Chief Integration Officer for Broadband Transformation, President of Bellsouth Broadband and Internet Services, and Chief Supply Chain Officer. He also served as an officer of AT&T from December 2006 to March 2008, as President of AT&T s Wireless Network. Through his experience, Mr. Burns has developed expertise in operations, mergers, financial management, and private equity investment. Through his executive experience and board service Mr. Burns has acquired both experience and training in corporate governance, executive compensation, and finance. Mr. Burns received both his Bachelor and Master s Degrees in Engineering from the University of Louisville, and an MBA from Vanderbilt University with Honors. Mr. Burns is well qualified to serve as a director due to his executive experience in large public companies, as well his board experience in privately held firms. Joseph Tabet, one of our independent directors as of the effective date of the registration statement of which this prospectus forms part, is also a partner in the Private Client Advisors group at William Blair & Company, and has served in such role since June, 2004. At William Blair, he currently manages money for high-net-worth individuals, retirement plans, and small businesses as well as international institutional clients, and has analyzed and advised on initial public offerings as well as Table of Contents CAPITALIZATION The following table sets forth our capitalization at December 31, 2013, and as adjusted to give effect to the filing of our amended and restated certificate of incorporation, the sale of our units in this offering and the private placement warrants and the application of the estimated net proceeds derived from the sale of such securities: December 31, 2013 Table of Contents follow-on offerings. From 1992 to 2004, he was a member of the Chicago Mercantile Exchange and Chicago Board of Trade, during which time he actively managed a proprietary fund. Mr. Tabet began his career at Thomson McKinnon Securities, Inc., a brokerage and investment banking firm, where he managed an equity partnership for the Resolution Trust Corporation. Following Thomson McKinnon s acquisition by Prudential-Bache Securities, Inc., Mr Tabet went on to work for Prudential Bache and later The MONY group as a financial advisor before joining William Blair in 2004. Mr. Tabet was a Woods Scholar at Hillsdale College, Michigan, where he graduated with a B.A. in philosophy; he later earned an M.B.A. in finance from the University of Illinois. Mr. Tabet is well qualified to serve as director due to his experience in finance and money management, and his experience performing due diligence and analysis on public and private companies. Number and Terms of Office of Officers and Directors Our board of directors is divided into two classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a two-year term. The term of office of the first class of directors, consisting of Messrs. Shea, Burns and Tabet, will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Messrs. Hennessy, Charlton and Bell, will expire at the second annual meeting of stockholders. We do not currently intend to hold an annual meeting of stockholders until after we consummate our initial business combination. Our officers are elected by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, Secretary, Assistant Secretaries, Treasurer and such other offices as may be determined by the board of directors. Director Independence NASDAQ listing standards require that a majority of our board of directors be independent. An independent director 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 board of directors has determined that Messrs. Bell, Shea, Burns and Tabet are independent directors as defined in the NASDAQ listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present. Executive Officer and Director Compensation None of our executive officers, directors or director nominees have received any cash (or non-cash) compensation for services rendered to us. Commencing on the date that our securities are first listed on the NASDAQ through the earlier of consummation of our initial business combination and our liquidation, we will pay an affiliate of our sponsor a total of $10,000 per month for office space, utilities and secretarial support. Our sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our independent directors will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates. After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. It is unlikely the amount of such compensation will be known at the Actual Table of Contents time, because the directors of the post-combination business will be responsible for determining executive and director compensation. Any compensation to be paid to our officers will be determined by a compensation committee constituted solely by independent directors. We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with us after the initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment. Committees of the Board of Directors Upon the effective date of the registration statement of which this prospectus forms part, our board of directors will have two standing committees: an audit committee and a compensation committee. Both our audit committee and our compensation committee will be composed solely of independent directors. Audit Committee Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish an audit committee of the board of directors. Messrs. Bell, Burns and Tabet will serve as members of our audit committee. Mr. Bell will serve as chairman of the audit committee. Under the NASDAQ listing standards and applicable SEC rules, we are required to have three members of the audit committee, all of whom must be independent. Messrs. Bell, Burns and Tabet are independent. Each member of the audit committee is financially literate and our board of directors has determined that Mr. Bell qualifies as an audit committee financial expert as defined in applicable SEC rules. Responsibilities of the audit committee include: the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us; pre-approving all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence; setting clear hiring policies for employees or former employees of the independent auditors; setting clear policies for audit partner rotation in compliance with applicable laws and regulations; obtaining and reviewing a report, at least annually, from the independent auditors describing (i) the independent auditor s internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within, the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; As Adjusted(1) Table of Contents reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. Compensation Committee Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a compensation committee of the board of directors. The members of our Compensation Committee will be Messrs. Shea, Bell and Burns. Mr. Shea will serve as chairman of the compensation committee. We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including: reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer s compensation, evaluating our Chief Executive Officer s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer s based on such evaluation; reviewing and approving the compensation of all of our other executive officers; reviewing our executive compensation policies and plans; implementing and administering our incentive compensation equity-based remuneration plans; assisting management in complying with our proxy statement and annual report disclosure requirements; approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; producing a report on executive compensation to be included in our annual proxy statement; and reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC. Director Nominations We do not have a standing nominating committee, though we intend to form a corporate governance and nominating committee as and when required to do so by law or NASDAQ rules, which will be headed by Mr. Burns. In accordance with Rule 5605(e)(2) of the NASDAQ rules, a majority of the independent directors may recommend a director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who shall participate in the consideration and recommendation of director nominees are Messrs Burns, Shea, Bell and Tabet. In accordance with Rule 5605(e)(1)(A) of Deferred underwriting commissions $ $ 3,250,000 Notes and advances payable 121,000 Common stock, subject to redemption(2) 92,774,990 Stockholders equity (deficit): Preferred stock, $0.0001 par value, 1,000,000 shares authorized; none issued or outstanding Common stock, $0.0001 par value, 29,000,000 shares authorized; 2,875,000 shares issued and outstanding (actual); 29,000,000 shares authorized; 12,500,000 shares issued and outstanding (excluding 9,277,499 shares subject to redemption) (as adjusted) Additional paid-in capital 25,000 5,000,010 Deficit accumulated during the development stage Total stockholders equity 25,000 5,000,010 Total capitalization $ 146,000 $ 101,025,000 Table of Contents the NASDAQ rules, all such directors are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place. The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to the Board should follow the procedures set forth in our bylaws. We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders. Compensation Committee Interlocks and Insider Participation None of our executive officers currently serves, and in the past year has not 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. Code of Ethics We have adopted a Code of Ethics applicable to our directors, officers and employees. We have filed a copy of our form of Code of Ethics and our audit committee charter as exhibits to the registration statement of which this prospectus is a part. You will be able to review these documents by accessing our public filings at the SEC s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K. See Where You Can Find Additional Information. Conflicts of Interest Each of our officers and directors (other than our independent directors) presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is required to present a business combination opportunity to such entity. Accordingly, if any of the above executive officers becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. We do not believe, however, that the fiduciary duties or contractual obligations of our executive officers will materially affect our ability to complete our business combination. Our sponsor, executive officers, directors and director nominees may become involved with subsequent blank check companies similar to our company, although they have agreed not to participate in the formation of, or become an officer or director of, any blank check company until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within 21 months after the closing of this offering or 24 months, as applicable. Potential investors should also be aware of the following other potential conflicts of interest: None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities. Table of Contents 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 us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. For a complete description of our management s other affiliations, see Directors and Executive Officers. Our initial shareholders have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the consummation of our initial business combination. Additionally, our initial shareholders have agreed to waive their redemption rights with respect to its founder shares if we fail to consummate our initial business combination within 21 months (or 24 months, as applicable) after the closing of this offering. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. With certain limited exceptions, the founder shares and private placement units will not be transferable, assignable or salable by our sponsor or our Chairman, respectively, until the earlier of (1) one year after the completion of our initial business combination and (2) the date on which we consummate a liquidation, merger, capital stock exchange, reorganization, or other similar transaction after our initial business combination that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of our common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, 50% of the founder shares will be released from the lock-up, and if the last sale price of our common stock equals or exceeds $15.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period, the remaining 50% of our founder shares will be released from the lock-up, or (2) if we consummate a transaction after our initial business combination which results in our stockholders having the right to exchange their shares for cash or property worth at least $12.00 per share, the of the founder shares will be released from the lock-up. Notwithstanding the foregoing, the founder earnout shares will remain subject to the lockup restrictions described above until the earlier of their forfeiture or the conditions to their release from forfeiture (as described elsewhere in this prospectus) are met. With certain limited exceptions, the private placement warrants and the common stock underlying such warrants, will not be transferable, assignable or salable by our sponsor until 30 days after the completion of our initial business combination. Since our sponsor and officers and directors may directly or indirectly own common stock and warrants following this offering, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. The conflicts described above may not be resolved in our favor. 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. Daniel J. Hennessy(1) Dura-Line Holdings communications and energy infrastructure Director GSE Environmental geosynthetic linings and products Board Observer and affiliate Code Hennessy & Simmons private equity Partner Kevin Charlton River Hollow Partners private equity Managing Partner Spirit Realty Corporation real estate investment trust Director Bradley Bell IDEX Corporation global industrial company Director Compass Mining Corporation mining Director Coskata Company biomass fuel Director Virent Corporation biomaterial fuel and chemical Director Peter Shea(2) Viskase Companies cellulose and fibrous casings Director Sitel Worldwide Corp. customer care solutions Director Give and Go Prepared Foods bakery manufacturer Director Richard Burns GeorgiasOwn Credit Union consumer retail financial Director Unison Site Management cell site management Director Dura-Line Holdings communications and energy infrastructure Director Joseph Tabet William Blair & Company broker dealer Partner (1) Mr. Hennessy, in his capacity as a partner of CHS, is obligated to show add-on acquisitions to portfolio companies of CHS Capital Fund V before we may pursue such acquisitions. However, Mr. Hennessy currently expects any such add-on acquisitions will be smaller than our potential acquisition target threshold. Additionally, CHS Capital Fund V s investment period for new platform company investments has expired. (2) Mr. Shea, in his capacity as a private equity advisor, is also required to first show his originating deals to certain private equity firms. In addition, he cannot provide due diligence assistance on deals that these firms are pursuing. Accordingly, if any of the above executive officers, directors or director nominees becomes aware of a business combination opportunity which is suitable for any of the above entities to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only Table of Contents present it to us if such entity rejects the opportunity. We do not believe, however, that any of the foregoing fiduciary duties or contractual obligations will materially affect our ability to complete our business combination. Our independent directors will not be obligated to present any business combination opportunities to us. We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA that such an initial business combination is fair to our company from a financial point of view. In the event that we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after the offering in favor of our initial business combination and our officers and directors have also agreed to vote any public shares purchased during or after the offering in favor of our initial business combination. Limitation on Liability and Indemnification of Officers and Directors Our amended and restated certificate of incorporation provides that our officers and directors 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, except to the extent such exemption from liability or limitation thereof is not permitted by the DGCL. We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our bylaws also permit us to maintain 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 such indemnification. We will purchase a policy of directors and officers liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors. 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 officers and directors, 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 officers and directors 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 officers and directors. * Less than one percent. (1) Unless otherwise noted, the business address of each of the following entities or individuals is 10 South Wacker Drive, Suite 3175, Chicago, IL 60606. (2) Includes 625,000 founder earnout shares subject to forfeiture as described herein. (3) These shares represent the founder shares held by our sponsor. Daniel J. Hennessy, our Chairman and Chief Executive Officer, is the sole managing member of our sponsor. Consequently, Mr. Hennessy may be deemed the beneficial owner of the founder shares held by our sponsor and has sole voting and dispositive control over such securities. Mr. Hennessy disclaims beneficial ownership over any securities owned by our sponsor in which he does not have any pecuniary interest. (4) The founder shares held by this individual will not be subject to forfeiture in the event the underwriter s overallotment option is not exercised, however, they will be subject to the forfeiture as founder earnout shares described elsewhere in this prospectus. Table of Contents Immediately after this offering, our initial stockholders will beneficially own 20.0% of the then issued and outstanding shares of our common stock (assuming they do not purchase any units in this offering). If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or a share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering. Because of this ownership block, our initial stockholders may be able to effectively influence the outcome of all matters requiring approval by our stockholders, including the election of directors, amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions other than approval of our initial business combination. The founder earnout shares (equal to 25% of the founder shares held by our initial stockholders and 5% of our issued and outstanding shares after this offering and any exercise of the underwriters over-allotment option) will be subject to forfeiture by our initial stockholders (or their permitted transferees) on the fourth anniversary of our initial business combination, unless prior to such date the last sale price of our common stock equals or exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period or the company completes a liquidation, merger, stock exchange or other similar transaction that results in all of its stockholders having the right to exchange their shares of common stock for consideration in cash, securities or other property which equals or exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like). The founder shares are identical to the shares of common stock included in the units being sold in this offering. However, the holders have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to redeem any shares in connection with a stockholder vote to approve a proposed initial business combination. Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 11,000,000 (or 12,125,000 if the over-allotment option is exercised in full) private placement warrants at a price of $0.50 per warrant ($5,500,000 in the aggregate or $6,062,500 if the over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant entitles the holder to purchase one-half of one share of our common stock at $5.75 per half share. The purchase price of the private placement warrants will be added to the proceeds from this offering to be held in the trust account pending our completion of our business combination. If we do not complete our business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period), the proceeds of the sale of the private placement warrants will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. The private placement warrants are subject to the transfer restrictions described below. The private placement warrants will not be redeemable by us so long as they are held by the sponsor or its permitted transferees. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering. Our sponsor and our executive officers and directors are deemed to be our promoters as such term is defined under the federal securities laws. Table of Contents Transfers of Founder Shares and Private Placement Warrants The founder shares, private placement warrants and any shares of common stock issued upon exercise of the private placement warrants are each subject to transfer restrictions pursuant to lock-up provisions in the letter agreements with us to be entered into by our initial stockholders. Those lock-up provisions provide that such securities are not transferable or salable (i) in the case of the founder shares, until the earlier of (A) one year after the completion of our initial business combination or earlier if, subsequent to our business combination, the last sale price of the common stock (x) equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property worth at least $12.00, and (ii) in the case of the private placement warrants and the respective common stock underlying such warrants, until 30 days after the completion of our initial business combination, except in each case (a) to our officers or directors, any affiliates or family members of any of our officers or directors, any members of our sponsor, or any affiliates of our sponsor, (b) in the case of an individual, by gift to a member of one of the members of the individual s immediate family or to a trust, the beneficiary of which is a member of one of the individual s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of a business combination at prices no greater than the price at which the shares were originally purchased; (f) in the event of our liquidation prior to our completion of our initial business combination; (g) by virtue of the laws of Delaware or our sponsor s limited liability company agreement upon dissolution of our sponsor; or (h) in the event of our completion of a 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 subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (e) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions. Notwithstanding the foregoing, the founder earnout shares will remain subject to the lockup restrictions described above until the earlier of their forfeiture or the conditions to their release from forfeiture (as described in the next paragraph) are met. A portion of the founder shares in an amount equal to 25% of the founder shares, or 5% of our issued and outstanding shares after this offering and any exercise of the underwriters over-allotment option, which we refer to as the founder earnout shares, will be subject to forfeiture by our initial stockholders (or their permitted transferees) on the fourth anniversary of our initial business combination, unless prior to such date the last sale price of our common stock equals or exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period or the company completes a liquidation, merger, stock exchange or other similar transaction that results in all of its stockholders having the right to exchange their shares of common stock for consideration in cash, securities or other property which equals or exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like). The number of founder earnout shares will be between 625,000 and 718,750, depending on the exercise of the underwriters over-allotment option. Registration Rights The holders of the founder shares and private placement warrants will have registration rights to require us to register a sale of any of our securities held by them pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering. These holders will be entitled to make up to three demands, excluding short form registration demands, that we register such securities for sale under Table of Contents the Securities Act. In addition, these holders will have piggy-back registration rights to include such securities in other registration statements filed by us and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares, upon the earlier of (A) one year after the completion of our initial business combination or earlier if, subsequent to our business combination, the last sale price of the common stock (x) equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property worth at least $12.00, and (ii) in the case of the private placement warrants and the respective common stock underlying such warrants, 30 days after the completion of our initial business combination. Notwithstanding the foregoing, the founder earnout shares will remain subject to the lockup restrictions described above until the earlier of their forfeiture or the conditions to their release from forfeiture (as described elsewhere in this prospectus) are met. We will bear the costs and expenses of filing any such registration statements. Table of Contents CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS In September 2013, our sponsor purchased 2,875,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per share. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20.0% of the outstanding shares upon completion of this offering. In October 2013, our sponsor transferred 35,000 founder shares to each of Messrs. Bell, Burns, Shea and Tabet, 10,000 to Mr. Lowrey and 50,000 to Mr. Charlton. These 200,000 founder shares will not be subject to forfeiture in the event the underwriter s overallotment option is not exercised, however, they will be subject to the forfeiture as founder earnout shares described elsewhere in this prospectus. If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering. The founder earnout shares (equal to 25% of the founder shares held by our initial stockholders and 5% of our issued and outstanding shares after this offering and any exercise of the underwriters over-allotment option) will be subject to forfeiture by our initial stockholders (or their permitted transferees) as described herein. If such shares are forfeited, we would record the aggregate fair value of the shares forfeited and reacquired to treasury stock and a corresponding credit to additional paid-in capital based on the difference between the fair market value of the forfeited shares and the price paid to us for such forfeited shares of approximately $6,250. Upon receipt, such forfeited shares would then be immediately cancelled, which would result in the retirement of the treasury stock and a corresponding charge to additional paid-in capital. Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 11,000,000 (or 12,125,000 if the over-allotment option is exercised in full) private placement warrants for a purchase price of $0.50 per warrant in a private placement that will occur simultaneously with the closing of this offering. Our sponsor will purchase these warrants. As such, our sponsor s interest in this transaction is valued at between $5,500,000 and $6,062,500, depending on the number of private placement warrants purchased. Each private placement warrant entitles the holder to purchase one-half of one share of our common stock at $5.75 per share. The private placement warrants (including the common stock issuable upon exercise of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by it until 30 days after the completion of our initial business combination. As more fully discussed in Management Conflicts of Interest, if any of our officers or directors (other than our independent directors) becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then current fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our executive officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us. Table of Contents We have entered into an Administrative Services Agreement with Hennessy Capital LLC, an affiliate of our sponsor, pursuant to which we will pay a total of $10,000 per month for office space, utilities and secretarial support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. Our sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf. Accordingly, in the event the consummation of our initial business combination takes the maximum 24 months, our sponsor and its affiliates will be paid a total of $240,000 ($10,000 per month) for office space, utilities and secretarial support and will be entitled to be reimbursed for any out-of-pocket expenses. As of the date of this prospectus, Hennessy Capital LLC, an affiliate of our sponsor, provided an aggregate of $121,000 to our company under an unsecured promissory note and in advances, to be used for a portion of the expenses of this offering. These loans and advances are non-interest bearing, unsecured and are due at the earlier of March 31, 2014 or the closing of this offering. The loans and advances will be repaid upon the closing of this offering out of the estimated $750,000 of offering proceeds that has been allocated to the payment of offering expenses. The value of our sponsor s interest in this transaction corresponds to the principal amount outstanding under any such loan. In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we would repay such loaned amounts. 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. Up to $750,000 of such loans may be convertible into warrants of the post business combination entity at a price of $0.50 per warrant at the option of the lender. The warrants would be identical to the placement warrants issued to the initial holder. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. 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 our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation. We have entered into a registration rights agreement with respect to the founder shares and private placement warrants, which is described under the heading Principal Stockholders Registration Rights. Table of Contents DESCRIPTION OF SECURITIES Pursuant to our amended and restated certificate of incorporation, our authorized capital stock consists of 29,000,000 shares of common stock, $0.0001 par value, and 1,000,000 shares of undesignated preferred stock, $0.0001 par value. The following description summarizes the material terms of our capital stock. Because it is only a summary, it may not contain all the information that is important to you. Units Each unit has an offering price of $10.00 and consists of one share of common stock and one warrant. Each warrant entitles the holder thereof to purchase one-half of one share of our common stock at a price of $5.75 per half share, subject to adjustment as described in this prospectus. For example, if a warrant holder holds two warrants, such warrants will be exercisable for one share of the company s common stock at a price of $11.50 per share. Warrants must be exercised for one whole share of common stock. The common stock and warrants comprising the units will begin separate trading on the 52nd day following the closing of this offering unless Deutsche Bank Securities Inc. informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of common stock and warrants. In no event will the common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file a Current Report on Form 8-K promptly after the closing of this offering which will include this audited balance sheet, which is anticipated to take place three business days after the date of this prospectus. If the underwriters over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters over-allotment option. Common Stock Prior to the date of this prospectus, there were 2,875,000 shares of our common stock outstanding. Our initial stockholders will own 20.0% of our issued and outstanding shares after this offering (assuming our initial stockholders do not purchase any units in this offering). Upon the closing of this offering, 12,500,000 shares of our common stock will be outstanding (assuming no exercise of the underwriters over-allotment option and the corresponding forfeiture of 375,000 founder shares by our sponsor). If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering. Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Unless specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of our common shares that are voted is required to approve any such matter voted on by our shareholders. Our board of directors is divided into two classes, each of which will generally serve for a term of two 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 voted for the election of directors can elect all of the directors. Our Table of Contents stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. Because our amended and restated certificate of incorporation authorizes the issuance of up to 29,000,000 shares of common stock, if we were to enter into a business combination, we will likely (depending on the terms of such a business combination) be required to increase the number of shares of common stock which we are authorized to issue at the same time as our stockholders vote on the business combination to the extent we seek stockholder approval in connection with our 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 DGCL, 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. We may not hold 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 DGCL, 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 DGCL. We will provide our stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest(which interest shall be net of taxes payable) divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our business combination. Unlike many blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by law, if a stockholder vote is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated certificate of incorporation requires these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC s proxy rules. If, however, a stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. However, the participation of our sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our business combination even if a majority of our public stockholders vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock, non-votes will have no effect on the approval of our business combination once a quorum is obtained. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our business combination. Table of Contents If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares. However, we would not be restricting our stockholders ability to vote all of their shares (including Excess Shares) for or against our business combination. If we seek stockholder approval in connection with our business combination, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. Pursuant to our amended and restated certificate of incorporation, if we are unable to complete our business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, subject to lawfully available funds therefor, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable and less up to $50,000 of interest to pay dissolution expenses) divided by the number of then 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 each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our business combination within 21 months from the closing of this offering (or 24 months, as applicable). However, if our initial stockholders acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our business combination within the prescribed time period. In the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, including interest(which interest shall be net of taxes payable) upon the completion of our initial business combination, subject to the limitations described herein. Founder Shares The founder shares are identical to the shares of common stock included in the units being sold in this offering, and holders of founder shares have the same stockholder rights as public stockholders, except that (i) the founder shares are subject to certain transfer restrictions, as described in more detail below, and (ii) our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our business combination and (B) to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our business combination within 21 months from the closing of this offering (or 24 months, as Table of Contents applicable), although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our business combination within such time period. If we submit our business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. With certain limited exceptions, the founder shares are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with our sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of one year after the completion of our initial business combination or earlier if, (x) subsequent to our business combination, the last sale price of the common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property worth at least $12.00. Up to 375,000 founder shares will be subject to forfeiture by our sponsor (or its permitted transferees) on a pro rata basis depending on the exercise of the over-allotment option. In addition, between 625,000 and 718,750 founder earnout shares (depending on the extent to which the underwriters over-allotment option is exercised) will be subject to forfeiture by our initial stockholders on the fourth anniversary of our initial business combination, unless prior to such date the last sale price of our common stock equals or exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period or the company completes a liquidation, merger, stock exchange or other similar transaction that results in all of its stockholders having the right to exchange their shares of common stock for consideration in cash, securities or other property which equals or exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like). The founder shares are identical to the shares of common stock included in the units being sold in this offering. However, the holders have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to redeem any shares in connection with a stockholder vote to approve a proposed initial business combination. Preferred Stock Our amended and restated certificate of incorporation provides that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred stock outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being issued or registered in this offering. Warrants Public Stockholders Warrants Each warrant entitles the registered holder to purchase one-half of one share of our common stock at a price of $5.75 per half share, subject to adjustment as discussed below, at any time commencing on the later of 12 months from the closing of this offering or 30 days after the completion of our initial Table of Contents business combination. For example, if a warrant holder holds two warrants, such warrants will be exercisable for one share of the company s common stock. Warrants must be exercised for a whole share. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. We will not be obligated to deliver any shares of common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration. No warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, unless an exemption is available. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of common stock underlying such unit. We have agreed that as soon as practicable, but in no event later than fifteen (15) business days, after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of common stock issuable upon exercise of the warrants. We will use our best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if our common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares under blue sky laws. Once the warrants become exercisable, we may call the warrants for redemption: in whole and not in part; at a price of $0.01 per warrant; upon not less than 30 days prior written notice of redemption (the 30-day redemption period ) to each warrant holder; and if, and only if, the reported last sale price of the common stock equals or exceeds $24.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date we send to the notice of redemption to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the common stock may fall below the $24.00 redemption trigger price as well as the $11.50 warrant exercise price (for whole shares) after the redemption notice is issued. Table of Contents If we call the warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise his, her or its warrant to do so on a cashless basis. In determining whether to require all holders to exercise their warrants on a cashless basis, our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of common stock issuable upon the exercise of our warrants. If our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering their warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the fair market value (defined below) by (y) the fair market value. The fair market value shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. If our management takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of common stock to be received upon exercise of the warrants, including the fair market value in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to us if we do not need the cash from the exercise of the warrants after our initial business combination. If we call our warrants for redemption and our management does not take advantage of this option, our sponsor and its permitted transferees would still be entitled to exercise their private placement warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their warrants on a cashless basis, as described in more detail below. A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person s affiliates), to the warrant agent s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the shares of common stock outstanding immediately after giving effect to such exercise. If the number of outstanding shares of common stock is increased by a stock dividend payable in shares of common stock, or by a split-up of shares of common stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of common stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding shares of common stock. A rights offering to holders of common stock entitling holders to purchase shares of common stock at a price less than the fair market value will be deemed a stock dividend of a number of shares of common stock equal to the product of (i) the number of shares of common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for common stock) multiplied by (ii) one (1) minus the quotient of (x) the price per share of common stock paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for common stock, in determining the price payable for common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of common stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the shares of common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights. In addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to the holders of common stock on account of such shares of common stock (or other shares of our capital stock into which the warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends, (c) to satisfy the redemption rights of the holders of common stock in connection with a proposed initial business combination, (d) as a result of the repurchase of shares of common stock by the company if the Table of Contents proposed initial business combination is presented to the stockholders of the company for approval, or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of common stock in respect of such event. If the number of outstanding shares of our common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of common stock. Whenever the number of shares of common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of common stock purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of common stock so purchasable immediately thereafter. In case of any reclassification or reorganization of the outstanding shares of common stock (other than those described above or that solely affects the par value of such shares of common stock), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding shares of common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of our common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by the company in connection with redemption rights held by stockholders of the company as provided for in the company s amended and restated certificate of incorporation or as a result of the repurchase of shares of common stock by the company if a proposed initial business combination is presented to the stockholders of the company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding shares of common stock, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the common stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the warrant agreement. Additionally, if less than 70% of the consideration receivable by Table of Contents the holders of common stock in such a transaction is payable in the form of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the per share consideration minus Black-Scholes value (as defined in the warrant agreement) of the warrant. The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. You should review a copy of the warrant agreement, which will be filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of common stock to be issued to the warrant holder. Private Placement Warrants The private placement warrants (including the common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except, among other limited exceptions as described under Principal Stockholders Transfers of Founder Shares and Private Placement Warrants, to our officers and directors and other persons or entities affiliated with the sponsor) and they will not be redeemable by us so long as they are held by the sponsor or its permitted transferees. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering. If the private placement warrants are held by holders other than the sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. If holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the fair market value (defined below) by (y) the fair market value. The fair market value shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by our sponsor and permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in Table of Contents place that prohibit insiders from selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who could exercise their warrants and sell the shares of common stock received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate. Dividends We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of a 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 a business combination. The payment of any cash dividends subsequent to a business combination will be within the discretion of our board of directors at such time. 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 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 the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. Our Transfer Agent and Warrant Agent The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all liabilities, including judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity. Our 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 completion of our initial business combination. These provisions cannot be amended without the approval of the holders of at least 65% of our common stock. Our initial stockholders, who will collectively beneficially own 20.0% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion to vote in any manner they choose. Specifically, our amended and restated certificate of incorporation provides, among other things, that: if we are unable to complete our initial business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-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, subject to lawfully available funds therefor, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable and less up to $50,000 of interest to pay dissolution expenses) divided by the number of then 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, Table of Contents the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction. Type of Transaction Table of Contents 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 each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law; prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination; although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our executive officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking or accounting firm that is a member of FINRA that such a business combination is fair to our company from a financial point of view; if a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act; Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination; If our stockholders approve an amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our business combination within 21 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 21 months from the closing of this offering but have not completed the initial business combination within such 21-month period), we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest(which interest shall be net of taxes payable) divided by the number of then outstanding public shares; and we will not effectuate our initial business combination with another blank check company or a similar company with nominal operations. In addition, our amended and restated certificate of incorporation provides that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws We will be subject to the provisions of Section 203 of the DGCL regulating corporate takeovers upon completion of this offering. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a business combination with: a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an interested stockholder ); Whether Stockholder Approval is Required Table of Contents an affiliate of an interested stockholder; or an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder. A business combination includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if: our board of directors approves the transaction that made the stockholder an interested stockholder, prior to the date of the transaction; after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder. Our amended and restated certificate of incorporation provides that our board of directors will be classified into two classes of directors. 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. Our authorized but unissued 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 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. 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 CEO or by our chairman. 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 received by the secretary to our principal executive offices not later than the close of business on the 90th day nor earlier than the opening of business on the 120th day prior to the scheduled date of the annual meeting of stockholders. 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. Securities Eligible for Future Sale Immediately after this offering (assuming no exercise of the underwriters over-allotment option) we will have 12,500,000 (or 14,375,000 if the underwriters over-allotment option is exercised in full) shares of common stock outstanding. Of these shares, the 10,000,000 shares (or 11,500,000 shares if the over-allotment option is exercised in full) sold in this offering 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 2,500,000 (or 2,875,000 if the underwriters over-allotment option is exercised in full) shares and all 11,000,000 (or 12,125,000 if the underwriters over-allotment option is exercised in full) private placement warrants Table of Contents are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering. Rule 144 Pursuant to Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months would be entitled to sell their securities provided that (i) 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 (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale. Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at 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 only a number of securities that does not exceed the greater of: 1% of the total number of shares of common stock then outstanding, which will equal 125,000 shares immediately after this offering (or 143,750 if the underwriters exercise their over-allotment option in full); or the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. Sales by our affiliates 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 Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition 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, our initial stockholders will be able to sell their founder shares and private placement warrants, as applicable, pursuant to Rule 144 without registration one year after we have completed our initial business combination. Registration Rights The holders of the founder shares and private placement warrants (and any shares of common stock issuable upon the exercise of the private placement warrant) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain piggy-back Table of Contents registration rights with respect to registration statements filed subsequent to our completion of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares, on the earlier of (A) one year after the completion of our initial business combination or earlier if, subsequent to our business combination, the last sale price of the common stock (x) equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property worth at least $12.00, and (ii) in the case of the private placement warrants and the respective common stock underlying such warrants, 30 days after the completion of our initial business combination. Notwithstanding the foregoing, the founder earnout shares will remain subject to the lockup restrictions described elsewhere in this prospectus until the earlier of their forfeiture or the conditions to their release from forfeiture (as described elsewhere in this prospectus) are met. We will bear the expenses incurred in connection with the filing of any such registration statements. Listing of Securities We have applied to list our units, common stock and warrants on NASDAQ under the symbols HCACU, HCAC and HCACW, respectively. We expect 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 warrants are eligible to trade separately, we anticipate that the shares of our common stock and warrants will be listed separately and as a unit on NASDAQ. We cannot guarantee that our securities will be approved for listing on NASDAQ. Deutsche Bank Securities Inc. Total 10,000,000 The underwriting agreement provides that the obligations of the underwriters to purchase the units included in this offering are subject to approval of legal matters by counsel and to other conditions. The underwriters are obligated to purchase all of the units (other than those covered by the over-allotment option described below) if they purchase any of the units. Units sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any units sold by the underwriters to securities dealers may be sold at a discount from the initial public offering price not to exceed $ per unit. If all of the units are not sold at the initial offering price, the underwriters may change the offering price and the other selling terms. Deutsche Bank Securities Inc. has advised us that the underwriters do not intend to make sales to discretionary accounts. If the underwriters sell more units than the total number set forth in the table above, we have granted to the underwriters an option, exercisable for 45 days from the date of this prospectus, to purchase up to 1,500,000 additional units at the public offering price less the underwriting discount. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, in connection with this offering. To the extent the option is exercised, each underwriter must purchase a number of additional units approximately proportionate to that underwriter s initial purchase commitment. Any units issued or sold under the option will be issued and sold on the same terms and conditions as the other units that are the subject of this offering. We, our sponsor and our officers and directors have agreed that, for a period of 180 days from the date of this prospectus, we and they will not, without the prior written consent of Deutsche Bank Securities Inc., offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any units, warrants, shares of common stock or any other securities convertible into, or exercisable, or exchangeable for, shares of common stock. Deutsche Bank Securities Inc. in its sole discretion may release any of the securities subject to these lock-up agreements at any time without notice. Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination or earlier if, subsequent to our business combination, the last sale price of the common stock (x) equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property worth at least $12.00, (except with respect to permitted transferees as described herein under Principal Stockholders Transfers of Common Stock and Warrants ). The private placement warrants (including the common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except with respect to permitted transferees as described herein under Principal Stockholders Transfers of Common Stock and Warrants ). Prior to this offering, there has been no public market for our securities. Consequently, the initial public offering price for the units was determined by negotiations between us and the representative. Per Unit(1) $ 0.70 $ 0.70 Total(1) $ 7,000,000 $ 8,050,000 (1) Includes $0.325 per unit, or approximately $3,250,000 (or $3,737,500 if the over-allotment option is exercised in full) in the aggregate payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the underwriters only on completion of an initial business combination, in an amount equal to $0.325 multiplied by the number of shares of common stock sold as part of the units in this offering, as described in this prospectus. In addition, we have agreed to pay for the FINRA-related fees and expenses of the underwriters legal counsel (excluding blue sky fees and expenses), not to exceed $40,000. If we do not complete our initial business combination within 21 months from the closing of this offering (or 24 months, as applicable), the trustee and the underwriters have agreed that (i) they will forfeit any rights or claims to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account, and (ii) that the deferred underwriters discounts and commissions will be distributed on a pro rata basis, together with any accrued interest thereon (which interest shall be net of taxes payable) to the public stockholders. In connection with the offering, the underwriters may purchase and sell units in the open market. Purchases and sales in the open market may include short sales, purchases to cover short positions, which may include purchases pursuant to the over-allotment option, and stabilizing purchases. Short sales involve secondary market sales by the underwriters of a greater number of shares than they are required to purchase in the offering. Covered short sales are sales of units in an amount up to the number of units represented by the underwriters over-allotment option. Naked short sales are sales of units in an amount in excess of the number of units represented by the underwriters over-allotment option. Covering transactions involve purchases of units either pursuant to the over-allotment option or in the open market after the distribution has been completed in order to cover short positions. To close a naked short position, the underwriters must purchase shares in the open market after the distribution has been completed. A naked short position is more likely to be created if the Table of Contents underwriters are concerned that there may be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in the offering. To close a covered short position, the underwriters must purchase units in the open market after the distribution has been completed or must exercise the over-allotment option. In determining the source of shares to close the covered short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through the over-allotment option. Stabilizing transactions involve bids to purchase units so long as the stabilizing bids do not exceed a specified maximum. Purchases to cover short positions and stabilizing purchases, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the units. They may also cause the price of the units to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions in the over-the-counter market or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time. We estimate that our portion of the total expenses of this offering payable by us will be $750,000, excluding underwriting discounts and commissions. We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make because of any of those liabilities. 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 introduce us to potential target businesses or assist us in raising additional capital in the future. If any of the underwriters provide services to us after this offering, we may pay such 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 any of the underwriters and no fees for such services will be paid to any of the underwriters prior to the date that is 90 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriters compensation in connection with this offering and we may pay the underwriters of this offering or any entity with which they are affiliated a finder s fee or other compensation for services rendered to us in connection with the completion of a business combination. Notice to Prospective Investors in the European Economic Area In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a relevant member state ), with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the relevant implementation date ), an offer of units described in this prospectus may not be made to the public in that relevant member state prior to the publication of a prospectus in relation to the units that has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in that relevant member state, all in accordance with the Prospectus Directive, except that, with effect from and including the relevant implementation date, an offer of our units may be made to the public in that relevant member state at any time: to any legal entity which is a qualified investor as defined in the Prospectus Directive; to fewer than 100, or, if the relevant member state has implemented the relevant provisions of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the issuer for any Table of Contents such offer; or natural or legal persons (other than qualified investors as defined below) subject to obtaining the prior consent of the underwriter for any such offer; or in any other circumstances that do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive. Each purchaser of units described in this prospectus located within a relevant member state will be deemed to have represented, acknowledged and agreed that it is a qualified investor within the meaning of Article 2(1)(e) of the Prospectus Directive. For the purpose of this provision, the expression an offer to the public in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the units to be offered so as to enable an investor to decide to purchase or subscribe for the units, as the expression may be varied in that member state by any measure implementing the Prospectus Directive in that member state, and the expression Prospectus Directive means Directive 2003/71/EC (and amendments thereto, including the PD 2010 Amending Directive to the extent implemented by the relevant member state) and includes any relevant implementing measure in each relevant member state, and the expression 2010 PD Amending Directive means Directive 2010/73/EU. We have not authorized and do not authorize the making of any offer of units through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the units as contemplated in this prospectus. Accordingly, no purchaser of the units, other than the underwriters, is authorized to make any further offer of the units on behalf of us or the underwriters. Notice to Prospective Investors in the United Kingdom This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order ) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as a relevant person ). The units are only available to, and any invitation, offer or agreement to purchase or otherwise acquire such units will be engaged in only with, relevant persons. This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents. Notice to Prospective Investors in France Neither this prospectus nor any other offering material relating to the units described in this prospectus has been submitted to the clearance procedures of the Autorit des March s Financiers or by the competent authority of another member state of the European Economic Area and notified to the Autorit des March s Financiers. The units have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the units has been or will be: released, issued, distributed or caused to be released, issued or distributed to the public in France; or used in connection with any offer for subscription or sale of the units to the public in France. Such offers, sales and distributions will be made in France only: to qualified investors (investisseurs qualifi s) and/or to a restricted circle of investors (cercle restreint d investisseurs), in each case investing for their own account, all as defined in, and in Table of Contents accordance with, Article L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code mon taire et financier; to investment services providers authorized to engage in portfolio management on behalf of third parties; or in a transaction that, in accordance with article L.411-2-II-1|b[-or-2|b[-or 3|b[ of the French Code mon taire et financier and article 211-2 of the General Regulations (R glement G n ral) of the Autorit des March s Financiers, does not constitute a public offer (appel public l pargne). The units may be resold directly or indirectly, only in compliance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code mon taire et financier. Notice to Prospective Investors in Hong Kong The units may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to professional investors within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a prospectus within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the units may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to units which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder. Notice to Prospective Investors in Singapore This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the units may not be circulated or distributed, nor may the units be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the SFA ), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA. Where the units are subscribed or purchased under Section 275 of the SFA by a relevant person which is: shares, debentures and units of shares and debentures of that corporation or the beneficiaries rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except: to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA; Table of Contents where no consideration is or will be given for the transfer; or where the transfer is by operation of law. Table of Contents LEGAL MATTERS Ellenoff Grossman & Schole LLP, New York, New York, is acting as counsel in connection with the registration of our securities under the Securities Act, and as such, will pass upon the validity of the securities offered in this prospectus. Skadden, Arps, Slate, Meagher & Flom LLP of Palo Alto, California, advised the underwriters in connection with the offering of the securities. EXPERTS The financial statements of Hennessy Capital Acquisition Corp. (a development stage company) as of December 31, 2013 and for the period September 24, 2013 (inception) through December 31, 2013, have been included herein in reliance upon the report of Rothstein Kass, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of Rothstein Kass as experts in accounting and auditing. 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 securities 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 securities, 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 Redemptions in Connection with our Initial Business Combination Other Permitted Purchases of Public Shares by our Affiliates Redemptions if we fail to Complete an Initial Business Combination Table of Contents Redemptions in Connection with our Initial Business Combination Other Permitted Purchases of Public Shares by our Affiliates Redemptions if we fail to Complete an Initial Business Combination Impact to remaining stockholders The redemptions in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn in order to pay taxes (to the extent not paid from amounts accrued as interest on the funds held in the trust account). If the permitted purchases described above are made, there will be no impact to our remaining stockholders because the purchase price would not be paid by us. The redemption of our public shares if we fail to complete our business combination will reduce the book value per share for the shares held by our initial stockholders, who will be our only remaining stockholders after such redemptions Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419 The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriters will not exercise their over-allotment option. None of the provisions of Rule 419 apply to our offering. Terms of Our Offering Terms Under a Rule 419 Offering Table of Contents Terms of Our Offering Terms Under a Rule 419 Offering Table of Contents Terms of Our Offering Terms Under a Rule 419 Offering Table of Contents Terms of Our Offering Terms Under a Rule 419 Offering Table of Contents MANAGEMENT Directors and Executive Officers Our directors, officers and director nominees are as follows: Name Age Title Table of Contents 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. Furthermore, our amended and restated certificate of incorporation provides that the doctrine of corporate opportunity will not apply with respect to any of our officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have. Below is a table summarizing the entities to which our executive officers, directors and director nominees currently have fiduciary duties or contractual obligations: Individual Entity Entity s Business Affiliation Table of Contents PRINCIPAL STOCKHOLDERS The following table sets forth information regarding the beneficial ownership of our common stock as of the date of this prospectus, and as adjusted to reflect the sale of our common stock included in the units offered by this prospectus, and assuming no purchase of 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; each of our executive officers, directors and director nominees that beneficially owns shares of our common stock; and all our executive 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 beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus. The post-offering ownership percentage column below assumes that the underwriters do not exercise their over-allotment option, that our sponsor forfeits 375,000 founder shares, and that there are 12,500,000 shares of our common stock issued and outstanding after this offering. Approximate Percentage of Outstanding Common Stock Name and Address of Beneficial Owner(1) Number of Shares Beneficially Owned Before Offering After Offering(2) Hennessy Capital Partners I LLC (our sponsor) 2,675,000 93.04 % 18.4 % Daniel J. Hennessy (3) 2,675,000 93.04 % 18.4 % Kevin J. Charlton (4) 50,000 1.7 % * Charles B. Lowrey II (4) 10,000 * * Bradley Bell (4) 35,000 1.2 % * Richard Burns (4) 35,000 1.2 % * Peter Shea (4) 35,000 1.2 % * Joseph Tabet (4) 35,000 1.2 % * All directors and executive officers as a group (7 individuals) 2,875,000 100.0 % 20.0 % Table of Contents UNDERWRITING Subject to the terms and conditions of the underwriting agreement, the underwriters named below, through their representative Deutsche Bank Securities 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 The determination of our per unit offering price was more arbitrary than would typically be the case if we were an operating company. Among the factors considered in determining initial public offering price were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, our management, our capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the units, common stock or warrants will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our units, common stock or warrants will develop and continue after this offering. We expect our units to be listed on NASDAQ under the symbol HCACU and, once the common stock and warrants begin separate trading, to have our common stock and warrants listed on NASDAQ under the symbols HCAC and HCACW , respectively. The following table shows the underwriting discounts and commissions that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters over-allotment option. Paid by Hennessy Capital Acquisition Corp. No Exercise Full Exercise Table of Contents HENNESSY CAPITAL ACQUISITION CORP. (a corporation in the development stage) STATEMENT OF STOCKHOLDERS EQUITY For the Period from September 24, 2013 (inception) to December 31, 2013 Common Stock Shares Amount Additional Paid-in Capital Deficit Accumulated During the Development Stage Stockholders Equity Table of Contents Until , 2014 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common stock, 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. You should rely only on the information contained in this prospectus. 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. 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 securities. TABLE OF CONTENTS Page 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: Legal fees and expenses $ 250,000 Printing and engraving expenses 45,000 Accounting fees and expenses 45,000 SEC Expenses 14,812 FINRA Expenses 17,750 Travel and road show 20,000 Directors and officers insurance 125,000 NASDAQ listing and filing fees 50,000 Miscellaneous expenses 182,438 Total offering expenses $ 750,000 Item 14. Indemnification of Directors and Officers. Our amended and restated certificate of incorporation provides that all of our directors, officers, employees and agents shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the Delaware General Corporation Law ( DGCL ). 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 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 II-1 Table of Contents 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 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 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 officers and directors or other employees and agents 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. (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, II-2 Table of Contents 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. In accordance with Section 102(b)(7) of the DGCL, our amended and restated certificate of incorporation, will provide that no director shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted under the DGCL. The effect of this provision of our amended and restated certificate of incorporation is to eliminate our rights and those of our stockholders (through stockholders derivative suits on our behalf) to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except, as restricted by Section 102(b)(7) of the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director s duty of care. If the DGCL is amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our amended and restated certificate of incorporation, the liability of our directors to us or our stockholders will be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or amendment of provisions of our amended and restated certificate of incorporation limiting or eliminating the liability of directors, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to further limit or eliminate the liability of directors on a retroactive basis. II-3 Table of Contents Our amended and restated certificate of incorporation will also provide that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability and loss (including, without limitation, attorney s fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing, a person eligible for indemnification pursuant to our amended and restated certificate of incorporation will be indemnified by us in connection with a proceeding initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to indemnification. The right to indemnification conferred by our amended and restated certificate of incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending or otherwise participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation) will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced if it is ultimately determined that such person is not entitled to be indemnified for such expenses under our amended and restated certificate of incorporation or otherwise. The rights to indemnification and advancement of expenses will not be deemed exclusive of any other rights which any person covered by our amended and restated certificate of incorporation may have or hereafter acquire under law, our amended and restated certificate of incorporation, our bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise. Any repeal or amendment of provisions of our amended and restated certificate of incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. Our amended and restated certificate of incorporation will also permit us, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other that those specifically covered by our amended and restated certificate of incorporation. Our bylaws, which we intend to adopt immediately prior to the closing of this offering, include the provisions relating to advancement of expenses and indemnification rights consistent with those set forth in our amended and restated certificate of incorporation. In addition, our bylaws provide for a right of indemnity to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of time. Our bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss under the DGCL. Any repeal or amendment of provisions of our bylaws affecting indemnification rights, whether by our board of directors, stockholders or by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. II-4 Table of Contents We will enter into indemnification agreements with each of our officers and directors a form of which is filed as Exhibit 10.7 to this Registration Statement. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. 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. In September 2013, Hennessy Capital Partners I LLC, our sponsor, purchased an aggregate of 2,875,000 shares of our common stock, for an aggregate offering price of $25,000 at an average purchase price of approximately $0.009 per share. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20.0% of the outstanding shares upon completion of this offering. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D. In addition, our sponsor has committed, pursuant to a written agreement, to purchase from us an aggregate of 11,000,000 private placement warrants (or 12,125,000 warrants if the over-allotment option is exercised in full) at $0.50 per warrant (for an aggregate purchase price of $5,500,000, or $6,062,500 if the over-allotment option is exercised in full). This purchase will take place on a private placement basis simultaneously with the completion of our initial public offering. This issuance will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. No underwriting discounts or commissions were paid with respect to such sales. II-5 Table of Contents 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.* 3.1 Certificate of Incorporation.* 3.2 Form of Amended and Restated Certificate of Incorporation.* 3.3 Bylaws.* 4.1 Specimen Unit Certificate.* 4.2 Specimen Common Stock Certificate.* 4.3 Specimen Warrant Certificate.* 4.4 Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant.* 5.1 Opinion of Ellenoff Grossman & Schole LLP.* 10.1 Promissory Note, dated October 11, 2013 issued to Hennessy Capital LLC.* 10.2 Form of Letter Agreement among the Registrant and our officers, directors and security holders.* 10.3 Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.* 10.4 Form of Registration Rights Agreement between the Registrant and certain security holders.* 10.5 Securities Subscription Agreement, dated September 24, 2013, among the Registrant and Hennessy Capital Partners I LLC.* 10.6 Sponsor Warrants Purchase Agreement dated October 15, 2013 among the Registrant and Hennessy Capital Partners I LLC.* 10.7 Form of Indemnity Agreement.* 10.8 Form of Administrative Services Agreement, dated as of _____________, 2014, by and between the Registrant and Hennessy Capital LLC.* 14 Form of Code of Ethics.* 23.1 Consent of Rothstein Kass. 23.2 Consent of Ellenoff Grossman & Schole LLP (included on 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 Compensation Committee Charter.* 99.3 Consent of Kevin M. Charlton* 99.4 Consent of Bradley Bell* 99.5 Consent of Peter Shea* 99.6 Consent of Richard Burns* 99.7 Consent of Joseph Tabet* * Previously filed. II-6 Table of Contents Item 17. Undertakings. (a) The undersigned registrant 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. (b) 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. (c) 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. (3) 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. (4) For the purpose of determining liability of a registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of an 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 an undersigned registrant; II-7 Table of Contents (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. II-8 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 16th day of January, 2014. HENNESSY CAPITAL ACQUISITION CORP. By: /s/ Daniel J. Hennessy Daniel J. Hennessy Chief Executive Officer KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Daniel J. Hennessy 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 SEC, 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, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Name Position Date /s/ Daniel J. Hennessy Chairman of the Board of Directors and January 16, 2014 Daniel J. Hennessy Chief Executive Officer (Principal Executive Officer) /s/ Charles B. Lowrey II Executive Vice President, Chief January 16, 2014 Charles B. Lowrey II Financial Officer and Secretary (Principal Financial and Accounting Officer) II-9 Table of Contents EXHIBIT INDEX Exhibit No. Description 1.1 Form of Underwriting Agreement.* 3.1 Certificate of Incorporation.* 3.2 Form of Amended and Restated Certificate of Incorporation.* 3.3 Bylaws.* 4.1 Specimen Unit Certificate.* 4.2 Specimen Common Stock Certificate.* 4.3 Specimen Warrant Certificate.* 4.4 Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant.* 5.1 Opinion of Ellenoff Grossman & Schole LLP.* 10.1 Promissory Note, dated October 11, 2013 issued to Hennessy Capital LLC.* 10.2 Form of Letter Agreement among the Registrant and our officers, directors and security holders.* 10.3 Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.* 10.4 Form of Registration Rights Agreement between the Registrant and certain security holders.* 10.5 Securities Subscription Agreement, dated September 24, 2013, among the Registrant and Hennessy Capital Partners I LLC.* 10.6 Sponsor Warrants Purchase Agreement dated October 15, 2013 among the Registrant and Hennessy Capital Partners I LLC.* 10.7 Form of Indemnity Agreement.* 10.8 Form Administrative Services Agreement, dated as of _____________, 2014, by and between the Registrant and Hennessy Capital LLC.* 14 Form of Code of Ethics.* 23.1 Consent of Rothstein Kass. 23.2 Consent of Ellenoff Grossman & Schole LLP (included on 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 Compensation Committee Charter.* 99.3 Consent of Kevin M. Charlton* 99.4 Consent of Bradley Bell* 99.5 Consent of Peter Shea* 99.6 Consent of Richard Burns* 99.7 Consent of Joseph Tabet* * Previously filed. II-10 Table of Contents [This Page Intentionally Left Blank] Daniel J. Hennessy Chairman and Chief Executive Officer Hennessy Capital Acquisition Corp. 10 South Wacker Drive, Suite SUMMARY 1
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+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before making an investment decision to purchase our securities in this offering. You should read the entire prospectus carefully, including the section entitled Risk Factors, our consolidated financial statements, and the related notes thereto and Management s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this prospectus, before making an investment decision to purchase our securities. Unless we state otherwise or the context otherwise requires, references in this prospectus to we, our, us, Bankwell and the Company refer to Bankwell Financial Group, Inc., a Connecticut corporation, and its consolidated subsidiaries. Company Overview We are a bank holding company, headquartered in New Canaan, Connecticut and offer a broad range of financial services through our banking subsidiary, Bankwell Bank, or the Bank, a Connecticut state commercial bank founded in 2002. Our primary market is the greater Fairfield County, Connecticut area, which we serve from our main banking office located in New Canaan, Connecticut and five other branch offices located throughout the Fairfield County area. According to the U.S. Department of Commerce Bureau of Economic Analysis data for 2012, Fairfield County is located in the second wealthiest metropolitan statistical area in the United States. As of December 31, 2013, on a consolidated basis, we had total assets of approximately $779.6 million, total loans of approximately $632.0 million, total deposits of approximately $661.5 million, and shareholders equity of approximately $69.5 million. We are committed to becoming the premier Hometown bank in Fairfield County and its surrounding areas. In 2011, the Commercial Record s Annual Readers Poll named us the No. 1 community bank in Connecticut. We believe that our market exhibits highly attractive demographic attributes and presents favorable competitive dynamics, thereby offering long-term opportunities for growth. We have a history of building long-term customer relationships and attracting new customers through what we believe is our superior customer service and our ability to deliver a diverse product offering. In addition, we believe that our strong capital position and extensive local ownership, coupled with a highly respected and experienced executive management team and board of directors, give us instant credibility with our customers and potential customers in our market. Our focus is on building a franchise with meaningful market share and consistent revenue growth complemented by operational efficiencies that we believe will produce attractive risk-adjusted returns for our shareholders. Our History and Growth Bankwell Bank was originally chartered as two separate banks, The Bank of New Canaan (including a separate division, Stamford First Bank) and The Bank of Fairfield, which were subsequently merged and rebranded as Bankwell Bank. It was chartered with a commitment to building the premier community bank in the markets we serve. We began operations in April 2002 with an initial capitalization of $8.6 million. Our net interest margin was 3.94% at December 31, 2013, compared to a high of 4.27% for the year ended December 31, 2011, in spite of industry-wide downward pressure driven by loan volume and a historically low interest rate environment. In November 2013, we acquired The Wilton Bank, and it was merged into Bankwell Bank. Our financial and operational highlights include the following: Growing our total assets to approximately $779.6 million at December 31, 2013, from $247.0 million at December 31, 2008, representing a 26% compound annual growth rate; our noninterest bearing deposits to approximately $118.6 million at December 31, 2013 from $36.9 million at December 31, 2008, representing a compound annual growth rate of 26%; and our total deposits to approximately $661.5 million at December 31, 2013 from $170.7 million at December 31, 2008, representing a compound annual growth rate of 31%; 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, nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED MAY 13, 2014 2,702,703 Shares Common Stock This prospectus relates to the initial public offering and sale of Bankwell Financial Group, Inc. s common stock. We are offering 2,702,703 shares of our common stock. Prior to this offering, there has been no established public market for our common stock. We currently estimate that the public offering price will be between $18.00 and $19.00 per share. We have applied to list our common stock on the Nasdaq Global Market under the symbol BWFG. The Secretary of the United States Treasury, our Series C preferred shareholder, may, from time to time, offer and sell up to 10,980 shares of our Series C preferred stock. The Series C preferred shareholder is not offering any shares of Series C preferred stock in connection with this offering of our common stock. If and when any sales occur, we will not receive any proceeds from the sale of Series C preferred stock by the U.S. Treasury. There is no established public market for our Series C preferred stock. We will use reasonable best efforts to list, or make available for quotation, our Series C preferred stock, if and when any shares of Series C preferred stock are offered and sold. We are an emerging growth company under the federal securities laws and will be subject to reduced public company reporting requirements. Please see Risk Factors beginning on page 20, for a discussion of certain risks that you should consider before making an investment decision to purchase our common stock. Per Share Total Initial public offering price of common stock $ $ Underwriting discount (1) $ $ Proceeds to us, before expenses $ $ (1) See Underwriting for additional information regarding the underwriting discount and certain expenses payable to the underwriters by us. NEITHER THE SECURITIES AND EXCHANGE COMMISSION, OR THE SEC, NOR ANY OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Certain of our directors and executive officers have indicated interest in purchasing an aggregate of up to approximately $8.4 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, our directors and executive officers 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 our directors and executive officers 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 our directors and executive officers than our directors and executive officers indicate an interest in purchasing or not to sell any shares to our directors and executive officers. The shares of our common stock and our preferred stock are not savings accounts, deposits, or other obligations of our bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation, or the FDIC, or any other governmental agency. The underwriters expect to deliver the shares of our common stock against payment on , 2014. SANDLER O NEILL + PARTNERS, L.P. Keefe, Bruyette & Woods A Stifel Company Prospectus dated , 2014 TABLE OF CONTENTS The JOBS Act also permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. However, we have opted out of this provision. As a result, we will comply with new or revised accounting standards to the same extent that compliance is required for non-emerging growth companies. This decision to opt out of the extended transition period under the JOBS Act is irrevocable. TABLE OF CONTENTS Growing our total loans outstanding to approximately $632.0 million at December 31, 2013 from $197.8 million at December 31, 2008, representing a 26% compound annual growth rate; and at December 31, 2013, commercial real estate loans comprised 50% of the total loan portfolio compared to 22% at December 31, 2008, representing a 49% compound annual growth rate; Maintaining high credit quality in our loan portfolio as a result of our disciplined underwriting. Our highest annual rate of net loan charge-offs to average loans over the past five years was 0.18% in 2009, and our average annual rate of net loan charge-offs to average loans from December 31, 2008 to December 31, 2013 was 0.08%. Additionally, our average ratio of nonperforming assets to total assets was 0.63% for the five years ended December 31, 2013 and was 0.23% at December 31, 2013. The ratio of total past due loans to total loans at December 31, 2013 was 0.73%; Making continued progress in revenue improvements and operational efficiencies by entering new lines of business with commercial mortgage loan sales, merging the banks together and completing a core system conversion and reducing our efficiency ratio year-over-year from 82.76% for the year ended December 31, 2012 to 75.72% for the year ended December 31, 2013; Achieving revenue momentum including an increase in our noninterest income from $345 thousand for the year ended December 31, 2012 to $4.7 million for the year ended December 31, 2013, which represents 16% of total revenue compared to 2% for the year ended December 31, 2012; Expanding our footprint and solidifying our presence in Fairfield County, with the acquisition of The Wilton Bank, complementing our full branch offices in New Canaan, Fairfield and Stamford, Connecticut and plans to establish a new branch in Norwalk, Connecticut in the second quarter of 2014, and expansion into Bridgeport, Connecticut, with a loan production office; and Launching Bankwell Investment Services, a new wealth management services division in October 2013. Through an agreement with an investment brokerage firm, we are providing on-site wealth management specialists to provide advice and support to individuals and businesses, which we expect will also increase our fee income. Our Competitive Strengths We believe that we are especially well-positioned to create value for our shareholders as a result of the following competitive strengths: Our Market. Our current market is defined as the greater Fairfield County area, which is part of the fourth most affluent metropolitan statistical area in the United States, the Bridgeport-Stamford-Norwalk, Connecticut Metropolitan Statistical Area, or MSA, according to the U.S. Department of Commerce. The Stamford market area includes numerous affluent suburban communities of professionals who work at the 16 Fortune 500 companies headquartered in Connecticut or commute into New York City, approximately 50 miles from our headquarters, and many small to mid-sized businesses which support these communities. Fairfield County is the wealthiest county in Connecticut, with a 2008 2012 median household income of $82,614 according to estimates from United States Census Bureau. We believe that this market has economic and competitive dynamics that are favorable to executing our growth strategy. Experienced and Respected Management Team with a Proven and Successful Track Record. Our executive management team, led by Peyton R. Patterson, is comprised of seasoned professionals with significant banking experience, a history of high performance at local financial institutions and success in identifying, acquiring and integrating financial institutions. Ms. Patterson has over 25 years of commercial banking experience, previously serving as Chairman, President and Chief Executive Officer at NewAlliance Bancshares, an approximately $9 billion asset bank headquartered in New Haven, Connecticut which was acquired by First Niagara Financial Group, Inc. in 2011. Our senior management team also includes Heidi S. DeWyngaert, Executive Vice President, Chief Lending Officer (nine years with us), Ernest J. Verrico, Sr., Executive Vice President, Chief Financial Officer (four years with us), Gail E.D. Brathwaite, Executive Vice TABLE OF CONTENTS TABLE OF CONTENTS President, Chief Operating Officer (formerly worked with Ms. Patterson for nine years at NewAlliance, one year with us), Diane Knetzger, Senior Vice President, Director of Marketing (nine years with us) and Christine A. Chivily, our Chief Credit Officer designee (one year with us). Dedicated Board of Directors with Strong Community Involvement. Our board of directors is comprised of a group of local business leaders who understand the need for strong community banks that focus on serving the financial needs of their customers. One of our directors, Frederick R. Afragola, was instrumental in our organization and growth. Mr. Afragola was the Chief Executive Officer and President of The Bank of New Canaan from its opening in 2002 until his retirement in 2008 and played an integral role in building our foundation and guiding our growth. The interests of our executive management team and directors are aligned with those of our shareholders through common stock ownership. At May 12, 2014, our directors and officers beneficially owned approximately 49% of our common stock. Certain of our directors and executive officers have indicated an interest in purchasing an aggregate of up to approximately $8.4 million in shares of our common stock in this offering at the initial public offering price. Assuming an initial public offering price of $18.50 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, our directors and executive officers would purchase an aggregate of up to approximately 454,054 of the 2,702,703 shares in this offering based on these indications of interest and would own approximately 36% of our outstanding common stock following this offering. By capitalizing on the close community ties and business relationships of our executive management team and directors, we are positioned to continue taking advantage of the market opportunity present in our primary market. Strong Capital Position. At December 31, 2013, we had a 7.45% tangible common equity ratio, and the Bank had a 7.91% Tier 1 leverage ratio and a 9.49% Tier 1 risk-based ratio. We believe that our ability to attract capital has facilitated our growth and is an integral component to the execution of our business plan. See Non-GAAP Financial Measures. Scalable Operating Platform. We provide banking technology, including remote deposit capture, internet banking and mobile banking, to provide our customers with the most choices and to create a scalable platform to accommodate our future growth aspirations. We believe that our advanced technology combined with responsive and personal service provides our customers with a superior banking experience. Our Business Strategy We seek to position ourselves as the Hometown bank and the banking provider of choice in our highly attractive market area, and to serve as a locally based alternative to our larger competitors through: Responsive, Customer-Centric Products and Services and a Community Focus. We offer a broad array of products and services which we customize to allow us to focus on building long-term relationships with our customers through high-quality, responsive and personal customer service. By focusing on the entire customer relationship, we build the trust of our customers which leads to long-term relationships and generates our organic growth. In addition, we are committed to meeting the needs of the communities that we serve. Our employees are involved in many civic and community organizations which we support through sponsorships. As a result, customers and potential customers within our market know about us and frequently interact with our employees which allows us to develop long-term customer relationships without extensive advertising. Strategic Acquisitions. To complement our organic growth, we focus on strategic acquisitions in or around our existing markets that further our objectives. We believe there are many banking institutions that continue to face credit challenges, capital constraints and liquidity issues and that lack the scale and management expertise to manage the increasing regulatory burden and will likely need to partner with an institution like ours. On March 31, 2014, we entered into a merger agreement with Quinnipiac Bank & Trust Company, or Quinnipiac. Total consideration for the acquisition is expected to be comprised of our common stock (75%) and cash (25%). Quinnipiac has one branch located in Hamden, Connecticut, and has applied for a second branch in the neighboring town of North Haven. We expect the transaction to close in the third quarter of 2014, TABLE OF CONTENTS subject to the requisite approval of the shareholders of Quinnipiac, required regulatory approvals (including approval of Quinnipiac s branch application for a branch in North Haven), and satisfaction of other customary closing conditions. We intend to continue to seek and evaluate other potential acquisitions that can provide meaningful financial benefits, long-term organic growth opportunities and expense reductions, without compromising our risk profile. Utilization of Efficient and Scalable Infrastructure. We employ a systematic and calculated approach to increasing our profitability and improving our efficiencies. We have recently improved our operating infrastructure particularly in the areas of technology, data processing, compliance and personnel. We believe that our scalable infrastructure provides us with an efficient operating platform from which to grow in the near term and without incurring significant incremental noninterest expenses, while continuing to deliver our high-quality, responsive customer service, which will enhance our ability to grow and increase our returns. Disciplined Focus on Risk Management. Effective risk management is a key component of our strong corporate culture. We use our strong risk management infrastructure to monitor our existing loan and investment securities portfolios, support operational decision-making and improve our ability to generate earning assets with strong credit quality. To maintain our strong credit quality, we use a comprehensive underwriting process and we seek to maintain a diversified loan portfolio and a conservative investment securities portfolio. Board-approved policies contain approval authorities, as appropriate, and are reviewed at least annually. We have a Risk Management Steering Committee comprised of executive officers who oversee new business initiatives and other activities that warrant oversight of risk and related mitigants. Internal review procedures are performed regarding anti-money laundering and consumer compliance requirements. We have a Chief Risk Officer who reports directly to the Chair of our Audit Committee. Recent Developments Financial Highlights for the First Quarter of 2014. The following is a discussion of certain unaudited financial information as of and for the three months ended March 31, 2014, all of which is preliminary in nature and based upon currently available information. The following quarterly results are also subject to revision based upon actual results, the review of those results by our independent auditors and an audit by our independent auditors of our annual results for the year ending December 31, 2014. Accordingly, we cannot assure you that upon completion of our review and the review of our independent auditors, we will not report materially different financial results than those set forth below. In addition, you should not assume that our operating results for the three months ended March 31, 2014 will be indicative of our operating results for the entire year ending December 31, 2014. At March 31, 2014, total assets were $812.1 million, a $32.4 million or 4% increase over December 31, 2013. Total loans outstanding and total deposits continued to show momentum during the first quarter and totaled $657.2 million and $679.2 million, respectively at March 31, 2014. Our credit quality remained strong, with nonperforming assets to total assets of 0.36% and the allowance for loan losses to total loans was 1.31%. Total shareholders equity at March 31, 2014 and December 31, 2013 was $71.1 million and $69.5 million, respectively. Tangible book value was $15.79 per share at March 31, 2014 compared to $15.46 per share at December 31, 2013 and the ratio of tangible common equity was 7.35% and 7.45%, respectively, at March 31, 2014 and December 31, 2013. Net income was $1.1 million for the first quarter of 2014, compared to $1.0 million for the first quarter of 2013 and $1.4 million for the fourth quarter of 2013. The quarters ended March 31, 2014 and December 31, 2013 included the following merger and acquisition related items: In the first quarter of 2014, merger and acquisition related expenses of $141 thousand, or $93 thousand net of tax, were recorded, primarily reflecting costs related to our agreement to purchase Quinnipiac Bank and Trust Company signed on March 31, 2014. Exclusive of these expenses, net income for the first quarter of 2014 would have been $1.2 million. In the fourth quarter of 2013, in connection with The Wilton Bank acquisition on November 5, TABLE OF CONTENTS 2013, a bargain purchase gain of $1.3 million and merger and acquisition related expenses of $844 thousand, or $776 thousand net of tax, were realized. Exclusive of these items, net income for the fourth quarter of 2013 would have been $585 thousand. For the three months ended March 31, 2014, we had net interest income of $7.1 million, an increase of $1.1 million, or 17%, over the three months ended March 31, 2013. Our net interest margin for the three months ended March 31, 2014 and 2013 was 3.97% and 4.16%, respectively. Included in the net interest margin for the quarters ended March 31, 2014 and 2013 was income related to the payoff of loans, which contributed five basis points and ten basis points, respectively. We also experienced growth in our non-interest income, which totaled $769 thousand for the three months ended March 31, 2014 representing 10% of our total revenue (sum of net interest income and noninterest income), up from $284 thousand, or 4% of total revenue, for the three months ended March 31, 2013. Expansion Activities. On March 31, 2014, we entered into a merger agreement with Quinnipiac. Quinnipiac has one branch located in Hamden, Connecticut, and has applied for a second branch in the neighboring town of North Haven. Both towns are in New Haven County, Connecticut, which will represent a new market for us. At December 31, 2013, Quinnipiac had approximately $100 million in assets, $87 million in deposits and loans of $83 million. Total consideration for the acquisition is expected to be comprised of our common stock (75%) and cash (25%). The total consideration to be paid to Quinnipiac shareholders, based on the closing price of a share of our common stock on the OTC Bulletin Board, or OTCBB, on March 31, 2014, is approximately $15 million. Pursuant to the merger agreement, each outstanding share of Quinnipiac will be converted at the election of the holder into the right to receive 0.56 shares of our common stock, or $12.00 in cash, subject to pro rata adjustments to meet the proportion of stock and cash consideration described above. Outstanding options to purchase Quinnipiac shares, totaling 109,000 as of March 31, 2014, will be exchanged for options in our common stock adjusted for the 0.56 fixed exchange ratio. The exercise price per share of our common stock under the new option shall be equal to the exercise price per share of Quinnipiac common stock subject to the Quinnipiac stock option divided by the 0.56 fixed exchange ratio. Outstanding warrants held by founders of Quinnipiac, totaling 122,500 as of March 31, 2014, will be automatically converted into a warrant to purchase 0.56 shares of our common stock for $17.86. Upon consummation of the transaction, Quinnipiac will be merged into Bankwell Bank. Upon effectiveness of the merger, we have agreed to increase the number of our directors and of the directors of Bankwell Bank by one to add one director from the Quinnipiac board of directors, who will be selected by our board of directors after consulting with Quinnipiac. Additionally, upon consummation of the transaction, we agreed to make change of control payments to Quinnipiac s President and Chief Executive Officer, Mark A. Candido, in an amount equal to $331,021, and to Quinnipiac s Chief Lending Officer and Executive Vice President, Richard R. Barredo, in an amount equal to $300,425. We intend to file a Form S-4 Registration Statement in connection with the proposed transaction and issuance of our common stock to Quinnipiac shareholders. We expect the transaction to close in the third quarter of 2014, subject to the requisite approval of the shareholders of Quinnipiac, required regulatory approvals (including approval of Quinnipiac s branch application for the branch in North Haven), and satisfaction of other customary closing conditions. On November 5, 2013, we acquired The Wilton Bank for approximately $5.0 million in cash, and merged The Wilton Bank into Bankwell Bank. The acquisition added one branch, approximately $25.1 million in loans, $64.2 million in deposits and expanded our presence in Fairfield County. In addition, we plan to open a new branch in Norwalk, Connecticut in the second quarter of 2014, which will further expand our footprint in Fairfield County. Capital Raising Activities. In the third quarter of 2013, we raised approximately $6.2 million in additional capital through the sale of 370,000 shares, approximately 9.5% of our issued shares of common stock, to an institutional investor, or the Institutional Investor. In connection with this private placement, we granted the Institutional Investor a preemptive right to participate in any private or public offering of shares of our common stock by us, including this offering, until September 30, 2016. We have provided the Institutional Investor with notice of its ability to exercise its preemptive rights in connection with this offering in accordance with the relevant agreement. TABLE OF CONTENTS Series C Preferred Stock Piggyback Registration. We are a participant in the United States Treasury s Small Business Lending Fund Program, or SBLF. As part of the SBLF, we issued to the Secretary of the United States Treasury, or the Treasury, 10,980 shares of our Senior Non-Cumulative Perpetual Preferred Stock, Series C, no par value, or Series C preferred stock. We agreed to provide the holders of our Series C preferred stock, currently only the Treasury, or the Selling Shareholder, with piggyback registration rights to certain offerings of our securities, including this offering. On April 3, 2014, the Treasury exercised its piggyback registration rights and, as a result, we have included the Treasury s Series C preferred stock in this registration statement. Risk Factors There are a number of risks that should be considered before making an investment in this offering. These risks are discussed more fully in the section entitled Risk Factors beginning on page 20 of this prospectus. These risks include but are not limited to the following: Our business may be adversely affected by general business and economic conditions. We rely heavily on our management team and could be adversely affected by the unexpected loss of key officers. At December 31, 2013, approximately 75%, or $332 million, of our commercial loans, were originated in the last four years. As such, our loan portfolio is relatively unseasoned and could increase risk of credit defaults in the future. Our limited experience with these loans does not provide us with a significant payment history pattern with which to judge future collectability. As a result, it may be difficult to predict the future performance of our loan portfolio. The success of acquisition transactions, including the acquisition of Quinnipiac, if it is consummated, and of The Wilton Bank, will depend on our ability to successfully combine the target banking institution s business with our business, and, if we experience difficulties with the integration process, the anticipated benefits of the acquisition may not be realized fully or at all or may take longer to realize than expected. The additional capital raised in this offering will be deployed to support our growth plans. There is no guarantee that our growth initiatives will be as successful as our historic organic growth has been. Our interest rate sensitivity profile was liability sensitive as of December 31, 2013, which will result in our income decreasing more in a rising rate environment than a falling rate environment. We operate in a highly regulated environment, which could restrain our growth and profitability. Additional Information Our principal executive office is located at 220 Elm Street, New Canaan, Connecticut 06840, and our telephone number is (203) 652-6300. Our website address is www.mybankwell.com. The information contained on or accessible through our website is not a part of or incorporated by reference into this prospectus. TABLE OF CONTENTS
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in, or incorporated by reference into, this prospectus. As a result, it may not contain all the information that may be important to you in, or that you should consider before making a decision as to whether or not to invest in our securities, and is qualified in its entirety by the more detailed information included in and incorporated by reference into this prospectus. You should read the entire prospectus carefully, including the section entitled Risk Factors and the documents incorporated by reference, which are described under Incorporation of Certain Documents by Reference before making an investment decision. For a more complete description of our business, see the Business section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which is incorporated by reference herein and the section entitled Recent Developments set forth below. Our Company Cross Country Healthcare, Inc. is a national leader in providing healthcare recruiting, staffing and workforce management solutions. With more than 30 years of experience, we are dedicated to placing highly qualified nurses and physicians as well as allied health, advanced practice, clinical research, and case management professionals. We provide both retained and contingent placement services for physicians, as well as retained search services for healthcare executives. We have approximately 4,300 active contracts with a broad range of clients, including acute care hospitals, physician practice groups, nursing facilities, rehabilitation and sports medicine clinics, government facilities, as well as nonclinical settings such as homecare and schools. Through our national staffing teams and network of more than 70 branch office locations, we are able to place clinicians for travel and per diem assignments, local short-term contracts and permanent positions. We are a market leader in providing flexible workforce management solutions, which include managed services provider, workforce assessments, internal resource pool consulting and development, electronic medical record transition staffing and recruitment process outsourcing. In addition, we provide education and training programs for healthcare professionals through seminars and e-learning tools. Our results are reported in three business segments: Nurse and Allied Staffing, Physician Staffing, and Other Human Capital Management Services. Our healthcare clients use our diversified service offerings to manage their changing workforce needs due to fluctuations in patient census, normal attrition, leaves of absence, seasonality, EMR technology conversions, facility expansions, and the uncertainty of workforce needs created by the Patient Protection and Affordable Care Act of 2010, among other things. By utilizing our diversified healthcare solutions, clients are able to flex their workforce up and down, streamline their purchasing needs, access specialties not available in their local area, and access quality healthcare personnel to provide continuity of care in order to improve patient outcomes. Nurses, allied professionals and physicians work with us for a variety of reasons, such as the ability to explore different geographic areas of the country, work flexible shifts, gain clinical experience by working in prestigious healthcare facilities, and position themselves for permanent positions. Our fees are paid directly by our clients and in certain instances by vendor managers. As a result, we have no direct exposure to Medicare or Medicaid reimbursements. Our operations reflect a diversified revenue mix across healthcare customers. For the full year 2013 and the nine months ended September 30, 2014, our revenue from continuing operations was $438 million and $430 million, respectively. Our nurse and allied staffing business segment was 62% and 72%, respectively, of revenue and is comprised of travel nurse, travel allied and branch-based local nurse and allied staffing. Our physician staffing business segment was 29% and 22%, respectively, of our revenue and consists of physician, certified registered nurse anesthetists (CRNAs), nurse practitioners (NPs) and physician assistants (PAs) staffing services with placements across multiple specialties. Our other human capital management services business segment was 9% and 6%, respectively, of our revenue and consists of education and training, as well as retained search services related primarily to physicians and healthcare executives. Table of Contents Recent Developments On June 30, 2014, we acquired substantially all of the assets and certain liabilities of Medical Staffing Network Healthcare, LLC ( MSN ) for an aggregate purchase price of $48.1 million, subject to a post-closing net working capital adjustment. We paid $44.9 million, net of cash acquired at closing, including $1.0 million placed into an escrow account for the net working capital adjustment. In the fourth quarter of 2014, the net working capital adjustment was finalized as a reduction to purchase price with a payment to us of $0.2 million from the escrow. An additional $2.5 million of the purchase price was deferred for a period of one year and will be used to fund the seller s COBRA obligations during that time with any residual being remitted to the seller at the end of the period. To date we have paid $0.1 million of the deferred purchase price toward the COBRA obligations. We financed the purchase price using $55.0 million in new subordinated debt consisting of a $30.0 million, 5-year term loan and $25.0 million of convertible notes having a 6-year maturity and a conversion price of $7.10. We also amended our loan agreement with Bank of America. N.A. to increase our borrowing capacity under our senior secured asset-based revolving credit facility from $65.0 million to $85.0 million. At the time of the acquisition, MSN had 55 locations throughout the U.S. that provide per diem, local, contract, travel, and permanent hire staffing services. This acquisition increases our branch network and market share, diversifies our customer base and brings new service lines. Management believes it positions us to serve our customers better and to increase earnings growth through improved fill rates, expansion of its managed service programs and per diem activities, and the recognition of cost synergies. Company Information Our executive offices are located at 6551 Park of Commerce Boulevard, N.W., Boca Raton, Florida, 33487, and our telephone number is (561) 998-2232. Our Internet website address is http://www.crosscountryhealthcare.com /. Information on, or accessible through, our website is not incorporated into, nor should it be considered part of, this prospectus or any applicable prospectus supplement, except as and solely to the extent otherwise provided herein or therein. Table of Contents The Offering Issuer Cross Country Healthcare, Inc. Common Stock offered by the selling stockholders Up to 3,521,127 shares of common stock, comprised of shares of common stock issued or issuable upon exercise of the Convertible Notes and shares of common stock that may be issuable from time to time in the event that the Company pays a portion of the interest on the Convertible Notes in kind. Common Stock to be issued and outstanding after this offering 36,327,675 shares Use of proceeds We will not receive any of the proceeds from the sale by the selling stockholders of the securities. See Use of Proceeds. NASDAQ Symbol Our common stock is listed on The Nasdaq National Market under the symbol CCRN.
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0000072170_inergetics_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0000072170_inergetics_prospectus_summary.txt
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+PROSPECTUS SUMMARY This prospectus summary highlights certain information about our company and other information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before making an investment decision. You should carefully read the entire prospectus and any prospectus supplement, including the section entitled "Risk Factors", before making an investment decision. About Us Inergetics, Inc., a Delaware corporation (the "Company", "we", "us" or "our"), operates through its wholly-owned subsidiary, Millennium Biotechnologies, Inc. (the "Subsidiary" or "Millennium"). Millennium was incorporated in the State of Delaware in November 2000 and engages in the research, development, and marketing of specialized nutritional supplements as an adjunct to medical treatments for select medical conditions, as well as for athletes seeking improved recovery and advanced performance. We currently markets products which are targeted toward individuals. Millennium s currently manufactures and markets four proprietary product lines and 36 SKU s to 7 separate target markets. These product lines include Surgex , Bikini Ready , SlimTrim, Martha Stewart Essentials, Om Essentials, Muscle Maker Grill and Intrinsix . Our products are unique in that they deliver healthy, whole food calories and do not contain high-fructose corn syrup or corn oil, which are not healthy or suitable forms of calories for Millennium s targeted markets. These ingredients have also shown to correlate with an increase in obesity, a promotion of insulin resistance, and are implicated in inflammation and cancer. Additionally, the use of high levels of Omega-6 fats (corn oil) has been shown to promote tumor growth in animal models. Millennium developed Surgex sports nutritional formula ( www.surgexsports.com ) in late 2007. Surgex was tested in two single-blind placebo controlled clinical trials conducted on the Division 1A Football and Soccer players at Rutgers University. Base on the results of these trials we believe that Surgex addresses the nutritional concerns of both professional and amateur elite athletes. These athletes often experience similar symptoms post-workout to those battling immuno-compromised conditions, such as fatigue, loss of lean muscle, oxidative stress, and reduced immune function. Millennium acquired Bikini Ready and SlimTrim in January 2013. Both Bikini Ready and SlimTrim are sold in the diet category in retail stores. In addition, SlimTrim is also sold direct to consumer on its web site and Bikini Ready is sold direct to consumer on its web site www.bikinireadylifestyle.com. 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," "non-accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer x Smaller reporting company 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. In May 2013, Millennium acquired the license for Martha Stewart Essentials. Condition specific supplements were developed for women. The product is sold in retailers and on the web site www.marthastewartessentials.com. Our principal executive offices are located at 550 Broad Street, Suite 1212, Newark, N.J. 07102, and our telephone number is (908) 604-2500. We maintain a website at http://www.inergetics.com. Information contained on our website and any other related websites referred to herein are not considered to be a part of, nor incorporated by reference in, this Prospectus. About This Offering Common stock to be offered by the Selling Stockholder 24,656,000 shares of common stock, $0.001 par value, issued or issuable pursuant to conversion of a Subordinated Secured Convertible Promissory Note dated July 14, 2014 (the "Note") and exercise of a Common Stock Purchase Warrant dated July 14, 2014 (the "Warrant"). Common stock outstanding prior to this offering 87,354,739 shares Common stock to be outstanding after giving effect to the issuance of the 24,656,000 shares registered in this prospectus. 112,010,739 shares(1) Use of Proceeds We will receive no proceeds from the sale of shares of common stock by the Selling Stockholder in this offering. However, we may receive proceeds from the exercise of the Warrant. See "Use of Proceeds."
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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 of VeriTeQ Corporation (referred to herein as we, our, us, VeriTeQ or the Company ). You should carefully read the entire prospectus, including Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations and the accompanying financial statements and the related notes to the Financial Statements before making an investment decision. Business Overview VeriTeQ Corporation, or VC, formerly known as Digital Angel Corporation, acquired its wholly-owned subsidiary, VeriTeQ Acquisition Corporation, or VAC, a Florida corporation, pursuant to the terms of a share exchange agreement, as more fully discussed below. VC became the legal acquirer of VAC and VAC became the accounting acquirer of VC pursuant to the terms of the Exchange Agreement (defined below). In January 2012, VAC acquired all of the outstanding stock of PositiveID Animal Health Corporation, or PAH, a Florida corporation from PositiveID Corporation, a related party. In December 2012, VAC formed a subsidiary, VTQ IP Holding Corporation, a Delaware corporation. VC, VAC and VAC s subsidiaries are referred to together as, VeriTeQ, the Company, we, our, and us . VAC was founded in December 2011 and is engaged in the business of radio frequency identification technologies, or RFID, for the Unique Device Identification, or UDI, of implantable medical devices and radiation dose measurement technologies for use in radiation therapy treatment. VeriTeQ is in the development stage as defined by Accounting Standards Codification subtopic 915-10 Development Stage Entities, or ASC 915-10, and its success depends on its ability to obtain financing and realize its marketing efforts. To date, VeriTeQ has not generated sales revenues, has incurred expenses and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment of a new business enterprise. VeriTeQ has proprietary technology, including over 100 patents, patents pending, patent licenses, and U.S. Food and Drug Administration, or the FDA, cleared and CE marked products. VeriTeQ has two principal business lines: unique identification technologies for medical devices and radiation dosimeters and other medical sensor applications. On September 20, 2013, the FDA published in the Federal Register its Final Rule for UDI, or the FDA Rule, which requires all medical devices distributed in the U.S. that are intended to be used more than once and intended to undergo any form of reprocessing before each use, to carry a UDI directly on the device itself, called direct part marking. The FDA Rule was issued in response to the passage of the FDA Safety and Innovation Act, which directed the federal agency to develop regulations that would create a UDI system for medical devices. Medical devices that are reprocessed and reused will inevitably be separated from their original label and device package, and therefore the FDA states direct part marking is the only way to ensure the accurate identification of such devices. In October 2004, VeriTeQ s human-implantable RFID microchip, which is the basis for the VeriTeQ s Q Inside Safety Technology, was cleared for use by the FDA. VeriTeQ believes that its Q Inside Safety Technology meets the automatic identification and data capture, or AIDC, technology requirement of the direct part marking mandate of the FDA Rule for reprocessed medical devices. The VeriTeQ UDI system consists of a passive implantable RFID microchip called Q Inside, a proprietary hand-held reader, and corresponding database. Complementing its UDI technology, VeriTeQ has proprietary technologies and patents for implantable and wearable radiation dosimeters and bio-sensing technologies. Its radiation dosimeter portfolio includes previously commercialized, FDA cleared and CE marked radiation dosimeter technologies that were formerly used in numerous U.S. hospitals to measure radiation doses in vivo and on the skin surface. VeriTeQ s OneDose and DVS SmartMarker technologies provide radiation oncologists, radiologists, therapists and physicists a tool to know the exact dosage of radiation delivered to a patient at the skin level and at the site of a tumor or tumor area. Significant Developments Share Exchange Agreement and Reverse Stock Split On June 24, 2013, VAC and its stockholders entered into a share exchange agreement, or the Exchange Agreement, with VC and the closing of the transaction, or the VeriTeQ Transaction, took place on July 8, 2013. Pursuant to the terms of the Exchange Agreement, VAC exchanged all of its issued and outstanding shares of common stock for shares of VC s preferred stock, which were converted into VC s common stock automatically upon the effectiveness of the 1:30 reverse stock split, or the Reverse Stock Split, on October 18, 2013. In addition, all outstanding VAC stock options and warrants to purchase shares of VAC s common stock, whether or not exercisable or vested, converted into options and warrants to acquire shares of VC s common stock. As a result of the VeriTeQ Transaction, VAC became a wholly-owned subsidiary of VC. Based on the terms of the VeriTeQ Transaction, which are more fully described under the heading, Description of Business presented below, VAC was the accounting acquirer and as a result VAC s operating results became the historical operating results of the Company. In addition, VAC s common stock has been presented as if it was converted into shares of VC s common stock at the beginning of the periods presented herein and based on an exchange ratio of 0.19083 under the terms of the Exchange Agreement. The exchange ratio took into consideration the Reverse Stock Split. As a result of the Reverse Stock Split, all share information in this Registration Statement on Form S-1 has been restated to reflect the Reverse Stock Split as if it had occurred at the beginning of the periods presented, where appropriate. Securities Purchase Agreement, Notes and Warrants On November 13, 2013, or the Closing Date, we entered into a securities purchase agreement, or the Purchase Agreement, with a group of institutional and accredited investors, or the Investors. Pursuant to the terms of the Purchase Agreement, we issued and sold to the Investors the Notes in the aggregate original principal amount of $1,816,667, or the Notes, and warrants to purchase up to 2,422,222 shares of our common stock, on the terms set forth below, or the Financing. The Notes mature on the first anniversary date of the issuance and were issued with an original issue discount of approximately 10% and the aggregate purchase price of the Notes was $1,650,000. The Notes are non-interest bearing, unless there is an event of default (as defined in the Notes), in which case interest on the Notes shall commence accruing daily at a rate of eighteen percent (18%) per annum. The initial conversion price of the Notes, or the Conversion Price, is $0.75 per share. In connection with the Financing, we agreed to allow our placement agent to participate in the offering for $150,000 in lieu of our obligation to pay the placement agent a cash fee of $150,000 and, therefore, the aggregate cash purchase price of the Notes is $1,500,000. In addition, the placement agent will receive 5% of the aggregate cash exercise price received by us upon exercise of any warrants in the offering, and they received 222,222 warrants entitling them to purchase 222,222 shares of common stock as part of their placement agent fee. The aggregate number of warrants issued in the Financing to the Investors and the placement agent was 2,644,444. We refer to the aggregate number of warrants herein as the Warrants. The Warrants are immediately exercisable, have an initial exercise price, or Exercise Price, of $2.84 per share and expire on the fifth anniversary of their initial issuance. In connection with the sale of the Notes and the Warrants we entered into a registration rights agreement, a security agreement, and a guaranty. Under the registration rights agreement, we have agreed to register 125% of the shares issuable under the Notes, or 3,027,778 shares, and 125% of the shares issuable under the Warrants, or 3,305,557 shares, for a total of 6,333,335; or such lesser number of shares as required by the SEC. Therefore, we are currently registering 856,449 shares of our common stock issuable in connection with the Notes. We intend to file additional registration statement(s) to register the additional shares required to be registered in connection with the Notes and the shares underlying the Warrants, if and when, such additional shares become eligible for registration. In addition, we and each depository bank in which such bank account is maintained entered into certain account control agreements with respect to certain restricted accounts described in the Notes and the security agreement. Under the terms of the Financing, we expect to receive gross proceeds of $1.5 million, less transaction expenses. On November 13, 2013, $750,000 of the gross proceeds from the sale of the Notes was placed into restricted bank accounts in the Company s name in an amount proportionate to each holder s principal Note balance. In addition, we were required to place $75,000 of the gross proceeds we received into a restricted bank account to cover one-half of the placement agent s fee, although this requirement was subsequently waived. In addition, we were required to place any proceeds from the sale of certain marketable securities that we owned into the restricted bank accounts in an amount proportionate to each holder s principal Note balance. Accordingly, in the fourth quarter of 2013, upon the sale of the marketable securities, we placed approximately $0.1 million in the restricted bank accounts. The restricted funds will be applied to pay any redemption or other payment due under the applicable Note to the applicable holder from time to time. A portion of the restricted funds will be released to us upon any conversion of the Notes or at any time the balance in the applicable restricted account, excluding the proceeds from the sale of the marketable securities, exceeds the principal of the applicable Note then outstanding. In addition, under the terms of the Purchase Agreement, the number of shares a holder, together with its affiliates, is able to beneficially own at any given time is limited to 4.99% of our total common stock then outstanding. If a holder s beneficial ownership reaches the 4.99% limit, they will not be able to convert any remaining portion of their Note or exercise their Warrant until such time that they sell enough shares to reduce their ownership percentage. These restrictions could limit the amount of proceeds we expect to realize from the Financing. The Financing is more fully described in the section titled, Description of Note and Warrant Financing beginning on page 13. Recent Developments Results for the Quarter and Year Ended December 31, 2013 We are currently in the process of preparing our financial results for the fourth quarter and year ended December 31, 2013 and, therefore, final results are not yet available. We shipped our first order of our Q Inside Safety Technology microchips in the fourth quarter of 2013 and, as a result we expect to recognize $18,000 of revenue in the fourth quarter. We expect our selling, general and administrative expenses to increase from the previous quarters due to the addition of four manufacturing related employees. We expect to record non-cash charges, currently estimated at approximately $8.2 million in the fourth quarter, primarily as a result of the beneficial conversion feature of the Notes and the valuation of the Warrants. These charges will be partially offset by other income as a result of a change of approximately $0.8 million in the valuation of a subordinated convertible debt with an embedded convertible option that is being revalued each reporting period. Accordingly, our liabilities and stockholders deficit will increase from the September 30, 2013 balances. Our cash on-hand at December 31, 2013 was approximately $12,000 and our restricted cash, resulting from the terms of the Notes and the Purchase Agreement, was approximately $0.9 million. Our estimated working capital deficit at December 31, 2013 is approximately $2.0 million ($2.9 million excluding restricted cash). The amounts discussed herein are not yet audited, are estimates and are subject to change based on our final review and analysis. Letter Agreement On January 30, 2014, we entered into a letter agreement with the buyers of our former subsidiary, Digital Angel Radio Communications Ltd. Pursuant to the letter agreement, the buyers paid us 0.1 million in full and final settlement of a deferred purchase price resulting from the sale. As a result, we will record, a loss of approximately $52,000 in the first quarter of 2014. Change in Management Effective January 31, 2014, Michael E Krawitz became our Chief Legal and Financial Officer replacing Lorraine M. Breece who resigned as our Chief Financial Officer on January 30, 2014. Ms. Breece will remain with us in a different capacity, which has not yet been determined. Mr. Krawitz has entered into an employment agreement with us, which is described beginning on page 51 of this prospectus. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 2 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 VERITEQ CORPORATION (Exact name of registrant in its charter) Delaware 3669 43-1641533 (State or other jurisdiction of (Primary Standard Industrial (IRS Employer incorporation or organization) Classification Code Number) Identification Number) 220 Congress Park Drive, Suite 200 Delray Beach, Florida 33445 (561) 846-7000 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Scott R. Silverman Chief Executive Officer VeriTeQ Corporation 220 Congress Park Drive, Suite 200 Delray Beach, Florida 33445 (561) 846-7000 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies of communications to: Tammy Knight, Esq. Holland & Knight LLP 515 East Las Olas Boulevard, Suite 1200 Fort Lauderdale, Florida 33301 Phone: (954) 525-1000 Fax: (954) 463-2030 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 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 of 1933, 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 of 1933, 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 of 1933, 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 (Do not check if a smaller reporting company) Where You Can Find Us Our principal executive offices are located at 220 Congress Park Drive, Suite 200, Delray Beach, Florida 33445. Our telephone number is (561) 846-7000.
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0000943119_fnbh_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0000943119_fnbh_prospectus_summary.txt
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+SUMMARY Securities Offered We are offering up to 2,300,000 shares of our common stock. Offering Price $0.70 per share. Manner of Offering We are offering the shares in this rights offering to holders of our common stock as of the Record Date of January 8, 2014. Form of Investment Investments in shares may be made by certified or cashier's check drawn on a U.S. bank, or by personal check. See "THE RIGHTS OFFERING – Acceptable Forms of Payment " below. Rights Offering If you are a shareholder as of the Record Date, you will receive a non-transferable subscription Right to participate in this rights offering. This Right will entitle you to purchase, subject to all of the terms and conditions included in this prospectus, up to six (6) shares of common stock for every one (1) share of common stock held by you as of the Record Date. We refer to this as the "Basic Subscription Privilege." See "THE RIGHTS OFFERING" below. Over-Subscription Privilege If you hold a Right and fully exercise your Basic Subscription Privilege to subscribe to purchase the largest number of shares available to you, you may also subscribe for additional shares pursuant to your "Over-Subscription Privilege" that allows you to subscribe to purchase up to a maximum of 500,000 shares total, including all shares subscribed pursuant to your Basic Subscription Privilege; however, any sale of shares in this offering pursuant to the exercise of Over-Subscription Privileges is subject to allotment and subject to the discretion of our Board to accept or reject subscriptions for shares pursuant to these Over-Subscription Privileges. See "THE RIGHTS OFFERING – Over-Subscription Privileges" below. Aggregate Amount of the Rights Offering Subject to our right to terminate the rights offering for any reason prior to accepting any subscriptions and subject to our right to reduce the number of Excess Shares we may sell pursuant to the exercise of Over-Subscription Privileges, we intend to issue and sell up to a maximum of 2,300,000 shares of common stock pursuant to subscriptions timely received pursuant to the exercise of Rights, including pursuant to the Over-Subscription Privileges. There is no minimum number of Rights that must be exercised in order for the offering to close. Investors who purchased shares of our mandatorily convertible preferred stock in the private placement transaction we closed in December 2013 have agreed not to participate in this rights offering as the primary purpose of this offering is to allow our other shareholders the opportunity to participate in the recapitalization at the same price per share of common stock used in that private placement transaction. See "THE COMPANY – Background of the Rights Offering" below for more information. Transferability of Rights The Rights are not transferable. Rights Offering Expiration The rights offering will expire at 5:00 p.m., Eastern time, on [ ], which we refer to in this prospectus as the Expiration Date, unless we decide, in our sole discretion, to extend this Expiration Date. Acceptance of Subscriptions Subscriptions for shares are not binding unless accepted by us. Subscriptions received in the rights offering will be rejected, in whole or in part, to the extent that subscriptions are received to purchase a number of shares in excess of the number we have agreed to accept. If we do not accept, in whole or in part, any particular subscription for shares, we will mail a refund to that subscriber in an amount equal to the purchase price for the shares as to which such subscription is not accepted. We will not pay any interest on funds submitted with subscriptions. All refunds will be mailed promptly after the expiration of the applicable subscription period. See "THE RIGHTS OFFERING – Return of Payments for Rejected Subscriptions" below. Minimum Purchase Requirement There is no minimum purchase requirement. Maximum Purchase Limit No shareholder may subscribe to purchase more than 500,000 shares, including shares subscribed pursuant to the shareholder's Basic Subscription Privilege and Over-Subscription Privilege. In addition, no shareholder may purchase shares to the extent that such shares, when added to shares already beneficially owned by the shareholder, will cause the shareholder's beneficial ownership of the outstanding voting stock of the Company to exceed 4.99%. Please see "DESCRIPTION OF OUR CAPITAL STOCK – Restrictions Under Our Tax Benefits Preservation Plan" below for more information. No Revocation Once you exercise a Right in this rights offering, your subscription to purchase shares is irrevocable. Procedure for Exercising a Right To exercise a Right in the rights offerings, complete the applicable subscription documents and deliver them to the subscription agent with full payment for the shares you elect to purchase. We must receive the proper forms and payments on or before 5:00 p.m. Eastern time on the applicable expiration date. See "THE RIGHTS OFFERING – Subscription Procedures" below. Nominee Accounts If you are a shareholder as of the Record Date and wish to exercise your Right to subscribe for shares and your common stock is held by a broker, dealer, custodian bank, or other nominee, then you should promptly contact your broker, dealer, custodian bank, or other nominee and request that they exercise the Right on your behalf. You may also contact the nominee and request that the nominee send separate subscription documents to you. Plan of Distribution The offering is not underwritten, and we have not employed any brokers, dealers, or agents to participate in the offering, other than our subscription agent and information agent for this offering. Use of Proceeds We intend to contribute a portion of the net proceeds from this offering, or perhaps all of the net proceeds from this offering, to our subsidiary Bank to improve its capital position. The balance of the net proceeds, if any, will be retained at the holding company to pay future holding company expenses and/or for future contribution to the Bank. Our management will have broad discretion in the application of the net proceeds, and shareholders and potential investors will be relying upon the judgment of our management regarding the application of these proceeds. See "USE OF PROCEEDS" below. Significant Shareholder Has Ability to Influence Company Stanley B. Dickson, one of the directors of our Company and Bank, is currently the beneficial owner of approximately 42% of our outstanding common stock. As disclosed under "RISK FACTORS" below, this level of ownership results in Mr. Dickson having a significant degree of influence over the Company and its operations. See "THE COMPANY – Control of the Company" below for more information. Stock Symbol FNHM
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001071760_ecosphere_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001071760_ecosphere_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus carefully including the section entitled Risk Factors before making an investment decision. All references to Ecosphere, we, the Company , our and us refer to Ecosphere Technologies, Inc. Our Company Ecosphere is an innovative U.S. technology licensing and manufacturing company that develops environmental solutions for global markets. We help industry increase production, reduce costs, and protect the environment through a portfolio of more than 35 patented and patent-pending technologies, including Ozonix and Ecos PowerCube , which are licensable across a wide range of industries and applications throughout the world. Ecosphere has an extensive portfolio of intellectual property on its patented Ozonix water treatment technology that includes five issued United States patents, plus one recently approved Notice of Allowance in January 2014, as well as numerous foreign patents, trademarks and pending patent applications. The Ecosphere Ozonix process is a revolutionary advanced oxidation process that is currently being used by Fidelity National Environmental Solutions or FNES, a company in which Ecosphere owns approximately 31%, to enable oil and gas customers to reduce costs, increase treatment efficiencies and eliminate harmful chemicals from oil and gas operations around the United States and will be used in part of Canada in the near future. Ozonix can be used to replace traditional chemicals in a wide variety of industries and applications, including but not limited to agriculture, energy, food and beverage, industrial, mining, marine and municipal wastewater treatment. We are devoting substantial effort to expand our business beyond the energy field in 2014 in order to further leverage our Ozonix technology via widespread partnering and licensing. In addition to FNES, we plan to replicate the success of our subsidiary strategy by granting global Ozonix field-of-use licenses to numerous industry-specific subsidiaries to achieve substantial technology deployment and the corresponding revenue and profit growth. We have recently formed six new subsidiaries, which includes; Ecosphere Agriculture, LLC, Ecosphere Food & Beverage, LLC, Ecosphere Industrial, LLC, Ecosphere Marine, LLC, Ecosphere Mining, LLC and Ecosphere Municipal, LLC. The Ecos PowerCube is the world s most powerful, mobile, solar-powered generator. It is a patented, self-contained, self-sustaining, solar-powered generator that uses the power of the sun to provide energy, communications and clean water to the world s most remote, off-grid locations. Ecosphere s business model is based upon the sale and licensing of intellectual property. In addition to its 31% interest in FNES, Ecosphere owns 100% of the patent rights to all of the potential industries and applications for its Ozonix technology outside of energy. All of the various industries and applications are available for sale including our 31% interest in FNES. Ecosphere is also actively marketing the Ecos PowerCube intellectual property to potential buyers. Corporate Information Our corporate headquarters are located at 3515 S.E. Lionel Terrace, Stuart, Florida, 34997 and our phone number is (772) 287-4846. Our corporate website can be found at www.ecospheretech.com. The information on our website is not incorporated in this prospectus. Presently, Ecosphere owns 31% of Fidelity National Environmental Services, LLC, or FNES, a company that has an exclusive global license from Ecosphere for energy related applications, including oil and gas exploration. Risks Affecting Us Our business is subject to numerous risks as discussed more fully in the section entitled Risk Factors immediately following this Prospectus Summary. In particular, our business would be adversely affected if: our management and sales team fail to monetize the intellectual property we have created that includes but is not limited to the sale of part or all of our 31% interest in FNES, the sale of part or all of our 100% interest in the six new Ozonix subsidiaries, and the sale of part or all of our 100% interest in the Ecos Power Cube ; For a more detailed discussion of these and other risks you should consider before making an investment in our common stock, see the section entitled Risk Factors beginning on page 5 of this prospectus. 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, $0.01 par value per share 18,449,987 $ 0.28 $ 5,138,321.38 $ 661.82 (1) Under Rule 416 of the Securities Act of 1933, the shares being registered include such indeterminate number of shares of common stock as may be issuable with respect to the shares being registered in this registration statement as a result of any stock splits, stock dividends. (2) The proposed maximum offering price per share and the proposed maximum aggregate offering price have been estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rules 457(h) under the Securities Act of 1933 on the basis of the average of the bid and asked price of our common stock on the Over-the-Counter Bulletin Board on January 13, 2014, a date within five days prior to the date of the filing of this registration statement. The registrant hereby amends this registration statement on such date or date(s) 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. Private Placement From December 18 through January 10, 2014, Ecosphere sold $1,845,000 of convertible notes, or the Notes, to four institutional investors and seven individual investors, including a director of Ecosphere. The Notes: (i) are convertible at $0.30 per share, (ii) are due two years from the investment date, and (iii) pay 10% interest per annum on the earlier of (x) the maturity date or (y) conversion. Additionally, Ecosphere issued the investors a total of 12,299,992 five-year warrants exercisable at $0.35 per share. In connection with the investment, Ecosphere agreed to register the shares of common stock underlying the Notes and warrants. The registration statement containing this prospectus is registering the shares of common stock underlying the Notes and warrants. The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission of which this prospectus is a part becomes 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 January 17, 2014 ECOSPHERE TECHNOLOGIES, INC. PROSPECTUS 18,449,987 Shares of Common Stock This prospectus relates to the sale of up to 18,449,987 shares of Ecosphere Technologies, Inc. common stock which may be offered by the selling shareholders identified in this prospectus. We will not receive any proceeds from the sales of shares of our common stock by the selling shareholders named on page 60. Our common stock trades on the Over-the-Counter Bulletin Board under the symbol ESPH . As of the last trading day before the date of this prospectus, the closing price of our common stock was $0.28 per share. The common stock offered in this prospectus involves a high degree of risk. See Risk Factors beginning on page 5 of this prospectus to read about factors you should consider before buying shares of our common stock. The selling shareholders are offering these shares of common stock. The selling shareholders may sell all or a portion of these shares from time to time in market transactions through any market on which our common stock is then traded, in negotiated transactions or otherwise, and at prices and on terms that will be determined by the then prevailing market price or at negotiated prices directly or through a broker or brokers, who may act as agent or as principal or by a combination of such methods of sale. The selling shareholders will receive all proceeds from the sale of the common stock. For additional information on the methods of sale, you should refer to the section entitled Plan of Distribution. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined whether this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is ________, 2014 The Offering Common stock outstanding prior to the offering: 164,138,402 shares Common stock offered by the selling shareholder upon conversion of notes: 6,149,995 shares (1) Common stock offered by the selling shareholder upon exercise of warrants: 12,299,992 shares (1) Common stock outstanding immediately following the offering: 182,588,389 shares Use of proceeds: Except for the proceeds we receive upon the exercise of warrants (if the selling shareholders do not use the optional cashless exercise method), we will not receive any proceeds from the sale of shares by the selling shareholders. See Use of Proceeds on page 12. Stock symbol: OTCBB: ESPH (1) Assumes all convertible notes are converted and all warrants are exercised for cash rather than on a cashless basis. The number of shares of common stock to be outstanding prior to and after this offering excludes: a total of 56,131,883 shares of common stock issuable upon the exercise of outstanding stock options; a total of 5,019,270 shares of common stock issuable upon the exercise of warrants, which does not include the warrants referred to above; a total of 2,607,813 shares of common stock issuable upon the conversion of notes, which does not include the shares underlying the notes referred to above; and a total of 362,497 shares of common stock underlying preferred stock. TABLE OF CONTENTS Page PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001118037_sajan-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001118037_sajan-inc_prospectus_summary.txt
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001136711_gamerica_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001136711_gamerica_prospectus_summary.txt
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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, Mind Solutions, the Company, VOIS, Inc., we, us and our refer to Mind Solutions, Inc., a Nevada corporation. The Company MedStrong International Corporation was incorporated in the State of Delaware on May 19, 2000, as Medical Records by Net, Inc. On October 17, 2000, its name was changed to Lifelink Online, Inc. In January 2001, its name was changed to MedStrong Corporation. On March 9, 2001, the corporate name was changed to MedStrong International Corporation. On January 31, 2007, our name was changed to VOIS, Inc. On February 12, 2007, we announced a change in our shell company status. We had been classified for reporting purposes as a shell company (as such term is defined in Rule 12b-2 under the Exchange Act). Commencing in the first quarter of 2007, we had developed a new line of business in connection with an Internet social networking site, incurred expenses developing this site, brought in senior experienced management, and purchased certain assets in furtherance of this line of business. On March 18, 2008, VOIS, Inc. changed its domicile from the State of Delaware to the State of Florida. There was no change in our capital structure as a result of this corporate event. On October 19, 2012, VOIS, Inc. entered into an Agreement and Plan of Merger (the Merger Agreement ) with Mind Solutions, Inc., a Nevada corporation ( MSI ), Mind Solutions, Inc., an Ontario corporation ( MSIC ) and Mind Solutions Acquisition Corp., a Nevada corporation ( MSAC ) which was a wholly-owned subsidiary of our company formed for this transaction. Under the terms of the Merger Agreement, MSAC was merged into MSI and MSI became a wholly-owned subsidiary of VOIS (the Merger ). The stockholders of MSI were issued a total of 196,000,000 shares of our common stock in exchange for 100 percent of the outstanding shares of MSI. Upon the closing of the Merger, our sole officer and director resigned and simultaneously with the Merger, Kerry Driscoll was appointed our sole officer and director. Our business and operations are now the business and operations of Mind Solutions, Inc., a Nevada corporation. On October 28, 2013, VOIS, Inc. changed the state of incorporation of VOIS, Inc. from Florida to Nevada by means of a reverse merger with our wholly-owned subsidiary, Mind Solutions, Inc., a Nevada corporation. As a result, we also adopted new articles of incorporation and new bylaws which will govern our corporate operations under Nevada law. Along with the change of domicile, we changed our name to Mind Solutions, Inc. Mind Solutions, Inc. develops systems for the Brain-Computer-Interface (BCI) market, which includes state of the art micro electro encephalograph, or EEG, wireless headset technology and software applications designed to operate with thought controlled technologies. Our software development is currently compatible with the Emotiv EEG headset, allowing the user to control any action on their PC through the power of their mind. We have three completed software applications on the market which operate on the Emotiv platform. We are working to provide applications for the mobile market, utilizing an open architecture platform, allowing outside developers to create thought-controlled applications, which can be submitted to Mind Solutions for review. Once approved, we plan to offer our products for sale on an App Store in the near future. Mind Solutions is working with what we regard as one of the most advanced electronics manufacturing companies in Hong Kong to develop our EEG headset and bring it to market. This BCI headset will allow users to operate thought-controlled applications on their mobile phone devices as well as on traditional PC computers. With the use of a wireless headset that detects and processes real time brain activity patterns (small voltage changes in the brain caused by the firing of neurons), the user may be able to control any machine with the power of his mind. The sensors detect thoughts, feelings, and expressions and initiates commands produced by the software we have developed based on research into the human brain the central control center for all our interactions and experiences. Using non-invasive electroencephalography (EEG), it is possible to observe each person s individual electrical brain activity. Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [_] (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 (1) Proposed Maximum Offering Price Per Share (2) Proposed Maximum Aggregate Offering Price (3) Amount of Registration Fee Common stock 800,000,000 $0.0019 $1,520,000 $195.78 Total Registration Fee $195.78 (1)In the event of a stock split, stock dividend, or similar transaction involving the 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. (2)Based on Rule 457 under the Securities Act. (3)This amount represents the maximum aggregate value of common stock which may be put to the selling stockholder by the registrant pursuant to the terms and conditions of an Equity Purchase Agreement between the selling stockholder and the registrant. Our focus is to develop software and certain related hardware. We are developing a proprietary micro electro encephalograph, or EEG, wireless headset that may, if we are successful, allow interaction with our software applications that we are also developing. The hardware we are developing is a BCI device to be used to interpret electrical signals produced by the brain. Mind Solutions has successfully tested the device on several Android smart phones and tablets and has established the EEG signals as well as communication with the respective devices. Once developed, we believe that the EEG headset may be the smallest in the world. If we are successful in our development efforts it may be used to communicate with mobile smart phones as well as personal computers, or PCs. We have received, on a preliminary basis, prototypes from our manufacturing sub-contractor in Hong Kong and, if our financial and market circumstances allow, and depending on the outcome of our efforts to raise additional capital, we may make arrangements for our manufacturing sub-contractor to begin manufacturing of the product. However, market conditions or our financial resources may not be sufficient to undertake these and other steps that we anticipate will be necessary. Finally, and if market conditions and our financial circumstances allow, we anticipate that we may develop thought-controlled applications to communicate with our planned EEG headset and, if we are successful in these efforts, we may add additional software applications thereafter. If these efforts are successful, we may initiate one or more mobile device applications, or APP store, which will be designed to allow outside developers to participate in a revenue sharing program for the thought-controlled applications they develop. Company Contact Information Our principal executive offices are located at 3525 Del Mar Heights Road, Suite 802, San Diego, California 92130, telephone (888) 461-3932, and fax (562) 252-8711. Our email address is contact@mindsolutionscorp.com. The Mind Solutions Internet website is located at www.mindsolutionscorp.com. The information contained in our website shall not constitute part of this prospectus. Asher Enterprises, Inc. Financing In 2012, 2013, and 2014, we executed various Securities Purchase Agreements with Asher Enterprises, Inc., whereby we issued convertible promissory notes to Asher Enterprises, Inc. bearing interest on the unpaid balance at the rate of eight percent. As of the date of this prospectus, a convertible promissory note dated February 6, 2014, payable to the order of Asher Enterprises, Inc. in the original principal amount of $37,500 remains unpaid, and a convertible promissory note dated May 8, 2014, payable to the order of Asher Enterprises, Inc. in the original principal amount of $42,500 remains unpaid. Each of the notes is convertible into shares of our common stock by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion. The term Conversion Amount means, with respect to any conversion of a note, the sum of (1) the principal amount of the note to be converted in such conversion plus (2) at Asher Enterprises, Inc. s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in the note to the Conversion Date; provided, however, that Mind Solutions shall have the right to pay any or all interest in cash plus (3) at our option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at Asher Enterprises, Inc. s option, any amounts owed to Asher Enterprises, Inc. under the note. The conversion price (the Conversion Price ) shall be the Variable Conversion Price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by Mind Solutions relating to our securities or the securities of any subsidiary of Mind Solutions, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The Variable Conversion Price shall mean 55 percent multiplied by the Market Price (as defined in the note) but in no event shall the Conversion Price be less than $0.00004. Market Price means the lowest Trading Price (as defined below) for our common stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Trading Price means, for any security as of any date, the lowest trading price on the Over-the-Counter Bulletin Board, or applicable trading market (the OTCBB ) as reported by a reliable reporting service ( Reporting Service ) mutually acceptable to Mind Solutions and Asher Enterprises, Inc. (i.e., Bloomberg). If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by Mind Solutions and the holders of a majority in interest of the notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such notes. 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. 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. Trading Day shall mean any day on which our common stock is traded for any period on the OTCBB, or on the principal securities exchange or other securities market on which our common stock is then being traded. If our common stock is chilled for deposit at DTC and/or becomes chilled at any point while the note remains outstanding, an additional eight percent discount will be attributed to the Conversion Price defined in the note. If Mind Solutions is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued shares available, Asher Enterprises, Inc. promises not to force Mind Solutions to issue these shares or trigger an Event of Default, provided that Mind Solutions takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors, where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. All shares of our common stock to be issued to Asher Enterprises, Inc. upon conversion of the notes will be free of any restrictions pursuant to Rule 144 under the Securities Act. The notes further provide for anti-dilution adjustments in favor of Asher Enterprises, Inc., in the event we offer additional shares of our common stock. Copies of the Securities Purchase Agreements and convertible notes in favor of Asher Enterprises, Inc. were filed as exhibits to a Form 10-K/A we filed with the SEC on May 14, 2014. None of the shares of our common stock which may be issued to Asher Enterprises, Inc. upon conversion of the notes are covered by this prospectus. JMJ Financial Financing On May 15, 2013, we executed a convertible promissory note in favor of JMJ Financial in the amount up to $250,000 bearing interest on the unpaid balance at the rate of 12 percent. While the note was in the original principal amount of $250,000, it was only partially funded on May 15, 2013, over six months ago, in the amount of $30,000.00, plus pro-rated original issue discount and pro-rated interest in the amount of $7,333.33, on August 14, 2013, over six months ago, in the amount of $20,000.00, on December 9, 2013, in the amount of $25,000, and on April 16, 2014, in the amount of $40,000. After allowing for conversions, only $37,418 of the note was convertible on the date of this prospectus. The Conversion Price of the note is 60 percent of the lowest trade price in the 25 trading days previous to the conversion (In the case that conversion shares are not deliverable by DWAC an additional 10 percent discount will apply; and if the shares are ineligible for deposit into the DTC system and only eligible for )(clearing deposit an additional five percent discount shall apply; in the case of both an additional cumulative 15 percent discount shall apply). Unless otherwise agreed in writing by both parties, at no time will JMJ Financial convert any amount of the note into common stock that would result in JMJ Financial owning more than 4.99 percent of the common stock outstanding of the registrant. JMJ Financial has the right, at any time after 180 days from the effective date of the note, at its election, to convert all or part of the outstanding and unpaid principal sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the registrant as per this conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. All shares of our common stock to be issued to JMJ Financial upon conversion of the notes will be free of any restrictions pursuant to Rule 144 under the Securities Act. Subject to Completion, June 27, 2014 MIND SOLUTIONS, INC. 800,000,000 Shares of Common Stock This prospectus relates to the resale of up to 800,000,000 shares of the common stock of Mind Solutions, Inc., a Nevada corporation, by Premier Venture Partners, LLC, a California Limited Partnership ( Premier ), a selling stockholder pursuant to a put right under that certain Equity Purchase Agreement dated March 11, 2014 (the Equity Purchase Agreement ), also referred to as an Equity Purchase Agreement, that we have entered into with Premier. The Equity Purchase Agreement permits us to put up to $1,000,000 in shares of our common stock to Premier. Moreover, we are registering the resale by Premier of an additional 12,765,957 shares of our common stock issued as Initial Commitment Shares in connection with the Equity Purchase Agreement. We will not receive any proceeds from the sale of the shares of our common stock offered by Premier. However, we will receive proceeds from the sale of securities pursuant to our exercise of the put right described in the Equity Purchase Agreement. We will bear all costs associated with this registration. Premier is an underwriter within the meaning of the Securities Act of 1933, as amended (the Securities Act ) in connection with the resale of our common stock under the Equity Purchase Agreement. Premier will pay us 75 percent of the lowest closing best bid price (the highest posted bid price) less $650, of the common stock during the five consecutive trading days immediately following the date of our notice to Premier of our election to put shares pursuant to the Equity Purchase Agreement. Our shares of common stock are traded on the OTC Pink operated by The OTC Markets Group, Inc. (the OTC Pink ) under the symbol VOIS. On June 18, 2014, the closing sale price of our common stock was $0.0019 per share. This investment involves a high degree of risk. You should purchase shares only if you can afford a complete loss. See Risk Factors beginning on page 11. 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. 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 _______, 2014 The note further provides for anti-dilution adjustments in favor of JMJ Financial, in the event we offer additional shares of our common stock. As of the date of this prospectus, $37,418 of the JMJ Financial note remains unpaid. A copy of the convertible note in favor of JMJ Financial was filed as an exhibit to a Form 10-K/A we filed with the SEC on May 14, 2014. None of the shares of our common stock which may be issued to JMJ Financial upon conversion of the note are covered by this prospectus. LG Capital Funding, LLC Financing On February 4, 2014, we executed a Securities Purchase Agreement with LG Capital Funding, LLC, whereby we agreed to issue convertible promissory notes in an aggregate amount of $50,000 to LG Capital Funding, LLC bearing interest on the unpaid balance at the rate of 10 percent, as follows: On February 25, 2014, we issued a $25,000 convertible note, unsecured, and due February 25, 2015. The note is convertible into shares of our common stock at any time from the date of issuance at a conversion rate of 55 percent of the market price, calculated as the lowest trading price in the previous 10 days leading up to the date of conversion. On February 25, 2014, we issued a $25,000 convertible note, unsecured, and due February 25, 2015. The note is convertible into shares of our common stock at any time from the date of issuance at a conversion rate of 55 percent of the market price, calculated as the lowest trading price in the previous 10 days leading up to the date of conversion. On March 25, 2014, we executed a second Securities Purchase Agreement with LG Capital Funding, LLC, whereby we agreed to issue a convertible promissory note in the amount of $40,000 to LG Capital Funding, LLC bearing interest on the unpaid balance at the rate of 10 percent. On March 25, 2014, we issued a $40,000 convertible note unsecured and due February 25, 2015. The note is convertible into shares of our common stock at any time from the date of issuance at a conversion rate of 55 percent of the market price, calculated as the lowest trading price in the previous 10 days leading up to the date of conversion. All shares of our common stock to be issued to LG Capital Funding, LLC upon conversion of the notes will be free of any restrictions pursuant to Rule 144 under the Securities Act. As of the date of this prospectus, $90,000 of the LG Capital Funding, LLC notes remains unpaid. Copies of the Securities Purchase Agreements and convertible notes in favor of LG Capital Funding, LLC were filed as exhibits to a Form 10-K/A we filed with the SEC on May 14, 2014. None of the shares of our common stock which may be issued to LG Capital Funding, LLC upon conversion of the notes are covered by this prospectus. GEL Properties, LLC Financing On February 4, 2014, we issued a convertible promissory note to GEL Properties, LLC bearing interest on the unpaid balance at the rate of 10 percent, in the original principal amount of $25,000. The note is unsecured, and due February 4, 2015, and is convertible into shares of our common stock at any time from the date of issuance at a conversion rate of 55 percent of the market price, calculated as the lowest trading price in the previous 10 days leading up to the date of conversion. TABLE OF CONTENTS Prospectus Summary 1
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+Table of Contents Stock Options. The compensation committee determines the exercise price of each stock option, which will not be less than the fair market value of a share of our common stock on the date of grant. Unless otherwise provided by our compensation committee, a participant's unvested stock options will immediately terminate upon the participant's cessation of employment, and vested stock options will remain outstanding for three months or one year (in the case of death) (or, in each case, until the applicable expiration date, if earlier). If the compensation committee determines that the cessation of a participant's employment resulted for reasons that cast such discredit on the participant as to justify immediate termination of stock options, all stock options then held by the participant will immediately terminate upon such termination of employment, whether or not vested. Restricted Stock. The compensation committee may grant or sell restricted stock to any participant (including, but not limited to, upon the exercise of options to purchase common stock) subject to the conditions and restrictions and for such purchase price, if any, as determined by the compensation committee. A participant will have all the rights of a shareholder with respect to shares of restricted stock granted or sold to the participant under the 2003 Plan. Unless the compensation committee determines otherwise, upon the cessation of a participant's employment for any reason, including death, the company will have the right (but not the obligation) to reacquire any shares of restricted stock outstanding at the participant's original purchase price, if any, for such shares. If there is no purchase price, restricted stock will be forfeited upon such termination of employment. Covered Transactions. Unless an award agreement provides otherwise, in the event of a covered transaction (as defined in the 2003 Plan) in which there is an acquiring or surviving entity, the compensation committee may provide for the assumption or substitution of some or all outstanding awards by the acquiring or surviving entity. If the awards are not so assumed or substituted, and except as otherwise provided in an award agreement, each stock option will vest and become fully exercisable prior to the covered transaction and the stock option will terminate upon consummation of the covered transaction. In the case of restricted stock, the compensation committee may require that any amounts delivered, exchanged or otherwise paid in respect of such stock in connection with the covered transaction be placed in escrow or otherwise made subject to such restrictions as the compensation committee deems appropriate. Under the 2003 Plan, a covered transaction generally includes a consolidation, merger or similar transaction in which the company is not the surviving entity, a sale or transfer of all or substantially all of our assets or a dissolution or liquidation of our company. 2013 Equity Incentive Plan Our board of directors adopted the 2013 Equity Incentive Plan and, following our initial public offering in September 2013, all equity-based awards will be granted under the 2013 Equity Incentive Plan. The following summary describes the material terms of the 2013 Equity Incentive Plan. This summary of the 2013 Equity Incentive Plan is not a complete description of all provisions of the 2013 Equity Incentive Plan and is qualified in its entirety by reference to the 2013 Equity Incentive Plan. Plan Administration. The 2013 Equity Incentive Plan is administered by our compensation committee. Our compensation committee has the authority to, among other things, interpret the 2013 Equity Incentive Plan, determine eligibility for, grant and determine the terms of awards under the 2013 Equity Incentive Plan, and to do all things necessary to carry out the purposes of the 2013 Equity Incentive Plan. Our compensation committee's determinations under the 2013 Equity Incentive Plan are conclusive and binding. Authorized Shares. Subject to adjustment, the maximum number of shares of our common stock that may be delivered in satisfaction of awards under the 2013 Equity Incentive Plan is currently 2,633,945 shares, which includes 155,884 shares of our common stock that were available for grant under the 2003 Plan on the date the 2013 Equity Incentive Plan was adopted and an increase of 1,133,945 shares on January 1, 2014 pursuant to the annual adjustment described below. The number of Amendment No. 1 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents Sotatercept and ACE-536 have already shown promising biological activity in initial clinical trials. We and Celgene have conducted six clinical trials with sotatercept in over 160 healthy volunteers and cancer patients. We have conducted one clinical trial with ACE-536 in healthy volunteers. In these studies, both sotatercept and ACE-536 caused a dose-dependent increase in the number of red blood cells. Based on these results, we and Celgene have initiated Phase 2 clinical trials with each of these protein therapeutic candidates in b-thalassemia and MDS. We and Celgene plan to initiate Phase 3 clinical trials for one or both of these protein therapeutic candidates in one or both of b-thalassemia and MDS by the end of 2014 or early 2015. b-thalassemia b-thalassemia is a hereditary disease arising from defects in genes involved in the production of hemoglobin, the protein responsible for carrying oxygen in red blood cells. During red blood cell formation in the bone marrow, these genetic defects cause most of the cells to die before they mature into fully functional red blood cells. As a consequence, patients with b-thalassemia have anemia, a lower than normal number of red blood cells, and many patients experience a broad array of complications arising from their disease, including an enlarged spleen, skeletal deformities and serious organ damage, such as liver fibrosis and heart failure, resulting from the accumulation of iron. There is no approved drug and no effective drug therapy for the anemia of b-thalassemia. Frequent blood transfusions are used to manage the treatment of anemia in patients with b-thalassemia, but further contribute to the accumulation of iron and associated organ toxicities. We and Celgene have shown that sotatercept and ACE-536 increase the production of red blood cells by promoting their maturation in the bone marrow. We believe this mechanism of action may be particularly beneficial for patients suffering from diseases, such as b-thalassemia, that are characterized by diminished red blood cell maturation. In a mouse model of b-thalassemia, the mouse version of ACE-536 demonstrated broad disease modifying effects. In this model, the mouse version of ACE-536 increased red blood cell production, reduced spleen size, increased bone density and reduced levels of iron in the kidney and liver. The Thalassaemia International Federation estimates that there are approximately 300,000 patients worldwide with b-thalassemia, approximately 20,000 of which are in the United States and Europe, who are dependent on frequent blood transfusions. We estimate that there are at least as many b-thalassemia patients who do not receive frequent blood transfusions. Many of these patients have hemoglobin levels that are approximately half that of normal individuals and experience significant complications from the disease. Myelodysplastic Syndromes (MDS) MDS are a group of heterogeneous hematologic diseases characterized by abnormal proliferation and differentiation of blood precursor cells, including red blood cell precursors, in the bone marrow. This leads to anemia, which is present in the vast majority of MDS patients at the time of diagnosis. Much like the anemia of b-thalassemia, the anemia of MDS is characterized by an over-abundance of early stage red blood cell precursors, a large proportion of which fails to mature into functional red blood cells during the later phases of the red blood cell formation process. Drugs that stimulate the production of early stage red blood cell precursors, such as recombinant erythropoietin, are often used to treat anemia in MDS patients, yet many do not experience a substantial improvement of their anemia with these drugs. Although not approved by the United States Food and Drug Administration (FDA) for use in patients with MDS, these products generate an estimated $500 to $700 million in annual U.S. sales from use in these patients, according to our market research. ACCELERON PHARMA INC. (Exact name of registrant as specified in its charter) Delaware 2836 27-0072226 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 128 Sidney Street Cambridge, MA 02139 (617) 649-9200 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Table of Contents Additional Opportunities for Sotatercept and ACE-536 Although sotatercept and ACE-536 have similar effects on red blood cells, sotatercept has been shown to increase bone mass and biomarkers of bone growth in humans. Many patients with chronic kidney disease suffer from both anemia and bone loss. Celgene is conducting two Phase 2 clinical trials of sotatercept in patients with chronic kidney disease-mineral and bone disorder. Additionally, we have shown that sotatercept inhibits tumor growth in mouse models of multiple myeloma, a cancer of the bone marrow, and sotatercept is being studied in an investigator-sponsored Phase 2 trial in multiple myeloma patients. Celgene and its collaborators continue to explore sotatercept in additional clinical trials including trials in patients with Diamond-Blackfan anemia and myelofibrosis. Acceleron and Celgene are exploring the preclinical activity of sotatercept and ACE-536 in other red blood cell disorders including sickle cell disease. Our Partnership with Celgene We are developing sotatercept and ACE-536 through our exclusive worldwide collaborations with Celgene. As of January 1, 2013, Celgene became responsible for paying 100% of worldwide development costs for both programs. Additionally, we may receive up to $560.0 million of potential development, regulatory and commercial milestone payments and, if these protein therapeutic candidates are commercialized, we will receive a royalty on net sales in the low-to-mid 20% range. If approved, we also will co-promote sotatercept and ACE-536 in North America, for which our commercialization costs will be entirely funded by Celgene. Dalantercept: Novel Protein Therapeutic Candidate in Phase 2 Clinical Trials for Cancer Our third clinical stage protein therapeutic candidate, dalantercept, is designed to inhibit blood vessel formation in tumors through a mechanism that is distinct from, and potentially synergistic with, vascular endothelial growth factor (VEGF) pathway inhibitors, the dominant class of cancer drugs that inhibit blood vessel formation. The VEGF pathway inhibitors collectively generate worldwide sales in excess of $8 billion annually. We are developing dalantercept primarily for use in combination with these successful products to produce better outcomes for cancer patients. Inhibiting Angiogenesis to Limit Tumor Growth Angiogenesis is a process by which new blood vessels are formed. Angiogenesis can be simplified to two major stages the proliferative stage followed by the maturation stage. During the proliferative stage, vascular endothelial cells, the cells lining the inside of the blood vessels, increase in number. This proliferative stage is followed by the maturation stage during which the endothelial cells coalesce to form tubes which are then stabilized through the recruitment of perivascular cells that form an outer layer of the blood vessels resulting in fully formed, functional vessels. Tumors depend on angiogenesis to form new blood vessels that supply nutrients and oxygen to feed the rapidly growing malignant cells. The principal molecule driving the proliferative stage of angiogenesis in tumors is a protein called VEGF. Inhibiting VEGF-driven angiogenesis to control tumor growth has become an important and widely-used approach to cancer treatment. There are several FDA-approved cancer drugs that inhibit the VEGF pathway. Despite the success of these drugs, many patients fail to respond or develop resistance to VEGF pathway inhibitor therapy, resulting in an unmet need for new therapies to inhibit angiogenesis by a different mechanism. We are using our knowledge of the TGF-b superfamily to develop dalantercept, a novel protein therapeutic candidate targeting the maturation stage of angiogenesis. Recently, the activin receptor-like kinase 1 (ALK1) has been recognized as an important regulator of the maturation stage of angiogenesis. ALK1 is one of the 12 receptors for ligands in the TGF-b superfamily and is found John L. Knopf, Ph.D. Chief Executive Officer and President 128 Sidney Street Cambridge, MA 02139 (617) 649-9200 (Name, address, including zip code, and telephone number, including area code, of agent for service) Table of Contents primarily on endothelial cells. The importance of the ALK1 pathway in angiogenesis was discovered in part through research into a genetic disease in which patients manifest vascular defects, including a reduced ability to form capillary beds, which are the networks of small blood vessels that connect arteries to veins and are necessary for nutrient and waste exchange in tissues. This research revealed that these patients have only one of two functional copies of the ALK1 gene. The resulting decreased signaling through the ALK1 receptor inhibits blood vessel maturation, leading to the reduced formation of capillary beds. Opportunities for Dalantercept We reasoned that leveraging the biology of the ALK1 pathway to inhibit maturation of blood vessels could impair the growth of tumors by limiting the development of capillary beds within the tumor. To test this hypothesis, mice with a predisposition to develop tumors were bred to have only one copy, rather than two copies, of the ALK1 gene that normally occur. In response to the loss of half of the ALK1 genes, tumor growth and size and blood vessel density in the tumor were reduced by half. We have also shown in two mouse cancer models that treatment with dalantercept decreases metastases. This is in contrast to VEGF pathway inhibitors, many of which have been shown to increase metastases in mouse cancer models. These results and additional research in the field have established the ALK1 signaling pathway as a promising target for developing a new class of anti-angiogenesis agents, ALK1 pathway inhibitors. We are developing dalantercept to treat cancer by inhibiting the ligands of the TGF-b superfamily that signal through the ALK1 receptor. We believe one promising opportunity for dalantercept will be its use in combination with VEGF pathway inhibitors because these agents target distinct sequential steps in tumor angiogenesis. Moreover, we believe that dalantercept sensitizes blood vessels to increase the effects of treatment with VEGF pathway inhibitors. A combination of ALK1 and VEGF pathway inhibitors could have application in a number of different oncology indications where VEGF pathway inhibitors are currently used, such as liver cancer, brain cancer, non-small cell lung cancer, colorectal cancer and renal cell carcinoma. With respect to our third clinical stage protein therapeutic candidate, dalantercept, we have conducted a single agent Phase 1 clinical trial in patients with advanced solid tumors. Additionally, we have studied the single agent activity of dalantercept in a Phase 2 clinical trial in patients with advanced head and neck cancer. Our ongoing focus is on the use of dalantercept in combination with an approved VEGF pathway inhibitor where we have both a mechanistic rationale and supportive preclinical data demonstrating dalantercept in combination with a VEGF pathway inhibitor provides enhanced anti-tumor effects in mice bearing human renal cell carcinoma xenographs. In an ongoing Phase 2 clinical trial of dalantercept in combination with axitinib, an approved VEGF pathway inhibitor, in patients with advanced renal cell carcinoma we have completed the dose escalation stage. We have now initiated the dose expansion phase of this study and plan to start the randomized controlled part of the study at the end of Q1 or early Q2 2014. We also intend to initiate a Phase 2 clinical trial of dalantercept in combination with the VEGF pathway inhibitor sorafenib in patients with liver cancer in the first half of 2014. We have not entered into a partnership for dalantercept and retain worldwide rights to this program. ACE-083: Neuromuscular Disorders In addition to our clinical stage programs, we are developing a protein therapeutic candidate, ACE-083, for a first-in-human clinical trial that we expect to initiate by the end of 2014. ACE-083 has been designed to promote muscle growth in those muscles in which the drug is injected, with minimal systemic effect. We are focused on the development of ACE-083 for diseases in which increases in the size and function of specific muscles may provide a clinical benefit, including inclusion body myositis, facioscapulohumeral dystrophy (FSHD) and disuse atrophy. Copies to: Marc Rubenstein, Esq. Ropes & Gray LLP Prudential Tower 800 Boylston Street Boston, MA 02199 (617) 951-7000 John D. Quisel, Ph.D., Esq. Vice President, General Counsel and Secretary Acceleron Pharma Inc. 128 Sidney Street Cambridge, MA 02139 (617) 649-9200 Jonathan L. Kravetz, Esq. Brian P. Keane, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, MA 02111 (617) 542-6000 Table of Contents Our Development Pipeline The status of our three clinical stage protein therapeutic candidates and our most advanced preclinical candidate is summarized below: Our Strategy Our goal is to be a leader in the discovery, development and commercialization of novel protein therapeutics for cancer and rare diseases. Key components of our strategy are: Advance sotatercept and ACE-536 into Phase 3 trials in collaboration with Celgene. We and Celgene are jointly developing sotatercept and ACE-536. Assuming successful completion of the ongoing Phase 2 clinical trials in b-thalassemia and MDS, we plan to initiate Phase 3 clinical trials with Celgene for one or both protein therapeutic candidates in one or both diseases by the end of 2014 or early 2015. Explore new indications for sotatercept and ACE-536 with Celgene. We and Celgene are continuing our preclinical research to assess the opportunity for sotatercept and ACE-536 to treat certain red blood cell disorders known as hemoglobinopathies, which include diseases such as thalassemias and sickle cell disease. Based on our encouraging preclinical and clinical data in b-thalassemia and our emerging understanding of the mechanism of action of these protein therapeutic candidates, we believe there is a potential for activity for sotatercept and ACE-536 in sickle cell disease, and we continue to explore development of these protein therapeutic candidates for this disease. Advance dalantercept into Phase 3-enabling clinical trials. Beyond our ongoing Phase 2 clinical trials, in 2014, we plan to initiate additional clinical trials of dalantercept in combination with either an approved anti-angiogenesis agent or chemotherapy in advanced solid tumors. One of these trials is expected to be in patients with liver cancer and other trials may be in patients with brain cancer, lung cancer or colon cancer. Approximate date of commencement of proposed sale to public: As soon as practicable after this Registration Statement is declared 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, 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 Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Proposed Maximum Aggregate Offering Price Amount of Registration Fee(1) Common Stock, $0.001 par value per share $115,000,000 $14,812 (1)Previously paid. Table of Contents Utilize our discovery and development platform to develop additional protein therapeutic candidates. In addition to sotatercept, ACE-536 and dalantercept, all of which were internally discovered using our research and development platform, we intend to continue to discover and develop other protein therapeutics that target and regulate various pathways in the TGF-b superfamily. We plan to bring an additional protein therapeutic candidate, ACE-083, into the clinic in 2014 targeting diseases involving muscle loss. We are also conducting pre-clinical development of ALK1 pathway inhibitors distinct from dalantercept for the treatment of diseases of the eye including age-related macular degeneration. In addition we are developing new protein therapeutic candidates for the treatment of cancer and diseases involving fibrosis. Strategically leverage collaborations to advance our protein therapeutic candidates. We have received more than $250.0 million from our collaboration partners, including Celgene. Our two collaborations with Celgene for sotatercept and ACE-536 provide us with significant funding and access to Celgene's considerable scientific, development, regulatory and commercial capabilities. We will continue to strategically evaluate possible collaborations where doing so could enhance the development or commercialization of other protein therapeutic candidates in our pipeline. Establish commercialization and marketing capabilities in North America and potentially other markets. We have retained co-promotion rights in North America for sotatercept and ACE-536, which will be entirely funded by Celgene. We intend to build hematology, oncology and neuromuscular disorder focused specialty sales forces and marketing capability to commercialize our protein therapeutic candidates that receive regulatory approval. Risk Factors An investment in our common stock involves a high degree of risk. Any of the factors set forth under "Risk Factors" may limit our ability to successfully execute our business strategy. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth under "Risk Factors" in deciding whether to invest in our common stock. Among these important risks are the following: We have incurred net operating losses since our inception and anticipate that we will continue to incur substantial operating losses for the foreseeable future. We may never achieve or sustain profitability. We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our development or commercialization efforts of our protein therapeutic candidates. If Celgene does not devote sufficient resources to the development of sotatercept and ACE-536, is unsuccessful in its efforts or chooses to terminate its agreements with us, our business will be materially harmed. If our protein therapeutic candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities, we may incur additional costs or experience delays in completing, or ultimately be unable to complete the development and commercialization of our protein therapeutic candidates. Our future commercial success depends upon attaining significant market acceptance of our protein therapeutic candidates, if approved, among physicians, patients and health care payers and, if we fail to do so, our business will be materially harmed. We expect to rely on third parties in the manufacturing and clinical development of our protein therapeutic candidates. If they fail to meet deadlines or perform in an unsatisfactory manner our business could be harmed. 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 Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Table of Contents If we are unable to obtain or protect intellectual property rights related to our protein therapeutic candidates, we may not be able to prevent competitors with the same or similar protein therapeutics from entering our markets. Implications of Being an Emerging Growth Company As a company with less than $1.0 billion in revenue during our most recently completed fiscal year, we qualify as an "emerging growth company" as defined in Section 2(a) of the Securities Act of 1933, as amended, which we refer to as the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable, in general, to public companies that are not emerging growth companies. These provisions include: Reduced disclosure about our executive compensation arrangements; No non-binding shareholder advisory votes on executive compensation or golden parachute arrangements; Exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting; and Reduced disclosure of financial information in this prospectus, including two years of audited financial information and two years of selected financial information. 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 if we have more than $1.0 billion in annual revenues as of the end of a fiscal year, if we are deemed to be a large-accelerated filer under the rules of the Securities and Exchange Commission, or if we issue more than $1.0 billion of non-convertible debt over a three-year-period. The JOBS Act permits an emerging growth company to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are choosing to "opt out" of this provision. Corporate Information We were incorporated in the state of Delaware in June 2003 as Phoenix Pharma, Inc., and we subsequently changed our name to Acceleron Pharma Inc. and commenced operations in February 2004. Our principal executive offices are located at 128 Sidney Street, Cambridge, Massachusetts 02139, and our telephone number is (617) 649-9200. Our Internet website is www.acceleronpharma.com. The information on, or that can be accessed through, our website is not part of this prospectus, and you should not rely on any such information in making the decision whether to purchase our common stock. Table of Contents The information in this preliminary prospectus is not complete and may be changed. 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. SUBJECT TO COMPLETION, DATED JANUARY 21, 2014 PRELIMINARY PROSPECTUS 2,035,000 Shares Common Stock $ per share Table of Contents
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+PROSPECTUS SUMMARY The following summary highlights selected information contained in this prospectus and may not contain all of the information that may be important to you. You should carefully read this entire prospectus, including the information set forth under Risk Factors and Cautionary Statement Regarding Forward-Looking Statements before making an investment decision. The terms we, us and our as used in this prospectus refer to Goodman Networks Incorporated and its directly and indirectly owned subsidiaries on a consolidated basis; references to Goodman Networks or our Company refer solely to Goodman Networks Incorporated; and references to Multiband refer to our subsidiary, Multiband Corporation. Overview We are a leading national provider of end-to-end network infrastructure and professional services to the wireless telecommunications industry. Our wireless telecommunications services span the full network lifecycle, including the design, engineering, construction, deployment, integration, maintenance and decommissioning of wireless networks. We perform these services across multiple network infrastructures, including traditional cell towers as well as next generation small cell and distributed antenna systems, or DAS. We also serve the satellite television industry by providing onsite installation, upgrading and maintenance of satellite television systems to both the residential and commercial markets. These highly specialized and technical services are critical to the capability of our customers to deliver voice, data and video services to their end users. We operate from a broad footprint, having provided services during 2013 in all 50 states. As of September 30, 2014, we employed over 4,700 people, including approximately 2,400 technicians and 490 engineers, and operated 59 regional offices and warehouses. During the year ended December 31, 2013, we completed over 65,000 telecommunications projects and fulfilled over 1.5 million satellite television installation, upgrade or maintenance work orders. We have established strong, long-standing relationships with Tier-1 wireless carriers and original telecommunications equipment manufacturers, or OEMs, including AT&T Mobility, LLC, or AT&T, Alcatel-Lucent USA Inc., or Alcatel-Lucent, and Sprint/United Management Company, or Sprint, as well as DIRECTV. Over the last few years, we have diversified our customer base within the telecommunications industry by leveraging our long-term success and reputation for quality to win new customers such as Nokia Solutions and Networks B.V., or NSN, T-Mobile International AG, or T-Mobile, and Verizon Wireless Inc., or Verizon. We generated nearly all of our revenues over the past several years under master service agreements, or MSAs, that establish a framework, including pricing and other terms, for providing ongoing services. We believe our long-standing relationships with our largest customers, which are governed by MSAs that historically have been renewed or extended, provide us with high visibility to our future revenue. During 2013, we also provided small cell or DAS services to over 100 enterprises including higher education institutions, stadiums for professional and collegiate sports events, hotels and resorts, major retailers, hospitals, corporations and government agencies. The wireless telecommunications industry is characterized by favorable trends that are driving our growth. This industry is going through an unprecedented and sustained phase of expansion and increased complexity as the number of wireless devices and demand for greater speed and availability of mobile data continues to grow rapidly. Users continue to upgrade to more advanced mobile devices, such as smartphones and tablets, and access more bandwidth-intensive applications. According to Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2013-2018, dated February 5, 2014, or the Cisco VNI Mobile Update, mobile data traffic will increase in North America by 660% between 2013 and 2018, or an average of over 50% percent annually. By 2018, North American mobile data traffic will reach approximately 3.0 exabytes per month, and the number of Long Term Evolution, or 4G-LTE, annual connections will grow 2.6 times compared to 2013. These developments are creating significant challenges for wireless carriers to manage increasing network congestion and continually deliver a high quality customer experience. In response, carriers, governments and Table of Contents The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. Subject to Completion Preliminary Prospectus dated November 25, 2014 PROSPECTUS Shares Common Stock This is our initial public offering of common stock. We are selling shares of our common stock. The selling stockholders identified in this prospectus have granted the underwriters an option to purchase up to an additional shares of common stock to cover over-allotments at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus. We will not receive any proceeds from the sale of shares by the selling stockholders. We expect the public offering price to be between $ and $ per share. Currently, no public market exists for the shares of our common stock. We intend to apply to list our common stock on the NASDAQ Global Market under the symbol GNET . Investing in our common stock involves a high degree of risk. See Risk Factors beginning on page 21. We are an emerging growth company as defined in Section 2(a)(19) of the Securities Act of 1933, as amended, and, as such, are allowed to provide in this prospectus more limited disclosures than an issuer that would not so qualify. In addition, for so long as we remain an emerging growth company, we will qualify for certain limited exceptions from investor protection laws such as the Sarbanes-Oxley Act of 2002 and the Investor Protection and Securities Reform Act of 2010. Please read Risk Factors Risks Related to Our Common Stock We are an emerging growth company and may elect to comply with reduced public company reporting requirements, which could make our common stock less attractive to investors and Summary JOBS Act. Per Share Total Public offering price $ $ Underwriting discount (1) $ $ Proceeds, before expenses, to us $ $ Proceeds, before expenses, to the selling stockholders $ $ (1) We refer you to Underwriting beginning on page 154 of this prospectus for additional information regarding total underwriting compensation. 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. Delivery of the shares of common stock will be made on or about , 2014. BofA Merrill Lynch Jefferies FBR Stifel BB&T Capital Markets D.A. Davidson & Co. PNC Capital Markets LLC The date of this prospectus is , 2014. Table of Contents other enterprises are making significant investments in their wireless infrastructures, such as increasing the 4G-LTE capacity of their wireless networks, as well as integrating small cell technology and DAS (supporting both Wi-Fi and cellular solutions) within wireless networks. To address the challenges presented by expanding increasingly complex network infrastructures, wireless carriers and OEMs have increased their dependency on an outsourcing model in an effort to control costs, deploy capital more efficiently and ensure schedule attainment. We believe our leading reputation and capacity to provide services on a national scale positions us to increase our market share and capitalize on future growth opportunities in the wireless telecommunications industry. Since our founding in 2000, we have evolved with the needs of the telecommunications industry and transformed our business into an end-to-end wireless infrastructure and professional services provider by adding new service capabilities, addressing new and growing wireless technologies and servicing a broader range of customers. In addition to offering core infrastructure and construction services, we have grown our offerings to include sophisticated network analysis, design, engineering, integration and optimization services. Small cell and DAS technologies have been developed to meet the rapidly growing bandwidth demands in the wireless industry. In keeping with this evolution, we have significantly invested in, and supplemented our small cell and DAS network service capabilities, both through organic growth and acquisitions. In 2013, we acquired Multiband, which provided us with a technician-based workforce that we intend to train to augment and reduce our cost of delivering small cell and DAS services. We have also broadened our capabilities to serve not only wireless carriers, but also OEMs and enterprise and public safety customers. For the year ended December 31, 2013, we generated revenues of $931.7 million and net loss of $43.2 million. For the nine months ended September 30, 2014, we generated revenues of $890.9 million and net income of $1.9 million. Our 18-month estimated backlog as of September 30, 2013 was $1.8 billion, and our 18-month estimated backlog as of September 30, 2014 was $1.8 billion. Our Businesses We primarily operate through three business segments, Professional Services, Infrastructure Services and Field Services. Through our Professional Services and Infrastructure Services segments, we help wireless carriers and OEMs design, engineer, construct, deploy, integrate, maintain and decommission critical elements of wireless telecommunications networks. Through our Field Services segment, we install, upgrade and maintain satellite television systems for both residential and commercial customers. Table of Contents Table of Contents The following diagram illustrates our customers recurring need for the services we provide in our Professional Services and Infrastructure Services segments: Professional Services. Our Professional Services segment provides customers with highly technical services primarily related to designing, engineering, integration and performance optimization of transport, or backhaul, and core, or central office, equipment of enterprise and wireless carrier networks. When a network operator integrates a new element into its live network or performs a network-wide upgrade, a team of in-house engineers from our Professional Services segment can administer the complete network design, equipment compatibility assessments and configuration guidelines, the migration of data traffic onto the new or modified network and the network activation. In addition, we provide services related to the design, engineering, installation, integration and maintenance of indoor small cell and DAS networks. Our acquisition of the assets of the Custom Solutions Group of Cellular Specialties, Inc., or CSG, in February 2013 was incorporated into our Professional Services segment, which has enhanced our ability to provide end-to-end in-building services from design and engineering to maintenance. Our enterprise small cell and DAS customers often require most or all of the services listed above and may also purchase consulting, post-deployment monitoring, performance optimization and maintenance services. Infrastructure Services. Our Infrastructure Services segment provides program management services of field projects necessary to deploy, upgrade, maintain or decommission wireless outdoor networks. We support wireless carriers in their implementation of critical technologies such as 4G-LTE, the addition of new macro and outdoor small cell sites, increase of capacity at their existing cell sites through additional spectrum allocations, as well as other performance optimization and maintenance activities at cell sites. When a network provider requests our services to build or modify a cell site, our Infrastructure Services segment is able to: (i) handle the required pre-construction leasing, zoning, permitting and entitlement activities for the acquisition of the cell site, (ii) prepare site designs, structural analysis and certified drawings and (iii) manage the construction or modification of the site including tower-top and ground equipment installation. These services are managed by Table of Contents Table of Contents our wireless project and construction managers and are performed by a combination of scoping engineers, real estate specialists, ground crews, line and antenna crews and equipment technicians, either employed by us or retained by us as subcontractors. Our Infrastructure Services segment also provides fiber and wireless backhaul services to carriers. Our fiber backhaul services, or Fiber to the Cell services, connect existing points in the fiber networks of wireline carriers to thousands of cell sites needing the bandwidth and ethernet capabilities for upgrading capacity. Our microwave backhaul services provide a turnkey solution offering site audit, site acquisition, microwave line of sight surveys, path design, installation, testing and activation services. This fiber and wireless backhaul work often involves planning, route engineering, right-of-way (for fiber work) and permitting, logistics, project management, construction inspection and optical fiber splicing services. Backhaul work is performed to extend an existing optical fiber network owned by a wireline carrier, typically between several hundred yards to a few miles, to the cell site. Field Services. Our Field Services segment provides installation and maintenance services to DIRECTV, commercial customers and a provider of internet wireless service primarily to rural markets. Our wholly owned subsidiary Multiband, which we acquired in August 2013, fulfilled over 1.5 million satellite television installation, upgrade or maintenance work orders during 2013 for DIRECTV, which represented 27.6% of DIRECTV s outsourced work orders for residents of single-family homes during 2013. We were the second largest DIRECTV in-home installation provider in the United States for the year ended December 31, 2013. Our Industries We participate in the large and growing market for connectivity and essential wireless telecommunications infrastructure services. We also participate in the significant satellite pay television installation and maintenance market for both residential and commercial customers as well as providing satellite access links for an internet service provider. Although we do not anticipate significant growth in the Field Services segment, we do believe our Professional Services and Infrastructure Services segments are poised for substantial growth consistent with the growth in the wireless telecommunications industry generally. We believe the following trends are driving growth in this market: Increasing Demand for Wireless Services We are addressing a vast and growing market opportunity resulting from an unprecedented and sustained escalation in both the number of wireless devices and the demand for those mobile devices to deliver and transmit larger quantities of mobile data traffic at ever increasing speeds. Mobile device manufacturers are rapidly introducing advanced mobile devices that have faster processors, increased memory and larger high-resolution screens that are capable of supporting advanced media and require faster data connections for an enhanced experience. According to the Cisco VNI Mobile Update, wireless data growth in North America is forecasted to increase on average 50% annually from 2013 through 2018, as smartphones, tablets, laptops, 3G and 4G-LTE modems and other telecommunications devices are becoming increasingly utilized by consumers. Moreover, a growing number of consumers are using their mobile devices as their primary means to access the internet, according to the Pew Internet & American Life Project s Cell Internet Use 2013 Report, dated September 16, 2013. This growth in wireless data demand will require service carriers to invest in existing infrastructure and build-out new infrastructure to prevent slow or unavailable data connections that negatively impact the experience of their customers and result in costly churn. Table of Contents Table of Contents The following chart illustrates the expected growth of mobile data traffic in North America through 2018: North American Mobile Data Traffic (Petabytes/Month) Source: Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2013-2018, February 2014. Table of Contents TABLE OF CONTENTS Page PROSPECTUS SUMMARY 1
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+Prospectus summary This summary highlights selected information 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 this entire prospectus carefully, including the Risk factors section beginning on page 12 and our consolidated financial statements and the related notes appearing at the end of this prospectus before making an investment decision. Unless the context otherwise requires, we use the terms Concert, our company, we, us and our in this prospectus to refer to Concert Pharmaceuticals, Inc. and its consolidated subsidiary, Concert Pharmaceuticals Securities Corporation. OUR BUSINESS We are a clinical stage biopharmaceutical company applying our extensive knowledge of deuterium chemistry to discover and develop novel small molecule drugs. Our approach starts with approved drugs, advanced clinical candidates or previously studied compounds that we believe can be improved with deuterium substitution to provide better pharmacokinetic or metabolic properties and thereby enhance clinical safety, tolerability or efficacy. We believe our approach may enable drug discovery and clinical development that is more efficient and less expensive than conventional small molecule drug research and development. We have a robust pipeline, including three clinical-stage candidates and a number of preclinical compounds that we are actively developing. Our clinical programs are CTP-354 for spasticity associated with multiple sclerosis and spinal cord injury, CTP-499 for diabetic kidney disease and AVP-786 for neurologic and psychiatric disorders under our collaboration with Avanir. We also have ongoing collaborations with Celgene, for deuterated compounds including CTP-730, which is in preclinical development for inflammatory diseases, and Jazz Pharmaceuticals, for JZP-386, a deuterated analog of sodium oxybate, the active ingredient in its marketed drug Xyrem , which is in preclinical development for narcolepsy. Between our wholly owned and collaboration programs, we expect to have up to five product candidates in clinical development by the end of 2014, including at least two product candidates in Phase 2 clinical trials. We believe that our application of deuterium chemistry, which we refer to as deuteration, is an efficient way to build on existing knowledge to create important new medicines. Deuterium is similar to hydrogen in size and shape. However, deuterium differs from hydrogen in one pharmaceutically important respect deuterium forms a more stable chemical bond with carbon. This increased stability has the potential, through the selective substitution of deuterium for hydrogen, to improve pharmacokinetic and metabolic properties without changing a compound s intrinsic biological activity. Our approach allows us to efficiently identify lead compounds for deuteration and, in some cases, shorten the amount of time necessary to initiate clinical trials as compared to conventional small molecule drug research and development. In clinical development, we believe that the U.S. Food and Drug Administration, or FDA, and comparable foreign regulatory authorities may allow some of our compounds that are deuterated analogs of approved products, or of compounds for which approval is pending, to follow an expedited development pathway by relying on previous clinical and preclinical data related to the non-deuterated compound. For example, in June 2013, Avanir reported that the FDA agreed to an expedited development pathway for AVP-786, permitting Avanir to reference data from its development of dextromethorphan and quinidine in its investigational new drug application, or IND, and any future New Drug Application, or NDA, for AVP-786. Our senior management team has extensive experience in drug discovery and development. Collectively, our team has been involved in the research, development or approval of 12 drugs. Dr. Roger D. Tung, our Chief Executive Officer and one of our founders, is an accomplished leader in drug research and development. Prior to founding our company, Dr. Tung was the Vice President of Drug Discovery at Vertex Pharmaceuticals, Inc., or Vertex. At Vertex, he was a co-inventor of two drugs that were approved for the treatment of HIV, amprenavir and fosamprenavir, and oversaw the discovery of two other approved drugs, ivacaftor (Kalydeco ) for cystic fibrosis and telaprevir (Incivek ) for hepatitis C. 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. PROSPECTUS Subject to Completion February 3, 2014 5,000,000 Shares Common Stock This is the initial public offering of our common stock. No public market currently exists for our common stock. We are offering all of the 5,000,000 shares of common stock offered by this prospectus. We expect the public offering price to be between $12.00 and $14.00 per share. We have applied to list our common stock on The NASDAQ Global Market under the symbol CNCE. We are an emerging growth company under applicable Securities and Exchange Commission rules and will be eligible for reduced public company disclosure requirements. See Prospectus summary Implications of being an emerging growth company. 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 12 of this prospectus. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. Per share Total Price to the public $ $ Underwriting discounts and commissions(1) $ $ Proceeds to us (before expenses) $ $ (1) See Underwriting for additional information regarding underwriter compensation. Certain of our existing principal stockholders and their affiliated entities, as well as Celgene, one of our collaborators, have indicated an interest in purchasing an aggregate of up to $14.0 million of shares of common stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, less or no shares to any of these potential purchasers and any of these potential purchasers could determine to purchase more, less or no shares in this offering. The underwriters may also purchase up to an additional 750,000 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, 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 , 2014. UBS Investment Bank Wells Fargo Securities JMP Securities Roth Capital Partners Table of Contents Through September 30, 2013, we had received an aggregate of $105.4 million in upfront and milestone payments, equity investments and research and development funding from current and former collaborations. Under our current collaborations, we have the potential to receive up to $1.6 billion in future milestone payments, including over $1.2 billion in research, development and regulatory milestones, as well as royalties on any future net product sales. OUR DCE PLATFORM We believe we are the leader in applying deuterium chemistry in drug discovery and development. We have built a deuterated chemical entity platform, which we refer to as our DCE Platform . Our platform comprises the proprietary know-how, techniques and information that we have accumulated since our inception in 2006. Due to our significant experience in deuterium chemistry and pharmaceutical research and development, we believe we are well-positioned to efficiently identify compounds for deuteration and to design, evaluate, develop and manufacture deuterated compounds. Our DCE Platform includes the following capabilities, which we believe provide us with key competitive advantages: Selection of attractive compounds for deuteration. We identify candidate compounds for selective deuteration through the efforts of a team that integrates chemistry, biology, medical, regulatory, intellectual property and commercial expertise. Medicinal chemistry and chemical and biological testing of deuterated compounds. We have developed significant proprietary know-how in the design, synthesis, chemical analysis, bioanalytical assessment, preclinical evaluation and clinical development of deuterated compounds. Manufacturing of deuterated compounds. We apply our manufacturing and analytical know-how and capabilities to reproducibly manufacture deuterated compounds. We have also successfully transferred our methods to manufacturing vendors that can produce multi-kilogram quantities of clinical trial materials. OUR PRODUCT CANDIDATES We are utilizing our DCE Platform to discover and develop product candidates for a variety of indications. The following table summarizes key information about our priority programs: Table of Contents You should rely only on the information contained in this prospectus and any free writing prospectus prepared by or on behalf of us or to which we have referred you. We have not, and the underwriters have not, authorized anyone to provide you with additional information or information different from that contained in this prospectus or any such free writing prospectus. We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. 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 shares of our common stock. TABLE OF CONTENTS Page Prospectus summary 1
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+PROSPECTUS SUMMARY This summary highlights selected information contained in greater detail elsewhere in this prospectus. Because this is only a summary, it does not contain all the information that may be important to you. You should read the entire prospectus carefully before making an investment decision, including the section entitled Risk Factors and the consolidated financial statements and the related notes and the information set forth under the heading Management s Discussion and Analysis of Financial Condition and Results of Operations. Unless the context otherwise requires, all references in this prospectus to we, us, our and the Company refer to AtheroNova Inc. and its wholly-owned subsidiary AtheroNova Operations, Inc. Our Business We have developed intellectual property ( IP ), covered by our issued and pending patent applications, which uses certain pharmacological compounds for the treatment of atherosclerosis, which is the primary cause of various cardiovascular diseases. Atherosclerosis occurs when cholesterol or fats are deposited and harden as plaques in the walls of arteries. This hardening reduces the space within the arteries through which blood can flow. The plaque can also rupture and greatly restrict or block altogether blood flow. Through a process called delipidization, such compounds dissolve the plaques so they can be eliminated through normal body processes and avoid such rupturing. Such compounds may be used both to treat and prevent atherosclerosis. In the near future, we plan to continue studies and trials to demonstrate the safety and efficacy our IP. Ultimately, we plan to license our technology to various licensees throughout the world who may use it in treating or preventing atherosclerosis and other medical conditions or sublicense the IP to other such users. Our first license agreement, entered into in November 2011, grants an exclusive distribution territory to CardioNova, a wholly-owned subsidiary of the Maxwell Biotech Group, for the Russian Federation, Belarus, Ukraine, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Moldova, Azerbaijan and Armenia (the Territory ). CardioNova has agreed to fund Phase 1 and 2 clinical trials for our lead atherosclerotic plaque regression candidate, AHRO-001in the Territory in exchange for shares of our common stock issued at milestone achievements in the clinical trials. To date, we have issued a total of 199,716 shares of our common stock representing 30% of the research budget for the clinical trials. If CardioNova is successful in receiving marketing approval of AHRO-001 from the Russian Ministry of Healthcare, they will be obligated to a royalty based on annual net sales of the product in the Territory for as long as intellectual property rights are in full force and effect. Our licensees may also produce, market or distribute products which utilize or add our compounds and technology in such treatment or prevention. Our Strategy Our goal is to develop a complete line of products based on our IP involving bile salts to address a number of medical conditions with the goal of introducing naturally occurring compounds to improve the medical conditions of those suffering from the effects of atherosclerosis caused by diabetes, heredity, poor diet and other plaque inducing states. Mortality and morbidity from the effects of atherosclerosis is believed to total in the billions of dollars each year for the United States healthcare system alone, with many times that for the worldwide market. AMENDMENT NO. 5 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Our primary product goal is to develop our initial product candidate to address the disease of atherosclerosis. We have manufactured a significant quantity of our Active Pharmaceutical Ingredient ( API ) necessary for use in clinical trials plus any requirements needed for toxicology testing. We have formulated and refined the oral administration tablet necessary to deliver our API to the ideal site in the digestive tract and are continuing to work on improvement and refinements to the formula. Frontage Laboratories, Inc., our contract manufacturer, produced sufficient supplies of our drug tablets to be used in our Phase 1b clinical trials being conducted by our Russian development partner. The shipment of the tablets being used in this additional clinical trial conducted there were shipped in June 2014 with the commencement of enrollment of patients having commenced in July 2014. The active treatment phase is planned to be for a period of twelve weeks and data should be available in approximately 6-8 months after commencement. A successful completion of that trial will allow CardioNova to move forward with a clinical study intended to enable the possible drug registration application for commercial sale in its distribution territory. Our Industry We compete against well-capitalized, established pharmacological companies and smaller companies, as well as from academic institutions, government agencies, and private and public research institutions in the U.S. and abroad. The market for our product candidates is highly competitive. The pharmacological sector is evolving and growing rapidly, and companies are continually introducing new products and services. Recent Developments
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+Prospectus Summary The following summary is a shortened version of more detailed information, exhibits and financial statements appearing elsewhere in this prospectus. Prospective investors are urged to read this prospectus in its entirety. GeoTraq is a development stage company engaged in the development, manufacture and sale of cellular transceiver modules (the Technology ), also known as Cell-ID modules, and the associated services required to support Cell-ID enabled products. The Technology provides solutions for the tracking, asset recovery and location based industries. The focus of the research and development of the Technology has been on developing a unique cellular transceiver specifically enabled by Cell-ID with all its inherent advantages over GPS and RFID to provide solutions for the tracking, asset recovery and location based industries. 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. During the next 12 months, GeoTraq will be engaged in Phase 1 of its business plan which entails product development, certification and manufacturing of its core product, the Cell-ID module. GeoTraq has recently entered into an agreement with a third party developer to design the hardware prototype and demonstration platform. The estimated time to completion is ten weeks for an Alpha device and ten more weeks for ten working Beta modules. The module, firmware and platform development process is expected to cost $60,000 followed by 30 days of testing, certification and licensing for another $125,000. Multiple manufacturing options have been identified by both GeoTraq and the developer and discussions have taken place with GSM carriers, gateway services and network operators to support the product and service. GeoTraq plans to initially sell the Cell-ID module for $16 each and will charge between $1.00 - $10.00 per month for service and $0.10 - $10.00 per look-up request depending on the customer s application. The modules will be sold through distributors and system integrators who will work with OEMs and the end customers to provision additional components and create the final form factor of the device. The end customers are corporations looking for a more cost effective way to track and monitor the location of expensive items for inventory or logistics and retrieve them if lost or stolen. Potential customers range from construction companies to equipment rental companies to medical device companies and any company that wants to monitor shipments and deliveries. GeoTraq also plans to start Phase 2 of its business plan which will include an aggressive marketing campaign designed to increase awareness of its Technology and its many applications. In Phase 2, GeoTraq plans to (1) hire personnel for sales, marketing and customer service, (2) create a marketing strategy for the Technology and its products, and (3) implement its marketing strategy on its target market. GeoTraq has budgeted approximately $600,000 for Phase 1 and expects it to take six months to complete with completion expected within the first three months of 2015. The accompanying financial statements have been prepared assuming GeoTraq will continue as a going concern. As discussed in Note 1 to the financial statements, GeoTraq has not generated any cash flow from operations and has accumulated losses since inception. These factors raise substantial doubt about GeoTraq s ability to continue as a going concern. GeoTraq is in the development stage of its business and to date has no product and has not generated any revenue from sales. In a development stage company, management devotes most of its activities to the research and development of its products. The financial statements have been prepared on a going concern basis, which implies that GeoTraq will continue to realize its assets and discharge its liabilities in the normal course of business. GeoTraq is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. There is no guarantee that GeoTraq will be able to raise any equity financing or generate profitable operations. As of July 31, 2014, GeoTraq has accumulated losses of $1,439,198 since inception. These factors raise substantial doubt regarding GeoTraq s ability to continue as a going concern. Management s decision to raise additional capital via another equity offering was based on the amount of money needed to take advantage of the market potential and the expensive cost of capital from the private sector. Bank loans were not an option since the company does not have any revenue and private equity deals would be extremely dilutive. The added expenses of $4,000 a year for auditing, $4,000 a year for reporting and $8,000 for this filing was much more cost effective than the alternatives. In addition, being an up to date reporting company adds shareholder value. To date GeoTraq has raised $519,309 via equity offerings and shares for debt settlements completed between July 13,2005 (date of inception) and July 31, 2014. The following table summarizes the date of offering, the price per share paid, the number of shares sold, and the amount raised for these offerings. Closing Date of Offering Price Per Share Paid Number of Shares Sold Amount Raised 14 July 2006 $0.001 3,000,000 $3,000 14 July 2006 $0.0056 4,250,000 $23,800 29 October 2008 $0.50 40,000 $20,000 19 November 2009 (1) $0.01 1,900,900 $19,009 16 November 2010 (1) $0.05 5,120,000 $256,000 16 November 2010 (1) $0.11 181,818 $20,000 16 November 2010 (1) $0.08 250,000 $20,000 16 November 2010 (1) $0.07 357,143 $25,000 16 November 2010 (1) $0.06 166,667 $10,000 11 March 2011 $0.12 1,000,000 $120,000 1 March 2014 $0.0001 25,000,000 $2,500 (1) Shares issued for settlement of debt owed on various convertible promissory notes. Since there is no minimum number of shares required to be sold by GeoTraq the company may receive no proceeds or very minimal proceeds from the offering. Should this occur, GeoTraq will not have enough working capital to continue as a going concern and potential investors may end up holding shares in a company with no operations or no market for its shares. Management has every intention to increase shareholder value through the development, manufacture and sales of its products. Neither the company, officers, directors nor affiliates intend for the company to be used as a conduit for a private company to become a public reporting company. Name, Address, and Telephone Number of Registrant GeoTraq Inc. 1200 Westlake Ave. N. #607 Seattle, Washington 98109 Tel: 206-283-1400 Page - 5 The Offering The following is a brief summary of this Offering. Securities being offered to new and current investors: Up to a maximum of 10,000,000 shares of common stock with no minimum purchase. Offering Price: $0.10 per share Offering period: The shares are being offered until August 31, 2015. Net proceeds to GeoTraq (assuming that all shares are sold): Up to a maximum of $1,000,000 Use of proceeds: To fund product development and marketing of its Cell-ID technology, pay accounts payable, pay for offering expenses, and fund ongoing operations. Number of shares outstanding before the Offering: 58,516,528 Number of shares outstanding after the Offering (assuming that all shares are sold): 68,516,528 Summary Financial Information The tables and information below are derived from GeoTraq s audited financial statements for the years-ended July 31, 2014, and 2013. GeoTraq had working capital of $83,189 as at July 31, 2014, and a working capital deficit of $32,562 as at July 31, 2013. Financial Summary July 31, 2014 (audited) $ July 31, 2013 (audited) $ Cash 87,389 210 Total Assets 90,939 2,610 Total Liabilities 491,972 95,142 Total Stockholder s Deficit (401,033) (92,532) Statement of Operations Accumulated From July 13, 2005 (Date of Inception) to July 31, 2014 $ For the Year Ended July 31, 2014 $ For the Year Ended July 31, 2013 $ Revenue - - - Net Loss (1,439,198) (311,001) (86,685) Net Loss per Share (0.01) (0.00) The book value per share of GeoTraq s outstanding common stock is $(0.0069) as at July 31, 2014. Page - 6
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+TABLE OF CONTENTS Kodiak Investment Agreement This prospectus relates to the resale of up to 5,000,000 shares of our common stock by Kodiak of which (i) up to 147,058 shares of common stock issued or to be issued to Kodiak as commitment shares pursuant to an Investment Agreement and (ii) up to 4,852,942 shares of common stock pursuant to a Put Notice(s) under the Investment Agreement. Kodiak will obtain our common stock pursuant to the Investment Agreement entered into by Kodiak and us, dated February 11, 2014. Although we are not mandated to sell shares under the Investment Agreement, the Investment Agreement gives us the option to sell to Kodiak, up to $5,000,000 worth of our common stock ( Shares ), par value $0.001 per share over an eighteen (18) month period following effectiveness of the registration of which this prospectus forms a part. At the date of filing, we may not obtain the full $5,000,000 in funding if the price of our common stock decreases (and remains below) 29% of the current market price. The $5,000,000 was stated as the total amount of available funding in the Agreement because this was the maximum amount that Kodiak agreed to offer us in funding. There is no assurance that the market price of our common stock will remain at its current price or increase in the future. The number of common shares that remains issuable may not be sufficient, dependent upon the share price, to allow us to access the full amount contemplated under the Agreement. Therefore, we may not have access to the remaining commitment under Investment Agreement if the market price of our common stock decreases more than 29% from its current price. Based on our stock price as of May 15, 2014, the registration statement covers the offer and possible sale under put notices of only approximately $7 million worth of our shares at current discounted market price of $1.4525 or approximately 83% of $1.75 (our market price at May 15, 2014) The purchase price of the common stock shall be set at eighty-three percent (83%) of the lowest daily volume weighted average price (VWAP) of the common stock during the pricing period. The pricing period shall be the five (5) consecutive trading days immediately after the Put Notice Date. On each Put Notice submitted to Kodiak by us, we have the option to specify a suspension price ( Suspension Price ) for that Put. In the event the Common Stock price falls below the Suspension Price, the Put shall be temporarily suspended. The Put shall resume at such time as the Common Stock is above the Suspension Price, provided the dates for the Pricing Period for that particular Put are still valid. In the event the Pricing Period has been completed, any shares above the Suspension Price due to Kodiak shall be sold Kodiak by us at the Suspension Price under the terms of this Agreement. The Suspension Price for a Put may not be changed by us once submitted to Kodiak. In addition, there is an ownership limit for Kodiak of 4.99%. On any Closing Date, we shall deliver to Kodiak the number of shares of the Common Stock registered in the name of Kodiak as specified in the Put Notice. In addition, we must deliver the other required documents, instruments and writings required. Kodiak is not required to purchase the shares unless: Our Registration Statement with respect to the resale of the shares of Common Stock delivered in connection with the applicable Put shall have been declared effective. We shall have obtained all material permits and qualifications required by any applicable state for the offer and sale of the Registrable Securities. We shall have filed with the SEC in a timely manner all reports, notices and other documents required. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________ AMENDMENT NO. 2 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ________________________________ GREENKRAFT, INC. (Exact name of registrant as specified in its charter) Nevada 3713 20-8767728 (State or other Jurisdiction of Incorporation) (Primary Standard Classification Code) (IRS Employer Identification No.) 2530 S. Birch Street Santa Ana, CA 92707 Tel.: (714) 545-7777 (Address and Telephone Number of Registrant s Principal Executive Offices and Principal Place of Business) George Gemayel President Greenkraft, Inc. 2530 S. Birch Street Santa Ana, CA 92707 Tel.: (714) 545-7777 (Name, Address and Telephone Number of Agent for Service) Copies of communications to: Marc A. Indeglia, Esq. Gregory R. Carney, Esq. Indeglia & Carney LLP 11900 W. Olympic Blvd. Suite 770 Los Angeles, CA 90064 Tel No.: (310) 982-2720 Fax No.: (310) 982-2719 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 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 of 1933, 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 of 1933, 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 of 1933, 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. Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company TABLE OF CONTENTS Kodiak will not engage in any short-sale (as defined in Rule 200 of Regulation SHO) of our common stock at any time during this Agreement. Pursuant to the Investment Agreement with Kodiak, we agreed to issue Kodiak 147,058 commitment shares. On February 11, 2014, we entered into a Registration Rights Agreement with Kodiak requiring, among other things, that we prepare and file with the SEC a Registration Statement on Form S-1 covering the resale of the shares issuable to Kodiak under the Investment Agreement. As per the Investment Agreement, Kodiak s obligations are not assignable. Summary Financial Data The summary financial information set forth below has been derived from the financial statements of Greenkraft, Inc., a Nevada corporation for periods presented and should be read in conjunction with the financial statements and the notes thereto included elsewhere in this Prospectus and in the information set forth in the section titled Management s Discussion and Analysis of Financial Condition and Results of Operations. The Acquisition was accounted for as a reverse merger and has been treated as a recapitalization of Greenkraft, Inc., a Nevada corporation (f/k/a Sunrise Global, Inc.) and with Greenkraft, Inc., a California corporation being treated as the acquirer for accounting purposes. Accordingly, for all periods presented herein, the financial statements of Greenkraft have been adopted as the historical financial statements of the registrant. Greenkraft, Inc., a Nevada corporation Three Months Ended March 31 Years Ended December 31, 2014 2013 2012 Revenues $ 1,282,461 $ 2,182,363 $ 236,011 Operating Expenses $ 1,210,108 $ 3,349,175 $ 1,126,214 Other Income (Expenses) $ (33,724 ) $ (58,233 ) $ (20,355 ) Net Income (Loss) $ 38,629 $ (1,224,731 ) $ (910,557 ) Total Assets $ 5,932,627 $ 3,105,383 $ 2,218,799 Total Liabilities $ 6,962,362 $ 5,127,276 $ 3,409,772 Accumulated deficit $ (3,118,047 ) $ (3,156,676 ) $ (1,931,945 ) Shareholder s Equity (Deficit) $ (1,029,735 ) $ (2,021,893 ) $ (1,190,973 ) 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 (3) Common Stock, par value $0.001 5,000,000 $ 1.70 $ 8,500,000 $ 1,095 (1) This Registration Statement covers the Offering of common stock of the Company according to an Investment Agreement and for the resale by the selling stockholder named in this Prospectus. The Company is making a good faith estimate on the number of shares that it may issue under the Investment Agreement. (2) The proposed maximum offering price per share and the proposed maximum aggregate offering price have been estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(c) under the Securities Act of 1933 on the basis of the average of the high and low prices of the Common Stock on the OTC Markets on February 7, 2014, a date within 5 trading days prior to the date of the filing of this registration statement. (3) 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
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001429655_biomet_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001429655_biomet_prospectus_summary.txt
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+This summary highlights aspects of our business and the notes. You should, however, carefully read the entire prospectus, including the information presented under the section entitled Risk Factors and our consolidated financial statements and the notes thereto incorporated by reference into this prospectus before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements as a result of certain factors, including those set forth under Risk Factors and Forward-Looking Statements. Unless the context otherwise requires or indicates, references to Biomet, the Company, we, us and our refer to Biomet, Inc. and its subsidiaries. Our Company General Biomet, Inc., an Indiana corporation incorporated in 1977, is one of the largest orthopedic medical device companies in the United States and worldwide with operations in more than 50 locations throughout the world and distribution in approximately 90 countries. Our principal subsidiaries include Biomet U.S. Reconstruction, LLC; Biomet Orthopedics, LLC; Biomet Manufacturing, LLC; Biomet Europe BV; EBI, LLC; Biomet 3i, LLC; Biomet International Ltd.; Biomet Microfixation, LLC; Biomet Sports Medicine, LLC; Biomet Trauma, LLC; and Biomet Biologics, LLC. We design, manufacture and market surgical and non-surgical products used primarily by orthopedic surgeons and other musculoskeletal medical specialists. We operate in one reportable business segment, musculoskeletal products, which includes the design, manufacture and marketing of products in six major categories: Knees, Hips, Sports, Extremities, Trauma, or S.E.T., Spine, Bone Healing and Microfixation, Dental and Cement, Biologics and Other Products. We have three geographic markets: United States, Europe and International. Corporate Information Biomet is incorporated in the State of Indiana. Our principal executive offices are located at 56 East Bell Drive, Warsaw, Indiana 46582. Our website address is www.biomet.com. The information contained on our website or that can be accessed through our website will not be deemed to be incorporated into this prospectus or the registration statement of which this Table of Contents FORWARD-LOOKING STATEMENTS Some of the statements made under the headings Summary and elsewhere in this prospectus contain forward-looking statements within the meaning of U.S. federal securities laws, including Section 27A of the Securities Act and Section 21E of the Exchange Act. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements generally preceded by, followed by or that include the words believe, could, expect, forecast, intend, may, anticipate, plan, predict, possibly, project, potential, estimate, should, will, or similar expressions. These statements include, but are not limited to, statements related to: the timing and number of planned new product introductions; the effect of anticipated changes in the size, health and activities of the population or on the demand for our products; assumptions and estimates regarding the size and growth of certain market categories; our ability and intent to expand in key international markets; the timing and anticipated outcome of clinical studies; assumptions concerning anticipated product developments and emerging technologies; the future availability of raw materials; the anticipated adequacy of our capital resources to meet the needs of our business; our continued investment in new products and technologies; the ultimate marketability of products currently being developed; our ability to successfully implement new technologies and transition certain manufacturing operations, including transitions to China; our ability to manage working capital and generate adequate cash flows to service outstanding debt; our ability to sustain sales and earnings growth; our success in achieving timely approval or clearance of our products with domestic and foreign regulatory entities; our success in implementing our operational improvement programs; the stability of certain foreign economic markets; the effect of foreign currency fluctuations on our results; the impact of anticipated changes in the musculoskeletal industry and our ability to react to and capitalize on those changes; our ability to successfully implement desired organizational changes; the impact of our managerial changes; our ability to take advantage of technological advancements; our reliance on our private equity stockholders; our $5,831.7 million of total indebtedness outstanding as of February 28, 2014, and our ability to incur additional indebtedness in the future; and our inability to generate sufficient cash in order to meet our debt service obligations. Any forward-looking statements contained in this prospectus are based upon our historical performance and on our current plans, estimates and expectations in light of information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us, our Principal Stockholders, the underwriters or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. You should not place undue reliance on any forward-looking statement and should consider the following factors, as well as the factors discussed elsewhere in this prospectus, including under Risk Factors . We believe that these factors include: changes in general economic conditions and interest rates; changes in the availability of capital and financing sources; changes in competitive conditions and prices in our markets; changes to the regulatory environment for our products, including national health care reform; the effects of incurring or having incurred a substantial amount of indebtedness under our 6.500% senior notes, 6.500% senior subordinated notes and senior secured credit facilities; the effects upon us of complying with the covenants contained in our senior secured credit facilities and the indentures governing our 6.500% senior notes and 6.500% senior subordinated notes; restrictions that the terms and conditions of our 6.500% senior notes and 6.500% senior subordinated notes and our senior secured credit facilities may place on our ability to respond to changes in our business or take certain actions; changes in the relationship between supply of and demand for our products; fluctuations in costs of raw materials and labor; Table of Contents prospectus forms a part, and investors should not rely on any such information in deciding whether to purchase the notes. We have included our website address in this prospectus only as an inactive textual reference and do not intend it to be an active link to our website. For additional information, contact our Corporate Communications department at (574) 372-1514. Ownership and Corporate Structures LVB Acquisition, Inc., or Parent, owns all of our issued and outstanding capital stock. LVB Acquisition Holding, LLC ( Holding ) owns 97.19% of the issued and outstanding capital stock of Parent. Substantially all the equity interests in Holding are owned, directly or indirectly, by a consortium of private equity funds affiliated with The Blackstone Group, Goldman, Sachs & Co., Kohlberg Kravis Roberts & Co. and TPG Global, LLC (together with its affiliates, TPG ), and their co-investors (jointly, the Sponsors ). Table of Contents the effect of foreign currency fluctuations on our results; changes in other significant operating expenses; decreases in sales of our principal product lines; slowdowns or inefficiencies in our product research and development efforts; increases in expenditures related to increased government regulation of our business; developments adversely affecting our sales activities inside or outside the United States; decreases in reimbursement levels by our customers, including certain of our foreign government customers that are experiencing financial distress; difficulties in transitioning certain manufacturing operations to China and other locations; challenges in effectively implementing restructuring and cost saving initiatives; increases in cost-containment efforts from managed care organizations and other third-party payors; loss of our key management and other personnel or inability to attract such management and other personnel; increases in costs of retaining existing independent sales agents of our products; potential future goodwill and/or intangible impairment charges; inability to obtain, protect or enforce our intellectual property rights; unanticipated expenditures related to litigation; and failure to comply with the terms of the DPA (as defined elsewhere in this prospectus). We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events. MARKET AND INDUSTRY DATA This prospectus includes industry data and forecasts that we obtained from industry and government publications and surveys, studies conducted by third parties, public filings and internal company sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of the included information. Statements as to our ranking, market position and market estimates are based on independent industry publications, government publications, third party forecasts and management s estimates and assumptions about our markets and our internal research. While we are not aware of any misstatements regarding our market, industry or similar data presented herein, such data involve risks and uncertainties and are subject to change based on various factors, including those discussed in Cautionary Note Regarding Forward-Looking Statements and Risk Factors in this prospectus. TERMS USED IN THIS PROSPECTUS Unless otherwise noted or indicated by the context, in this prospectus: The term guarantors , as of the date of this prospectus with respect to both the senior notes and the senior subordinated notes, means Biomet 3i, LLC, Biomet Biologics, LLC, Biomet Europe Ltd., Biomet Fair Lawn, LLC, Biomet Florida Services, LLC, Biomet International Ltd, Biomet Leasing, Inc., Biomet Manufacturing, LLC, Biomet Microfixation, LLC, Biomet Orthopedics, LLC, Biomet Spine, LLC, Biomet Sports Medicine, LLC, Biomet U.S. Reconstruction, LLC, Biomet Trauma, LLC, Cross Medical Products, LLC, EBI Holdings, LLC, EBI, LLC, EBI Medical Systems, LLC, Electro-Biology, LLC, Implant Innovations Holdings, LLC, Interpore Cross International, LLC, Interpore Spine Ltd., Kirschner Medical Corporation, Lanx, Inc. and Lanx Sales, LLC. However, since each of our current and future wholly owned domestic restricted subsidiaries that is a guarantor of our senior secured credit facilities will fully and unconditionally guarantee the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis, the identities of the guarantors may change from time to time without notice. See Description of Senior Notes Guarantees and Description of Senior Subordinated Notes Guarantees. The term senior notes indenture refers to the Senior Notes Indenture dated as of August 8, 2012 among Biomet, Inc., the Guarantors listed therein and Wells Fargo Bank, National Association and the First Supplemental Indenture, dated as of October 2, 2012 among Biomet, Inc., the Guarantors listed therein and Wells Fargo Bank, National Association, collectively. The term senior subordinated notes indenture refers to the Senior Subordinated Notes Indenture dated as of October 2, 2012 among Biomet, Inc., the Guarantors listed therein and Wells Fargo Bank, National Association. The term indentures refers to the senior notes indenture and senior subordinated notes indenture, collectively. Table of Contents Summary of the Terms of the Notes The following summary contains basic information about the notes and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of the notes, you should read the section of the prospectus entitled Description of Senior Notes and Description of Senior Subordinated Notes. For purposes of this summary and the Description of Senior Notes and Description of Senior Subordinated Notes, references to the Company, Biomet, the issuer, we, our and us refer only to Biomet, Inc. and not to its subsidiaries. Issuer Biomet, Inc. Notes Offered Senior Notes $1,825 million in aggregate principal amount of 6.500% Senior Notes due 2020. Senior Subordinated Notes $800 million in aggregate principal amount of 6.500% Senior Subordinated Notes due 2020. Maturity Dates The senior notes will mature on August 1, 2020. The senior subordinated notes will mature on October 1, 2020. Interest Rates Interest on the notes will be payable in cash and will accrue at a rate of 6.500% per annum. Interest Payment Dates Senior Notes August 1 and February 1, commencing February 1, 2013. Senior Subordinated Notes April 1 and October 1, commencing April 1, 2013. Guarantees Each of our existing and future wholly-owned domestic restricted subsidiaries has jointly, severally and unconditionally guaranteed the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis, in each case to the extent such subsidiaries guarantee our senior secured credit facilities. Table of Contents EXPLANATORY NOTE This Registration Statement relates to the previously filed Registration Statement on Form S-1 (File No. 333-188262) (the Previous Registration Statement ) of Biomet, Inc. ( Biomet ). Biomet filed the Previous Registration Statement to register the following securities issued by Biomet and guaranteed by the guarantors named in the Registration Statement: $1,825,000,000 6.500% Senior Notes due 2020 (the Senior Notes ) and $800,000,000 6.500% Senior Subordinated Notes due 2020 (the Senior Subordinated Notes ). There were no applicable registration fees required to be paid at the time of the original filing of the Previous Registration Statement. This Registration Statement has two purposes: First, to register subsidiary guarantees of the Senior Notes and the Senior Subordinated Notes by certain additional subsidiaries (the Additional Subsidiary Guarantors ) of Biomet, and to include the Additional Subsidiary Guarantors as registrants; and Second, to update the Previous Registration Statement pursuant to Section 10(a)(3) of the Securities Act to incorporate by reference the consolidated financial statements and the notes thereto included in Biomet Annual Report on Form 10-K for the fiscal year ended May 31, 2013 (as updated in the Current Report on Form 8-K filed on April 11, 2014) and to update certain other information in the Registration Statement. Pursuant to Rule 429 under the Securities Act of 1933, as amended, this Registration Statement, upon effectiveness, will serve as a post-effective amendment to the Previous Registration Statement. Table of Contents Ranking Senior Notes The senior notes are our senior unsecured obligations and rank pari passu in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto; are senior in right of payment to any future indebtedness that is expressly subordinated in right of payment thereto (including our senior subordinated notes); and are effectively junior to our existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. Similarly, the guarantees of the senior notes are such guarantors senior unsecured obligations and rank pari passu in right of payment with all existing and future indebtedness of each guarantor that is not expressly subordinated thereto; are senior in right of payment to any future indebtedness of each guarantor that is expressly subordinated in right of payment thereto; and are effectively junior to all existing and future secured indebtedness of each guarantor to the extent of the value of the collateral securing such indebtedness. Senior Subordinated Notes The senior subordinated notes are our senior subordinated unsecured obligations and rank junior in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto (including the senior notes); rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and are senior in right of payment to any future subordinated indebtedness and effectively junior to our existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. Similarly, the guarantees of the senior subordinated notes are such guarantors senior subordinated unsecured obligations, and rank junior in right of payment with all existing and future indebtedness of each guarantor that is not expressly subordinated thereto; rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and are senior in right of payment to any future indebtedness of each guarantor that is expressly subordinated in right of payment thereto and effectively junior to all existing and future secured indebtedness of each guarantor to the extent of the value of the collateral securing such indebtedness. Table of Contents The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED APRIL 11, 2014 PRELIMINARY PROSPECTUS $1,825,000,000 6.500% Senior Notes due 2020 $800,000,000 6.500% Senior Subordinated Notes due 2020 NOTES OFFERED $1,825.0 million of our 6.500% Senior Notes due 2020, which we refer to as the senior notes. $800.0 million of our 6.500% Senior Subordinated Notes due 2020, which we refer to as the senior subordinated notes. We refer to the senior notes and the senior subordinated notes collectively as the notes. MATURITY The senior notes will mature on August 1, 2020. The senior subordinated notes will mature on October 1, 2020. INTEREST Senior notes: Interest is payable in cash and accrues at the rate of 6.500% per annum. Senior subordinated notes: Interest is payable in cash and accrues at the rate of 6.500% per annum. INTEREST PAYMENT DATES Senior notes: August 1 and February 1, commencing February 1, 2013. Senior subordinated notes: April 1 and October 1, commencing April 1, 2013. REDEMPTION We may redeem some or all of the senior notes on or after August 1, 2015 at redemption prices described in this prospectus. We may redeem some or all of the notes on or after October 1, 2015 at redemption prices described in this prospectus. CHANGE OF CONTROL Upon certain change of control events, each holder of notes may require us to purchase all or a portion of such holder s notes as described in this prospectus. GUARANTEES Each of our existing and future wholly-owned domestic restricted subsidiaries will jointly, severally and unconditionally guarantee the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis, in each case to the extent such subsidiaries guarantee our senior secured credit facilities. RANKING The senior notes and the related guarantees will be our senior unsecured obligations and will rank pari passu in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto; be senior in right of payment to any future indebtedness that is expressly subordinated in right of payment thereto (including our senior subordinated notes); and be effectively junior to our and our guarantors existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. The senior subordinated notes will be our senior subordinated unsecured obligations and will rank junior in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto (including the senior notes); rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and be senior in right of payment to any future subordinated indebtedness and effectively junior to our and our guarantors existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. See Risk Factors beginning on page 7 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 any affiliates of Goldman, Sachs & Co. in connection with offers and sales of the notes related to market-making transactions in the notes effected from time to time. Goldman, Sachs & Co. or its affiliates 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 , 2014. We are responsible for the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with additional information or information different from that contained in this prospectus and we take no responsibility for any other information that others may give you. This prospectus does not offer to sell nor ask for offers to buy any of the securities in any jurisdiction where it is unlawful, where the person making the offer is not qualified to do so, or to any person who cannot legally be offered the securities. You should not assume that the information contained in or incorporated by reference in this prospectus is accurate as of any date other than the date on the front cover of this prospectus or the date of any document incorporated by reference herein. Table of Contents Optional Redemption Senior Notes At any time prior to August 1, 2015, we may redeem up to 35% of the aggregate principal amount of the senior notes with the net proceeds of certain equity offerings at the redemption price set forth in this prospectus, plus accrued and unpaid interest, if any, to the redemption date. At any time prior to August 1, 2015, we may redeem the senior notes, in whole or in part, at our option, at a redemption price equal to 100% of their principal amount plus a make-whole premium and accrued and unpaid interest, if any, to the date of redemption. On and after August 1, 2015, we may redeem some or all of the senior notes at any time at the redemption prices set forth in this prospectus plus accrued and unpaid interest, if any, to the date of redemption. See Description of Senior Notes Optional Redemption. Senior Subordinated Notes At any time prior to October 1, 2015, we may redeem up to 40% of the aggregate principal amount of the senior subordinated notes with the net proceeds of certain equity offerings at the redemption price set forth in this prospectus, plus accrued and unpaid interest, if any, to the redemption date. At any time prior to October 1, 2015, we may redeem the senior subordinated notes, in whole or in part, at our option, at a redemption price equal to 100% of their principal amount plus a make-whole premium and accrued and unpaid interest, if any, to the date of redemption. On and after October 1, 2015, we may redeem some or all of the senior subordinated notes at any time at the redemption prices set forth herein plus accrued and unpaid interest, if any, to the date of redemption. See Description of Senior Subordinated Notes Optional Redemption. Change of Control Upon certain change of control events, each holder of notes may require us to purchase all or a portion of such holder s notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the purchase date. See Description of Senior Notes Repurchase at the Option of Holders Change of Control and the definition of Change of Control under Description of Senior Notes Certain Definitions, and Description of Senior Subordinated Notes Repurchase at the Option of Holders Change of Control and the definition of Change of Control under Description of Senior Subordinated Notes Certain Definitions. Table of Contents Certain Covenants The indentures governing the notes contain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: pay dividends on, redeem or repurchase capital stock or make other restricted payments; make investments; incur indebtedness or issue certain equity; create certain liens; incur obligations that restrict the ability of our subsidiaries to make dividend or other payments to us; enter into transactions with our affiliates; create or designate unrestricted subsidiaries; and consolidate, merge or transfer all or substantially all of our assets. These covenants are subject to important exceptions and qualifications, which are described under the headings Description of Senior Notes and Description of Senior Subordinated Notes in this prospectus. Certain of these covenants will be suspended if the notes are assigned an investment grade rating by Standard & Poor s Rating Services ( Standard & Poor s ) and Moody s Investors Services, Inc. ( Moody s ) and no default has occurred and is continuing. If either rating on the notes should subsequently decline to below investment grade or a default occurs and is continuing, the suspended covenants will be reinstated. Listing We do not intend to list the notes on any securities exchange. Governing Law The notes are governed by, and construed in accordance with, the laws of the State of New York. Trustee Wells Fargo Bank, National Association
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001432939_credex_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001432939_credex_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights certain information appearing elsewhere in this prospectus. It is not exhaustive and may not contain all of the information that you should consider before making your investment decision. We encourage you to read this prospectus and the documents to which we refer in their entirety before making a decision to invest, including the information set forth under the heading Risk Factors. Unless the context clearly indicates otherwise, references in this prospectus to the Company, we, us, Credex, our or other similar terms mean Credex Corporation. Overview Credex, a Florida corporation, was formed on September 2, 2005. The Company was formed for the purpose of raising the necessary funds for purchasing, servicing, managing and reselling of non-performing (defaulted) unsecured credit card debt portfolios to be acquired from financial institutions and distressed debt wholesalers. Since its inception, the Company derived no revenues and no income from such business and as result as of December 31, 2012, had an accumulated deficit of $309,281. The Company recently decided to pursue a new business opportunity and entered into a memorandum of understanding (the MOU ) with Kirida Resources Inc. ( Kirida ), to pursue and implement forestry management programs in emerging market countries. Kirida is a Canadian company that has options to manage forests in Papua New Guinea, Liberia and Cameroon. Kirida has a team of professional forestry management experts to implement harvesting programs as per international environmental standards with reforestation programs and product certifications. The Company is currently reviewing forestry management and harvesting projects with Kirida. Based on its review, the Company intends to decide whether to pursue certain opportunities based on several factors including revenue potential. The Company was introduced to Kirida through mutual contacts in the summer of 2013. During its discussions with Kirida, the Company learned about attractive global investment opportunities in timber, particularly in Liberia given the availability and accessibility to the forested land for logging and development, the ability to acquire land, the ability to obtain required licenses for logging and forestry activities, the high quality timber species and high demand in Europe and Asia for logs, sawn wood and other processed and specialty products. After learning more, the Company approached Kirida about potentially collaborating to make an investment in timber. Other than the MOU, we currently have no agreements and do not anticipate entering into any such agreements until we complete this offering. We intend to use the net proceeds from this offering to develop our business operations. See Business and Use of Proceeds. We are a development stage company with no revenues or operating history. Our address is 848 Rainbow Blvd, # 2096 Las Vegas, Nevada 89107. The telephone number is 801-243-5661. While our address is in Nevada, our sole officer and director currently operates our business from Utah without an office and through the use of phone and email. The Company has attempted to attract private placement investments in the past. Thus far, the Company has not been able to implement its plans or begin operations because it has not been successful in raising the equity capital necessary to implement such plans. 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. At the present time, we are classified as a shell company under Rule 405 of the Securities Act Rule 12b-2 of the Exchange Act. As such, all restricted securities presently held by the affiliates of our company may not be resold in reliance on Rule 144 until: (1) we file Form 10 information with the Securities and Exchange Commission ( SEC ) when we cease to be a shell company ; (2) we have filed all reports as required by Section 13 and 15(d) of the Securities Act for twelve consecutive months; and (3) one year has elapsed from the time we file the current Form 10 type information with the SEC reflecting our status as an entity that is not a shell company. 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 Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. The Offering Common stock offered by us 41,007,500 shares Common stock to be outstanding immediately after this offering 100,000,000 shares (assumes all 41,007,500 shares offered are sold) Use of Proceeds The proceeds to us from this offering, excluding estimated offering expenses payable by us, will be approximately $8.2 million. THIS Is the maximum amount that the company could receive under this offering, however, the company may not receive any net proceeds after completing this offering. We expect to use the net proceeds we receive from this offering for evaluating timber projects, acquiring certain properties and commencing production pursuant to a memorandum of understanding ( MOU ) executed with Kirida Resources Inc. ( Kirida ) We intend to use the remaining proceeds from this offering for capital expenditures, working capital and other general corporate purposes. See Use of Proceeds. Dividend Policy We currently expect to retain all available funds and future earnings, if any, for use in the operation and growth of our business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends to holders of our common stock will be at the discretion of our Board and will depend upon many factors, including our results of operations, financial condition, earnings, capital requirements, legal requirements, restrictions in our debt agreements and other factors our Board deems relevant. See Dividend Policy.
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001443157_efleets_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001443157_efleets_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
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@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001451433_nutranomic_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001451433_nutranomic_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..dec6dd28aca4c3dfd7fc6bbe90b2df63ebabf839
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+Summary Prospective investors are urged to read this prospectus in its entirety. We were incorporated in the State of Nevada on March 15, 2007 as Buka Ventures Inc. ( Buka Ventures ). We were a development stage company and did not generate any revenues under our Buka Ventures operations. On September 19, 2013, we acquired Health Education Corporation dba NutraNomics, a Utah corporation ( Health Education ), by issuing shares of our common stock to Health Education s shareholders. As a result, Health Education has become our wholly owned subsidiary, and we now carry on the business of research, development and sales of nutritional products. Health Education was founded in 1995 by our director and officer, Dr. Tracy K. Gibbs, and by 1997 produced and branded its own product line. Since then, we have formulated more than 480 nutritional supplements, including formulating vitamin, mineral, herbal, and probiotic supplements, and we have expanded our own product range. The Company sells its own brand of supplements in multiple countries direct to the public. The Company also performs research and development services and outsource-manufacturing for third parties. 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. Our principal offices are located at 11487 South 700 East, Salt Lake City, UT 84020. Our telephone number is 801-576-8350. Our year end is July 31. Except as otherwise indicated, as used throughout the remainder of this prospectus, references to Company, Nutranomics, we, us, or our refer to we , us and our refer to Nutranomics, Inc., formerly known as Buka Ventures Inc., a Nevada corporation, from and after September 19, 2013, and Health Education Corporation dba NutraNomics, a Utah corporation, prior to September 19, 2013.
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001452580_ehouse_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001452580_ehouse_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..6137761dee43cc523965c736e354614f1d352a8b
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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 of Ehouse Global, Inc. (referred to herein as the "Company," "Ehouse," "we," "our," and "us"). 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. Business Overview We were incorporated under the laws of the Commonwealth of Massachusetts on February 11, 2005 under the name "Veterans In Packaging, Inc." and became a corporation in the State of Nevada on January 7, 2009. We changed our name to Ehouse Global, Inc. in January 2013. We conduct our business through NutraLiquids, LLC ("NutralLiquids") to develop nutraceutical vitamin, supplement and functional beverage products for the consumer packaged goods industry. The Company declared a 34 for 1 forward split of its common stock in January 2013. All share and per share amounts in this prospectus thereto give retroactive effect to the forward split. Reverse Merger and Spinoff We entered into a Share Exchange Agreement effective April 30, 2013 (the "Exchange Agreement") by and among (i) Ehouse (ii) NutraLiquids and (iii) the shareholders of NutraLiquids, pursuant to which the holders of 100% of the outstanding units of NutraLiquids transferred to us all of the units of NutraLiquids in exchange for the issuance of 52,000,000 shares of our common stock. As a result of the Share Exchange, NutraLiquids became a wholly-owned subsidiary of Ehouse. The merger was accounted for as a reverse acquisition and recapitalization. NutraLiquids is the acquirer for accounting purposes, and Ehouse is the issuer. Accordingly, NutraLiquids' historical financial statements for periods prior to the acquisition become those of the acquirer retroactively restated for the equivalent number of shares issued in the merger. Reported operations prior to the merger are those of NutraLiquids. No Ehouse operating results from prior to the merger date are included in reported financial statements of operations. Earnings per share for the period prior to the merger are restated to reflect the equivalent number of shares outstanding. We entered into an Assignment and Assumption Agreement (the "Spin-off Agreement") with Ed Peplinski, our former President and largest shareholder, under which we assigned and transferred to Mr. Peplinski all of our rights, title and interest in and to the operating assets specifically associated with its packaging business sand assumed the liabilities specifically associated with the packaging business as defined in the Spin-off Agreement and return 198,000,000 shares of our common stock owned by him. As a result of the Spin-off Agreement, we ceased to be a company engaged in the commercial packaging market. Our operations are now conducted through NutraLiquids and primarily consist of development of and plan to sell liquid nutritional beverages. The Company cannot take advantage of being an emerging growth company under the JOBS Act because it had gone public prior to December 8, 2011. Investment Agreement with Dutchess On January 23, 2014, we entered into an investment agreement with Dutchess Opportunity Fund, II, LP, a Delaware limited partnership ("Dutchess"). Pursuant to the terms of the Dutchess Investment Agreement, Dutchess committed to purchase up to $10,000,000 of our common stock over a period of up to thirty-six (36) months. From time to time during the thirty-six (36) months period commencing from the effectiveness of the registration statement, we may deliver a put notice to Dutchess which states the dollar amount that we intend to sell to Dutchess on a date specified in the put notice. The Put Amount shall be equal to up to either 1) two hundred percent (200%) of the average daily volume (U.S. market only) of the Common Stock for the three (3) Trading Days prior to the applicable Put Notice Date, multiplied by the average of the three (3) daily closing prices immediately preceding the Put Date or 2) on hundred thousand dollars ($100,000). The purchase price per share to be paid by Dutchess shall be calculated at a ten percent (10%) discount to the lowest volume weighted average price of the common stock as reported by Bloomberg, L.P. during the five (5) consecutive trading days immediately after the receipt by Dutchess of the put notice. We initially reserved 244,500,000 shares of our common stock for issuance under the Dutchess Investment Agreement. In connection with the Dutchess Investment Agreement, we also entered into a registration rights agreement with Dutchess, pursuant to which we are obligated to file a registration statement with the Securities and Exchange Commission (the "SEC") covering 244,500,000 shares of our common stock underlying the Dutchess 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 and maintain the effectiveness of such registration statement until termination of the Dutchess Investment Agreement. The Dutchess Investment Agreement is not transferable and any benefits attached thereto may not be assigned. The 40,000,000 shares to be registered herein represent 17.9% of the shares then issued and outstanding, assuming that the selling stockholder will sell all of the shares offered for sale. The 40,000,000 shares to be registered herein represent 30% of the shares issued and outstanding held by non-affiliates of the Company. At an assumed purchase price of $0.00396 (equal to 90% of the closing price of our common stock of $0.0044 on May 20, 2014), we will be able to receive up to $158,400 in gross proceeds, assuming the sale of the entire 40,000,000 shares being registered hereunder pursuant to the Dutchess Investment Agreement. Accordingly, we would be required to register additional 2,485,252,525shares to obtain the balance of $9,841,600 under the Dutchess Investment Agreement. We are currently authorized to issue 2,500,000,000 shares of our common stock. We may be required to increase our authorized shares in order to receive the entire purchase price. Dutchess has agreed to refrain from holding an amount of shares which would result in Dutchess 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 Dutchess 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. Dutchess will periodically purchase our common stock under the Dutchess 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 Dutchess to raise the same amount of funds, as our stock price declines. The aggregate investment amount of $10,000,000 was determined based on numerous factors, including the following: to develop brands and liquid nutritional beverages products that are natural and environmentally-focused; to bring new brands to market as well as increasing the size and diversity of the existing Nutraliquids product line; and to acquire, license and operate companies that seek distribution of liquid nutritional beverages in North America. The Company will need the full amount of $10,000,000 funding under the Dutchess Investment Agreement to fund the brand acquisition and product development plan. We may have to increase the number of our authorized shares in order to issue the shares to Dutchess if we reach our current amount of authorized shares of common stock. Accordingly, because our ability to draw down any amounts under the Dutchess Investment Agreement is subject to a number of conditions, there is no guarantee that we will be able to draw down any portion or all of the proceeds of $10,000,000 under the Dutchess Investment Agreement. We believe that it is likely that we will be able to drawn down on the full amount of the Agreement, however, prior to drawing down on the full amount, we may not be able to draw down on the full amount without filing an amendment to our Articles of Incorporation to increase the Company s authorized shares of common stock. Pursuant to state law, the filing of the amendment to increase the authorized shares of common stock may require board and shareholder approval. As such, we cannot make any guarantee that we will be successful in accessing the full amount under the Dutchess Investment Agreement. Where You Can Find Us Our principal office is located at 9974 Scripps Ranch Blvd., #182, San Diego, CA 92131. Our telephone number is (858) 459-0770.
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001454389_stonegate_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001454389_stonegate_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..cd76d9637a83041f8b9deb1506afb2997b562c41
--- /dev/null
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@@ -0,0 +1 @@
+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 read the entire prospectus carefully, including the sections entitled Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations and our consolidated financial statements and the related notes. Unless the context otherwise requires, the information in this prospectus reflects our stock dividend of 12.861519 additional shares of our common stock for each share of our common stock that was outstanding on May 14, 2013. Our Company We are a leading, non-bank, integrated mortgage company focused on efficiently and effectively originating, acquiring, selling, financing and servicing U.S. residential mortgage loans. We are also one of the fastest growing non-bank mortgage originators, having grown origination volume by 209% during the nine months ended September 30, 2013 as compared to the nine months ended September 30, 2012. Our origination volume increased 12%, to $2.3 billion, during the three months ended September 30, 2013 from $2.1 billion in originations in the three months ended June 30, 2013 and grew 123% from origination volume of $1.1 billion in the three months ended September 30, 2012. Our loan originations are primarily sourced through our network of retail branches and through our relationships with approximately 1,000 third party originators ( TPOs ) as of September 30, 2013. For the nine months ended September 30, 2013, we originated $6.3 billion in loans ($2.3 billion of which were originated in the three months ended September 30, 2013) and, as of September 30, 2013, we serviced a portfolio with an unpaid principal balance of $9.7 billion, an increase of 28% from the June 30, 2013 ending unpaid principal balance of $7.6 billion, and an increase of 229% over the unpaid principal balance at September 30, 2012 of $2.9 billion. We attribute our growth to our vertically integrated and scalable mortgage banking platform, which we believe enables us to efficiently and effectively originate, acquire, sell, finance and service residential mortgage loans, and to our on-going geographic and product expansion. Since January 1, 2012, we have expanded our business into 18 additional states and Washington, D.C., added approximately 960 correspondent and wholesale customers, opened or acquired 19 retail branch offices and as a result increased our origination volume substantially. We also recently launched additional mortgage products, including our mortgage financing business, through a wholly-owned operating subsidiary, NattyMac, LLC ( NattyMac ), which will complement our growth. We focus on originating mortgage loans associated with the purchase of residential real estate, representing 53% of our originations for the twelve months ended September 30, 2013, as opposed to the refinancing of existing mortgage loans. Since June 2013, the U.S. residential mortgage industry has experienced an increase in interest rates. Industry-wide mortgage loan originations have declined as the recent increase in interest rates has made the refinancing of mortgage loans less attractive for borrowers. Increasing interest rates can have a direct impact on the operating results of companies in the mortgage industry, including on our operating results. Our revenues decreased 27%, to $32.3 million, in the three months ended September 30, 2012 from $44.3 million in the three months ended June 30, 2013. We believe our third quarter results reflect solid business execution during a period of rising interest rates and underscore the strength of our differentiated, vertically integrated and scalable mortgage banking platform. Our three lines of business mortgage originations, mortgage servicing and mortgage financing complement each other and create a natural hedge against interest rate volatility and business cyclicality, an important factor in our performance. We were founded in 2005 by members of our executive team who held various senior level executive positions at large mortgage companies and financial institutions. The loans we originate, finance and service conform to the requirements of Government-Sponsored Enterprises ( GSEs ), such as the Federal National Table of Contents The information in this prospectus is not complete and may be changed. Neither we nor the selling shareholders may 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 neither we nor the selling shareholders are soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Subject to Completion Preliminary Prospectus dated January 10, 2014 PROSPECTUS (Subject to completion) 6,388,889 Shares Stonegate Mortgage Corporation Common Stock This prospectus relates solely to the resale of up to an aggregate of 6,388,889 shares of our common stock by the selling shareholders identified in this prospectus (which term as used in this prospectus includes pledgees, donees, transferees or other successors-in-interest). We are registering the offer and sale of the shares, which were acquired by the selling shareholders in our private offering in May 2013. The selling shareholders may offer the shares from time to time as they may determine through public transactions or through other means described in the section entitled Plan of Distribution at prevailing market prices, at prices different than prevailing market prices or at privately negotiated prices. The prices at which the selling shareholders may sell the shares may be determined by the prevailing market price for the shares at the time of sale, may be different than such prevailing market prices or may be determined through negotiated transactions with third parties. We will not receive any of the proceeds from the sale of these shares by the selling shareholders. We have agreed to pay all expenses relating to registering the shares. The selling shareholders will pay any brokerage commissions and/or similar charges incurred for the sale of these shares. Because all of the shares offered under this prospectus are being offered by the selling shareholders, we cannot currently determine the price or prices at which our shares may be sold under this prospectus. Our common stock is listed on the NYSE under the symbol SGM . On January 8, 2014, the last reported sale price of our common stock was $16.93. We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, and therefore have elected to comply with certain reduced public company reporting requirements. Investing in our common stock involves risks that are described in the Risk Factors section beginning on page 19 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 January , 2014. Table of Contents Unless the context requires otherwise, references in this prospectus to Stonegate, the Company, we, us and our refer to Stonegate Mortgage Corporation and its consolidated subsidiaries. In this prospectus, we refer to Long Ridge Equity Partners, LLC as Long Ridge Equity Partners and Stonegate Investors Holdings LLC, our largest shareholder, as Stonegate Investors Holdings. You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities and Exchange Commission. Neither we nor the selling shareholders have authorized anyone to provide you with additional information or information different from that contained in this prospectus or in any free writing prospectus filed with the Securities and Exchange Commission. 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 stock. For investors outside the United States: Neither we nor any of the selling shareholders have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus outside of the United States. Market data used in this prospectus has been obtained from independent industry sources and publications as well as from research reports prepared for other purposes. We have not independently verified the data obtained from these sources, and we cannot assure you of the accuracy or completeness of the data. Forward-looking information obtained from these sources is subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this prospectus. Table of Contents Mortgage Association ( Fannie Mae ) and the Federal Home Loan Mortgage Corporation ( Freddie Mac ), as well as government agencies, such as the Government National Mortgage Association ( Ginnie Mae ), the Federal Housing Administration ( FHA ), the Department of Veterans Affairs ( VA ), and private investors. We utilize proprietary technology to automate many of our core processes, which allows us to perform a high level of risk-based due diligence on each loan. We have also automated various aspects of quality control and regulatory compliance risk processes, which allows us to ensure adherence to credit, compliance and collateral standards of the GSEs and other investors. We believe that our expertise and the strength of our mortgage platform is best demonstrated by our exceptional track record as a mortgage originator and servicer, coupled with our ability to scale operations without compromising the quality of originated and serviced loans. As a result of our strong operating, technology and underwriting procedures that we apply consistently to each loan, we have not incurred any material losses related to repurchase or indemnification demands from the GSEs or other investors in our loans. We believe our lack of legacy issues and our focus on purchase versus refinance mortgages has positioned us as one of the leading non-bank integrated mortgage origination and servicing providers capable of taking advantage of growth opportunities in the mortgage sector. Recent Events Acquisition of Crossline Capital, Inc. On December 20, 2013, we acquired Crossline Capital, Inc., or Crossline, a California-based mortgage lender that originates and services residential mortgages. The acquisition of Crossline allows us to increase our retail origination volume through tuck-in acquisition. Crossline is licensed to originate mortgages in 20 states including Arizona, California, Colorado, Connecticut, Florida, Georgia, Idaho, Maryland, Massachusetts, New Hampshire, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Virginia and Washington, and is an approved FNMA Seller Servicer. In addition, Crossline operates two national mortgage origination call centers in Lake Forest, California and Scottsdale, Arizona and also operates retail mortgage origination branches in seven other locations in Southern California. The purchase price for Crossline, which, along with working capital for the business, is being funded out of our existing cash resources and line of credit facilities with our warehouse lenders, was approximately $9.4 million. Acquisition of Wholesale Channel and Retail Assets from Nationstar Mortgage Holdings, Inc. On November 29, 2013, we acquire the wholesale lending channel and certain distributed retail assets of Nationstar Mortgage Holdings Inc., or Nationstar. The acquisition of Nationstar s wholesale lending channel and retail assets complement our existing wholesale and retail channels and accelerates our geographic retail channel expansion. In the acquisition, we agreed to purchase the assets and offer employment to certain employees associated with these businesses. The purchase price for the assets acquired from Nationstar was approximately $0.5 million, which, along with working capital for the business, is being funded out of our existing cash resources and line of credit facilities with our warehouse lenders. Initial Public Offering. On October 16, 2013, we sold our common stock in our initial public offering (the IPO ). We realized net proceeds of approximately $123.9 million from the IPO, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from the IPO to make investments relating to our business and for general corporate purposes. Market Overview The U.S. residential mortgage industry is the largest segment of the consumer finance industry with over $10.0 trillion of outstanding debt at December 31, 2012 and originations of $1.8 trillion, including $1.2 trillion of refinancing volume, for the year ending December 31, 2012. Of the 2012 total volume, over 87% of originations conformed to the requirements of the GSEs or government agencies, compared to approximately 38% and 36% in 2005 and 2006, respectively. We expect that with the proposed GSE reform, lower qualifying loan limits and higher GSE guarantee fees, origination volumes conforming to the requirements of the GSEs or government agencies Table of Contents (collectively referred to as Agency mortgage loans ) will gradually decline while non-Agency mortgage loans will increase and comprise a larger portion of the mortgage loan market. The non-Agency mortgage loan market has also been stressed due to the limited ability of mortgage originators to securitize mortgage loans or sell loans to investors. According to Inside Mortgage Finance, non-Agency mortgage-backed securities ( MBS ) issuance, which accounted for 56% of all MBS in 2006, declined to less than 1% in 2012, though volumes are expected to increase with higher quality originations and increasing confidence in a housing recovery. Participants in the mortgage industry consist of large depository institutions and non-bank originators that sell directly to the GSEs as well as other originators, referred to as TPOs, that originate loans from retail customers and sell them to a depository institution or non-bank originator (referred to as an Aggregator ), such as ourselves. Loans are sourced through a variety of channels including retail branches, the internet and call centers, as well as acquired from TPOs such as banks, mortgage bankers and brokers. The mortgage industry is extremely fragmented and is principally comprised of a large number of regional participants. Of the over 15,000 mortgage companies that are currently licensed to originate mortgage loans in the U.S., 81% have a presence in only one state and 75% have five or fewer mortgage loan officers. These mortgage originators either sell directly to the GSEs or to Aggregators, though there is significant concentration amongst the loans sold to the GSEs. Of the $710 billion of loans sold to the GSEs during the six months ended June 30, 2013, as reported to Inside Mortgage Finance, the top 25 sellers accounted for 70%, or $495 billion, of loan originations with the remaining approximately 2,000 sellers accounting for the remaining 30% or $215 billion of loan originations. The financial crisis led many of the largest depository institutions to reduce their participation in the mortgage market, including discontinuing the acquisition of mortgages from TPOs, and the industry remains in a period of significant transformation. Additionally, GSEs and other regulators have imposed substantial compliance requirements, increased capital requirements and proposed enhanced fees based on volume for smaller originators, thus potentially limiting participants in the sector and driving consolidation across the sector. We expect that these changes will drive more and more originators to become TPOs and sell originations to Aggregators such as ourselves, rather than the current practice of selling directly to the GSEs. During the six months ended June 30, 2013, over 1,700 sellers sold $50 million or less in loans to the GSEs, representing $21 billion or 3% of total volume. Further, we also believe that evolving market conditions, including the higher requirements to be able to sell directly to the GSEs, will also drive consolidation amongst industry participants with smaller originators lacking scale being acquired by larger participants in the sector. We believe that the fragmented mortgage industry, increasing regulation and stricter policies provide an attractive opportunity to an Aggregator such as ourselves. As a result of regulatory and market driven changes instituted in the mortgage market, including higher capital requirements for commercial banks on mortgage servicing rights ( MSR ) and increased quality control and compliance standards for mortgage underwriting, we believe that mortgage origination activity is gradually shifting from banks to non-banks. We believe that this trend is expected to continue at an accelerated rate in the future. Additionally, because the residential mortgage industry is characterized by high barriers to entry, including the necessity for approvals required to sell loans to, and service loans for, the GSEs or government organizations, state licensing requirements, and operating and technology platform requirements, we believe that we are well positioned to lead the rapidly evolving mortgage loan origination and servicing sector. Our Business We are an integrated mortgage company that derives revenue from three principal sources: mortgage origination, mortgage financing and mortgage servicing. Our mortgage origination business generates income primarily through origination fees and gains upon the sale of mortgage loans sourced through our correspondent, wholesale and retail channels. We also provide financing to our correspondent customers and others while they are accumulating loans prior to selling them to Aggregators, including ourselves, through our mortgage financing business and we earn interest and fee income for these services. We also have the ability to retain the MSRs on the loans we sell and to create a recurring servicing income stream in our mortgage servicing business. We Table of Contents believe our three business lines are complementary and provide us with the ability to effectively and efficiently source, finance, sell and service mortgage loans. Mortgage Originations Our mortgage origination business primarily originates and sells residential mortgage loans, which conform to the underwriting guidelines of the GSEs and government agencies. We also originate and sell jumbo loans, i.e., loans that conform to the underwriting guidelines of the GSEs, except that they exceed the maximum loan size allowed for single unit properties. We expect that as the non-Agency market continues to recover and GSE reform is approved and implemented, a larger proportion of the industry volume will be comprised of non-Agency mortgage loans. We believe we are well positioned to benefit from this shift in the market given our business model and management expertise in originating and securitizing non-Agency mortgage loans. We are currently licensed in 39 states and Washington, D.C., including six states (California, Montana, Oregon, Rhode Island, Virginia and Washington) where we have become licensed since June 30, 2013. We intend to become licensed in all 48 of the contiguous United States in the first half of 2014. The nine states in which we are not licensed, including six states where we have a pending license application, represented approximately 15% of the overall residential mortgage origination market in 2012 and the five states where we have become licensed since June 30, 2013, represented approximately 30% of the overall residential mortgage origination market in 2012. As we become licensed in these additional states and as we increase our origination activity in the states where we have only recently become licensed, we believe our origination volume will increase substantially. Economic and housing and mortgage market conditions can vary significantly from one geographic region to another; therefore, the geographic distribution of our mortgage originations can have a direct impact on the overall performance of our servicing portfolio. As of September 30, 2013, approximately 14%, 10% and 9% of the aggregate outstanding loan balances in our servicing portfolio were concentrated in Texas, Indiana and Ohio, respectively. Although we anticipate that our origination and servicing portfolios will become less geographically concentrated over time as we expand our operations into the additional nine states where we are not currently licensed and the states where we have only recently become licensed, the geographic distribution of the mortgage loans we originate and service in the near term will likely be similar to that of our current servicing portfolio. To the extent the states where we have a higher concentration of loans experience weaker economic conditions, greater rates of decline in single family residential real estate values or reduced demand within the residential mortgage sector relative to the United States generally, the risks inherent in our business would be magnified as compared to our competitors that have a broader and less concentrated geographic footprint. Additionally, since inception, we have focused on originating mortgage loans associated with purchase transactions as opposed to refinancings to a greater degree than many industry participants. During 2012, Table of Contents approximately 45% of our loan originations were purchase loans and approximately 55% were refinance transactions, compared to 29% and 71%, respectively, for the industry as a whole. We believe purchase transactions are more sustainable than refinance transactions, and typically have slower prepayment speeds in early years, making the MSRs more valuable and less volatile. Additionally, we believe that the mortgage market will increasingly shift to purchase mortgages as the housing market continues to recover, first time home buyers re-enter the housing market and interest rates increase. Further, as the non-Agency market continues to recover, we believe that our platform and management expertise in originating and securitizing these mortgages will position us well to benefit from this transformation. We originate residential mortgage loans through three channels: correspondent, wholesale and retail. Although the majority of our originations are currently through our correspondent channel, our presence in the wholesale and retail channels makes our platform both diversified and scalable. While the channels are diverse, we constantly focus on quality control and maintaining high underwriting standards. We perform diligence on and underwrite loans through our proprietary technology platform, Online Loan Information Exchange ( OLIE ), an integrated, automated risk-based due diligence engine that automates the review process by applying business rules specific to the loan and the seller. We analyze credit, collateral and compliance risk on every loan on a pre-funding or a pre-purchase basis in order to ensure that each loan meets our investors standards and any applicable regulatory rules. We also capture loan data and documents associated with the loan from application through sale/securitization and servicing, giving us the ability to run additional business rules that provide indication of loan performance. We believe that the ability to offer greater transparency and data to institutional investors that purchase our loans or securities backed by our loans will provide us with a substantial advantage over our competitors in our sales executions as the mortgage market continues to evolve and we begin to securitize our own non-Agency mortgage loans. Our three mortgage loan originations channels are discussed in more detail below. Correspondent Channel We acquire newly originated loans conforming to the underwriting standards of the GSEs or government agencies as well as non-Agency mortgage loans conforming to the standards of our investors from our network of correspondents across 39 states plus Washington, D.C. We identify our correspondent customers through a team of relationship managers who are responsible for signing-up customers and ensuring that we receive an adequate share of their origination volume. In addition to competitive pricing, we offer our correspondents access to a state-of-the-art technology platform, funding through our financing platform (NattyMac), including access to innovative financing programs such as early purchase facilities, as well as a timely and transparent process of acquiring their loans. In return, our correspondents provide us with high quality products that meet our underwriting standards. We track the performance of our correspondents on a score-card and terminate relationships where quality and other requirements are not met. We believe that our programs offer correspondents an attractive value proposition, including greater access to capital and liquidity, as they seek to maintain and grow their businesses. As a testament to our relationship management and product offering, our correspondent origination volume has increased from $1.2 billion in the nine months ended September 30, 2012 to $4.6 billion in the nine months ended September 30, 2013, or by 283%, including a 19% increase from $1,488.6 million in the second quarter of 2013 to $1,766.3 in the third quarter of 2013. Our growth has been driven by adding new correspondents as well as deepening relationships with existing correspondents. Our correspondent channel represented 73% of our mortgage originations for the nine months ended September 30, 2013. We conduct financial, operational and risk reviews of each correspondent prior to initially approving them as a customer and on an annual basis to ensure compliance with our guidelines and those of the various regulators who govern our business. In addition we conduct background and financial reviews of the principals and their mortgage loan officers, and in some cases require personal guarantees. We believe that as we receive licenses in additional states and continue to increase our coverage of correspondents, we will continue to increase our market share. Table of Contents Wholesale Channel Through our wholesale channel, we originate loans through a network of approximately 460 non-exclusive relationships with various approved mortgage companies and mortgage brokers. Mortgage brokers identify applicants, help them complete a loan application, gather required information and documents, and act as our liaison with the borrower during the lending process. We review and underwrite an application submitted by a broker, accept or reject the application, determine the range of interest rates and other loan terms, and fund the loan upon acceptance by the borrower and satisfaction of all conditions to the loan in much the same manner as our retail channel. By relying on brokers to market our products and assist the borrower throughout the loan application process, we can increase loan volume through our wholesale channel with proportionately lower increases in overhead costs compared with the costs of increasing loan volume through loan originations in our retail channels. We provide a variety of Agency, government insured and non-Agency mortgage loan products to our brokers to allow them to better service their borrowers. Before approving a mortgage broker for business, we focus on several attributes including origination volume, quality of originations and tangible net worth. We also conduct financial and background checks on the principals and their mortgage loan officers through various third-party sources and in some cases we require personal guarantees. Once we begin acquiring loans from our mortgage brokers, we track the performance of the loans on an on-going basis and terminate business relationships if the loans consistently do not perform or if there is evidence of misrepresentation. During the twelve months ended September 30, 2013, we did not terminate any significant relationships due to our continued focus on underwriting loans and ensuring compliance with policies. Retail Channel Our retail channel primarily operates through 40 retail offices across 14 states. In this channel, company representatives originate loans through their relationships with local real estate agents, builders, telemarketing and other local contacts. This channel accounted for 15% of our 2012 originations. We expect to continue to grow our retail channel by adding new branches for at least the next 24 months. In addition, we expect that with the continued transformation of the mortgage sector there will be opportunities to acquire small retail mortgage operators as several independent mortgage originators will lack the scale to profitably originate and sell mortgages. We believe that we could provide a solution to such operators by acquiring and integrating them into our branch network. We are currently actively evaluating opportunities to acquire several of these retail originators and believe that the continued development and growth of our retail channel is central to our business strategy. Financing We acquired our financing platform, known as NattyMac, in August 2012, and fully integrated the platform into our mortgage banking operations in December of 2012. Founded in 1994, NattyMac earlier operated as an independent mortgage warehouse lender focused on financing prime mortgage collateral, such as Agency-eligible, government insured and government guaranteed loans that were committed for purchase by GSEs. Following our acquisition, in June 2013, we consolidated our NattyMac financing platform into a wholly-owned subsidiary which will focus on providing warehouse financing to us, our correspondent customers and others. We expect that NattyMac will be able to leverage our proprietary technology (OLIE) and our existing due diligence and underwriting processes to efficiently underwrite the warehouse lines of credit it provides for our correspondents who are its customers and others. We intend for this to create an additional source of funding for our correspondents to originate mortgage loans that meet our underwriting requirements and are eligible for us to purchase. Our financing platform features a centralized custodian and disbursement agent allowing us to enter into participation arrangements with financial institutions, such as regional banks for an interest in our newly Table of Contents originated loans during the time these loans would otherwise be funded by a warehouse line or traditional repurchase facility. Additionally, by offering regional banks an opportunity to invest in a liquid high-quality asset, we are able to earn fee and net interest income. We believe that regional banks continue to have significant appetite for such investment opportunities and we believe our financing platform allows us to compete with bank-owned mortgage lenders who have access to cheaper deposit funding. We believe this is a competitive advantage over other non-bank mortgage originators and servicers who are reliant on other forms of wholesale financing to fund their operations. Mortgage Servicing Our mortgage servicing business is organized to maintain a high quality servicing portfolio and keep delinquency rates far below the industry average. We perform loan administration, collection and default activities, including the collection and remittance of loan payments, responding to customer inquiries, accounting for principal and interest, holding custodial (impound) funds for the payment of property taxes and insurance premiums, counseling delinquent mortgagors, modifying loans and supervising foreclosures and our property dispositions. Our servicing model is also very focused on recapture, which involves actively working with existing borrowers to refinance their mortgage loans. When a loan is paid off or refinanced with a different lender, we lose the servicing fees on the loan, so our ability to recapture loans successfully is important to the longevity of our servicing cash flows. Because the refinanced loans typically have lower interest rates or lower monthly payments, and, in general, subsequently refinance more slowly and default less frequently, these refinancings also typically improve the overall quality of our servicing portfolio. For the twelve months ended September 30, 2013, we recaptured 33% of our payoffs (based on the dollar amount of refinanced mortgage loans). Our servicing business produces strong recurring, contractual fee-based revenue with minimal credit risk. Servicing fees are primarily based on the aggregate unpaid principal balance ( UPB ) of the loans serviced and the payment structure varies by loan source and type. These include differences in rate of servicing fees as a percentage of UPB and in the structure of advances. We believe our origination business gives us a distinct advantage in building a high-quality portfolio of MSRs over those who rely heavily on purchasing MSRs from others to build their portfolios as originated portfolios generally perform better given the extensive diligence and underwriting procedures that we apply to each loan. We service loans using a model designed to improve loan performance and reduce loan defaults and foreclosures. Our servicing portfolio consists of MSRs we retain from loans that we originate and MSRs we acquire from third party originators, including in transactions facilitated by GSEs, such as Fannie Mae and Freddie Mac. The loans we service are typically securitized by us, i.e., the loans have been pooled together with multiple other loans and interests have been sold to third party investors that are secured by loans in the securitization pool. As of September 30, 2013, our servicing portfolio contained $9.7 billion of residential first mortgages, with a weighted average coupon of 3.71% and a weighted average age of nine months. At September 30, 2013, the 90+ day delinquency rate in our servicing portfolio was 0.34%, the weighted average FICO score of our servicing portfolio was 740, and the adjusted constant prepayment rate ( CPR ) of our servicing portfolio as of September 30, 2013 was 5.80%. Our Strengths Leading, Non-Bank, Integrated Mortgage Company We are a leading, non-bank, integrated mortgage company focused on efficiently and effectively originating, acquiring, selling, financing and servicing residential mortgage loans. We originate mortgages loans through our correspondent, wholesale and retail channels which provide diversity, increase scale and reduce Table of Contents dependency on any particular channel. During the nine months ended September 30, 2013, the correspondent, wholesale and retail channels accounted for 73%, 19% and 8%, respectively, of our origination volume. Our origination and financing businesses enable us to offer a comprehensive product suite to our customers and build an attractive mortgage servicing portfolio. Profitable, Sustainable Business with Significant Growth Potential We have been profitable every year since 2008 and, for the nine months ended September 30, 2013, our net income grew by 54% over the same period last year. Net income for the three months ended September 30, 2013, which was impacted by rising interest rates, was $1.7 million, compared to $9.1 million in the three months ended June 30, 2013 and $9.5 million in the three months ended September 30, 2012. The growth in net income has been driven by a significant increase in origination volume which increased by 209% during the nine months ended September 30, 2013 over the same period last year. We were able to achieve this growth as we expanded geographically into additional states, deepened correspondent relationships and expanded product offerings. We believe that we have significant growth potential as we are currently licensed in only 39 states plus Washington, D.C., representing approximately 85% of the nation s total origination volume in 2012. These 39 states include six states (California, Montana, Oregon, Rhode Island, Virginia and Washington) where we have become licensed since June 30, 2013 and have not yet commenced any material operations. As we launch our services nationally and expand in the remaining nine contiguous United States, which accounted for approximately $287 billion, or approximately 15%, of the nation s origination volume in 2012 and the six states where we have become licensed since June 30, 2013, which accounted for approximately $590 billion, or approximately 30%, of the nation s origination volume in 2012, we believe that we will be able to continue to see meaningful growth in our origination volume. We will also see meaningful growth as we expect to benefit from consolidation in the mortgage market with the potential acquisition of retail originators, such as our acquisitions of Crossline and the retail assets of Nationstar. Additionally, we are focused on purchase money volume which accounted for 53% of our origination volume for the twelve months ended September 30, 2013 compared to the industry average of 28% for the twelve months ended September 30, 2013. We believe that as refinancing volumes potentially decline with an increase in interest rates, we will be better positioned than the rest of the industry as our origination volumes will be more sustainable. Further, we also benefit from our growing mortgage servicing business which produces recurring fee income and from our financing business which provides fee and interest income. We have made significant strategic investments in our business as we strive for growth. These investments include the opening of 19 retail branches in six states during 2012 and first half of 2013. In addition, in June 2013 we launched our non-Agency jumbo mortgage loan program and mortgage financing business to offer our customers a full suite of products. In order to achieve our growth targets, we have made significant investments and incurred significant operating expenses, which we believe will generate attractive returns over time. Stable, Diversified and Complementary Funding Platform Our NattyMac platform allows us to integrate a syndicated financing facility into our mortgage banking platform that consists of repurchase and participation agreements with major financial institutions, as well as regional and community banks. The financing facility provides a stable, low-cost diversified source of funding for our business and allows us to offer this as a service to our correspondent and other customers. We view this as a competitive advantage over other non-bank mortgage originators and servicers and a means of competing with banks that historically use deposit funding sources to finance their businesses. The platform also provides an ancillary source of fee and net interest income as we sell participations to depository institutions seeking an interest in liquid assets. Table of Contents We view our NattyMac platform as being complementary to our origination business as correspondents are incentivized to sell the loans warehoused on our platform to us as it provides them with greater liquidity and minimizes the capital they require in their business. We believe our pre-funding due diligence process also reduces credit, compliance, collateral, interest rate and market risk by allowing us to assess the salability to potential funding sources and/or other loan investors prior to funding. Consistent Ability to Produce High Quality Loans We are focused on originating and servicing a portfolio of high quality residential mortgage loans. The table below contains information on the quality of our loans and delinquency rates for the dates indicated. As of or for the Nine Months Ended September 30, Year Ended December 31, 2013 2012 2011 Average FICO score of loans originated 729 747 741 LTV of loans originated 85 % 83 % 84 % Servicing portfolio weighted average FICO score 740 744 735 Servicing portfolio 90+ day delinquency rate 0.34 % 0.44 % 0.37 % We believe that our asset performance is superior to the industry due to our technologically advanced platform, consistent and conservative underwriting processes and focus on conducting a pre-funding review of each loan to ensure it meets the standards set by the GSEs or our loan investors. These practices differ from many of our competitors that apply different underwriting standards and review policies depending on the channel from which the loan is originated from. For example, some of our competitors conduct a pre-funding analysis on a sampling basis for loans acquired in the correspondent and wholesale channels but a full review on loans originated through the retail channel. We believe that our relentless focus on quality and consistency in applying underwriting policies and procedures has enabled us to have no significant repurchase demands, thus minimizing our risk profile and differentiating us from much of our competition. Our Complementary Origination, Servicing and Financing Businesses Create a Natural Hedge Against Interest Rate Volatility and Business Cyclicality Our principal sources of revenue, mortgage servicing, mortgage origination and mortgage financing, contribute to our stable business profile by creating a natural hedge against changes in the interest rate environment. As interest rates rise and the likelihood of refinancing decreases, MSRs generally increase in value which helps to offset any decline in origination volumes. Additionally, as long-term interest rates increase we will earn greater fee and interest income as yields on mortgage loans will increase while the funding costs will remain proportionately lower. As interest rates decline and the likelihood of refinancing increases, origination volumes tend to increase which helps to offset the decline in the value of MSRs caused by the higher probability of loan prepayment. In addition, our origination platform helps us to recapture servicing rights on loan payoffs and thus replenish our MSRs during periods of high prepayments. For the twelve months ended September 30, 2013, our recapture rate was 33% of payoffs (based on the dollar amount of refinanced mortgage loans). We expect that our recapture rate will increase further as our retail call center operations continues to expand their focus on retention of our servicing portfolio. Robust, Proprietary Operating Platform We believe that the current processes and systems generally used by brokers and correspondents to originate loans are fragmented and result in inconsistent data, lack of controls, and limited transparency for Table of Contents market participants. In response to this weakness, we have built a proprietary diligence and underwriting decision platform, OLIE, that incorporates what we believe to be the best balance of data integrity, efficiency, ease of use, speed of decision, loan quality, consistency and control. We believe this service is valued by our brokers and correspondents and offers us a distinct advantage over our competitors. OLIE provides a transparent view of all documents and loan level data throughout the entire life of a loan, from origination through securitization and final disposition, enabling us to measure and manage the performance of our loans, giving us the ability to proactively identify trends that may negatively impact our operational or financial performance. After we originate a loan, we also capture loan data and documents associated with the loan from application through sale/securitization and servicing, giving us the ability to run additional business rules that test the effectiveness of our system and provide indication of loan performance. We believe that our current platform and our robust diligence procedures are the central reason we have not had any significant loan losses from indemnification or repurchase demands compared to other competitors who have realized significant losses. Additionally, we are able to offer greater transparency to the institutional investors that purchase our loans which is reflected in our sales execution. Subsequent to June 30, 2013, we implemented version 1.0 and 2.0 of our C3 automated risk-based diligence engine, which is integrated with OLIE. C3 allows us to perform an electronic quantitative risk assessment on each loan, enabling us to target our due diligence procedures on higher risk loans and thereby gain efficiencies in performing the diligence process. Our servicing of these loans gives us the ability to analyze the effectiveness of our C3 automated risk-based diligence engine and, we believe, as an integrated platform with OLIE, has provided our institutional investors with even more robust diligence procedures targeted at the loans where they seek that additional level of due diligence. Seasoned Management Team Our senior management team is comprised of experienced mortgage industry executives with a track record of managing all aspects of the residential mortgage business through a variety of credit cycles and market conditions. Our founder and Chief Executive Officer, Jim Cutillo, has successfully led and managed the company through the recent transformation of the mortgage industry. Additionally, our president and other members of our senior management team have an average of 20 years of experience in the mortgage banking industry. We believe our executive management team has a clear vision and common set of core values and will be able to successfully execute our rapid growth strategy. Our Growth Drivers We expect to drive future growth in the following ways: Grow Origination Volume Across Channels We intend to grow our origination volume across our channels by expanding nationally. We are currently licensed in 39 states plus Washington, D.C., which account for approximately 85% of U.S. residential mortgage originations. We intend to become licensed in all 48 contiguous United States in the first half of 2014. As we launch our services nationally and expand in the remaining nine contiguous United States, which accounted for approximately $287 billion, or approximately 15%, of the nation s origination volume in 2012, and the six states where we have become licensed since June 30, 2013, which accounted for approximately $590 billion, or approximately 30%, of the nation s origination market in 2012 we believe that we will be able to continue to see meaningful growth in our origination volume. This will also enable us to substantially grow our correspondent, wholesale and retail footprint and deepen existing correspondent and wholesale relationships. Table of Contents Expand into Non-Agency Mortgage Loans Our extensive expertise in prime non-Agency jumbo securitization provides us the opportunity to substantially grow our non-Agency loan origination volume. We intend to focus on increasing production of loans that meet Agency criteria in nearly all respects other than loan size. These loans are generally referred to as jumbo loans and are originated through our existing channels. Over the last few years, this market has been hindered by the lack of an efficient capital market in which to sell such loans. We believe, as the market normalizes and non-Agency private securitization returns, we will be one of the few non-bank originators with this capability, giving us the ability to be an Aggregator for others and establishing ourselves as a market leader. The non-Agency MBS market was 56% of the total MBS market or $1.14 trillion in 2006 compared to 0.78% or $13.2 billion in 2012. In anticipation of the non-Agency market recovering and GSE reform, we intend to create a securitization shelf in 2014 and offer investors an opportunity to invest in securities backed by these loans. We may also retain the junior subordinated notes from the securitizations and create a recurring interest income stream for ourselves. We believe that our integrated origination and servicing platform coupled with our expertise provides us with what we believe is a significant competitive advantage. We expect this investment strategy to create an attractive risk-adjusted return for our shareholders and to position us as one of the leading non-bank integrated mortgage origination and service providers. Grow our Servicing Business We anticipate being able to continue to retain the MSRs associated with loans we originate at attractive multiples through our integrated mortgage banking platform, whereas many of our competitors rely on purchasing MSRs. We feel our strategy is not only a more efficient utilization of capital but has less credit, collateral and compliance risk, since all loans are carefully reviewed by us prior to purchase. We believe we can also leverage our correspondent channel to purchase MSRs from correspondent clients on a co-issue basis, meaning our clients originate and securitize Agency loans and concurrently transfer the servicing rights to us. This co-issue strategy will allow us to acquire the MSRs on an originated MSR ( OMSR ) basis versus a purchased MSR ( PMSR ) basis, since the servicing is treated as a whole loan origination. The co-issue strategy provides a competitive advantage over other purchasers of MSRs via bulk acquisitions as we have an existing relationship with the originator and understand their origination capabilities and techniques which drives the credit quality and performance of these loans. MSRs purchased in this way are expected to have substantially similar attributes to our originated loans with respect to note rate, credit quality and loan type. We completed our first transaction in the fourth quarter of 2013, acquiring an MSR portfolio with a UPB of approximately $142 million for a total cash purchase price of approximately $1.5 million, and continue to grow this area of our business to augment the acquisition of servicing rights. We plan to perform the same level of pre-funding due diligence on these loans prior to purchasing the servicing rights from the seller. This strategy is similar in nature to our origination strategy of offering mandatory delivery and is another delivery type that is not dependent on our origination business, making it highly scalable and efficient from an operational and financial perspective. Grow our Mortgage Financing Business In the current market, many correspondents lack capital to grow their businesses and, therefore, are constrained by their balance sheets from a warehouse lending perspective. A typical warehouse lender will provide financing subject to a tangible net worth covenant and require that the correspondent contribute a percentage of the principal balance to fund the warehoused loans. Often, this creates a capital constraint for the correspondent if the take-out or permanent investor takes too long to review or purchase the loan. We have created an early purchase facility that allows approved correspondents to sell us loans on an accelerated basis, moving them off their balance sheets and freeing up their warehouse lines so they can fund more loans. We earn fee and net interest income on Table of Contents these loans, which are held on average 15 days prior to sale. This also complements our mortgage origination business as we will generally acquire these loans from the correspondents, add the MSR to our portfolio and service the loans for borrowers going forward. We launched our financing business in June 2013 by hiring two dedicated experienced account executives and we expect to make additional hires as we roll out this business nationwide. Summary Risk Factors Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled Risk Factors immediately following this prospectus summary. Some of these risks are: our ability to compete successfully in the highly competitive mortgage loan servicing and mortgage loan origination industries; experiencing financial difficulties like some originators and mortgage servicers have experienced; adverse changes in the residential mortgage market; our ability to obtain sufficient capital to meet our financing requirements; our ability to grow our loan origination volume; the geographic concentration of our servicing portfolio may result in a higher rate of delinquencies and/or defaults; our mortgage financing business is subject to risks, including the risk of default and competitive risks; our estimates may prove to be imprecise and result in significant changes in financial performance, including valuation; the impact on our business of federal, state and local laws and regulations concerning loan servicing, loan origination, loan modification or the licensing of individuals and entities that engage in these activities; substantial compliance costs arising from state licensing and operational requirements or loss of our licenses; our ability to originate and/or acquire MSRs; our ability to recover our significant investments in personnel and our technology platform; the implementation of our proprietary loan due diligence, scoring and decision platform on schedule, which is still in the process of being refined and implemented; the accuracy and completeness of information we receive about borrowers and counterparties; a significant change in delinquencies and/or defaults for the mortgage loans we service; our ability to recapture mortgage loans from borrowers who refinance; changes in prevailing interest rates, such as the recent increase in rates experienced since June 2013, and any corresponding effects on origination volumes or the value of our assets; Table of Contents our rapid growth may be difficult to sustain and manage and may place significant demands on our administrative, operational and financial resources; our ability to identify and complete acquisitions of retail mortgage originators and other businesses; our ability to realize all of the anticipated benefits of our acquisitions; the change of control rules under Section 382 of the Internal Revenue Code of 1986, as amended (the Code ), may limit our ability to use net operating loss carryforwards to reduce future taxable income; failure to establish and maintain effective systems of internal controls; errors in our financial models or changes in assumptions; our ability to adapt to and implement technological changes; the impact of the ongoing implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ( Dodd-Frank Act ) on our business activities and practices, costs of operations and overall results of operations; losses due to fraudulent and negligent acts on the part of loan applicants, brokers, other vendors, existing customers, our employees and other third parties; the loss of the services of one or more of the members of our executive management team; and an active trading market for our common stock may not be sustained. Our Ownership Structure We are an Ohio corporation that was incorporated in 1976. Prior to March 2012, our shareholders were members of our executive management team and other investors. In March 2012, Long Ridge Equity Partners, a private investment firm focused on the financial services industry, invested in us through its affiliate. We completed a private offering in May 2013, which we refer to as our May 2013 private offering, in which we issued and sold 6,388,889 shares of our common stock to various institutional investors, accredited investors and offshore investors at an offering price of $18.00 per share, and we received approximately $115 million of proceeds, before expenses. Long Ridge Equity Partners remains our largest shareholder and has entered into various agreements with us and certain other parties which are described further in Certain Relationships and Related Party Transactions Arrangements with Long Ridge Equity Partners and its Affiliates. Table of Contents The following chart illustrates our organizational structure, after giving effect to the IPO. We have one wholly-owned subsidiary, NattyMac, LLC, an Indiana limited liability company. 1 Includes investors from our May 2013 private offering and our directors and other non-executive management shareholders (other than Stonegate Investors Holdings and its affiliates). 2 Includes the shares of common stock owned by Stonegate Investors Holdings, Long Ridge Equity Partners I, LP and Long Ridge Offshore Subsidiary Holdings, LLC, each of which is an affiliate of Long Ridge Equity Partners, LLC. Stonegate Investors Holdings and its affiliate also own warrants to purchase 242,621 shares of our common stock with an exercise price of $18.00 per share. Excludes shares issuable upon any exercise of the warrants. Recent Developments Recent Industry Trends Since June 2013, the U.S. residential mortgage industry has experienced an increase in interest rates. Industry-wide mortgage loan originations have declined as the recent increase in interest rates has made the refinancing of mortgage loans less attractive for borrowers. Increasing interest rates can have a direct impact on the operating results of companies in the mortgage industry, including on our operating results. An increase in interest rates generally could lead to the following, which may in the aggregate have an adverse effect on our results: a reduction in origination and loan lock volumes; a shift from loan refinancing volume to purchase loan volume; short-term contraction of the gain on sale margin of mortgage loans including negative fair market value adjustments on locked loans and loans held for sale; Table of Contents an increase in net interest income from financing (assuming a steeper forward yield curve); and an increase in the value of mortgage servicing rights due to a decline in prepayment expectations. Emerging Growth Company Status We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ), and 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. These exemptions provide that, so long as a company qualifies as an emerging growth company, it will, among other things: 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 Act, and certain disclosure requirements of the Dodd-Frank Act relating to compensation of its named executive officers; be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities Exchange Act of 1934, as amended (the Exchange Act ), and instead provide a reduced level of disclosure concerning executive compensation; and be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board (the PCAOB ), requiring mandatory audit firm rotation or a supplement to the auditor s report on the financial statements. Although we are still evaluating the JOBS Act, we may take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us as long as we qualify as an emerging growth company, except that 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. We will, in general, qualify as an emerging growth company until the earliest of: the last day of our fiscal year following the fifth anniversary of the date of the IPO; the last day of our fiscal year in which we have annual gross revenue of $1.0 billion or more; the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; and the date on which we are deemed to be a large accelerated filer, which will occur at such time as we (1) have an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as of the last business day of our most recently completed second fiscal quarter, (2) have been required to file annual and quarterly reports under the Exchange Act for a period of at least 12 months and (3) have filed at least one annual report pursuant to the Exchange Act. Table of Contents Registration Rights and Lock-Up Agreements Pursuant to a Registration Rights Agreement between us and the initial purchaser/placement agent for our May 2013 private offering, which we refer to as the Registration Rights Agreement, we are required, among other things, to: file or confidentially submit with the Securities and Exchange Commission, or the SEC, a resale shelf registration statement registering all of the shares of our common stock sold in our May 2013 private offering that are not sold by selling shareholders in the IPO no later than September 12, 2013 (which is 120 days after the closing date of our May 2013 private offering); and use our commercially reasonable efforts to cause the resale shelf registration statement to become effective under the Securities Act of 1933, as amended (the Securities Act ), as soon as reasonably practicable after the filing, and in any event, no later than February 15, 2014, and to maintain the resale shelf registration statement continuously effective under the Securities Act for a specified period. We confidentially submitted with the SEC on September 9, 2013 a registration statement on Form S-1 for the resale of the shares of our common stock sold in our May 2013 private offering and when the registration statement is declared effective by the Securities and Exchange Commission, we will have satisfied our obligations under the Registration Rights Agreement. We, and each of our officers, directors and Stonegate Investors Holdings have entered into a lock-up agreement with the lead managing underwriter, of the IPO with respect to shares of our common stock, restricting the direct or indirect sale of such securities, subject to certain exceptions, for 180 days after the date of the IPO prospectus without the prior written consent of the representatives of the underwriters in the IPO. Additionally, our other shareholders who purchased common stock in our May 2013 private offering have agreed with us, subject to certain exceptions, not to directly or indirectly sell, offer to sell, grant any option or otherwise transfer or dispose of our common stock for 60 days after the date of the IPO prospectus, which was October 9, 2013. Our Offices Our principal executive offices are located at 9190 Priority Way West Drive, Suite 300, Indianapolis, Indiana, 46240. Our main telephone number is (317) 663-5100. Our Internet website is www.stonegatemtg.com. Table of Contents
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+PROSPECTUS SUMMARY You should read the following summary together with the more detailed information concerning our company, the common stock being sold in this offering, and our consolidated financial statements appearing in this prospectus. Because this is only a summary, you should read the rest of this prospectus before you
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+PROSPECTUS SUMMARY This summary contains basic information about us and this offering. This summary is not complete and does not contain all the information you should consider before investing in the securities offered hereby. You should read this summary in conjunction with, and the summary is qualified in its entirety by, the more detailed information contained elsewhere in this prospectus, including the information under Risk Factors beginning on page 7 of this prospectus and the financial statements and related notes included in this prospectus. Company Overview We are engaged in the exploration and development of a potash mine in the Holbrook Basin of eastern Arizona, which we refer to as the Holbrook Project. Potash is primarily used as an agricultural fertilizer due to its high potassium content. Potassium, nitrogen and phosphate are the three primary nutrients essential for plant growth. The Holbrook Project consists of permits and leases on 143 mineral estate sections spanning approximately 88,175 acres in the Holbrook Basin of eastern Arizona, along the southern edge of the Colorado Plateau. We completed a pre-feasibility study, or PFS, for the Holbrook Project in July 2013. We are currently working toward a definitive feasibility study, or DFS, for the Holbrook Project. We commenced our phase 4 drilling program in August 2013 and completed the program in October 2013. We believe this drilling program completes the drilling necessary to complete a DFS. Damon G. Barber President and Chief Executive Officer Prospect Global Resources Inc. 1401 17th Street, Suite 1550 Denver, Colorado 80202 Fax: (303) 990-8444 Email: dbarber@prospectgri.com (Name, address, including zip code, and telephone number, including area code, of agent for service) Table of Contents Recent Developments Recent Financings In September 2013 we raised $3.0 million of gross proceeds when the holder of 5,000 of our Series B Warrants exercised those warrants and subsequently holders of 737,000 of our Series B Warrants issued in the June 2013 public offering exchanged their Series B Warrants for Series B-1 Warrants and thereafter exercised their Series B-1 Warrants. The Series B-1 Warrants were identical to the Series B Warrants except that the exercise price was reduced from $6.00 to $4.05 per share and each Series B-1 Warrant was exercisable for one share of common stock and a Series A Warrant to purchase 1.75 shares of common stock (compared to one share of common stock and a Series A Warrant to purchase one share of common stock in the original Series B Warrants). We issued 1,294,750 Series A Warrants upon exercise of the Series B-1 Warrants, 868,461 Series A Warrants pursuant to the full ratchet anti-dilution protection provisions in the Series B-1 Warrants and 781,887 additional five year warrants pursuant to the anti-dilution protection contained in other outstanding warrants. The exercise price of all warrants issued pursuant to this transaction was $4.05 per share. In February 2014 raised $1.1 million of gross proceeds when we and each of the holders of 747,298 of our Series A Warrants issued in our June 26, 2013 public offering agreed that we would reduce the exercise price from $4.05 to $1.50 in exchange for these warrants being exercised immediately and the issuance of a new Series A Warrant for each warrant exercised with an exercise price of $1.50, exercisable for five years only upon stockholder approval of the exercise. Each of the participating warrant holders entered into a separate Series A Warrant exercise agreement. Pursuant to the full ratchet anti-dilution terms in the Series A Warrants, the exercise price of our remaining outstanding Series A Warrants was adjusted to $1.50 and we issued an additional 5,467,779 Series A Warrants with an exercise price of $1.50. As a result of the reduction of the exercise price of the Series A Warrants, the exercise price on the 1,787,171 warrants held by Buffalo Management was reduced from $4.05 to $3.50 and we issued Buffalo Management 280,841 additional warrants with an exercise price of $3.50. Restructuring of Senior Secured Debt On April 3, 2014, we entered into a debt restructuring and extension agreement, or Extension Agreement, with The Karlsson Group which further restructured the senior first priority secured promissory note, as amended, that we originally issued to Karlsson on August 1, 2012 in connection with our purchase of Karlsson s 50% interest in our subsidiary American West Potash LLC. Under the terms of the Extension Agreement, we have agreed to use our best efforts to raise a sufficient aggregate amount to prepay the entire Karlsson Note for an aggregate payment of $15 million, which we refer to as the Discounted Payoff Amount, on or before April 23, 2014. The current amount we would owe if we do not pay the Discounted Payment Amount by April 23, 2014 is approximately $153.1 million. In connection with the Extension Agreement: upon payment of the Discounted Payoff Amount, the Karlsson Note will be deemed paid in full, and the Karlsson Group will release its first priority lien over our assets; The Karlsson Group will retain its 2% royalty interest in us following payment of the Discounted Payoff Amount and will receive an additional 1% royalty interest increasing their royalty interest to 3%; our first tax gross up payment is due on April 23, 2014 and such payment will count towards the aggregate $15 million Discounted Payoff Amount; if we do not pay the Discounted Payoff Amount on or before April 23, 2014, we will be in default under the pre-Extension Agreement Karlsson Note without the contractual right to cure such default, which would allow the Karlsson Group to foreclose on all of our assets; the 172,117 warrants currently held by the Karlsson Group (of which 60,000 have an exercise price of $6.00 per share and 112,117 have an exercise price of $12.50 per share) will be exchanged promptly following the conclusion of our special meeting of stockholders scheduled for April 9, 2014 for a number of shares of our common stock, which we refer to as the Karlsson Exchange Shares, equal to 4.99% of (i) the number of shares of our common stock that would be outstanding on April 9, 2014, after giving effect to the issuance of the Karlsson Exchange Shares and the issuance of all shares of our common stock issuable upon exercise or in exchange for Series A Warrants and warrants held by Buffalo Management, insofar as any of proposals 2, 3, and 4 are approved at the stockholders meeting or (ii) the number of shares of our common stock outstanding on April 9, 2014 after giving effect to the issuance of the Karlsson Exchange Shares if none of proposals 2, 3, or 4 is approved at the stockholders meeting (see Special Meeting of Stockholders ); upon payment of the Discounted Payment Amount we will issue The Karlsson Group a new warrant to purchase a number of shares of our common stock equal to the excess of (x) 4.99% of the sum of the number of shares to be outstanding after giving effect to the issuance of shares sold in conjunction with the capital raised to pay the Discounted Payment Amount plus exercise or conversion of all then outstanding rights to acquire or securities convertible into common stock, plus the number of shares subject to the new warrant over (y) the number of shares owned by Karlsson on the date the warrant is issued. The new warrant will have a term of five years from the issuance date, a cashless exercise option and a strike price equal to the price per share of our common stock sold in conjunction with the capital raised to pay the Discounted Payment Amount; we have agreed to pay Karlsson s legal fees in connection with the preparation and negotiation of the Extension Agreement and a recent waiver, with $50,000 having been paid on December 13, 2013 and $100,000 on February 2, 2014 and with the balance being payable no later than April 23, 2014; Amounts paid for legal fees do not count toward the $15 million Discounted Payoff Amount; we agreed to amend the additional consideration agreement to cover all of our and our affiliates current and future land holdings pursuant to royalty agreements, and to record all royalty agreements in the real estate records in Arizona; and we agreed to amend the supplemental payment agreement to provide that Karlsson is entitled to a one-time payment of 10% of the net proceeds in excess of $200 million received by us upon a sale of Prospect consummated on or before February 1, 2018. As of April 7, 2014, we are not contemplating a sale of Prospect. If we are not able to raise the money to pay off the Karlsson Group debt on or before April 23, 2014 we may decide to file bankruptcy. Copies of all communications, including communications sent to agent for service, should be sent to: Jeffrey M. Knetsch Brownstein Hyatt Farber Schreck, LLP 410 Seventeenth Street, Suite 2200 Denver, Colorado 80202 (303) 223-1100 Fax: (303) 223-1111 Email: jknetsch@bhfs.com Approximate date of commencement of proposed sale to the public: From time to time after the effectiveness of this Registration Statement. Table of Contents Restructuring of Senior Unsecured Debt On January 10, 2014 we entered into an agreement with the holders of our Apollo debt pursuant to which we owe an aggregate amount of approximately $7.4 million in principal and interest as of April 4, 2014. The agreement (as amended) provides that upon repayment or extinguishment of our senior secured debt owing to The Karlsson Group, Inc. on or before April 23, 2014 in accordance with the terms of the Extension Agreement and in any event for consideration with aggregate value less than or equal to 17% of the aggregate amount outstanding thereunder (including in respect of accrued interest and tax gross-up obligations) we may repay the notes by issuance of a number of shares of our common stock with an aggregate value of 17% of all amounts owing under the notes (including accrued interest). If we are not able to raise the money to pay off the Karlsson Group debt on or before April 23, 2014 we may decide to file bankruptcy. 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. 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 Proposed maximum offering price per share(1) Proposed maximum aggregate offering price (1) Amount of registration fee Common Stock(2) 1,090,198 $ 3.05 (6) $ 3,325,104 $ 428.27 Common Stock(2) 742,000 $ 2.62 (6) $ 1,944,040 $ 250.39 Common Stock(2) 742,298 $ 1.16 (6) $ 861,066 $ 110.90 Common Stock(3) 916,668 $ 4.05 (7) $ 3,712,506 $ 478.17 Common Stock(4) 2,163,212 $ 4.05 (7) $ 8,761,009 $ 1,128.42 Common Stock(5) 3,800,842 $ 1.52 (8) $ 5,777,280 $ 744.11 Common Stock(5) 1,666,936 $ 1.08 (8) $ 1,800,291 $ 231.88 Total 11,122,154 $ 26,181,296 $ 3,372.15 (9) (1) In the event of a stock split, reverse stock split, stock dividend, warrant exercise price adjustment or similar transaction involving our securities, the number of shares registered shall automatically be adjusted to cover the additional shares of stock issuable pursuant to Rule 416 under the Securities Act, as amended. (2) These shares are being registered for resale by certain selling stockholders named in this registration statement. (3) These shares are being registered for resale upon exercise of the registrant s Series A Warrants issued on August 30, 2013. (4) These shares are being registered for resale upon exercise of the registrant s Series A Warrants issued on September 26, 2013. (5) These shares are being registered for resale upon exercise of the registrant s Series A Warrants issued on February 12, 2014. (6) Pursuant to Rule 457(c) under the Securities Act, calculated based upon prices for the common stock as quoted on the Nasdaq Capital Market on October 24, 2013 ($3.05), January 14, 2014 ($2.62) and April 4, 2014 ($1.16). (7) Pursuant to Rule 457(g) under the Securities Act, as amended, calculated based upon the exercise price of the warrants, which is $4.05 per share. (8) Pursuant to Rule 457(c) under the Securities Act, calculated based upon prices for the common stock as quoted on the Nasdaq Capital Market on February 21, 2014 ($1.52) and April 17, 2014 ($1.08). (9) $3,029.37 Previously paid. Pursuant to Rule 429 under the Securities Act of 1933 the prospectus contained in this registration statement also relates to 109,500 shares issuable under the registrant s Series A Warrants registered in the registrant s registration statement on Form S-3 (File No. 333-180492) and for which a filing fee of $45,840 was paid with the initial filing of that registration statement on March 30, 2012. 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, as amended, 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. Table of Contents Restatement of Financial Statements We recently restated our financial statements for the fiscal years ended March 31, 2013 and 2012 and the quarterly periods ending June 30, September 30 and December 31, 2012 and June 30 and September 30, 2013 to (i) reverse stock compensation related to unvested stock option awards for former employees and board members, (ii) expense certain costs that had been previously capitalized and (iii) remove references to us being a development stage company. The restated financial statements are included in this prospectus and have been filed in amendments to our annual report on Form 10-K for the year ended March 31, 2013 and quarterly reports on Form 10-Q for the quarters ended June 30, 2013, September 30, 2013 and December 31, 2013. This restatement does not change our reported cash or business plan. Special Meeting of Stockholders We have filed with the SEC a definitive proxy statement for a special meeting of stockholders to be held on April 9, 2014. The four proposals to be voted on at the meeting are: (i) an exchange of all 9,404,456 of our outstanding Series A Warrants for an equal number of shares of common stock where no additional consideration will be paid by the Series A Warrant holders; (ii) an exchange of 2,068,012 of other warrants held by Buffalo Management LLC, an affiliate of ours, for 868,566 shares of common stock where no additional consideration will be paid by Buffalo; (iii) to grant the board discretionary authority to effect a reverse split of up to 1 for 20 with respect to the issued and outstanding shares of our common stock. If approved, the board s discretion to effect the reverse stock split would last until December 31, 2014, when such discretion would terminate if not exercised by the board; and (iv) to approve the exercisability of 747,298 Series A Warrants to purchase common stock at $1.50 per share issued in connection with the exercise of 747,298 Series A Warrants on February 11, 2014. We are asking our stockholders to approve the warrant exchanges because we believe, based upon the advice of the potential underwriters of our previously announced proposed public offering of up to $25 million of common stock, that the warrant exchange will enhance the likelihood of a successful public offering by eliminating the market overhang of such a large number of warrants. Nasdaq Delisting Our common stock was suspended from trading on The NASDAQ Stock Market effective at the open of business on April 7, 2014 because we did not achieved compliance with a NASDAQ listing rule that requires a minimum market value of listed common stock of $35 million. Our common stock is eligible for trading and quotation on the OTCQB market, under the symbol PGRX . We intend to pursue listing on a national exchange upon extinguishment of our senior secured debt to The Karlsson Group. Summary of the Offering The following is a brief summary of certain terms of this offering and is not intended to be complete. It does not contain all of the information that will be important to a holder of shares of our common stock and warrants to purchase our common stock. Outstanding Shares Offered to the Public by the Selling Stockholders 1,832,198 Shares Underlying Privately Placed Series A Warrants Offered to the Public by the Selling Stockholders 8,547,658 Shares Offered to the Holders of our Series A Warrants 109,500 Use of Proceeds We will not receive any proceeds from the resale by the selling stockholders of the 1,832,198 shares of outstanding stock owned by them or the 8,547,658 shares issuable to them upon exercise of their unregistered Series A Warrants. We may receive up to a maximum of approximately $14.1 million in gross and net proceeds upon full exercise of all our outstanding Series A Warrants, the shares underlying which are all registered under the registration statement of which this prospectus is a part and offered hereby. The proceeds from exercise in full of the 109,500 shares of common stock issuable pursuant to the Series A Warrants issued in our June 2013 public offering would be approximately $0.2 million gross and $0.1 million net. These are the only actual proceeds we will receive from this offering as the remainder of the offering relates only to the resale of common stock. No assurances can be given, however, that all or any portion of the Series A Warrants will ever be exercised. We intend to use any proceeds received from the exercise of the Series A Warrants to: (i) Make mandatory repayments of outstanding indebtedness. We are required to pay 10% of any capital raised to each of The Karlsson Group and Apollo (20% in total) as payments on their respective promissory notes. (ii) Fund the development of the Holbrook Project. We are required to deposit 50% of the net proceeds of the next $18.8 million of capital raised (a total of $9.4 million) into escrow for Holbrook project expenses; and (iii) Fund general corporate purposes. Total Common Stock Outstanding at March 31, 2014 5,004,578 shares Total Common Stock Outstanding After Exercise or Exchange of all Series A Warrants and Buffalo Warrants 15,277,600 shares 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 is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted. PROSPECTUS Subject to completion, dated April 8, 2014. PROSPECT GLOBAL RESOURCES INC. 11,231,654 Shares of Common Stock This prospectus relates to (a) the issuance by us of up to 109,500 shares of our common stock to the holders of outstanding Series A Warrants issued in a public offering upon exercise of the Series A Warrants, (b) the resale by the selling stockholders of 8,547,658 shares of our common stock issuable to the holders of outstanding Series A Warrants issued in private placements and (c) the resale of 2,574,496 outstanding shares of our common stock that are owned by the selling stockholders identified herein and were acquired in transactions completed prior to the filing of the registration statement of which this prospectus is a part. The shares underlying all of our outstanding Series A Warrants are being offered by this prospectus. The Series A Warrants are currently exercisable at $1.50 per share. The selling stockholders may sell all or a portion of their shares through public or private transactions at prevailing market prices or at privately negotiated prices. Information regarding the selling stockholders and the times and manner in which they may offer and sell the shares under this prospectus is provided under Selling Stockholders and Plan of Distribution in this prospectus. We have agreed to pay all the costs and expenses of this registration. We will not receive any proceeds from the resale by the selling stockholders of the 1,832,198 shares of outstanding stock owned by them or the 8,547,658 shares issuable to them upon exercise of their unregistered Series A Warrants. We may receive proceeds upon exercise of outstanding Series A Warrants, and any proceeds we receive will be used as described under Use of Proceeds . An investment in our securities involves serious risks, including the risk that we are unable to raise sufficient capital to continue funding our operations, service our debt and complete the exploration, development and build out of our Holbrook potash project and continue our listing on The Nasdaq Capital Market. You should read carefully the Risk Factors beginning on page 7 of this prospectus. Trading in our common stock is reported on the OTCQB market under the symbol PGRX. On April , 2014, the last reported sale price of our common stock was $ per share. Our principal offices are located at 1401 17th Street, Suite 1550, Denver CO 80202 and our telephone number is 303-990-8444. 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 the prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is April [ ], 2014 Table of Contents
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+PROSPECTUS SUMMARY This summary highlights selected information appearing 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 the information you should consider before investing in our common stock. You should carefully read this prospectus in its entirety before investing in our common stock, including the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus. Unless the context otherwise requires, we use the terms "Marketo", the "Company", "we", "us" and "our" in this prospectus to refer to Marketo, Inc. and, where appropriate, our consolidated subsidiaries. Business Overview We are the provider of a leading cloud-based marketing software platform that enables organizations to engage in modern relationship marketing. Our software platform is designed to enable the effective execution, management and analytical measurement of marketing activities, helping organizations to acquire new customers more efficiently, build stronger relationships with existing customers, improve sales effectiveness and drive faster revenue growth. On our platform, we deliver an easy-to-use, integrated suite of advanced applications, which today include Marketing Automation, Social Marketing, Sales Insight, Revenue Analytics, Marketing Management, and Real-time Personalization. To enable our customers to obtain maximum value from our platform, we have created an ecosystem of third-party applications, as well as a network of resources to foster marketing thought leadership, sharing and collaboration among our users. Furthermore, we provide our customers with expert professional services, delivered by marketers, for marketers, to enable rapid time to value through effective implementation and usage of our solutions. We designed our platform to be valuable across large enterprises and Small and Medium Businesses (SMBs) that sell to both businesses and consumers in virtually any industry. We market and sell our products directly and through a growing network of distribution partners. Our client base is diverse, with 2,760 customers across a wide range of industries including business services, consumer, financial services, healthcare, manufacturing, media, technology and telecommunications. Representative customers include one or more divisions of the following companies: Capgemini, CenturyLink, Citrix, Gannett, General Electric, Medtronic, Moody's, Panasonic, Symantec and Sony. Except for a single customer in 2011 who was slightly over 1%, no single customer represented more than 1% of subscription and support revenue in 2010, 2011, 2012 and during the nine months ended September 30, 2012 and 2013. For each of 2011 and 2012 and the nine months ended September 30, 2012 and 2013, our 20 largest customers accounted for less than 10% of our total revenue. We provide our solutions on a subscription basis and generated revenue of $14.0 million, $32.4 million and $58.4 million in 2010, 2011 and 2012, respectively, representing year-over-year increases of 131% and 80%, respectively. During the nine months ended September 30, 2012 and 2013, we generated revenue of $41.6 million and $67.7 million, respectively, representing an increase of 63% during the first nine months of 2013 as compared to the first nine months of 2012. We had net losses of $11.8 million, $22.6 million, $34.4 million, $26.3 million and $31.9 million in 2010, 2011, 2012 and for the nine months ended September 30, 2012 and 2013, respectively, due to increased investments in our growth. As of September 30, 2013, we had an accumulated deficit of $114.1 million. Our Industry Buyers of consumer and business goods and services are increasingly becoming self directed in their purchase decision making. With a wide range of information available across multiple online, social and offline channels and with an increased ability to opt out of unwanted communications, the Amendment No. 1 to FORM S-1 REGISTRATION STATEMENT Under The Securities Act of 1933 Table of Contents manner in which buyers obtain information and make decisions about purchases is undergoing a dramatic transformation. Buyers are spending more time gathering information from search engines, company websites, blogs, online product reviews and social networks. As a result, brand perceptions are formed and significant purchasing decisions are often made prior to or without any direct contact with a salesperson or seeing a product in a retail setting. At the same time, there is a growing range of digital information about prospects and customers that can be captured by marketers, including unstructured and diverse behavioral data such as purchase history, website visits, webinar attendance, video consumption, document downloads, telephonic and email inquiries and social network activity. This presents an opportunity for marketers to capture, analyze and leverage this information to deliver timely and relevant messages to their targeted audiences and to enable their salespeople to focus on their most promising opportunities. This, in turn, allows companies to allocate their marketing investments more effectively. These trends have led to the emergence of a modern approach to relationship marketing, requiring marketers to fundamentally change how they engage with prospects and customers. Marketers now must engage with each customer in an individual and personalized dialog over time, facilitating the customer's self-directed research and decision-making, and stimulating buying. Used effectively, this approach enables modern marketers to significantly and measurably enhance an organization's ability to grow revenue, maximize return on investments in marketing and increase customer lifetime value. The result is that marketing professionals now seek a new generation of software solutions that effectively leverage behavioral data and automation techniques to enable them to build and maintain personalized customer relationships at scale, and hence to become central catalysts for revenue growth in their companies. Marketers already invest significant funds in pursuit of revenue. According to the CMO Council's report, The 2011 State of Marketing, global marketing and communications spending exceeds $1.5 trillion annually. Companies of all sizes are spending greater portions of their marketing budgets on technology to achieve higher productivity and better business results. For instance, according to research firm IDC's 2012 CMO Tech Marketing Barometer Study, technology CMOs estimate that 8.7% of their total marketing program budget will be spent on marketing IT. We believe that our platform addresses several established segments of marketing-related software that in aggregate have been estimated by Gartner to be approximately $32 billion in 2013. These segments include customer relationship management, business intelligence, and web conferencing, teaming platforms and social software suites. Gartner expects the aggregate of these segments to grow to nearly $41 billion by 2016. Our Solution We are the provider of a leading cloud-based marketing software platform that is purpose-built to enable organizations ranging from SMBs to the world's largest enterprises to engage in modern relationship marketing. Our platform enables the effective execution, management and analytical measurement of online, social and offline marketing activities and customer interactions. Our software solution is complemented by resources, tools and expertise designed to help our customers collaborate, learn and get better results faster. The key benefits of our solution include: Drives faster revenue growth. Our solution enables organizations to more effectively and efficiently acquire new customers, improve sales effectiveness and generate faster revenue growth. Enables organizations to better build and retain long-term customer relationships. Our solution enables organizations to engage in personalized and interactive multi-channel dialogs with their MARKETO, INC. (Exact name of registrant as specified in its charter) Table of Contents prospects and customers, resulting in deep, long-lasting relationships that increase customer lifetime value. Streamlines the marketer's world. Our solution enables organizations to manage entire multi-channel marketing campaigns and related customer interactions from a single platform. This combines and advances the capabilities of a broad array of discrete point products in the market today, reducing complexity and costs. Increases efficiency and speed of marketing execution. Our solution is designed to be intuitive and easy to use so that marketers can efficiently use its many features without requiring extensive training or specialized technical skills. The elements of our solution work together to simplify and automate repetitive tasks, so organizations can rapidly turn new marketing ideas into revenue opportunities. Provides deep analytical insight. Our solution serves as the system of record for data across marketing campaigns and channels and connects to other complementary enterprise data sources. Our analytics capabilities help our customers measure the effectiveness and the revenue generation impact of their marketing activities. Our Competitive Strengths Our key competitive strengths include: Ease of use. Our solution is designed to enable users to rapidly adopt and use our platform to manage their marketing activities, from the simple to the most sophisticated tasks, and to do so with little or no need for technical skills or IT support. Powerful capabilities. Our solution is designed to give users progressive access to increasingly powerful features when they need them, and offers significant headroom in the richness of the campaigns they can create as well as the analytic questions they can answer. Complete platform. We offer a suite of applications that are tightly integrated and deliver a broad range of capabilities that would otherwise require the purchase and use of multiple disparate point solutions such as email marketing tools, social campaign products and business intelligence software. Enterprise integration. Our platform offers extensible integration with a range of enterprise-wide processes and systems, including customer relationship management (CRM) systems, e-commerce platforms, in-house databases and custom applications. In addition, we have developed specialized integrations with industry-leading CRM solutions including salesforce.com and Microsoft Dynamics CRM to allow marketing, sales and service professionals to work collaboratively. Thought leadership. We strive to be a thought leader in our industry, identifying and interpreting emerging trends in relationship marketing, shaping and guiding industry dialog, and creating and sharing the best marketing practices. Network effects. The extended Marketo community includes over 2,700 customers, over 40,000 online community members and over 170 partners who share their experiences, best practices and ready-to-use marketing campaign templates with other Marketo users. We call this the Marketing Nation. The growth of this community creates a network effect as the expanded access to expertise and information benefits all participants and becomes increasingly valuable to our current and prospective customers. Independence. We are an independent marketing software company exclusively focused on providing innovative marketing technologies, solutions and content for the modern marketing Delaware (State or other jurisdiction of incorporation or organization) 7372 (Primary Standard Industrial Classification Code Number) 56-2558241 (I.R.S. Employer Identification Number) 901 Mariners Island Blvd., Suite 200 San Mateo, California 94404 (650) 376-2300 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Table of Contents professional. Our independence enables us to continue to innovate and deliver advanced, differentiated marketing solutions, and to work with a broader set of partners, providing us a competitive advantage in the industry. Our Growth Strategy Key elements of our growth strategy are to: Acquire new customers. We plan to acquire an increasing number of customers through the expansion of our direct sales teams. We also intend to expand our indirect sales teams to pursue additional channel, agency and OEM distribution partnerships, and to selectively enter new geographic markets. Expand within our existing customer base. We intend to increase revenue from existing customers, many of whom initially purchase a component of our solution for a subset of users, and subsequently expand the use of our solutions. Further penetrate additional markets and verticals. Although to date a majority of our customers and revenue has been derived from the business-to-business (B2B) market, we have had initial success in selling into the business-to-consumer (B2C) market and intend to continue to target a range of B2C industries. In addition, we intend to expand our vertical marketing efforts in order to increase the depth of our market penetration in certain industries. Continue to innovate and extend our marketing thought leadership. We plan to continually develop new applications that enhance the functionality of our solution and address the latest opportunities and challenges for marketers, which we will sell to both existing and new customers. We also intend to leverage our competitive strength in marketing thought leadership to advance our solutions and to deliver rich content and robust services that provide differentiated value to our customers. Pursue selective strategic acquisitions. We intend to selectively acquire businesses and technologies as we did with the acquisition of Insightera in December 2013 and Crowd Factory in April 2012. We plan to evaluate opportunities that will strengthen and expand the functionality of our platform and provide access to new customers or markets. Risks Affecting Us Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled "Risk Factors" immediately following this prospectus summary. These risks include, but are not limited to, the following: We have a history of losses and may not achieve consistent profitability in the future. If we are unable to attract new customers or sell additional services and functionality to our existing customers, our revenue growth will be adversely affected. If subscription renewal rates decrease, or we do not accurately predict subscription renewal rates, our future revenue and operating results may be harmed. If we are unable to maintain a good relationship with salesforce.com and develop and grow our relationships with other platform providers, our business will suffer. We face significant competition from both established and new companies offering marketing software and other related applications, as well as internally developed software, which may harm our ability to add new customers, retain existing customers and grow our business. Phillip M. Fernandez President & Chief Executive Officer Marketo, Inc. 901 Mariners Island Blvd., Suite 200 San Mateo, California 94404 (650) 376-2300 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copy to: Table of Contents Our recent rapid growth may not be indicative of our future growth and, if we continue to grow rapidly, we may not be able to manage our growth effectively. If our or our customers' security measures are compromised or unauthorized access to customer data is otherwise obtained, our marketing software may be perceived as not being secure, customers may curtail or cease their use of our solutions, our reputation may be harmed and we may incur significant liabilities. Interruptions to or degraded performance of our service could result in customer dissatisfaction, damage to our reputation, loss of customers, limited growth and reduction in revenue. If we are unable to further penetrate the B2C market and additional vertical industries, our revenue may not grow and our operating results may be harmed. We may experience quarterly fluctuations in our operating results due to a number of factors, which makes our future results difficult to predict and could cause our operating results to fall below expectations or our guidance. Corporate Information Our principal executive offices are located at 901 Mariners Island Blvd, Suite 200, San Mateo, California 94404, and our telephone number is (650) 376-2300. Our website is www.marketo.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus. We were incorporated in California in January 2006 and reincorporated in Delaware in January 2010. Marketo, the Marketo logo, Marketing Nation, LaunchPoint and other trademarks or service marks of Marketo appearing in this prospectus are the property of Marketo. Trade names, trademarks and service marks of other companies appearing in this prospectus are the property of their respective holders. We have omitted the and designations, as applicable, for the trademarks used in this prospectus. We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). We will remain an emerging growth company until the earliest to occur of: the last day of the fiscal year in which we have more than $1.0 billion in annual revenue; the date we qualify as a "large accelerated filer", with at least $700 million of equity securities held by non-affiliates; the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities; and the last day of the fiscal year ending after the fifth anniversary of our initial public offering. Aaron J. Alter Tony Jeffries Michael E. Coke Wilson Sonsini Goodrich & Rosati Professional Corporation 650 Page Mill Road Palo Alto, California 94304 (650) 493-9300 Margo M. Smith Senior Vice President & General Counsel Marketo, Inc. 901 Mariners Island Blvd., Suite 200 San Mateo, California 94404 (650) 376-2300 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: 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. 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 (Do not check if a smaller reporting company) Smaller reporting company Table of Contents The Shares Offered Under this Prospectus Common stock offered by the selling stockholders 427,761 shares NASDAQ trading symbol "MKTO" Use of proceeds All of the shares of common stock being offered under this prospectus are being sold by the selling stockholders or their pledges, donees, transferees, assignees or other successors in interest. Accordingly, we will not receive any proceeds from the sale of these shares. 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, par value $0.0001 per share 427,761 $32.43 $13,872,290 $1,786.75(3) (1)Pursuant to Rule 416(e) of the Securities Act of 1933, as amended, this Registration Statement shall also cover any additional shares of the Registrant's common stock that become issuable by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without receipt of consideration that increases the number of the Registrant's outstanding shares of common stock. (2)Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act of 1933, as amended, based on the average of the high and low sales prices of the Registrant's Common Stock as reported by The NASDAQ Global Select Market on December 18, 2013. (3)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 Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Table of Contents
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+PROSPECTUS SUMMARY You should read the following summary together with the more detailed business information, financial statements and related notes that appear elsewhere in this prospectus. In this prospectus, unless the context otherwise denotes, references to "we", "us", "our", and "Company" are to GEI Global Energy Corp. GLOBAL ENERGY INNOVATIONS, INC. Global Energy Innovations, Inc. ("GEI") is a Michigan corporation incorporated on March 13, 2007 and was established to develop and commercialize innovative technologies that provide world markets with clean and secure energy that is sustainable and environmentally benign. GEI is focused on the development of next-generation fuel cells to provide electric power at costs significantly below the average cost of electricity from most traditional sources, such as oil, natural gas, and coal-fired electric power plants. The GEI proprietary high temperature PEM (Polymer Exchange Membrane) fuel cell electrical power generation systems technology represents a potential advantage in terms of performance, scalability, and efficiency. GEI as a private fuel cell development company, since 2007, designed and fabricated pre-commercial fuel cell electrical power generation systems for industrial customers, the federal government, and research organizations. On August 15, 2013 Global Energy Innovations, Inc., the Michigan private company merged with SUJA Minerals, Inc., a public company listed on the OTCQB. SUJA Minerals, Inc. was originally incorporated as a State of Nevada public company on April 28, 2010 to conduct exploration activities on the Crawford Creek Property located in British Columbia, Canada. Post-merger, the combined entity, now public, changed its name from SUJA Minerals, Inc. to GEI Global Energy Corp. The Company s corporate headquarters are located at 6060 Covered Wagon Trail, Flint, Michigan, 48532, with telephone number of (810) 610-2816 and website address of http://www.geiglobal.com/. Table of Contents Stock Issued in Connection with the Conversion of Debt During the year ended December 31, 2013, the Company issued 3,000 shares of common stock valued at $177,662 for the conversion of the principal and accrued interest of debt held by six (6) convertible debt holders. The Company also issued 5,000 shares of common stock valued at $32,700 for the conversion of the principal and accrued interest of debt held by one (1) convertible debt holders. The conversion price was agreed to by the transacting parties. The fair values of the shares of common stock issued for the conversion of debt was recorded as a reduction in convertible notes payable and accrued interest for the year ended December 31, 2013. Date Number of Shares Fair Value July 31, 2013 3,000 $ 177,662 December 4, 2013 5,000 $ 32,700 Total 8,000 $ 210,362 ITEM 16. EXHIBITS The following exhibits are included with this registration statement: Exhibit Number. Name/Identification of Exhibit 3.1 Articles of Incorporation 3.3 Bylaws 5 Opinion of Joseph L. Pittera, Esq. 10.1 Subscription Agreement for River North Equity, LLC 10.2 Extended Line of Credit Registration Rights Agreement for River North Equity, LLC 23.1 Consent of Independent Auditor 23.2 Consent of Counsel (See Exhibit 5) ITEM 17. UNDERTAKINGS Under Rule 415 of the Securities Act, we are registering securities for an offering to be made on a continuous or delayed basis in the future. The registration statement pertains only to securities (a) the offering of which will be commenced promptly, will be made on a continuous basis and may continue for a period in excess of 30 days from the date of initial effectiveness and (b) are registered in an amount which, at the time the registration statement becomes effective, is reasonably expected to be offered and sold within two years from the initial effective date of the registration. Based on the above-referenced facts and in compliance with the above-referenced rules, GEI Global Energy Corp. includes the following undertakings in this Registration Statement: 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: CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Amount to be Registered (1) Proposed Maximum Offering Price Per Share ($) Proposed Maximum Aggregate Offering Price ($)(2) Amount of Registration Fee ($) Shares of Common Stock, $ Par Value $0.001 150,000,000 $0.067(1) $10,000,000(1) $1162.00 1 We are registering 150,000,000 shares of our common stock that we will sell to River North Equity, pursuant to an Investment Agreement entered into on September 12, 2014, which together shall have an aggregate initial offering price not to exceed $10,000,000. In the event the maximum aggregate offering price is reached, any remaining unsold shares shall be removed from registration. The proposed maximum offering price per share will be determined by the registrant in connection with the issuance of the securities registered hereunder. 2 The registration fee is calculated pursuant to Rule 457(c) of the Securities Act of 1933 based on the average of the high and low transaction prices on November 26, 2014. 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. ABOUT THIS PROSPECTUS You should rely only on the information contained in this prospectus. Neither we, nor the selling shareholders have authorized anyone to provide you with different or additional information. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is not an offer to sell nor is it seeking an offer to buy shares of our common stock in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is correct only as of the date of this prospectus, regardless of the time of the delivery of this prospectus or any sale of shares of our common stock. Table of Contents 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 offer. Securities Offered: Under the Investment Agreement, River North Equity, LLC has agreed to provide us with up to $10,000,000 of funding upon effectiveness of this prospectus; for which 100, 000,000 shares of our common stock are being registered pursuant to this prospectus. During this period, we can deliver a put under the Investment Agreement by selling shares of our common stock to River North Equity, LLC and River North Equity, LLC will be obligated to purchase the shares. An individual put transaction must close before we can deliver another put notice to River North Equity, LLC. Offering Price Per Share: The purchase price per share of common stock will be set at seventy percent (70%) of the lowest closing bid price of the common stock during the five consecutive trading days immediately following the date of our notice to River North Equity, LLC of our election to put shares pursuant to the Investment Agreement (i.e. 25% discount to market). The maximum offering price is $0.067 for the 150,000,000 for a maximum aggregate offering price of $10,000,000. Offering Period: The shares are being offered for a period not to exceed December 31, 2015. Company Proceeds: $10,000,000 maximum Use of Proceeds: See Use of Proceeds Shares Outstanding Before: 831,066,776 Shares Outstanding After: 981,066,776 Table of Contents Table of Contents PROSPECTUS SUMMARY 1 CORPORATE INFORMATION
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+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 jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, dated __________, 2014 PRELIMINARY PROSPECTUS KEY LINK ASSETS CORP. 590,000 SHARES OF COMMON STOCK $0.10 PER SHARE The selling shareholders of Key Link Assets Corp. (the Company ) named in this Prospectus are offering shares of common stock through this Prospectus. We will not receive any of the proceeds from the sale of the shares by the selling shareholders. Our common stock is presently not traded on any market or securities exchange. The 590,000 shares of our common stock may be sold by selling shareholders at a fixed price of $0.10 per share until our shares are quoted on the OTCBB and thereafter 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 shareholders. There is no assurance that an active trading market for our shares will develop, or, if developed, that it will be sustained. In the absence of an active trading market, investors may be unable to liquidate their investment or make any profit from the investment. The Company is considered an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ) and will be subject to reduced public company reporting requirements. See Risk Factors below. THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED IN THE RISK FACTORS SECTION BEGINNING ON PAGE 3. We have incurred losses to date, and our independent auditors have issued an opinion that there is substantial doubt about our ability to continue as a going concern. The Company has no or nominal operations and has assets consisting solely of cash and cash equivalents and is, therefore, a shell company as defined by Rule 405 under the Securities Act. The Company s status as a shell company imposes certain restrictions inapplicable to non-shell companies and operates to limit certain transfer of its securities as discussed herein. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense. You should rely only on the information contained in this Prospectus and the information we have referred you to. We have not authorized any person to provide you with any information about this Offering, the Company, or the shares of our Common Stock offered hereby that is different from the information included in this Prospectus. If anyone provides you with different information, you should not rely on it. The date of this Prospectus is ______, 2014
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+PROSPECTUS SUMMARY The following summary highlights information 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 this entire prospectus carefully. In particular, you should read the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and the notes relating to those statements included elsewhere in this prospectus. Some of the statements in this prospectus constitute forward-looking statements. See "Forward-Looking Statements." In this prospectus, unless the context requires otherwise, references to the "Company," "we," "our," or "us" refer to 21st Century Oncology Holdings, Inc. (formerly known as Radiation Therapy Services Holdings, Inc.), the issuer of the securities offered hereby, and its consolidated subsidiaries. "21CH" refers to 21st Century Oncology Holdings, Inc. alone and "21C" refers to 21st Century Oncology, Inc. (formerly known as Radiation Therapy Services, Inc.), 21CH's direct, wholly owned subsidiary. "21CI" refers to 21st Century Oncology Investments, LLC (formerly known as Radiation Therapy Investments, LLC), our sole stockholder. Unless the context otherwise requires, references to the "offerings" refer collectively to the offering of our common stock and the offering of our Series A preferred stock. Company Overview We are the leading global, physician-led provider of integrated cancer care ("ICC") services. Our physicians provide comprehensive, academic quality, cost-effective coordinated care for cancer patients in personal and convenient community settings (our "ICC model"). We believe we offer a powerful value proposition to patients, hospital systems, payers and risk-taking physician groups by delivering high quality care and first rate clinical outcomes at lower overall costs through outpatient settings, clinical excellence, physician coordination and scaled efficiency. We operate the largest integrated network of cancer treatment centers and affiliated physicians in the world which, as of March 31, 2014, was comprised of approximately 771 community-based physicians in the fields of radiation oncology, medical oncology, breast, gynecological and general surgery, urology and primary care. Our physicians provide medical services at approximately 376 locations, including our 185 radiation therapy centers, of which 47 operate in partnership with health systems. Our cancer treatment centers in the United States are operated predominantly under the 21st Century Oncology brand and are strategically clustered in 31 local markets in 16 states. Our 35 international treatment centers in six Latin American markets are operated under the 21st Century Oncology brand or a local brand and, in many cases, are operated with local minority partners, including hospitals. We hold market leading positions in the majority of our local markets. Our operating philosophy is to provide academic center level care to cancer patients in a community setting. To act on this philosophy, we employ or affiliate with leading physicians and provide them with the advanced medical technology necessary to achieve optimal clinical outcomes across a full spectrum of oncologic disease in each local market. In support of our physicians and technologies, we also develop and invest in medical management software, training programs for our staff and business enterprise systems to allow for rapid diffusion of clinical initiatives and continuous quality and performance improvement. In addition, we maintain strong clinical research relationships with multiple academic centers of excellence and cooperative research groups, gaining access to cutting edge treatments and making them available to our patients often years in advance of their commercial introduction to the marketplace. As a result, we attract and retain talented physician leaders by providing opportunities to work in a stimulating clinical environment offering superior end-to-end resources and designed to deliver high quality patient care. Our Company was founded in 1983 by a group of physicians that came together to deliver academic level quality radiation therapy at the community level. With significant investment in clinical programs, operating infrastructure and business systems, we expanded our delivery of sophisticated radiation therapy Amendment No. 3 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents ABOUT THIS PROSPECTUS We are an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the "Securities Act"), and Section 3(a)(80) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and we are eligible to take advantage of certain exemptions from various reporting requirements under the Jumpstart Our Business Startups Act ("JOBS Act") that are not applicable to other public companies that are not "emerging growth companies." Pursuant to Section 102 of the JOBS Act, we have provided reduced executive compensation disclosure. We intend to "opt out" of the extended transition period with respect to new or revised accounting standards and, as a result, we will comply with any such new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies, and we chose not to provide the reduced financial information allowed under Section 102 of the JOBS Act, which requires only two years of audited financial statements and reduced selected financial data. 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 nonaffiliates 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 nonconvertible debt during the preceding three-year period. MARKET, RANKING AND OTHER INDUSTRY DATA In this prospectus, we rely on and refer to information and statistics regarding the radiation therapy services industry as well as the cancer treatment industry and, unless otherwise specified, our market share is based on our revenue rank among public and private radiation therapy services companies based on public filings with the Securities and Exchange Commission (the "SEC"), industry presentations and industry research reports. Where possible, we obtained this information and these statistics from third-party sources, such as independent industry publications, government publications or reports by market research firms, including company research, trade interviews, and public filings with the SEC. Additionally, we have supplemented third-party information where necessary with management estimates based on our review of internal surveys, information from our customers and vendors, trade and business organizations and other contacts in markets in which we operate, and our management's knowledge and experience. However, these estimates are subject to change and are uncertain due to limits on the availability and reliability of primary sources of information and the voluntary nature of the data gathering process. As a result, you should be aware that industry data included in this prospectus, and estimates and beliefs based on that data, may not be reliable. Neither we nor the initial purchasers make any representation as to the accuracy or completeness of such information. OTHER DATA Numbers included in this prospectus have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them. COPYRIGHTS We own the rights to a copyright that protects the content of our "Gamma Function" software technology. Solely for convenience, the copyright referred to in this prospectus is listed without the symbol, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our right to this copyright. Table of Contents services domestically and then globally. Given the changing healthcare landscape, increased focus on lower cost, higher quality care and potential for value-based reimbursement, we built a more complete and integrated cancer care platform to better meet the needs of patients, physicians and payers. As a result, we proactively broadened our provision of care to include a full spectrum of cancer care services by employing and affiliating with physicians in the related specialties of medical oncology, breast, gynecological and general surgery, urology and primary care. This innovative approach to cancer care through our ICC model enables us to collaborate across our physician base, integrate services and payments for related medical needs and disseminate best practices. We believe this results in better cancer care to patients, a stronger presence in each market we serve and the ability to capitalize on changes and developments in the payment and delivery landscape. We have demonstrated an ability to grow our business through various environments, and we believe our business is poised for accelerated success given the current industry focus on delivering high quality care in a lower cost setting. The key components of our business model include: Differentiated Scale We are approximately 3.3 times larger than our next largest competitor, based on average treatments per day, which differentiates us with key stakeholders. Domestically, we have over 21,000 cases and perform over 500,000 treatments on an annual basis. As a result of our scale, we believe we have a higher level of efficiency and clinical and operational sophistication that health systems seek in partners and payers seek for nationwide or innovative contracts. In addition, our scale makes us the destination of choice for acquisition candidates and physicians pursuing alignment with larger enterprises. Integrated Cancer Care Model Developed to further penetrate existing markets and provide for enhanced clinical care, we believe our ICC model positions us as a key partner for payers, physicians and hospital systems today and to become an important part of any clinical enterprise of the future that seeks superior outcomes at predictable and affordable costs. Health System Partnerships Capitalizes on the trend of health systems leveraging partners to improve their oncology service offering and help manage the strategic, operational and financial challenges stemming from healthcare reform. These challenges include the pressure to contain healthcare costs, align with key physician resources and manage competitive demands for capital. Collaborative Payment Arrangements Proactively developed multiple coordinated and collaborative relationships with key payers and other industry participants to create alternative payment mechanisms to reduce cost and improve quality. For example, we developed and implemented the nation's first bundled payment radiation therapy program with a national private payer, and we are continually in discussions with payers to develop additional mutually beneficial payment arrangements. We also led the formation of an industry group to coordinate providers into a unified and collaborative relationship in order to work with both commercial and government payers on approaches to transition to bundled payments for an episode of care based on evidence-based pathways. In addition to our demonstrated success in varied environments, we have capitalized on the strength and breadth of our platform to develop new growth opportunities. Examples of such initiatives include our entry into and growth in international markets and our development and monetization of unique value-added services. Entry Into and Expansion in International Markets In 2011, we acquired and partnered with the highly sophisticated management team of Medical Developers, LLC ("MDLLC") the largest company in Latin America dedicated to radiation therapy. This investment was very attractive due to the increasing demand in that market for cancer treatment services created by a significantly underserved patient population, increased detection, a growing middle-class and expanded insurance access. MDLLC provides us the opportunity for enhanced growth rates, diversified 21ST CENTURY ONCOLOGY HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 5311 (Primary Standard Industrial Classification Code Number) 26-1747745 (I.R.S. Employer Identification No.) 2270 Colonial Boulevard Fort Myers, Florida 33907 (239) 931-7275 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Table of Contents payment sources, leveraging of best practices into a new global market and efficient equipment utilization. Value-Added Services Developed new revenue sources by leveraging our internally developed capabilities and resources including technology, clinical protocols, physician breadth and expertise and care management services. This provides incremental high-margin diversifying revenue lines for us and often serves as an entry point for new geographies and customer relationships. For example, our CarePoint service line leverages our cancer care management capabilities to provide a range of solutions up to and including comprehensive oncology care management solutions to insurers or other entities that are financially responsible for the health of defined populations. This provides us a new source of revenue and CarePoint contracts may serve as an entry point for new markets for our cancer treatment services. We have grown through a combination of organic, internally developed ("de novo"), acquisition and joint venture opportunities and innovative payer and hospital system relationships. We believe these major avenues for growth will become increasingly attractive as our scale, sophistication and clinical capabilities continue to distinguish us from our competition. As a result, we will continue to employ or affiliate with quality physicians, acquire freestanding radiation oncology centers and partner with leading health systems and payers as a result of the superior value proposition we provide each of these constituents: Physicians We believe physicians choose to join us because of our physician-focused culture, best-in-class clinical and research platform focused on oncology and affiliations with leading academic programs, as well as the ability to enhance income. Physician income is typically enhanced at the Company due to the breadth of our services, our focus on technology, the benefits of our ICC model and our scale, and our effective business office capabilities. Freestanding Centers Independent radiation businesses choose to join us because mounting pressures on their businesses make affiliation with a scaled and sophisticated partner beneficial. After acquiring a center, we typically upgrade existing equipment and technologies, implement our proprietary treatment and delivery tools, leverage our effective business office capabilities, develop ICC relationships and enable access to our contracts, all of which should dramatically improve the financial performance of the acquired center. Health Systems We believe health systems choose to partner with us due to our shared operating philosophy, enhanced patient care and access, strong physician leadership and ICC approach, all of which lead to a superior ability to attract and retain key specialists. We provide a flexible approach to health system partnerships which can include joint ventures, management agreements, hospital-based and/or freestanding locations and fully outsourced relationships. Payers We believe payers choose to partner with us as a result of our evidence-based clinical pathways, strong and integrated local market presence and ability to coordinate patient care in the most appropriate setting with lower cost and transparent pricing. We have leading market share in most of our local markets, and we seek to employ or affiliate with the highest quality physicians in all cancer related specialties. In addition, we track and measure clinical data to both evaluate treatment effectiveness and innovate new paradigms for payment methodologies. For the year ended December 31, 2013, we generated total revenues of $736.5 million. During this time period, 87.7% of our net revenue was derived from our integrated operations in North America, and 12.3% of our net revenue was derived from our operations in Latin America. See " Summary Historical Consolidated Financial and Other Data" for a reconciliation of EBITDA and Adjusted EBITDA to Net Loss attributable to 21st Century Oncology Holdings, Inc. shareholder. In October 2013, we closed on our acquisition of OnCure Holdings, Inc. ("OnCure"), which comprises $106 million of acquired revenue, 33 radiation therapy centers and 11 radiation oncology physician groups in Florida, California and Indiana. This level of revenue represents a 15% increase in our Bryan J. Carey President, Vice Chairman and Chief Financial Officer 2270 Colonial Boulevard Fort Myers, Florida 33907 (239) 931-7275 (Name, address, including zip code, and telephone number, including area code, of agent for service) Table of Contents revenue for the year ended December 31, 2012. In addition, on February 10, 2014, we completed our investment in Florida-based SFRO Holdings, LLC ("SFRO"), acquiring 65% of the equity interests in SFRO, increasing the number of our radiation therapy treatment centers by 21 and adding 88 additional ICC and radiation oncology physicians (the "SFRO Joint Venture"). OnCure and SFRO are expected to add approximately 694 and 591 average treatments per day, respectively, increasing our total treatments per day to approximately 4,750. Industry Trends Cancer treatment is an important, large and growing market globally. We operate in the $290 billion global cancer care market, of which the domestic market comprises approximately $125 billion, as of 2010. Cancer is the second leading cause of death in the United States and globally. According to the most recent data available from the World Health Organization, global cancer prevalence includes approximately 29 million cases with approximately 13 million new cases and approximately 8 million cancer-related deaths per year. In addition to the scale of the current addressable market, cancer incidence in the United States is estimated to grow at an approximately 2% rate annually through 2030, with an outsized proportion of treatments occurring in outpatient settings which are expected to grow at approximately 31% compared to approximately 3% for inpatient services, from 2013 to 2023. As the population ages, the number of U.S. cancer diagnoses is expected to continue to increase, as approximately 77% of all cancers diagnosed from 2006 to 2010 were in persons 55 years of age and older. Additionally, since 2006, the percentage of cancer cases addressed by radiation has grown from approximately 55% to nearly two-thirds. We believe we are well-positioned to benefit from other major trends currently affecting the healthcare services markets in which we compete, including: Focus on Cost Containment in Healthcare Rising healthcare costs have continued to strain federal, state and local, as well as employer and patient budgets. In addition, domestic cancer costs are projected to grow from $125 billion in 2010 to $207 billion by 2020, and oncology is typically one of the top two largest cost categories for health plans. Efficient management of cancer care across the patient continuum through utilizing more efficient outpatient settings, which can cost approximately 14% less for commercial payers than other alternatives, and coordination across medical disciplines represents a significant opportunity to contain and reduce overall healthcare costs while improving quality and outcomes. In addition, newly developed health insurance exchanges may ultimately present a significant opportunity for us, as payers look to contract with high quality, low cost providers in local markets, like us. We believe we are well positioned to benefit from this trend as the largest provider of lower cost, convenient and high clinical quality cancer care service in outpatient settings. This will also be of increased importance as patients have an increased responsibility for their healthcare costs. Shift Towards Coordinated Care Recent healthcare legislation, continued cost pressures on payers, and the increase in the number of patients with complex conditions will likely create significant opportunities for cost-effective, sophisticated providers that can offer coordinated, integrated care delivery. Private payers are increasingly moving toward narrow networks and directing patients to the most coordinated and cost-effective providers of care. Additionally, certain health reform initiatives promote the transition from traditional fee-for-service payment models to more "value-based" or "capitated" payment models where overall outcomes and census management are more important success factors than the number of procedures delivered. These trends require improved care coordination and communication throughout an episode of care to enable providers to analyze patient data and identify more effective treatment protocols that ultimately improve outcomes and reduce costs. To meet these goals, we have authored and maintain a set of best clinical With copies to: Joshua N. Korff Christopher A. Kitchen Kirkland & Ellis LLP 601 Lexington Avenue New York, New York 10022 (212) 446-4800 Luis R. Penalver Cahill Gordon & Reindel LLP 80 Pine Street New York, New York 10005 (212) 701-3000 Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. Table of Contents practice guidelines for each of the major cancer diagnoses. The guidelines are based on widely recognized consensus expert group statements and supporting medical literature and serve as the foundation of our efforts to achieve a consistently high level of care throughout our Company. Our physicians interact with the guidelines in real-time and at the point of care through use of our online treatment prescription and medical record systems in order to help guide their clinical decisions toward the most appropriate and effective medical management for their patient. We have an established history of offering high quality, cost effective integrated services and developing the related infrastructure to ensure coordinated care across specialists. We believe we are well positioned for the changing delivery landscape where payers are searching for partners to help manage medical costs without sacrificing care. Dynamics Impacting Health Systems Many hospitals and health systems recognize the strategic, operational and financial challenges stemming from healthcare reform, the burgeoning efforts to contain healthcare costs, and growing consumer preference for treatment in more comfortable community care settings. In response, many health systems are developing strategies to reduce operating costs, align with physicians, create additional service lines, expand their geographic footprint and service locations and prepare for new value-based payment models. A growing number of health systems are entering into strategic partnerships with select provider organizations in order to achieve these goals. Provider organizations, such as ours, can often provide a high degree of specialization, more efficient outpatient facilities, best practices learned from a nationwide network, scaled operating systems, and financial capital to help healthcare systems meet their goals. We currently have 47 radiation oncology centers in strategic operational partnerships with health systems where we provide a variety of services that leverage our capabilities to support their communities. Continued Provider Consolidation Driven by Changing Environment Consolidation among healthcare providers, including facility operators and clinicians, is expected to continue due to increasing cost pressure and greater complexities as well as requirements imposed by new payment, reporting and delivery systems. Independent physicians are increasingly becoming employed by hospitals or affiliated with larger group practices like ours. For instance, since 2010, we have expanded our physician base by 183%. In addition, recent reimbursement cuts in our industry, coupled with the high cost of technology and the necessity of coordination of care, have contributed to a more rapid pace of consolidation relative to prior years. As the largest global, physician-led provider of integrated cancer care, we believe we are well positioned to be an acquisition partner of choice due to our well developed business model, economies of scale and efficient technology utilization. We believe our ability to create value through accretive acquisitions at attractive valuations and increase physician efficiency in both the United States and globally creates a significant opportunity to leverage our core competencies while further expanding our global footprint. We expect that the current operating environment will continue to produce an attractive pipeline of accretive acquisitions and physician employment and affiliation opportunities in existing and adjacent markets. The radiation therapy and related physician specialist landscape is highly fragmented. In 2013, there were approximately 2,350 locations providing radiation therapy in the United States, of which approximately 1,100 were freestanding, or non-hospital based, treatment centers. Approximately 25% of freestanding treatment centers are affiliated with the largest three provider networks, with the Company holding approximately 13% of the freestanding market. It is estimated that there are approximately 793,000 physicians in the United States today, of which 36% remain independent as compared to well over 50% a decade ago. The Latin American radiation therapy market is similarly fragmented with most competition coming primarily from hospitals and some smaller local groups. In Argentina, we are the largest radiation therapy provider, with particularly strong market positions in Buenos Aires, Cordoba, La 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. 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 Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Amount to be Registered Proposed Maximum Offering Price Per Share(1) Proposed Maximum Aggregate Offering Price(1) Amount of Registration Fee(5) Common Stock, $0.0001 par value per share 12,777,778(2) $10 $127,777,780 $16,458 Series A Mandatory Convertible Junior Non-Voting Preferred Stock, $0.0001 par value per share(3) 1,150,000(2) $50 $57,500,000 $7,406 Common Stock, $0.0001 par value per share(4) 1,078,125 $10 $10,781,250 $1,389 (1)Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended. (2)Includes additional shares that the underwriters have the option to purchase. (3)In accordance with Rule 457(i) under the Securities Act, this Registration Statement also registers the shares of our common stock that are initially issuable upon conversion of the Series A preferred stock registered hereby. The number of shares of our common stock issuable upon such conversion is subject to adjustment upon the occurrence of certain events described herein and will vary based on the public offering price of the common stock registered hereby. Pursuant to Rule 416 under the Securities Act, the number of shares of our common stock to be registered includes an indeterminable number of shares of common stock that may become issuable upon conversion of the Series A preferred stock as a result of such adjustments. (4)This Registration Statement also registers shares of our common stock that may be issued as dividends on the Series A preferred stock in accordance with the terms thereof. (5)Previously paid in total amount of $44,791. 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 Plata and Mendoza. In the majority of other Latin American markets that we serve, we are the number one or number two provider. Competitive Strengths We believe that the underlying industry trends provide for attractive, long-term market growth, and that our leading market position created by our competitive strengths will enable us to grow at a faster rate than the overall radiation therapy market. Multiple Sources for Self-Sustaining Long-Term Growth The radiation therapy market is growing organically due to increases in cancer incidence, increases in the types of cancer addressable with technology and a stable pricing environment. Cancer incidence in the United States is estimated to increase by an approximately 2% rate annually through 2030, with an outsized proportion of treatments occurring in outpatient settings, which are expected to grow at approximately 31% compared to approximately 3% for inpatient services from 2013 to 2023. More precise delivery of radiation treatment has enabled radiation therapy to be utilized for additional types and sites of cancer, which has increased the addressable market for our services. In addition to this addressable market growth, commercial pricing changes have generally been positive as we continue to be relatively attractively priced and Medicare pricing is more stabilized due to the Center for Medicare & Medicaid Services ("CMS") approaching its goal of site neutrality and the industry's development of a meaningful collaborative relationship with CMS. International markets are growing faster than U.S. markets due to a significantly underserved patient population, increased detection, a growing middle-class, expanded insurance access and a stable pricing environment. In addition to underlying positive organic industry growth, we have implemented the following initiatives to accelerate our growth profile which are funded out of internally generated cash flow and selective borrowings: Organic growth enhancements; Acquisitions; Health system partnerships and de novo centers; and Strategic relationships with payers. Leading Player in Large and Fragmented Market We have 771 community-based physicians and provided approximately 4,150 radiation therapy treatments on average per day for 2013 in our 185 treatment centers. We believe this scale makes us the largest provider of cancer care services in the world, substantially larger than our next largest competitor. In addition to our national scale, we maintain a leading market position in the majority of our local markets. Our national scale affords us the opportunity to develop systems and processes efficiently and access technology that empowers our physicians to deliver best-in-class care. It also enables us to share and benefit from new approaches and recently developed findings across our network. Furthermore, our scale allows us to recognize benefits in areas such as revenue cycle management, purchasing, recruiting, compliance and quality assurance. Our leading local market shares, coupled with our national scale, strengthen our managed care contracting, our relationships with health systems and our ability to deploy innovative payment models, all of which enable us to capture greater patient census. Despite our scale, we estimate that our operations only comprise approximately 6% of the market for radiation therapy services in the United States, and a lower amount internationally, representing a robust opportunity to continue our acquisition growth strategies. Table of Contents EXPLANATORY NOTE This Registration Statement contains a prospectus relating to the initial public offering of our common stock (for purposes of this Explanatory Note, the "Common Stock Prospectus"), together with separate prospectus pages relating to an offering of our Series A mandatory convertible junior non-voting preferred stock, $0.0001 par value per share (for purposes of this Explanatory Note, the "Series A Preferred Stock Prospectus"). The complete Common Stock Prospectus follows immediately after this Explanatory Note. Following the Common Stock Prospectus are the following alternative and additional pages for the Series A Preferred Stock Prospectus: front and back cover pages, which will replace the front and back cover pages of the Common Stock Prospectus; pages for the "Prospectus Summary The Offering" section, which will replace the "Prospectus Summary The Offering" section of the Common Stock Prospectus; pages for the "Risk Factors Risks Related to this Offering and Ownership of Our Series A Preferred Stock and Common Stock" section, which will replace the "Risk Factors Risks Related to this Offering and Ownership of Our Common Stock" section of the Common Stock Prospectus; pages for the "Ratio of Earnings to Fixed Charges and Preferred Stock Dividends" section, which will be added to the Series A Preferred Stock Prospectus; pages for the "Description of Series A Preferred Stock" section, which will replace the "Concurrent Offering of Series A Preferred Stock" section of the Common Stock Prospectus; pages for the "Certain United States Federal Income and Estate Tax Considerations" section, which will replace the "Certain U.S. Federal Income and Estate Tax Considerations for Non-U.S. Holders" section of the Common Stock Prospectus; and pages for the "Underwriting (Conflicts of Interest)" section, which will replace the "Underwriting (Conflicts of Interest)" section of the Common Stock Prospectus. In addition, the following disclosures contained within the Common Stock Prospectus will be replaced in the Series A Preferred Stock Prospectus: the references to "common stock" contained in (i) the first paragraph following the Table of Contents,
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+PROSPECTUS SUMMARY The following summary highlights selected information contained in this prospectus. This summary does not contain all the information that may be important to you. You should read the more detailed information contained in this prospectus, including, but not limited to, the risk factors beginning on page 10. References to we, us, our, Blue Water or the Company mean Blue Water Global Group, Inc. 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 other similar expressions to identify such forward-looking statements. You should not place too much reliance on these 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.
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+PROSPECTUS SUMMARY AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, "WE," "US," "OUR," AND "OZ SAFEROOMS" REFERS TO OZ SAFEROOMS TECHNOLOGIES, INC. 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. Our Company We manufacture and market tornado shelters that are known as "saferooms." Our saferooms are impenetrable, above-ground concrete emergency shelters designed to protect the occupants during tornadoes, hurricanes and other disasters. An Oz Saferoom represents the next generation of storm protection, providing a technological upgrade to traditional storm shelters. Applying our patent-pending method of monolithic reinforced concrete construction, we build the Oz Saferoom without the joints and seams that weaken conventional storm shelters. Whereas a conventional storm shelter is designed to withstand the impact of a 15 pound wooden 2x4 travelling at 100 mph, the Oz Saferoom is designed to – and has – withstood a direct hit from an F5 (wind speeds of 200 mph or greater) tornado – the kind that are becoming all-too-common in the Tornado Alley of the Southwest. To our knowledge, the Oz Saferoom is the only above-ground monolithic concrete saferoom available commercially in the U.S. Oz Saferooms Technologies, Inc. was incorporated in Oklahoma on October 18, 2010 as the successor to a business originally organized in New York State in 2002. To date we have installed 390 Oz Saferooms, all within a relatively short distance from our headquarters in Oklahoma City. Our plan is to use a portion of the proceeds of this offering to develop a second facility in Tulsa, then expand throughout the area susceptible to tornados (Texas, Oklahoma, Kansas, Missouri) as rapidly as available capital and labor resources permit. We intend to use the greater portion of the net proceeds from this offering to equip additional installation crews and to fund our expansion. We believe that the demand for our product already demonstrated, despite our modest investment in advertising, indicates that we will be able to efficiently utilize a large increase in additional installation capacity as soon as we can fund the new crews and provide them the necessary training. Each additional installation crew requires a capital investment of approximately $565,000: $400,000 for equipment and $165,000 for training and working capital. Our factory and principal executive offices are located at 3216 SE 30th Street, Del City, Oklahoma 73115. Our phone number is (405) 672-8400. Industry Overview There are a large number of manufacturers offering storm shelters and saferooms. The National Wind Institute at Texas Tech University, which provides testing for compliance with FEMA's debris impact criterion, has certified compliance with that criterion by over 90 manufacturers, the greater number of which are located in Oklahoma and its adjacent states. Because installation of a saferoom is labor-intensive, none of these manufacturers has developed a market share beyond its local region nor is there any dominant participant in the market. While below-ground shelters have been the traditional protection against tornadoes, evidence has accumulated that below-ground shelters expose the users to injuries during entry and exit, to flooding, and to a significant risk of being trapped by debris when the tornado has passed. As a result, there has been a growing preference for above-ground shelters in recent years. 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, please 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: 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 Exchange Act. (check one): Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company x (Do not check if a smaller reporting company) CALCULATION OF REGISTRATION FEE Securities to be Registered Amount To Be Registered(1) Offering Price Per Share(2) Aggregate Offering Price Registration Fee Common Stock: 4,000,000 $ 5.00 $ 20,000,000 $ 2,576 (1)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. (2)Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) and (o) of the Securities Act. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine. Our Competitive Strengths Our competitive strength is the quality and reliability of our product. Working with the Rochester Institute of Technology (RIT), we have developed a design and construction process that we submit to rigorous testing procedures, including the mechanical properties tests promulgated by the American Society for Testing and Materials (ASTM) as well a finite element analysis developed by RIT and our own impact testing. This combination of test procedures has enabled us to develop a unique product that can withstand catastrophic forces of energy whether installed as a stand-alone product or retrofitted into an existing home or institution. We market the Oz Saferoom as a unique technological upgrade to any storm shelter or saferoom available in the U.S. Although for most of our customers the Oz Saferoom is their first investment in tornado protection, a not insignificant number purchase the Oz Saferoom to replace an existing storm shelter when they realize the significant benefits and added protections that it offers: The seamless construction of our saferoom means the homeowner has no need to fear damage from flying debris, not even cars or trucks. There are no joints in an Oz Saferoom, so there is no place where tornado wind can cause a rupture nor any seam at the foundation from which the Oz Saferoom can be sheared. The danger posed by electric wires downed by a storm is eliminated inside an Oz Saferoom, but is significant and occasionally fatal in the metal structures sold by our competitors. When tornados cause broken utility conduits, traditional underground shelters can be flooded or filled with natural gas; the inhabitants of an Oz Saferoom are protected. Cell phone communications, radio and television can be had from inside a concrete saferoom, relieving the stress of riding out a storm, and allowing the inhabitants to maintain communication with emergency responders. Our technology allows us to retrofit an Oz Saferoom into an existing commercial or residential property, where it can function as a meeting room, kitchen, office, bedroom or living room, when not needed for its primary saferoom function. The overall feeling that our customers experience on entering an Oz Saferoom is a sense of security. Even as Mother Nature wreaks havoc on their neighborhood, our customers know they and their loved ones will survive to rebuild, if necessary.
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+PROSPECTUS SUMMARY This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary may not contain all of the information that you should consider before investing in our ADSs. You should carefully read the entire prospectus, including "Risk Factors" and the financial statements and related notes appearing elsewhere in this prospectus, before making an investment decision. In addition, we commissioned Frost & Sullivan, a third-party market research firm, to prepare a report for the purpose of providing various industry and other information and illustrating our position in the car rental and car service industry in China. Information from the report prepared by Frost & Sullivan, or the Frost & Sullivan Report, appears in "Prospectus Summary," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Industry," "Business" and other sections of this prospectus. We have taken such care as we consider reasonable in the production and extraction of information from the Frost & Sullivan Report and other third-party sources. Overview We are the No. 1 car services provider and No. 2 car rentals provider in China in terms of market share by revenues in 2013, according to Frost & Sullivan. The top three players in China's car rental and car service industry, including us, in aggregate accounted for 10.7% of the market share by revenues in 2013, according to Frost & Sullivan. We believe such high market fragmentation presents a strong potential for our future growth and industry consolidation. Since our establishment, we have focused on investing in our infrastructure and technology, which enables us to benefit from increasing economies of scale. We believe that our broad geographic coverage, efficient fleet management, leading brand name, complementing business model and innovative services differentiate ourselves from major competitors and build a solid foundation for our long-term success, as demonstrated by the following: As of June 30, 2014, we had the broadest geographical coverage among all car rentals and car services providers in China as measured by the number of cities in which services are provided directly, according to Frost & Sullivan. We operate all our 760 service locations in 90 cities across China directly to ensure consistent and high-quality services. From January 1, 2012 to June 30, 2014, our fleet size increased from 7,717 to 15,409, while we generally maintained a car rental fleet utilization rate of over 70% during the same period. According to Frost & Sullivan, we had the highest fleet utilization rate among the top five car rental companies in China in 2013. Our "eHi" brand is one of the most-recognized brands in China's car rental and car service industry, according to Frost & Sullivan. As of June 30, 2014, we had over 550,000 registered members and over 32,000 corporate clients that used our car rentals and car services, respectively. We provide one-stop comprehensive services to both individual customers and corporate clients. This business model, together with our leading positions in both China's car service market and car rental market, enables us to cross-sell to different target customers and capture complementary and evolving market opportunities. We utilize mobile and Internet platforms to provide online to offline, or O2O, mobility solutions. We believe we were the first car rental service provider in China to introduce dedicated mobile applications for our customers to make reservations. In the six months ended June 30, 2014, 52.8% and 30.0% of our car rental services were derived from reservations made through our website and mobile applications, respectively. AMENDMENT No. 4 TO FORM F-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents Our one-stop comprehensive services include the following: Car rentals. We provide self-drive car rental services to both individual customers and corporate clients to meet their travel, leisure, business and ground transportation needs. Our short-term car rentals have a term of less than one year and are primarily provided to individual customers on a daily, weekly or monthly basis. Our long-term car rentals have a term of one year or longer and are primarily provided to corporate clients. As of June 30, 2014, our car rental fleet included 14,260 vehicles of over 200 models primarily from major automobile manufacturers. In 2013, we derived approximately 66.6% of our net revenues from car rentals. Car services. We provide chauffeured car services primarily to corporate clients, which consist of corporations of all sizes and government agencies. Our corporate clients include a majority of Fortune 500 companies in China. Our car services include routine services such as airport pickup and drop-off, inter-office transfers and other business transportation needs, as well as event-driven activities such as conventions, promotional tours and special events. We generally enter into long-term framework agreements with our corporate clients pursuant to which our vehicles and chauffeur services are provided by different subsidiaries under separate contracts. With over 1,000 vehicles and drivers as of June 30, 2014, our car services were offered in 57 major cities across China with a focus on first-tier cities including Beijing, Shanghai, Guangzhou and Shenzhen. In 2013, we derived approximately 33.4% of our net revenues from car services. We are the exclusive strategic partner of Enterprise in China. As the largest car rental company in the world with around 1.4 million vehicles in operation, Enterprise shares its operational experience and industry expertise with us. We are also the designated and preferred business partner of Ctrip, a leading player in the online travel agency business and a well-known travel brand in China. Ctrip has integrated access to our online reservation system on its website since May 2012 and in its mobile applications since June 2014. Our total net revenues increased from RMB450.1 million in 2012 to RMB566.4 million (US$91.3 million) in 2013, representing a growth rate of 25.8%. Our total net revenues increased from RMB260.7 million for the six months ended June 30, 2013 to RMB384.5 million (US$62.0 million) for the six months ended June 30, 2014, representing a growth rate of 47.5%. We incurred net losses of RMB175.7 million, RMB152.2 million (US$24.5 million) and RMB20.7 million (US$3.3 million) in 2012, 2013 and the six months ended June 30, 2014, respectively. Our non-GAAP adjusted EBITDA, defined as net income or loss before depreciation and amortization, share-based compensation, interest expenses, interest income and provision for income taxes, was RMB68.9 million, RMB102.1 million (US$16.5 million) and RMB133.0 million (US$21.4 million) in 2012 and 2013 and the six months ended June 30, 2014, respectively. For a reconciliation of our non-GAAP adjusted EBITDA to net loss, the nearest U.S. GAAP measure, see " Summary Consolidated Financial and Operating Data Non-GAAP financial measure." Our industry China's car rental and car service industry is still at an early stage of development and has experienced rapid growth in recent years. Car rental market. Car rentals refer to rental of a vehicle driven by the customer for a specified period of time. The car rental market primarily consists of two types of service offerings: (i) short-term car rentals, which have a term of less than one year and are primarily targeting individual customers, and (ii) long-term car rentals, which have a term of one year or longer and are primarily targeting corporate clients. According to Frost & Sullivan, China's car rental market as measured by revenues grew from RMB9.4 billion in 2009 to RMB26.7 billion in 2013, representing a compounded annual growth rate, or CAGR, of 29.8%, and is projected to grow to RMB51.0 billion by 2017, representing a projected CAGR of 17.6% from 2013 to 2017. eHi Car Services Limited (Exact name of Registrant as Specified in Its Charter) Not Applicable (Translation of Registrant's Name into English) Cayman Islands (State or Other Jurisdiction of Incorporation or Organization) 7510 (Primary Standard Industrial Classification Code Number) Not Applicable (I.R.S. Employer Identification Number) Unit 12/F, Building No. 5, Guosheng Center 388 Daduhe Road, Shanghai, 200062 People's Republic of China (8621) 6468-7000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Law Debenture Corporate Services Inc. 400 Madison Avenue, 4th Floor New York, New York 10017 (212) 750-6474 (Name, address, including zip code, and telephone number, including area code, of agent for service) Table of Contents Car service market. Car services refer to rental of a vehicle accompanied by a driver for a specified period of time, which primarily target corporate clients. According to Frost & Sullivan, China's car service market as measured by revenues grew from RMB1.3 billion in 2009 to RMB3.0 billion in 2013, representing a CAGR of 23.3%, and is projected to grow to RMB5.2 billion by 2017, representing a projected CAGR of 14.8% from 2013 to 2017. China's car rental and car service industry today is characterized by relatively low penetration rate and high level of market fragmentation. According to Frost & Sullivan, in 2013, the car rental and car service penetration rate in China was 0.4% in 2013, which was significantly lower than that in the United States (1.7%), Japan (2.6%) and Korea (2.5%). Car rental and car service penetration rate is calculated by dividing the aggregate number of rental and service vehicles by the aggregate number of passenger vehicles in the relevant country or region. In addition, in 2013, the top three players in China's car rental and car service industry, including us, in aggregate accounted for 10.7% of the market share as measured by revenues, while the market share of the top three players reached 95.4% in the United States, 32.4% in Japan and 48.1% in Korea, respectively, according to Frost & Sullivan. We believe the relatively low penetration rate and high market fragmentation in China indicate a strong potential for future growth and consolidation in China's car rental and car service industry. Competition in the car rental and car service industry is primarily based on, among other things, brand recognition, network coverage, rental price, quality and convenience of services, ability to provide tailored services, operating efficiency and variety of service offerings. Driven by the continued growth of economy and increasing car usage for travel, leisure, business and ground transportation needs, the market demand for car rentals and car services is expected to maintain a stable growth from 2014 to 2017. Our competitive strengths We believe that the following competitive strengths have contributed to our rapid growth and our market-leading position: leadership in China's fast growing car rentals and car services industry with one-stop comprehensive service offerings; innovation and technology driving business excellence; efficient fleet management; strong brand recognition focusing on customer experience; strategic partnerships with leading global travel service providers; and experienced management team. Our strategies Our mission is to provide comprehensive mobility solutions as an alternative to car ownership by best utilizing existing resources and sharing economy to create optimal value. We are pursuing the following strategies to achieve this mission: continue to leverage the strengths of our one-stop comprehensive services business model to capture opportunities in the continually evolving markets; further increase network penetration in existing markets and expand geographically in selected markets; retain and grow our customer base and attract more premium customers through targeted marketing as well as tailored service offerings; and Copies to: Portia Ku Ke Geng O'Melveny & Myers LLP 37/F Plaza 66, 1266 Nanjing Road W Shanghai, 200040 People's Republic of China (8621) 2307-7000 Alan Seem Shuang Zhao Shearman & Sterling LLP c/o 12/F, Gloucester Tower, The Landmark 15 Queen's Road Central Hong Kong (852) 2978-8000 Table of Contents continue to identify strategic partnership opportunities. Our challenges Our ability to achieve our goal and execute our strategies is subject to risks and uncertainties, including: our ability to achieve and sustain profitability; our heavy reliance on proprietary technology platform; our ability to compete successfully against current and future competitors; our ability to sustain our growth rates and manage our expansion plan; our ability to dispose used vehicles at desirable prices or timing or through appropriate channels; our ability to raise sufficient capital to fund and expand our operations at a reasonable cost; various government policies on automobile control and purchase restrictions in certain Chinese cities; our ability to enhance our brand recogonition and maintain a high level of customer satisfaction; our ability to control the losses resulting from customer violation of traffic rules; and our ability to obtain all of the requisite permits, licenses or making all of the requisite filings or registrations or meeting other regulatory requirements for operating car rentals and car services business in China. Please see "Risk Factors" and other information included in this prospectus for a discussion of these and other risks and uncertainties that we face. Recent developments The following sets forth our selected unaudited financial data for the three months ended September 30, 2014: Net revenues. Our total net revenues for the three months ended September 30, 2014 were RMB220.1 million, as compared to total net revenues of RMB148.3 million for the three months ended September 30, 2013, which was primarily attributable to increases in net revenues from both car rentals and car services. Net loss. Our net loss for the three months ended September 30, 2014 was RMB26.9 million, as compared to net losses of RMB38.7 million for the three months ended September 30, 2013, which was primarily attributable to the increase in our total net revenues while our expenses increased at a lower rate during the periods. Adjusted EBITDA. Our adjusted EBITDA for the three months ended September 30, 2014 was RMB76.4 million, as compared to adjusted EBITDA of RMB19.5 million for the three months ended September 30, 2013, which was primarily attributable to the increase in our total net revenues. For information regarding our Adjusted EBITDA, see " Summary Consolidated Financial and Operating Data Non-GAAP financial measure." Our selected unaudited financial data for the three months ended September 30, 2014 may not be indicative of our financial results for future interim periods or for the full year ending December 31, 2014. See "Risk Factors Risks related to our business and industry Our business is seasonal, and a disruption in our operations during our peak or off peak seasons could materially adversely affect our 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. 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 earliest effective registration statement for the same offering. Table of Contents results of operations." Please also refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus for information regarding trends and other factors that may affect our results of operations. On October 30, 2014, we entered into a framework loan facility agreement with Ctrip Travel Information Technology (Shanghai) Co., Ltd., or Ctrip Travel, an affiliate of Ctrip, pursuant to which Ctrip Travel will extend, through entrusted bank loans, an aggregate amount of RMB300 million loan facility to us before December 31, 2014. The loan facility has a term of three years and bears an interest rate of 8% per annum payable on a quarterly basis. Pursuant to the framework loan facility agreement, we, Ctrip Travel and Agricultural Bank of China will enter into a separate entrusted bank loan agreement to set forth the detailed terms of such loan facility, and we will provide security interest to Ctrip Travel upon entering into the entrusted bank loan agreement. On October 31, 2014, Crawford exercised all of the 1,500,000 warrants held by it to purchase 1,500,000 common shares at a per share purchase price of US$5.50. Our corporate history and structure We commenced our business in 2006, which was initially focused on providing car services to premium corporate clients. In 2008, we began to provide car rentals to individual customers. Our company, eHi Car Services Limited (previously known as Prudent Choice International Limited or eHi Auto Services Limited), was incorporated in the Cayman Islands on August 3, 2007. eHi Car Services Limited is a holding company. Currently we operate our car rentals business primarily through our PRC subsidiaries Shanghai eHi Car Rental Co., Ltd., or eHi Rental, and eHi Auto Services (Jiangsu) Co., Ltd., or eHi Jiangsu, and their subsidiaries and branches. For our car services business, we provide vehicles and chauffeur services through different subsidiaries under separate contracts. We provide vehicles through eHi Rental and eHi Jiangsu as well as their subsidiaries and branches, and provide chauffeur services through our PRC subsidiary Shanghai Smart Brand Auto Driving Services Co., Ltd., or Shanghai Smart Brand, and its subsidiaries and branches. Our current operations are not subject to the ICP license requirements. To further expand our Internet and mobile services, we entered into a series of contractual arrangements in March 2014 with our PRC incorporated variable interest entity Shanghai eHi Information Technology Service Co., Ltd., or eHi Information, and its shareholders. eHi Information obtained the ICP license from the relevant telecommunication authorities on September 24, 2014. eHi Information currently does not have any operation and we do not expect eHi Information to contribute a material portion of our net revenues and operations in the foreseeable future. CALCULATION OF REGISTRATION FEE Title of each class of securities to be registered Amount to be registered(2)(3) Proposed maximum offering price per share(3) Proposed maximum aggregate offering price(2)(3) Amount of registration fee Class A common shares, par value US$0.001 per share(1) 23,000,000 US$7.00 US$161,000,000 US$18,708(4) (1)American depositary shares issuable upon deposit of the Class A common shares registered will be registered under a separate registration statement on Form F-6 (Registration No.333-199819). Each American depositary share represents two Class A common shares. (2)Includes (i) Class A common shares represented by American depositary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public and (ii) Class A common shares represented by American depositary shares that may be purchased by the underwriters pursuant to an option to purchase additional Class A common shares represented by American depositary shares. These Class A common shares are not being registered for the purposes of sales outside of the United States. (3)Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended. (4)Previously paid. (1)Consists of 86,045,911 Class B common shares and 7,692,306 Class A common shares. (2)Consists of 20,000,000 Class A common shares. (3)eHi Information is a variable interest entity incorporated in China and is 50% owned by Mr. Hongtao Han and 50% owned by Mr. Chun Xie. We effectively control eHi Information through contractual arrangements. 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, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine. Table of Contents Implications of being an emerging growth company As a company with less than $1.0 billion in revenue for our last fiscal year, we qualify as an "emerging growth company" pursuant to the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, in the assessment of the emerging growth company's internal control over financial reporting. As an emerging growth company, we intend to rely on the exemption from auditor attestation requirement under Section 404. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We have elected to "opt out" of this provision and, as a result, we will comply with new or revised accounting standards as required when they are adopted for public companies. This decision to opt out of the extended transition period under the JOBS Act is irrevocable. See "Risk Factors Risks related to our business and industry We are an 'emerging growth company' within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements" and " We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an `emerging growth company.' " We will remain an emerging growth company until the earliest of (a) the last day of our fiscal year during which we have total annual gross revenues of at least $1.0 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (c) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our ADSs that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above. Corporate information Our principal executive offices are located at Unit 12/F, Building No.5, Guosheng Center, 388 Daduhe Road, Shanghai, 200062, the People's Republic of China. Our telephone number at this address is +86-21-6468-7000. Our agent for service of process in the United States is Law Debenture Corporate Services Inc. located at 400 Madison Avenue, 4th Floor, New York, New York 10017. Investors should contact us for any inquiries through the address or telephone number of our principal executive offices. Our principal website is www.1hai.cn. The information contained on our website is not a part of this prospectus. Conventions which apply to this prospectus Except where the context otherwise requires and for purposes of this prospectus only: "ADSs" refer to our American depositary shares, each of which represents two Class A common shares, and "ADRs" refer to American depositary receipts, which, if issued, evidence our ADSs; "Avis" refers to Avis Rent a Car System, LLC; "Avis China" refers to Avis' affiliates in China; "CDH" refers to CDH Car Rental Service Limited; "China" or the "PRC" refers to the People's Republic of China, excluding, for the purpose of this prospectus only, Taiwan, Hong Kong and Macau; 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. Subject to Completion Preliminary Prospectus Dated November 13, 2014 10,000,000 American Depositary Shares eHi Car Services Limited Representing 20,000,000 Class A Common Shares This is an initial public offering of American depositary shares, or ADSs, of eHi Car Services Limited. We are offering 10,000,000 ADSs. Each ADS represents two Class A common shares, par value US$0.001 per share. Prior to this offering, there has been no public market for our ADSs or our Class A common shares. We anticipate the initial public offering price per ADS will be between US$12.00 and US$14.00. We have applied to have the ADSs listed on the New York Stock Exchange, or the NYSE, under the symbol "EHIC." We are an "emerging growth company" under applicable U.S. federal securities laws and are eligible for reduced public company reporting requirements. Table of Contents "Crawford" refers to The Crawford Group, Inc., the parent company of Enterprise Holdings; "Ctrip" refers to Ctrip Investment Holding Ltd. and its affiliates; "Dazhong" refers to Dazhong Transportation (Group) Co., Ltd.; "eHi Hong Kong" refers to eHi Auto Services (Hong Kong) Holding Limited; "eHi Information" refers to Shanghai eHi Information Technology Service Co., Ltd.; "eHi Jiangsu" refers to eHi Auto Services (Jiangsu) Co., Ltd.; "eHi Rental" refers to Shanghai eHi Car Rental Co., Ltd.; "Elite Plus" refers to Elite Plus Developments Limited; "Enterprise" refers to Enterprise Holdings and Enterprise China, collectively; "Enterprise China" refers to Enterprise Holdings (China) LLC, an affiliate of Enterprise Holdings; "Enterprise Holdings" refers to Enterprise Holdings Inc.; "Frost & Sullivan" refers to Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., a third-party market research company that we commissioned to provide information on the industry in which we operate; "GS Group" refers to GS Car Rental HK Limited and GS Car Rental HK Parallel Limited, collectively; "Hertz" refers to The Hertz Corporation; "Ignition Group" refers to Ignition Growth Capital I, L.P. and Ignition Growth Capital Managing Directors Fund I, LLC, collectively; "JAFCO" refers to JAFCO Asia Technology Fund IV; "L&L" refers to L&L Financial Leasing Holding Limited; "New Access" refers to New Access Investments Group Limited and New Access Capital International Limited, collectively; "Qiangsheng" refers to Shanghai Qiangsheng Holding Co., Ltd.; "Qiming Group" refers to Qiming Venture Partners II, L.P., Qiming Venture Partners II-C, L.P. and Qiming Managing Directors Fund II, L.P., collectively; "period-end fleet size" refers to the aggregate number of vehicles in our car rentals and car services fleets as of the last day of a given period to which we hold legal title, including vehicles that we have written off in accordance with our accounting policy and vehicles that are currently missing but have not been written off. The period-end fleet sizes of our car rentals or car services were determined based on last orders assigned to our vehicles at the end of any given period; "preferred shares" refer to our Class A and Series A, B, C, D and E convertible redeemable preferred shares, par value US$0.001 per share; "RMB" or "Renminbi" refers to the legal currency of China, and "$," "dollars," "US$" or "U.S. dollars" refers to the legal currency of the United States; "registered members" refer to individuals who have registered accounts with us; "Shanghai Smart Brand" refers to Shanghai Smart Brand Auto Driving Services Co., Ltd.; Investing in our ADSs involves a high degree of risk. For a description of the risks that you should consider before buying the ADSs, see "Risk Factors" beginning on page 19. Table of Contents "Shanghai Taihao" refers to Shanghai Taihao Financial Leasing Co., Ltd.; "shares" or "common shares" refer to our Class A and Class B common shares, par value US$0.001 per share; "Shouqi" refers to Shouqi Car Rental Co., Ltd.; "Shuzhi" refers to Shuzhi Information Technology (Shanghai) Co., Ltd.; "we," "us," "our company," "our" and "eHi" refer to eHi Car Services Limited, its predecessor entities, subsidiaries and variable interest entity; and "Yongda" refers to China Yongda Automobiles Services Holdings Limited. Per ADS Total Initial public offering price US$ US$ Underwriting discounts and commissions(1) US$ US$ Proceeds, before expenses, to us US$ US$ Table of Contents THE OFFERING The following information assumes that the underwriters will not exercise their option to purchase additional ADSs in the offering, unless otherwise indicated: Price per ADS We currently estimate that the initial public offering price will be between US$12.00 and US$14.00 per ADS. ADSs offered by us 10,000,000 ADSs ADSs outstanding immediately after this offering 10,000,000 ADSs Concurrent private placement Concurrently with, and subject to, the completion of this offering, each of Dongfeng Asset Management Co. Ltd., or Dongfeng Asset Management, China Universal Asset Management Co., Ltd., or CUAM, and Ctrip has agreed to purchase from us US$30 million, US$10 million and US$10 million, respectively, in Class A common shares at a price per share equal to the initial public offering price adjusted to reflect the ADS-to-common-share ratio (the "concurrent private placement"). Assuming an initial offering price of US$13.00 per ADS, the mid-point of the estimated range of the initial public offering price shown on the front cover of this prospectus, Dongfeng Asset Management, CUAM and Ctrip will purchase 4,615,384, 1,538,461 and 1,538,461 Class A common shares from us, respectively. Our proposed issuance and sale of Class A common shares to these investors are being made through private placement pursuant to an exemption from registration with the U.S. Securities and Exchange Commission, or the SEC, under Regulation S of the Securities Act. Each of these investors has agreed with the underwriters not to, directly or indirectly, sell, transfer or dispose of any Class A common shares acquired in the concurrent private placement for a period of 180 days after the date of this prospectus, subject to certain exceptions. See "Underwriting." Common shares outstanding immediately after this offering We will adopt a dual-class voting structure immediately prior to the completion of this offering. 113,738,217 common shares, par value US$0.001 per share, comprised of 27,692,306 Class A common shares, including a total of 7,692,306 Class A common shares we will issue and sell in the concurrent private placement at an assumed initial public offering price of US$13.00 per ADS, the mid-point of the estimated range of the initial public offering price shown on the front cover of this prospectus, and 86,045,911 Class B common shares will be issued and outstanding immediately upon completion of this offering. Class B common shares issued and outstanding immediately after the completion of this offering will represent 75.7% of our total issued and outstanding shares and 96.9% of the then total voting power. The ADSs Each ADS represents two Class A common shares. (1)The underwriters will receive compensation in addition to the underwriting discount. See "Underwriting." Table of Contents The depositary will be the holder of the Class A common shares underlying the ADSs and you will have rights as an ADS holder as provided in the deposit agreement. We do not expect to pay dividends in the foreseeable future. If, however, we declare dividends on our common shares, the depositary will pay you the cash dividends and other distributions it receives on our Class A common shares, after deducting its fees and expenses. You may surrender your ADSs to the depositary to withdraw Class A common shares underlying your ADSs. The depositary will charge you a fee for such an exchange. We may amend or terminate the deposit agreement for any reason without your consent. If an amendment becomes effective, you will be bound by the deposit agreement as amended if you continue to hold your ADSs. To better understand the terms of the ADSs, you should carefully read the section in this prospectus entitled "Description of American Depositary Shares". You should also read the deposit agreement, which is filed as an exhibit to the registration statement that includes this prospectus. Common Shares Our common shares will be divided into Class A common shares and Class B common shares immediately prior to the completion of this offering. Holders of Class A common shares and Class B common shares will have the same rights except for voting and conversion rights. In respect of matters requiring a shareholder vote, each Class A common share will be entitled to one vote, and each Class B common share will be entitled to ten votes. Certain matters including those related to the change of control of our company require an additional approval by the holders of a majority of Class A common shares voting as a separate class. Each Class B common share is convertible into one Class A common share at any time by the holder thereof. Class A common shares are not convertible into Class B common shares under any circumstances. Class B common shares will be automatically converted into the same number of Class A common shares under certain circumstances, including any transfer of Class B common shares by a holder thereof to any person or entity which is not an affiliate of such holder. For a description of Class A common shares and Class B common shares, see "Description of Share Capital." Option to purchase additional ADSs We have granted the underwriters an option, exercisable within 30 days from the date of this prospectus, to purchase up to an additional 1,500,000 ADSs. 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. Table of Contents Use of proceeds We intend to use the net proceeds from this offering and the concurrent private placement to expand our fleet and service network, and for general corporate purposes, including working capital and funding potential acquisition of complementary businesses, although we are not currently negotiating any such transactions. See "Use of Proceeds" for more information. NYSE symbol We have applied to have the ADSs listed on the NYSE under the symbol EHIC. Our ADSs and common shares will not be listed on any other stock exchange or traded on any automated quotation system. Depositary JPMorgan Chase Bank, N.A. Directed share program At our request, the underwriters have reserved for sale, at the initial public offering price, up to 5% of the total ADSs offered in this offering, to our directors, officers, employees, business associates and related persons through a directed share program.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2014/CIK0001524190_ikang_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001524190_ikang_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2014/CIK0001524190_ikang_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2014/CIK0001531088_american_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001531088_american_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..4ba79c579c8267ac196a28d127fa750828145051
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2014/CIK0001531088_american_prospectus_summary.txt
@@ -0,0 +1 @@
+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, American Critter College, and ACC refer to American Critter College, Inc. American Critter College, Inc. is a development stage company incorporated in the State of Delaware in March of 2011. ACC s address and phone number is: American Critter College, Inc. 271 Serenity Place Newport, Virginia 24128 540-641-0159 telephone Operating History American Critter College, 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 develop a number of ACC locations in the southeast United States, where our trainers will instruct dog owners the proper methods of training their pets, and help establish a clear line of communication between dog owners and their pets. To date, operations have been on an extremely limited basis. Under the application of Rule 405 under Regulation C, we are considered to be a Shell Company as we (a) have nominal operations at this time and (b) have nominal assets. Company Assets ACC s principal assets ( Assets ) consisted of cash totaling $ 4,912 as of December 31, 2013 and its website at www.americancrittercollege.com . 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 December 31, 2013, the Company had Gross Revenues of $0. From inception to the period ending December 31,2013 , the Company had Total Operating Expenses of $ 83,816 , Net Loss of $83,816, Total Current Assets of $4,912, Total Assets of $4,912, Total Current Liabilities of $0, and Total Stockholders Equity (Deficit) of $4,912. Future Assets and Growth Previously, we expected to open brick and mortar centers but have since decided to focus on our web based training and products. We believe to carry out our business successfully, we will need approximately $50,000. The Company has developed its website and has started marketing its products and services. Over the next year we will continue to develop our marketing strategy and web presence at www.americancrittercollege.com . We hope to position ourselves uniquely in the marketplace, offering not simply the training of each client s dog, but empowering each individual pet owner with the know-how to train his or her own pet. The Company had a Net Loss of $ 83,816 for the period from March 30, 2011 to December 31 , 2013 and a Net Loss of $4,217 for the nine months ended December 31, 2013. The Company 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. 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. CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Amount to be Registered Proposed Maximum Offering Price Per Unit Proposed Maximum Aggregate Offering Price (1) Amount of Registration Fee (2) Common Stock already issued, par value $.0001 11,203,085 $ 0.02 $ 224,061.70 $ 64.19 Common Stock to be issued, par value $.0001 1,000,000 $ 0.02 $ 20,000 $ 5.73 Total 12,203,085 $ 0.02 $ 244,061.70 $ 69.92 _________________ (1) Registration fee has been paid via Fedwire. (2) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the securities act of 1933 or until the registration statement shall become effective on such date as the commission, acting pursuant to said section 8(a), may determine. We bring a fresh perspective into the marketplace for pet owners seeking a way to train their animals as the typical business model for pet obedience training involves teaching the pet owner how to train their pet rather than the typical arrangement where pet owners drop their pets off at an obedience training facility. We hope that this will differentiate us from our competition within the pet training market. The Company may lose money in its first, full year of operation and it shall require raising additional capital to develop its services. The Company currently has two managers, Hunt Keith and Mark N. Radford. However, Mr. Keith is involved in other businesses and Mr. Radford currently holds a full-time position at another company and does not dedicate to himself to the Company on a full-time level. Neither Mr. Keith nor Mr. Radford intend to devote more than 20 hours per month to the Company in these early stages. Both Mr. Keith and Mr. Radford have limited experience in our industry and developing a company devoted to pet obedience training. Terms of the Offering Currently, there are 11,203,085 issued and outstanding shares of common stock. Upon completion of this offering, there will be 12,203,085 issued and outstanding shares of common stock. 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. 02 was determined by the price shares were sold to our shareholders in a private placement memorandum plus an increase based on the fact the shares will be registered, however there is no guarantee that the shares will be liquid as there may never be a market for the securities offered herein. $0.02 is a fixed price at which the selling security holders may sell their shares until our common stock is quoted on the OTC Bulletin Board or another Exchange, at which time the shares may be sold at prevailing market prices or privately negotiated prices. 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. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] SUBJECT TO COMPLETION, DATED _______________ PRELIMINARY PROSPECTUS American Critter College, Inc. 12,203,085 Shares of Common Stock Price per share: $0. 02 The selling shareholders named in this prospectus are offering 11,203,085 shares of common stock in addition to the 1,000,000 the Company is issuing . The selling stockholders are selling shares of common stock covered by this prospectus for their own account and will receive $.02 per share sold in this offering and may receive up to a total of $224,061.70 in the aggregate if the entire offering is sold. There is no present public trading market for the Company's Common Stock and the price at which the Shares are being offered bears no relationship to conventional criteria such as book value or earnings per share. There can be no assurance that the offering price bears any relation to the current fair market value of the Common Stock. We intend on using all of our cash resources of approximately $ 4,192 for the next 12 months to our offering expenses of approximately $3,812. We will need to raise additional funds in order to cover these expenses. In order to provide for listing requirements, we will need to raise additional capital either from this offering or from loans from our officers and directors of which there is no guarantee. The selling shareholders of American Critter College, Inc. are underwriters. The 11,203,805 common shares included in this prospectus may be sold by the selling security holders at a fixed price of $.02 for the duration of this offering. The Company is considered an emerging growth company under Section 101(a) of the Jumpstart Our Business Startups Act as it is an issuer that had total annual gross revenues of less than $1 billion during its most recently completed fiscal year. Our independent registered public accounting firm included an explanatory paragraph in the report on our 2012 and 2013 financial statements related to the substantial doubt in our ability to continue as a going concern. The sales price to the public is fixed at $0. 02 per share until such time as the shares of common stock become traded on the Over The Counter Bulletin Board or some exchange. We intend to contact an authorized OTCBB market maker for sponsorship of our securities on the OTCBB, upon effectiveness of this registration statement. However, there is no guarantee our common stock will be accepted for quotation on the OTC Bulletin Board. If our common stock becomes quoted on the Over the Counter Bulletin Board, then the sales price to the public will vary according to the selling decisions of each selling shareholder and the market for our stock at the time of resale. The purchase of our shares involves substantial risk. See risk factors beginning on page 4 for a discussion of risks to consider before purchasing our common stock. You should rely only on the information contained in this prospectus. We have not, and the Selling Stockholders have not, authorized anyone to provide you with different information. If anyone provides you with different information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date. 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 the prospectus. Any representation to the contrary is a criminal offense. THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL OUR SHARES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL OUR SHARES, AND IT IS NOT SOLICITING AN OFFER TO BUY OUR SHARES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2014/CIK0001532981_eros_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001532981_eros_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..6f804f0d6930c39dc307a8e16cbc05fbd879d606
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2014/CIK0001532981_eros_prospectus_summary.txt
@@ -0,0 +1,382 @@
+PROSPECTUS SUMMARY
+
+ 
+
+The following summary should be read together
+with, and is qualified in its entirety by, the more detailed information and financial statements and related notes included elsewhere
+in this prospectus. The following summary does not contain all of the information you should consider before investing in our A
+ordinary shares. For a more complete understanding of this offering, we encourage you to read this entire prospectus, including
+the "Risk Factors" section, before investing in our A ordinary shares.
+
+ 
+
+Unless otherwise indicated or required
+by the context, as used in this prospectus, the terms "Eros," "we," "us," "our"
+and the "Company" refer to Eros International Plc and all its subsidiaries that are consolidated under International
+Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board. Our fiscal year ends on March 31
+of each year. When we refer to a fiscal year, such as fiscal 2014, we are referring to the fiscal year ended on March 31
+of that year. The "Founders Group" refers to Beech Investments Limited, Olympus Foundation, Arjan Lulla, Kishore Lulla,
+Vijay Ahuja and Sunil Lulla. 
+
+ 
+
+"High budget" films refer to
+Hindi films with direct production costs in excess of $8.5 million and Tamil as well as Telugu films with direct production
+costs in excess of $7.0 million, in each case translated at the historical average exchange rate for the applicable fiscal year.
+"Low budget" films refer to both Hindi, Tamil, and Telugu films with less than $1.0 million in direct production
+costs, in each case translated at the historical average exchange rate for the applicable fiscal year. "Medium budget"
+films refer to Hindi, Tamil, and Telugu films within the remaining range of direct production costs. With respect to low budget
+films, references to "film releases" refer to theatrical releases or, for films that we did not theatrically release,
+to our initial DVD, digital or other non-theatrical exhibition.
+
+ 
+
+Overview
+
+ 
+
+Eros International Plc is a leading global
+company in the Indian film entertainment industry, which co-produces, acquires and distributes Indian language films in multiple
+formats worldwide. Our success is built on the relationships we have cultivated over the past 30 years with leading talent, production
+companies, exhibitors and other key participants in our industry. Leveraging these relationships, we have aggregated rights to
+over 2,300 films in our library, plus approximately 700 additional films for which we hold digital rights only, including recent
+and classic titles that span different genres, budgets and languages, and we have distributed a portfolio of over 220 new films
+over the last three completed fiscal years. New film distribution across theatrical, television and digital channels along with
+library monetization provide us with diversified revenue streams.
+
+ 
+
+Our goal is to co-produce, acquire and distribute
+Indian films that have a wide audience appeal. We have released internationally or globally Hindi language films which were among
+the top grossing films in India in 2013. In the fiscal years ending in 2014, 2013 and 2012, we released 23, 16 and 11 Hindi language
+films globally, respectively. These Hindi films form the core of our annual film slate and constitute a significant portion
+of our revenues and associated content costs. The balance of our typical annual slate for these years of over 60 other films was
+comprised of Tamil and other regional language films.
+
+ 
+
+Our distribution capabilities enable us to
+target a majority of the 1.2 billion people in India, our primary market for Hindi language films, where, according to bollywoodhungama.com,
+we released four out of the top ten grossing Hindi films in India in 2013 and two of the top ten grossing Hindi language films
+in India in 2012. Further, according to BoxOfficeIndia.com, we released four out of the top ten grossing Hindi language
+films in India in 2011. Our distribution capabilities
+further enable us to target consumers in over 50 countries internationally, including markets with large South Asian populations,
+such as the United States and the United Kingdom, where according to Rentrak, we had a market share of over 40% of all theatrically
+released Indian language films in 2012 based on gross collections in each of these two markets. Other international markets that
+exhibit significant demand for subtitled or dubbed Indian-themed entertainment include Europe and Southeast Asia. Depending on
+the film, the distribution rights we acquire may be global, international or India only. Recently, as demand for regional film
+and other media has increased in India, our brand recognition in Hindi films has helped us to grow our non-Hindi film business
+by targeting regional audiences in India and beyond. With our distribution network for Hindi and
+Tamil films and additional distribution support through our majority owned subsidiary, Ayngaran International Limited, or Ayngaran,
+we believe we are well positioned to expand our offering of non-Hindi content.
+
+ 
+
+ 1
+
+ 
+
+ 
+
+We distribute our film content globally across
+the following distribution channels: theatrical, which includes multiplex chains and stand-alone theaters; television syndication,
+which includes satellite television broadcasting, cable television and terrestrial television; and digital, which includes primarily
+internet protocol television, or IPTV, video on demand, or VOD, and internet channels. Eros Now, our on-demand entertainment portal
+accessible via internet-enabled devices, was launched in 2012 and now has a selection of over 1,000 movies and over 6,500
+music videos available. We expect that Eros Now eventually will include our full film library, as well as further third party
+content.
+
+ 
+
+Our total revenues for fiscal 2014 increased
+to $235.5 million from $215.3 million for fiscal 2013, EBITDA increased to $58.9 million for fiscal 2014 from $48.8 million for
+fiscal 2013, and our net income increased to $37.1 million for fiscal 2014 from $33.7 million for fiscal 2013.
+
+ 
+
+Our Competitive Strengths
+
+ 
+
+We believe the following competitive strengths
+position us as a leading global company in the Indian film entertainment industry.
+
+ 
+
+Leading co-producer and acquirer of new Indian film content,
+with an extensive film library.
+
+ 
+
+As one of the leading participants in the
+Indian film entertainment industry we believe our size, scale and market position will continue contributing to our growth in
+India and internationally. We have established our size and scale by aggregating a film library of over 2,300 films plus approximately
+700 additional films for which we hold digital rights only, and releasing over 220 new films over the last three years. We have
+demonstrated our leading market position by releasing, internationally or globally, Hindi language films which were among the
+top grossing films in India in 2013, 2012 and 2011. We believe that we have strong relationships with the Indian creative
+community and a reputation for quality productions.
+
+ 
+
+We believe that these factors, along with
+our worldwide distribution platform, will enable us to continue to attract talent and film projects of a quality that we believe
+is one of the best in our industry, and build what we believe is a strong film slate for fiscal 2015 with some of the leading
+actors and production houses with whom we have previously delivered our biggest hits. We believe that the combined strength of
+our new releases and our extensive film library positions us well to build new strategic relationships.
+
+ 
+
+Established, worldwide, multi-channel distribution network.
+
+ 
+
+We distribute our films to the Indian population
+in India, the South Asian diaspora worldwide and to non-Indian consumers who view Indian films that are subtitled or dubbed in
+local languages. Internationally, our distribution network extends to over 50 countries, such as the United States, the United
+Kingdom and throughout the Middle East, where we distribute films to Indian expatriate populations, and to Germany, Poland, Russia,
+Romania, Indonesia, Malaysia, Taiwan, Japan, South Korea, China and Arabic speaking countries, where we release Indian films that
+are subtitled or dubbed in local languages. Through this global distribution network, we distribute Indian entertainment content
+over the following primary distribution channels — theatrical, television syndication and digital platforms. Our primarily
+internal distribution network allows us greater control, transparency and flexibility over the regions in which we distribute our
+films which we believe will result in higher profit margins as a result of the direct exploitation of our films without the payment
+of significant commissions to sub-distributors.
+
+ 
+
+Diversified revenue streams and pre-sale strategies mitigate
+risk and promote cash flow generation.
+
+ 
+
+Our business is driven by three major revenue streams:
+
+ theatrical distribution;
+
+ television syndication; and
+
+ digital distribution and ancillary products and services.
+
+ 
+
+ 
+
+ 2
+
+ 
+
+ 
+
+In fiscal 2014, theatrical distribution accounted
+for nearly 46% of revenues, and television syndication and digital distribution and ancillary products and services accounted
+for 34% and 20%, respectively, reflecting our diversified revenue base that reduces our dependence on any single distribution
+channel. We bundle library titles with new releases to maximize cash flows and we also utilize a pre-sale strategy to mitigate
+new production project risks by obtaining contractual commitments to recover a portion of our capitalized film costs through the
+licensing of television, music and other distribution rights prior to a film s completion. For example, for the three high
+budget Hindi films that we released in fiscal 2014, we had contractual revenue commitments in place prior to their release that
+allowed us to recoup 48%, 50% and 73% of our direct production costs for those films. In the case of the high budget Telugu
+film that we released in fiscal 2014, we recouped over 100% of our direct production costs through contractual commitments
+prior to the film s release. While we released no high budget Tamil films in fiscal 2014, in the case of high budget Tamil
+films that we released in fiscal 2013, we recouped 100% of our direct production costs through contractual commitments prior to
+the release of those films.
+
+ 
+
+In addition, we further seek to reduce risk
+to our business by building a diverse film slate, with a mix of films by budget, region and genre that reduces our reliance on
+"hit films." This broad-based approach also enables us to bundle old and new titles for our television and digital
+distribution channels to generate additional revenues long after a film s theatrical release period is completed. We believe
+our multi-pronged approach to exploiting content through theatrical, television syndication and digital distribution channels,
+our pre-sale strategies and our portfolio approach to content sourcing and exploitation mitigates our dependence on any one revenue
+stream and promotes cash flow generation.
+
+ 
+
+Strong and experienced management team.
+
+ 
+
+Our management team has substantial industry
+knowledge and expertise, with a majority of our executive officers and executive directors having been involved in the film, media
+and entertainment industries for 20 or more years, and has served as a key driver of our strength in content sourcing. In particular,
+several members of our management team have established personal relationships with leading talent, production companies, exhibitors
+and other key participants in the Indian film industry, which have been critical to our success. Through their relationships and
+expertise, our management team has also built our global distribution network, which has allowed us to effectively exploit our
+content globally.
+
+ 
+
+Our Strategy
+
+ 
+
+Our strategy is driven by the scale and variety
+of our content and the global exploitation of that content through diversified channels. Specifically, we intend to pursue the
+following strategies:
+
+ 
+
+Co-produce, acquire and distribute high quality content to
+augment our library.
+
+ 
+
+We will continue to leverage the longstanding
+relationships with creative talent, production houses and other key industry participants that we have built since our founding
+to source a wide variety of content. Our focus will be on investing in future slates comprised of a diverse portfolio mix ranging
+from high budget global theatrical releases to lower budget movies with targeted audiences. We intend to maintain our focus on
+high and medium budget films and augment our library, with quality content for exploitation through
+our distribution channels and explore new bundling strategies to monetize existing content.
+
+ 
+
+Capitalize on positive industry trends in the Indian market.
+
+ 
+
+Propelled by the economic expansion within
+India and the corresponding increase in consumer discretionary spending, the FICCI Report 2014 projects that the dynamic Indian
+media and entertainment industry will grow at a 14.2% compound annual growth rate, or CAGR, from $15.5 billion in 2013 to $30.2
+billion by 2018, and that the Indian film industry will grow from $2.1 billion in 2013 to $3.7 billion in 2018. India is one
+of the largest film markets in the world. According to FICCI Report 2014, average ticket prices at leading multiplexes increased
+by 12%-17% from 2011-2013. The average ticket price at high-end multiplexes was $4.00, $2.20 at multiplexes overall and $1.60
+at single screens in 2013.
+
+ 
+
+The Indian television market is one of the
+largest in the world, reaching an estimated 161 million television, or TV households in 2013, of which over 139 million were cable
+households. FICCI Report 2014 projects that the Indian television industry will grow from $7.0 billion in 2013 to $15.0
+billion in 2018. The growing size of the TV industry has led television satellite networks to provide an increasing number of
+channels, resulting in competition for quality feature films for home viewing in order to attract increased advertising and subscription
+revenues.
+
+ 
+
+ 3
+
+ 
+
+ 
+
+Broadband and mobile platforms present growing
+digital avenues to exploit content. According to FICCI Report 2014, the number of internet users in India reached 214
+million in 2013 and is projected to reach 494
+million by 2018. Smartphone usage is projected to rapidly increase from 66
+million active internet enabled smart phones in 2013 to 334
+million in 2018. The $160 million Indian
+music industry is projected to grow to $300 million by 2018,
+although music publishing activities accounted for less than 1% of our fiscal 2013 net revenues. While these projections generally
+align with management s expectations for industry growth, there is no guarantee that such future growth will occur.
+
+ 
+
+We will take advantage of the opportunities
+presented by these trends within India to monetize our library and distribute new films through existing and emerging platforms,
+including by exploring new content options for expanding our digital strategy such as filming exclusive short form content for
+consumption through emerging channels such as mobile and internet streaming devices.
+
+ 
+
+Further extend the distribution of our content outside of
+India to new audiences.
+
+We currently
+distribute our content to consumers in more than 50 countries, including in markets where this significant demand for
+subtitled and dubbed Indian themed entertainment, such as Europe and South East Asia, as well as to markets where there is
+significant concentration of South Asian expatriates, such as the Middle East, the United States and the United Kingdom. We
+intend to promote and distribute our films in additional countries, and further expand in countries where we already
+distribute, when we believe that demand for Indian filmed entertainment exists or the potential for such demand exists. For
+example, we have entered into arrangements with local distributors in Taiwan, Japan, South Korea, and China to distribute
+dubbed or subtitled Eros films through theatrical release, television broadcast or DVD release. Additionally, we believe that
+the general population growth in India experienced over recent years will eventually lead to increasing migration of Indians
+to other regions, resulting in increased demand for our films internationally.
+
+Increase our distribution of content through digital platforms
+globally.
+
+We intend to continue
+to distribute our content on existing and emerging digital platforms, which includes primarily internet protocol television, or
+IPTV, video on demand, or VOD, and internet channels. We also have an ad-supported YouTube portal site on Google that hosts an
+extensive collection of clips of our content and has generated 2.0 billion aggregate views and more than 2.3 million free
+subscribers. In North America, we have an agreement with International Networks, a subsidiary of Comcast, to provide a subscription
+video on demand, or SVOD, service called "Bollywood Hits On Demand" that is currently carried on Comcast, Cox Communications,
+Rogers Communication, Cablevision and Time Warner Cable. In August 2012, we expanded our digital presence with the launch of our
+on-demand entertainment portal Eros Now, through which we leverage our film and music libraries by providing ad-supported and
+subscription-based streaming of film and music content via internet-enabled devices.
+
+Furthermore, through a collaboration with
+HBO Asia, two premium television channels, HBO Defined and HBO Hits, were launched on the DISH and Airtel DTH digital platforms
+in February 2013, on Hathway and GTPL digital cable platforms in August 2013, and on Tata Sky DTH in December 2013. We are currently
+generating no revenue from the HBO Asia collaboration and do not anticipate any revenues from this collaboration until the
+second quarter of fiscal 2015. We expect to provide approximately 110 titles per year, including ten to twelve new release
+titles or first run films, and a combination of exclusive and non-exclusive library titles, to the two HBO channels to complement
+Hollywood film and television content from HBO Asia. Both channels are advertising-free and available as standard and high definition
+channels. HBO Asia and Eros will both provide content in the first window after theatrical release to these two channels. We intend
+to pursue similar models utilizing our extensive film library to gain access to similar partners throughout the world. We believe
+new offerings and emerging distribution channels such as DTH satellite, VOD, mobile and internet streaming services will also
+provide us with significant growth opportunities and potentially generate recurring subscription revenues.
+
+ 
+
+Expand our regional Indian content offerings.
+
+ 
+
+We will utilize our resources, international
+reputation and distribution network to continue expanding our non-Hindi content offerings to reach the substantial Indian population
+whose main language is not Hindi. While Hindi films retain a broad appeal across India, the diversity of languages within India
+allows us to treat regional language markets as distinct markets where particular regional language films have a strong following.
+In fiscal 2014 we increased our Tamil global releases to eight films as compared to three films in fiscal 2013. In fiscal 2014,
+none of our four high budget films were Tamil films, while one high budget film was a Telugu film. We have a high budget
+Tamil film and a high budget Telugu film planned for fiscal 2015 in addition to our high budget Hindi films. In addition
+to Tamil and Telugu, we plan to expand our content for selected regional languages such as Marathi and Punjabi. We intend
+to use our existing distribution network across India to distribute regional language films to specific territories. Where opportunities
+are available and where we have the rights, we also intend to exploit re-make rights to some of our popular Hindi movies into
+non-Hindi language content targeted towards these regional audiences.
+
+ 
+
+ 4
+
+ 
+
+ 
+
+Summary Risk Factors
+
+ 
+
+An investment in our A ordinary shares
+involves a high degree of risk. You should carefully consider the risks summarized below, the risks described under "Risk
+Factors" and the other information contained in this prospectus, including our consolidated financial statements and the
+related notes, before deciding to purchase any of our A ordinary shares:
+
+ any disputes or failure to enter into agreements with multiplex or theater operators could have
+a material adverse effect on our ability or willingness to release our films as scheduled;
+
+ any failure to source film content will have a material and adverse impact on our business;
+
+ delays, cost overruns, cancellation or abandonment of the completion or release of films may
+have an adverse effect on our business;
+
+ the popularity and commercial success of our films are subject to numerous factors beyond our
+control;
+
+ the success of our business depends on our ability to consistently create and distribute filmed
+entertainment that meets the changing preferences of the broad consumer market both within India and internationally;
+
+ our ability to exploit our content is limited to the rights that we own or are able to continue
+to license from third parties;
+
+ we depend on the Indian box office success of our Hindi and high budget Tamil and Telugu films
+for a significant portion of our revenues;
+
+ we may not be paid the full amount of box office revenues to which we are entitled as a result
+of underreporting of box office receipts by theater operators;
+
+ fluctuation in the value of the Indian Rupee against foreign currencies, such as the 10.4% decline
+in the value of the Indian Rupee in the two-month period from July 1, 2013 to August 30, 2013, could materially and adversely affect
+our results of operations, financial condition and ability to service our debt;
+
+ the monetary and fiscal policies of India and globally, inflation, deflation, unanticipated turbulence
+in interest rates, foreign
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001550956_access-us_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001550956_access-us_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..50c15cc7948dc1575300b5bb134f7a93aa29c2b6
--- /dev/null
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights some information from this prospectus, and it may not contain all the information important to making an investment decision. A potential investor should read the following summary together with the more detailed information regarding the Company and the common stock being sold in this offering, including Risk Factors and the financial statements and related notes, included elsewhere in this prospectus. The Company History Access US Oil & Gas, Inc., a Delaware corporation (the Company ), is a mineral exploration and development corporation, whose primary business is the participation in the Upstream portion of the oil and gas industry. The Company was incorporated in the State of Delaware in April 2012, and was formerly known as Gumtree Acquisition Corporation ( Gumtree or Gumtree Acquisition ). In September 2012, the Company implemented a change of control by issuing shares to new shareholders, redeeming shares of existing shareholders, electing new officers and directors and accepting the resignations of its then existing officers and directors. In connection with the change of control, the Company changed its name from Gumtree Acquisition Corporation to Access US Oil & Gas, Inc. The Company is located at 673 Woodland Square Loop SE, Suite 320, Lacey, Washington 98503. The Company s main phone number is (206) 792-7575. Business The Company was formed for the purpose of oil and gas exploration, development and production. As a participant in the upstream portion of the oil and gas industry, the Company has partnered with professional oil and gas extraction companies in proven oil formations in the United States. The Company searches for oil and gas production opportunities and strategically acquires land and mineral rights and oil and gas leasehold interests. The Company then conducts public involvement programs and oversees operations on its leases, including drilling and completion of the wells. The Company has an agreement ( Agreement ) with Comanche Exploration Company LLC ( Comanche ) in which it obtained a percentage right to a land leasehold and the right and obligation to participate in oil drilling and mineral exploitation on that and other land. The Company has made $1,192,953.00 deposit on the Agreement, and is actively raising debt financing to satisfy its additional capital obligations under the Agreement. It also plans to enter into more oil drilling and pumping agreements with Comanche as additional capital is raised. Risks and Uncertainties facing the Company The Company has a limited operating history and may experience losses in the near term. The Company needs to maintain a steady operating structure, ensuring that expenses are contained such that profits are consistently achieved. In order to expand the Company s business, the Company would likely require additional financing. As an early-stage company, management of the Company must continually develop and refine its strategies and goals in order to execute the business plan of the Company on a broad scale and expand the business. The Company anticipates that it may need significant capital in future years to expand its operations in accordance with its current business plan. One of the biggest challenges facing the Company will be in securing adequate capital to continue to expand its business and build a larger scale and more efficient set of operations. Secondarily, an ongoing challenge remains the maintenance of an efficient operating structure and business model. The Company must keep its expenses and the costs of employees at a minimum in order to generate a profit from the revenues that it receives from its exploration and drilling projects. Third, in order to expand, the Company will need to continue implementing effective sales, marketing and distribution strategies to identify oil leases as potential investments and attract major petroleum companies for future opportunities and potential profit. The Company has devised its initial sales, marketing and advertising strategies, however, the Company will need to continue refinement of these strategies and also skillfully implement these plans in order to achieve ongoing and long-term success in its business. Fourth, the Company must continuously use the latest technology to enhance the efficiency and economy of its exploration, development and production efforts. The oil and gas industry presents significant risks for the Company, as it requires expending substantial resources to locate and obtain permits for projects that may return little or no returns. Due to financial constraints and the early stage of the Company s life, the Company has to date conducted limited advertising and marketing to reach customers. In addition, the Company has not yet located the sources of funding to develop the Company on a broader scale through acquisitions or other major partnerships. If the Company were unable to locate such financing and/or later develop strong and reliable sources of potential customers and a means to efficiently reach buyers and customers, it is unlikely that the Company could develop its operations to return revenue sufficient to further develop its business plan. Moreover, the above assumes that the Company s services are consistently met with client satisfaction in the marketplace and exhibit steady success amongst the potential customer base, neither of which is reasonably predictable or guaranteed. Significant uncertainty exists concerning State regulations of oil and gas exploration and drilling as these regulations constantly change from year-to-year across many States. Changes in regulations (or the promulgation of new regulations or deletion of previous regulations) in States may have a substantially adverse effect on the Company and its business, including (without limitation) by increasing the costs of leasing, drilling and extracting oil and gas. The Company will likely be significantly affected by any unforeseen changes in the businesses and operations of its joint venture partners. Typically, the Company will hold a 50% interest in the joint venture and will be responsible for 50% of the costs. Therefore, any unforeseen changes in the financial wellbeing of another party to the joint venture could have adverse affects on the joint venture. Due to these and other factors, the Company s need for additional capital, the Company s independent auditors have issued a report raising substantial doubt of the Company s ability to continue as a going concern. Trading Market Currently, there is no trading market for the securities of the Company. The Company intends to work with market-makers for its securities that will apply for quotation of its common stock on the OTC Bulletin Board. However, the Company does not know if any such application will be made and whether it will be successful if made, how long such application will take, or, that if successful, that a market for the common stock will ever develop or continue on the OTC Bulletin Board. There can be no assurance that the Company will qualify for quotation of its securities on the OTC Bulletin Board. See RISK FACTORS and DESCRIPTION OF SECURITIES . The Offering The maximum number of Shares that can be sold pursuant to the terms of this offering is 1,990,000. The offering will terminate twenty-four (24) months from the date of this prospectus unless earlier fully subscribed or terminated by the Company. This prospectus relates to the offer and sale by certain shareholders of the Company of up to 1,990,000 Shares (the Selling Shareholder Shares ). The selling shareholders, who are deemed to be statutory underwriters, will offer their shares at a price of $0.10 per share, until the Company's common stock is listed on a national securities exchange or is quoted on the OTC Bulletin Board (or a successor); after which, the selling shareholders may sell their shares at prevailing market or privately negotiated prices, including (without limitation) in one or more transactions that may take place by ordinary broker's transactions, privately-negotiated transactions or through sales to one or more dealers for resale. Common stock outstanding before the offering 21,290,000 (1) Common stock for sale by selling shareholders 1,990,000 Common stock outstanding after the offering 21,290,000 Offering Price $ 0.10 per share Proceeds to the Company $ 0 (1) Based on number of shares outstanding as of the date of this prospectus. As of the date of this offering, non-affiliates of the Company currently hold 1,290,000 shares of common stock in the Company (of the 21,290,000 total outstanding shares at present). The total number of shares being registered through this prospectus exceeds the number of shares held by non-affiliates of the Company. All shares of the Company s common stock currently held by non-affiliates are being registered pursuant to this prospectus. Summary Financial Information The Company had no operations or specific business plan until the change in control. The statements of operations data for the years ended December 31, 2012 and December 31, 2013 and the balance sheet data as of December 31, 2013 are derived from the audited financial statements of the Company and related notes thereto included elsewhere in this prospectus. The statement of operations data for the six months ended June 30, 2014, and the balance sheet as of June 30, 2014, provided below are derived from the unaudited financial statements and related notes thereto included elsewhere in this prospectus. Six months ended Year ended April 23, 2012 (inception) through June 30, 2014 December 31, 2013 December 31, 2012 (unaudited) Statement of operations data Revenue $ 87,129 $ 0 $ 0 Income (Loss) from operations $ (186,938 ) $ (610,117 ) $ (341,469 ) Net income (loss) $ (188,054 ) $ (618,695 ) $ (342,000 ) At June 30, 2014 At December 31, 2013 At December 31, 2012 (unaudited) Balance sheet data Cash $ 16,677 $ 1,002,866 $ 1,769 Other assets $ 4,762,530 $ 4,531,984 $ 500,000 Total assets $ 4,779,207 $ 5,534,850 $ 501,769 Total liabilities $ 5,903,393 $ 6,470,982 $ 836,988 Total shareholders equity (deficit) $ (1,124,186 ) $ (936,132 ) $ (335,219 )
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2014/CIK0001553784_view-on_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001553784_view-on_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..49de708817111a5476080d5a913840a140142a94
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2014/CIK0001553784_view-on_prospectus_summary.txt
@@ -0,0 +1 @@
+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, Company, and View on Two, refer to View on Two, Inc. View on Two (formerly SegwayCity ) was founded in 2012 by David Hunter who has experience in the construction and real estate industries. In 2014, Mr. Hunter resigned and was replaced by Teresa Garvin. The Company was formed to engage in the business of providing individual and group tours to leisure clients. Services and products provided by View on Two, Inc. will initially include pre-arranged tours, custom packages according to clients specifications, local travel consultation, and as time progresses making reservations for lodging amongst other related services. Segway City, Inc. seeks to differentiate itself as the premier local adventure tour company in the greater Charlotte area. As the Company grows it will take on people and expand into related markets and services. The Company will also look for additional leverage by establishing relationships and representations with appropriate strategic allies . Company Assets View on Two s principal assets ( Assets ) consisted of cash totaling $2,185 as of June 30, 2013. Under the application of Rule 405 under Regulation C, we are considered to be a Shell Company as we (a) have nominal operations at this time and (b) have nominal assets. 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 June 30, 2013 the Company had Gross Revenues of $0. From inception to the period ending June 30, 2013, the Company had Total Operating Expenses of $103,790, Net Loss of $103,790, Total Current Assets of $2,185, Total Assets of $2,185, Total Current Liabilities of $0, and Total Stockholders Equity (Deficit) of $2,185. Although our burn rate historically has been approximately $500 - $600 per month, but we very much expect to see this increase to about $1,500 per month once we have some limited funding. We expect our current capital to last us an additional 3 0 days and then we will look to our officer and majority shareholders to provide additional funding. To date, our majority shareholders, which are run by our CEO, have provided us with capital, including the capital for our most recent financial review. We expect our burn rate to increase to up to $2,500 per month as we commence operations. Future Assets and Growth In the future, the Company hopes to develop relationships with a number of valuable contacts in the Charlotte, North Carolina area and increase awareness of the service we offer in the various target segments we will be targeting. We will start in the Charlotte, North Carolina area, but hope to eventually expand nationwide. Mr. Hunter was unable to dedicate time to our business, and thus, resigned. He was replaced by Ms. Teresa Garvin. If Ms. Garvin is unable to dedicate time to this effort, as s he is currently committed to fewer than twenty hours per month with the Company, then progress may be stagnated. 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. We hope to position ourselves for success in the Charlotte, North Carolina tourism market through our network of industry contacts. The Company had a Net Loss $103,790 for the period from inception to June 30, 2013 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. 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 business. Although there are several comparable segway tour companies currently in the Charlotte, North Carolina market, we believe that we can position ourselves uniquely by focusing on delivering a high quality, comfortable service to tourists and visitors. Our business model is predicated on the assumption that we can generate a steady stream of clients through contacts that are involved with the tourism industry in Charlotte, North Carolina. The Company may lose money in its first, full year of operation and it shall require raising additional capital to develop its services. The Company currently has one manager, Teresa Garvin 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 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 may sell their shares until our common stock is quoted on the OTC Bulletin Board or another Exchange, at which time the shares may be sold at prevailing market prices or privately negotiated prices. 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.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2014/CIK0001558085_toa_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001558085_toa_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..49ac69f99e5d98024aa68754ce821c84fb96ec52
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2014/CIK0001558085_toa_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 4
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2014/CIK0001558092_biomet_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001558092_biomet_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..d1834d7a4a4dc0c589d1b604733ce60731edb660
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2014/CIK0001558092_biomet_prospectus_summary.txt
@@ -0,0 +1 @@
+This summary highlights aspects of our business and the notes. You should, however, carefully read the entire prospectus, including the information presented under the section entitled Risk Factors and our consolidated financial statements and the notes thereto incorporated by reference into this prospectus before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements as a result of certain factors, including those set forth under Risk Factors and Forward-Looking Statements. Unless the context otherwise requires or indicates, references to Biomet, the Company, we, us and our refer to Biomet, Inc. and its subsidiaries. Our Company General Biomet, Inc., an Indiana corporation incorporated in 1977, is one of the largest orthopedic medical device companies in the United States and worldwide with operations in more than 50 locations throughout the world and distribution in approximately 90 countries. Our principal subsidiaries include Biomet U.S. Reconstruction, LLC; Biomet Orthopedics, LLC; Biomet Manufacturing, LLC; Biomet Europe BV; EBI, LLC; Biomet 3i, LLC; Biomet International Ltd.; Biomet Microfixation, LLC; Biomet Sports Medicine, LLC; Biomet Trauma, LLC; and Biomet Biologics, LLC. We design, manufacture and market surgical and non-surgical products used primarily by orthopedic surgeons and other musculoskeletal medical specialists. We operate in one reportable business segment, musculoskeletal products, which includes the design, manufacture and marketing of products in six major categories: Knees, Hips, Sports, Extremities, Trauma, or S.E.T., Spine, Bone Healing and Microfixation, Dental and Cement, Biologics and Other Products. We have three geographic markets: United States, Europe and International. Corporate Information Biomet is incorporated in the State of Indiana. Our principal executive offices are located at 56 East Bell Drive, Warsaw, Indiana 46582. Our website address is www.biomet.com. The information contained on our website or that can be accessed through our website will not be deemed to be incorporated into this prospectus or the registration statement of which this Table of Contents FORWARD-LOOKING STATEMENTS Some of the statements made under the headings Summary and elsewhere in this prospectus contain forward-looking statements within the meaning of U.S. federal securities laws, including Section 27A of the Securities Act and Section 21E of the Exchange Act. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements generally preceded by, followed by or that include the words believe, could, expect, forecast, intend, may, anticipate, plan, predict, possibly, project, potential, estimate, should, will, or similar expressions. These statements include, but are not limited to, statements related to: the timing and number of planned new product introductions; the effect of anticipated changes in the size, health and activities of the population or on the demand for our products; assumptions and estimates regarding the size and growth of certain market categories; our ability and intent to expand in key international markets; the timing and anticipated outcome of clinical studies; assumptions concerning anticipated product developments and emerging technologies; the future availability of raw materials; the anticipated adequacy of our capital resources to meet the needs of our business; our continued investment in new products and technologies; the ultimate marketability of products currently being developed; our ability to successfully implement new technologies and transition certain manufacturing operations, including transitions to China; our ability to manage working capital and generate adequate cash flows to service outstanding debt; our ability to sustain sales and earnings growth; our success in achieving timely approval or clearance of our products with domestic and foreign regulatory entities; our success in implementing our operational improvement programs; the stability of certain foreign economic markets; the effect of foreign currency fluctuations on our results; the impact of anticipated changes in the musculoskeletal industry and our ability to react to and capitalize on those changes; our ability to successfully implement desired organizational changes; the impact of our managerial changes; our ability to take advantage of technological advancements; our reliance on our private equity stockholders; our $5,831.7 million of total indebtedness outstanding as of February 28, 2014, and our ability to incur additional indebtedness in the future; and our inability to generate sufficient cash in order to meet our debt service obligations. Any forward-looking statements contained in this prospectus are based upon our historical performance and on our current plans, estimates and expectations in light of information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us, our Principal Stockholders, the underwriters or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. You should not place undue reliance on any forward-looking statement and should consider the following factors, as well as the factors discussed elsewhere in this prospectus, including under Risk Factors . We believe that these factors include: changes in general economic conditions and interest rates; changes in the availability of capital and financing sources; changes in competitive conditions and prices in our markets; changes to the regulatory environment for our products, including national health care reform; the effects of incurring or having incurred a substantial amount of indebtedness under our 6.500% senior notes, 6.500% senior subordinated notes and senior secured credit facilities; the effects upon us of complying with the covenants contained in our senior secured credit facilities and the indentures governing our 6.500% senior notes and 6.500% senior subordinated notes; restrictions that the terms and conditions of our 6.500% senior notes and 6.500% senior subordinated notes and our senior secured credit facilities may place on our ability to respond to changes in our business or take certain actions; changes in the relationship between supply of and demand for our products; fluctuations in costs of raw materials and labor; Table of Contents prospectus forms a part, and investors should not rely on any such information in deciding whether to purchase the notes. We have included our website address in this prospectus only as an inactive textual reference and do not intend it to be an active link to our website. For additional information, contact our Corporate Communications department at (574) 372-1514. Ownership and Corporate Structures LVB Acquisition, Inc., or Parent, owns all of our issued and outstanding capital stock. LVB Acquisition Holding, LLC ( Holding ) owns 97.19% of the issued and outstanding capital stock of Parent. Substantially all the equity interests in Holding are owned, directly or indirectly, by a consortium of private equity funds affiliated with The Blackstone Group, Goldman, Sachs & Co., Kohlberg Kravis Roberts & Co. and TPG Global, LLC (together with its affiliates, TPG ), and their co-investors (jointly, the Sponsors ). Table of Contents the effect of foreign currency fluctuations on our results; changes in other significant operating expenses; decreases in sales of our principal product lines; slowdowns or inefficiencies in our product research and development efforts; increases in expenditures related to increased government regulation of our business; developments adversely affecting our sales activities inside or outside the United States; decreases in reimbursement levels by our customers, including certain of our foreign government customers that are experiencing financial distress; difficulties in transitioning certain manufacturing operations to China and other locations; challenges in effectively implementing restructuring and cost saving initiatives; increases in cost-containment efforts from managed care organizations and other third-party payors; loss of our key management and other personnel or inability to attract such management and other personnel; increases in costs of retaining existing independent sales agents of our products; potential future goodwill and/or intangible impairment charges; inability to obtain, protect or enforce our intellectual property rights; unanticipated expenditures related to litigation; and failure to comply with the terms of the DPA (as defined elsewhere in this prospectus). We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events. MARKET AND INDUSTRY DATA This prospectus includes industry data and forecasts that we obtained from industry and government publications and surveys, studies conducted by third parties, public filings and internal company sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of the included information. Statements as to our ranking, market position and market estimates are based on independent industry publications, government publications, third party forecasts and management s estimates and assumptions about our markets and our internal research. While we are not aware of any misstatements regarding our market, industry or similar data presented herein, such data involve risks and uncertainties and are subject to change based on various factors, including those discussed in Cautionary Note Regarding Forward-Looking Statements and Risk Factors in this prospectus. TERMS USED IN THIS PROSPECTUS Unless otherwise noted or indicated by the context, in this prospectus: The term guarantors , as of the date of this prospectus with respect to both the senior notes and the senior subordinated notes, means Biomet 3i, LLC, Biomet Biologics, LLC, Biomet Europe Ltd., Biomet Fair Lawn, LLC, Biomet Florida Services, LLC, Biomet International Ltd, Biomet Leasing, Inc., Biomet Manufacturing, LLC, Biomet Microfixation, LLC, Biomet Orthopedics, LLC, Biomet Spine, LLC, Biomet Sports Medicine, LLC, Biomet U.S. Reconstruction, LLC, Biomet Trauma, LLC, Cross Medical Products, LLC, EBI Holdings, LLC, EBI, LLC, EBI Medical Systems, LLC, Electro-Biology, LLC, Implant Innovations Holdings, LLC, Interpore Cross International, LLC, Interpore Spine Ltd., Kirschner Medical Corporation, Lanx, Inc. and Lanx Sales, LLC. However, since each of our current and future wholly owned domestic restricted subsidiaries that is a guarantor of our senior secured credit facilities will fully and unconditionally guarantee the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis, the identities of the guarantors may change from time to time without notice. See Description of Senior Notes Guarantees and Description of Senior Subordinated Notes Guarantees. The term senior notes indenture refers to the Senior Notes Indenture dated as of August 8, 2012 among Biomet, Inc., the Guarantors listed therein and Wells Fargo Bank, National Association and the First Supplemental Indenture, dated as of October 2, 2012 among Biomet, Inc., the Guarantors listed therein and Wells Fargo Bank, National Association, collectively. The term senior subordinated notes indenture refers to the Senior Subordinated Notes Indenture dated as of October 2, 2012 among Biomet, Inc., the Guarantors listed therein and Wells Fargo Bank, National Association. The term indentures refers to the senior notes indenture and senior subordinated notes indenture, collectively. Table of Contents Summary of the Terms of the Notes The following summary contains basic information about the notes and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of the notes, you should read the section of the prospectus entitled Description of Senior Notes and Description of Senior Subordinated Notes. For purposes of this summary and the Description of Senior Notes and Description of Senior Subordinated Notes, references to the Company, Biomet, the issuer, we, our and us refer only to Biomet, Inc. and not to its subsidiaries. Issuer Biomet, Inc. Notes Offered Senior Notes $1,825 million in aggregate principal amount of 6.500% Senior Notes due 2020. Senior Subordinated Notes $800 million in aggregate principal amount of 6.500% Senior Subordinated Notes due 2020. Maturity Dates The senior notes will mature on August 1, 2020. The senior subordinated notes will mature on October 1, 2020. Interest Rates Interest on the notes will be payable in cash and will accrue at a rate of 6.500% per annum. Interest Payment Dates Senior Notes August 1 and February 1, commencing February 1, 2013. Senior Subordinated Notes April 1 and October 1, commencing April 1, 2013. Guarantees Each of our existing and future wholly-owned domestic restricted subsidiaries has jointly, severally and unconditionally guaranteed the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis, in each case to the extent such subsidiaries guarantee our senior secured credit facilities. Table of Contents EXPLANATORY NOTE This Registration Statement relates to the previously filed Registration Statement on Form S-1 (File No. 333-188262) (the Previous Registration Statement ) of Biomet, Inc. ( Biomet ). Biomet filed the Previous Registration Statement to register the following securities issued by Biomet and guaranteed by the guarantors named in the Registration Statement: $1,825,000,000 6.500% Senior Notes due 2020 (the Senior Notes ) and $800,000,000 6.500% Senior Subordinated Notes due 2020 (the Senior Subordinated Notes ). There were no applicable registration fees required to be paid at the time of the original filing of the Previous Registration Statement. This Registration Statement has two purposes: First, to register subsidiary guarantees of the Senior Notes and the Senior Subordinated Notes by certain additional subsidiaries (the Additional Subsidiary Guarantors ) of Biomet, and to include the Additional Subsidiary Guarantors as registrants; and Second, to update the Previous Registration Statement pursuant to Section 10(a)(3) of the Securities Act to incorporate by reference the consolidated financial statements and the notes thereto included in Biomet Annual Report on Form 10-K for the fiscal year ended May 31, 2013 (as updated in the Current Report on Form 8-K filed on April 11, 2014) and to update certain other information in the Registration Statement. Pursuant to Rule 429 under the Securities Act of 1933, as amended, this Registration Statement, upon effectiveness, will serve as a post-effective amendment to the Previous Registration Statement. Table of Contents Ranking Senior Notes The senior notes are our senior unsecured obligations and rank pari passu in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto; are senior in right of payment to any future indebtedness that is expressly subordinated in right of payment thereto (including our senior subordinated notes); and are effectively junior to our existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. Similarly, the guarantees of the senior notes are such guarantors senior unsecured obligations and rank pari passu in right of payment with all existing and future indebtedness of each guarantor that is not expressly subordinated thereto; are senior in right of payment to any future indebtedness of each guarantor that is expressly subordinated in right of payment thereto; and are effectively junior to all existing and future secured indebtedness of each guarantor to the extent of the value of the collateral securing such indebtedness. Senior Subordinated Notes The senior subordinated notes are our senior subordinated unsecured obligations and rank junior in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto (including the senior notes); rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and are senior in right of payment to any future subordinated indebtedness and effectively junior to our existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. Similarly, the guarantees of the senior subordinated notes are such guarantors senior subordinated unsecured obligations, and rank junior in right of payment with all existing and future indebtedness of each guarantor that is not expressly subordinated thereto; rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and are senior in right of payment to any future indebtedness of each guarantor that is expressly subordinated in right of payment thereto and effectively junior to all existing and future secured indebtedness of each guarantor to the extent of the value of the collateral securing such indebtedness. Table of Contents The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED APRIL 11, 2014 PRELIMINARY PROSPECTUS $1,825,000,000 6.500% Senior Notes due 2020 $800,000,000 6.500% Senior Subordinated Notes due 2020 NOTES OFFERED $1,825.0 million of our 6.500% Senior Notes due 2020, which we refer to as the senior notes. $800.0 million of our 6.500% Senior Subordinated Notes due 2020, which we refer to as the senior subordinated notes. We refer to the senior notes and the senior subordinated notes collectively as the notes. MATURITY The senior notes will mature on August 1, 2020. The senior subordinated notes will mature on October 1, 2020. INTEREST Senior notes: Interest is payable in cash and accrues at the rate of 6.500% per annum. Senior subordinated notes: Interest is payable in cash and accrues at the rate of 6.500% per annum. INTEREST PAYMENT DATES Senior notes: August 1 and February 1, commencing February 1, 2013. Senior subordinated notes: April 1 and October 1, commencing April 1, 2013. REDEMPTION We may redeem some or all of the senior notes on or after August 1, 2015 at redemption prices described in this prospectus. We may redeem some or all of the notes on or after October 1, 2015 at redemption prices described in this prospectus. CHANGE OF CONTROL Upon certain change of control events, each holder of notes may require us to purchase all or a portion of such holder s notes as described in this prospectus. GUARANTEES Each of our existing and future wholly-owned domestic restricted subsidiaries will jointly, severally and unconditionally guarantee the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis, in each case to the extent such subsidiaries guarantee our senior secured credit facilities. RANKING The senior notes and the related guarantees will be our senior unsecured obligations and will rank pari passu in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto; be senior in right of payment to any future indebtedness that is expressly subordinated in right of payment thereto (including our senior subordinated notes); and be effectively junior to our and our guarantors existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. The senior subordinated notes will be our senior subordinated unsecured obligations and will rank junior in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto (including the senior notes); rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and be senior in right of payment to any future subordinated indebtedness and effectively junior to our and our guarantors existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. See Risk Factors beginning on page 7 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 any affiliates of Goldman, Sachs & Co. in connection with offers and sales of the notes related to market-making transactions in the notes effected from time to time. Goldman, Sachs & Co. or its affiliates 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 , 2014. We are responsible for the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with additional information or information different from that contained in this prospectus and we take no responsibility for any other information that others may give you. This prospectus does not offer to sell nor ask for offers to buy any of the securities in any jurisdiction where it is unlawful, where the person making the offer is not qualified to do so, or to any person who cannot legally be offered the securities. You should not assume that the information contained in or incorporated by reference in this prospectus is accurate as of any date other than the date on the front cover of this prospectus or the date of any document incorporated by reference herein. Table of Contents Optional Redemption Senior Notes At any time prior to August 1, 2015, we may redeem up to 35% of the aggregate principal amount of the senior notes with the net proceeds of certain equity offerings at the redemption price set forth in this prospectus, plus accrued and unpaid interest, if any, to the redemption date. At any time prior to August 1, 2015, we may redeem the senior notes, in whole or in part, at our option, at a redemption price equal to 100% of their principal amount plus a make-whole premium and accrued and unpaid interest, if any, to the date of redemption. On and after August 1, 2015, we may redeem some or all of the senior notes at any time at the redemption prices set forth in this prospectus plus accrued and unpaid interest, if any, to the date of redemption. See Description of Senior Notes Optional Redemption. Senior Subordinated Notes At any time prior to October 1, 2015, we may redeem up to 40% of the aggregate principal amount of the senior subordinated notes with the net proceeds of certain equity offerings at the redemption price set forth in this prospectus, plus accrued and unpaid interest, if any, to the redemption date. At any time prior to October 1, 2015, we may redeem the senior subordinated notes, in whole or in part, at our option, at a redemption price equal to 100% of their principal amount plus a make-whole premium and accrued and unpaid interest, if any, to the date of redemption. On and after October 1, 2015, we may redeem some or all of the senior subordinated notes at any time at the redemption prices set forth herein plus accrued and unpaid interest, if any, to the date of redemption. See Description of Senior Subordinated Notes Optional Redemption. Change of Control Upon certain change of control events, each holder of notes may require us to purchase all or a portion of such holder s notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the purchase date. See Description of Senior Notes Repurchase at the Option of Holders Change of Control and the definition of Change of Control under Description of Senior Notes Certain Definitions, and Description of Senior Subordinated Notes Repurchase at the Option of Holders Change of Control and the definition of Change of Control under Description of Senior Subordinated Notes Certain Definitions. Table of Contents Certain Covenants The indentures governing the notes contain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: pay dividends on, redeem or repurchase capital stock or make other restricted payments; make investments; incur indebtedness or issue certain equity; create certain liens; incur obligations that restrict the ability of our subsidiaries to make dividend or other payments to us; enter into transactions with our affiliates; create or designate unrestricted subsidiaries; and consolidate, merge or transfer all or substantially all of our assets. These covenants are subject to important exceptions and qualifications, which are described under the headings Description of Senior Notes and Description of Senior Subordinated Notes in this prospectus. Certain of these covenants will be suspended if the notes are assigned an investment grade rating by Standard & Poor s Rating Services ( Standard & Poor s ) and Moody s Investors Services, Inc. ( Moody s ) and no default has occurred and is continuing. If either rating on the notes should subsequently decline to below investment grade or a default occurs and is continuing, the suspended covenants will be reinstated. Listing We do not intend to list the notes on any securities exchange. Governing Law The notes are governed by, and construed in accordance with, the laws of the State of New York. Trustee Wells Fargo Bank, National Association
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001559754_wowio-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001559754_wowio-inc_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. It does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, including the section titled "Risk Factors" and our consolidated financial statements and the related notes. You should only rely on the information contained in this prospectus. We have not, and the selling shareholders 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 accurate only as of the date on the front cover, but the information may have changed since that date. Unless the context otherwise requires, when we use the words "WOWIO," "Studio W," "Issuer," "Registrant," "Carthay Circle Publishing," "the Company," "we," "us" or "our Company" in this prospectus, we are referring to Wowio, Inc., a Texas corporation. OUR COMPANY We are in the business of creating, distributing, marketing, and monetizing "published" material, such as books, comic books, illustrated novels and graphic novels, and producing digital media, including web series, eBooks, eComics, graphic novels and branded entertainment, which is displayed on digital and traditional media channels. Our business is comprised of three divisions: 1) wowio.com, the eBook distribution platform with a unique pricing model, which takes advantage of our proprietary patent; 2) Studio W, the digital media production entity, creating online and off-line brand-expansion entertainment properties and programs for our content; and 3) Carthay Circle Publishing, Inc. ("Carthay"), the newest subsidiary, which we intend to use to build out our catalog of content to exploit across our various consumer-facing properties. Through wowio.com, we currently distribute both company-owned and 3rd-party-owned eBooks and eComics, generating revenues through eBook and eComics sales transactions. Approximately 87% of the content we distribute through wowio.com is owned by third parties. We currently generate revenues through the insertion of advertising in eBooks. To date, such advertising campaigns have not utilized our proprietary patented technology, but we anticipate such use in the future. Finally, we also currently generate revenues through online advertising on the wowio.com website. Through Studio W, we create and produce our own content such as online videos, generating revenues through pre-roll video ads and additional online advertising on our content-oriented websites TheDuck Webcomics, PopGalaxy and our branded YouTube channels. Through Carthay, we intend to publish our own library of material as eBooks and eComics, which we will distribute on our own wowio.com site as well as distribute through other eBook distribution platforms, generating revenues through eBook sales transactions. Management intends to create a library of content whereby 50% of the content from Carthay will be original material created by the Company and approximately 50% will be created by third parties. In addition to generating revenues through eBook/eComics sales, we intend to license our content library for exploitation across traditional media outlets such as film and television. Though we have not yet begun, we intend to license our patent to other eBook distribution platforms. The digital platform has expanded the global reach for content providers, and content consumers now have access to entertainment choices that they did not have previously. For the first time, based on this digital platform, content creators can reach their targeted consumers directly and with greater immediacy than ever before. With social media platforms, the spontaneity and viral reach of the message, the book, the video or the brand can be global nearly overnight. Because our proprietary patent allows for the insertion of advertising into eBooks, we are able to deliver content to the consumer at no or substantially reduced costs. We offer digital content and eBooks provided by third party publishers to consumers for free when advertising campaigns are available. If the eBook or digital content does not contain an advertising campaign, then we offer the eBook to the consumer at a retail price selected by the publisher and the Company receives an allowance for credit card processing charges, for which we hold back approximately 10% of the retail price. When there is an advertising campaign, we charge the sponsorship advertiser between $1.00 and $3.00 a book and we pay the publisher $0.25 - $0.50 per book depending on the length and we keep the remaining portion. Accordingly, because the proceeds we receive from eBook sales not attached to advertising campaigns are limited to our processing costs, we do not seek to generate profits from such sales. Rather, eBook sales not tied to advertising campaigns are intended to draw traffic to our websites, so that we can profitably sell advertising on our websites, and are also intended to draw publishers, so that we can seek to enter into additional advertising campaigns for the eBooks sold on our websites. Of the approximately 6,800 total number of eBooks offered on the wowio.com site, about 800 are owned by the Company and over 6,000 are from publishers who have entered into distribution arrangements with the Company, which makes these titles available for free or reduced prices and eligible for advertising campaigns. (Of these 6,000 eBooks, approximately 30 are currently covered by advertising campaigns and the remainder are offered to the consumer at a price selected by the publisher). As the number of successful ad campaigns increases, the Company hopes to increase the number of eBooks eligible for and covered by continued advertising programs. We offer advertisers opportunities to market across all of our websites to consolidated and engaged web-communities in specified demographics. We distribute content across our own websites (including www.WOWIO.com, www.drunkduck.com, www.theduckwebcomics.com, www.WEvolt.com and www.popgalaxy.com) and on company-branded YouTube Channels, Facebook pages and Twitter accounts, as well as on partner properties, social media and various web and mobile technologies. As a development stage company, revenues to date have been insignificant as the Company has primarily completed proof-of-concept and prototypical ad campaigns with our ad partners. We currently generate revenues primarily through the advertising on our sites and through the sales of eBooks and eComics. We intend to expand our efforts in order to generate revenues through licensing our content library for the creation of targeted advertising campaigns and for the production of films, television shows, books and video games. We also intend to license the rights to use our patent for the insertion of advertising into eBooks. In December 2012, we launched the Carthay website. We expect to re-launch a multi-channel eBook delivery platform in a newly-designed wowio.com site during 2013. With this site, we expect to increase online visibility by connecting to other related sites through Application Programming Interfaces (APIs) that will allow us to engage with the audience of partner sites. With a broader audience reach and more attractive product offering, our goal is to increase our revenues through increased sales of eBooks and ad revenues generated from the expected higher traffic. We anticipate the cost to re-launch this site to be approximately $250,000 and we have identified two qualified service providers, Regard Solutions for the technology build and Iteration Group for design, to deliver a website capable of delivering content across a number of platforms. In November 2012, we signed an agreement with Golden Heart Holdings ("GHH") to launch a new "Showcase" store on the GHH media e-commerce platform at shop.wowio.com, where we expect to generate revenues through eBook sales and online advertising. This site was developed at no cost to the Company through a Master Services Agreement made as of November 6, 2012 by and between GHH and Wowio whereby Wowio will become a part of GHH s network of partners that sell and distribute a variety of digital and physical products through the addition of the shop.wowio.com tailored and branded eStore. In addition, both an Advertising Publishing Agreement and Advertising Agreement were made as of November 26, 2012 by and between Wowio and GHH whereby GHH wishes to utilize Wowio s ad services for the optimization and delivery of advertisements to GHH s websites and Wowio s advertising clients on websites owned and operated by GHH. Wowio will then pay to GHH a percent of any net ad revenue actually received from the applicable Wowio advertising clients. Finally, we also anticipate increasing revenues through the licensing of our patent, a process we are beginning to undertake as the advertising community has just started to see the eBook distribution channel as a viable alternative to other content distribution outlets. Through our Carthay subsidiary, we expect to see increased revenues as we anticipate higher revenue participation as a cross-media publishing entity, earning 30-90% of revenues generated from sales of eBooks, audio books and print books as well as the possibility of content license fees for other media exploitation such as film, television and video games. Going forward Carthay will enter an arrangement with the Company to sell the books it publishes and also make them available for advertising campaigns. We also intend to seek arrangements with other websites such as Amazon, iTunes, Google and Barnes & Noble to sell the books published by Carthay. This is a distinct difference from the activities and related revenue streams of a pure distribution platform such as wowio.com that generates revenues from advertising dollars based on traffic and only 10-30% of the retail price for each eBook. We intend to expand Carthay s library of material and thereby increase our opportunity to share in sale revenues as a publisher and distribute the digital, audio and print versions of each property. In order to expand Carthay, the Company intends to hire a senior publishing executive to manage Carthay and identify new materials for development and distribution. We estimate the costs involved to expand Carthay to be approximately $100,000/year for a publishing executive, $80,000 for social media management and $20,000 for technical support. The Company is in default under substantially all of its debt (other than notes issued in August through December 2013, and debt owed to TCA Global Credit Master Fund, L.P. ("TCA"), the maturity of which has been extended pursuant to a settlement agreement between the Company and TCA). On June 14, 2013, TCA filed a complaint against us alleging that the Company defaulted on loan transactions between the Company and TCA, and seeking to foreclose on all of the Company s assets and money damages in excess of $350,000. Because the Company failed to timely respond to the complaint, on July 24, 2013, a Clerk s Entry of Default was entered against the Company. Effective November 19, 2013, the Company and TCA entered into a settlement agreement, pursuant to which (i) the Company acknowledged that the aggregate amount it owed to TCA, as of October 24, 2013, was $449,221 (including a $50,000 fee agreed to by the Company in connection with the restructuring), (ii) the Company made a payment of $65,631 against the outstanding balance, (iii) TCA waived the defaults under the loan transaction and extended the due date of the outstanding amounts it is owed to May 19, 2014, and (iv) on November 21, 2013, TCA filed a Motion to Vacate the Clerk s Entry of Default and the parties filed a Joint Stipulation of Dismissal Without Prejudice. On November 25, 2013, the court granted TCA s Motion to Vacate the Clerk s Entry of Default, the Clerk s Entry of Default was vacated by the Court, and the action was dismissed without prejudice. See "Legal Proceedings." Under our agreement with TCA, we are required to pay 100% of any revenue we receive, and 50% of the proceeds we receive from any sale of equity or debt securities, directly to TCA, until we have repaid our obligations to TCA in full. Accordingly, the amount we will be required to repay on May 19, 2014 will be equal to $385,590 (the balance as of October 24, 2013 of $449,221, less the payment of $65,631 we made upon entering into the settlement agreement), plus interest that will accrue (at the rate of 12% per year) to May 19, 2014 (approximately $46,271), less any amounts we repay in accordance with the requirement noted above that we pay 100% of any revenue we receive, and 50% of the proceeds of any sale of securities, directly to TCA, until we have repaid our obligations to TCA in full. Because we cannot determine the amount of revenue or the amount of proceeds we will receive from the sale of securities prior to May 19, 2014, we cannot presently determine the precise amount we will be required to repay on May 19, 2014. Further, because our revenues to date have not been significant, and in light of the losses we have sustained to date (see "Going Concern" on page 5), we anticipate that we will need to raise additional capital to repay the amount we will owe to TCA on May 19, 2014. We plan to seek to raise such additional capital following the effective date of the registration statement of which prospectus forms a part, although there is no assurance such funding will be available on terms acceptable to the Company, or at all. GOING CONCERN Our independent registered public accounting firm has issued an unqualified opinion with an explanatory paragraph to the effect that there is substantial doubt about our ability to continue as a going concern. The inclusion of a going concern modification in our independent registered public accounting firm s report for the years ended December 31, 2012 and 2011 may materially and adversely affect our stock price or our ability to raise new capital. See "Management s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" and Note 1 to our consolidated financial statements included elsewhere in this prospectus. We experienced net losses of $9,253,287 and $5,032,592 for the years ended December 31, 2012 and 2011, respectively. We experienced net losses of $3,570,562 and $7,427,504 for the nine months ended September 30, 2013 and 2012, respectively. As of September 30, 2013, our deficit accumulated during the development stage was $23,433,629. Unless we raise additional funds, either through the sale of equity or debt securities or one or more collaborative arrangements, we will not have sufficient funds to continue our operations. Even if we take these actions, the funds we raise may be insufficient, particularly if our costs are higher than projected or unforeseen expenses arise. 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
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001565487_halex_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001565487_halex_prospectus_summary.txt
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+PROSPECTUS SUMMARY Company Overview Halex Energy Corp. ("Halex") is a development stage company incorporated on January 20, 2011 under the laws of the State of Nevada. Our fiscal year end is December 31. Our principal office is located at 9190 Double Diamond Parkway, Reno, NV 89521. Our telephone number is 916.293.6337 and our e-mail is info@halexenergy.com. Since becoming incorporated, Halex has not made any significant purchases or sale of assets, nor have we been involved in any mergers, acquisitions or consolidations. Halex has never declared bankruptcy, never been in receivership, and never been involved in any legal actions or proceedings. Halex is a development stage enterprise owning exclusive licenses from K Air Energy ( K Air ) for distribution, installation and operation of a renewable energy system in the state of California. K Air is currently developing a prototype of this renewable energy system known as a Hybrid Renewable Energy System ("HRES"). We do not own any interest in any property. We have no rights, title, interest or other intellectual property rights in the HRES system. Currently, we have no further business planned if K Air is unable to develop the proposed HRES and commercialize its use. As of September 30, 2013, the date of company's last financial statements, Halex has raised $2,457 through the sale of common stock. This sale was a purchase of 24,570,000 shares by the Company s officer and director Jeff Lamberson and by the other founding shareholders. Halex also has raised $161,113 through the issuance of promissory notes to some of the founding shareholders. As of September 30, 2013, we had $4 of cash on hand and had expenses from inception to September 30, 2013 of $285,715, which was related to corporate start-up fees. As of the date of this prospectus, we have not yet generated or realized any revenues from our business operations. The Company believes that we will need a minimum $20,000 to maintain the corporate entity, accounting and filings over the next 12 months and a minimum of $300,000 to carry out our operations and marketing preparation for the next 12 months. For our audited financial information please see Financial Statement within this document below. Management As of the date of this prospectus, Halex has one Director, Jeffery Lamberson and two Officers, Jeffery Lamberson (President, Treasurer, CAO, CEO, and Secretary) and Alfred Foley, Vice President. Our Officers have assumed responsibility for all planning, development and operational duties, and will continue to do so throughout the beginning stages of the business plan. Other than the Officers/Director, there are no employees. The Offering Halex Energy Corp. is offering up to 6,000,000 shares of common stock at an offering price of $0.50 per share. There is currently no public market for our common stock. Moreover, there is no trading symbol assigned to the common stock. Halex Energy Corp. s Officers and Director currently own 5,000,000 shares of restricted common stock. Potential investors must be aware that if we are unable to raise proceeds through this offering we will be unable to complete our business plan, resulting in businesses failure and a complete loss of any investment made into the Company. JOBS Act The Company is electing to not opt out of JOBS Act extended accounting transition period. This may make its financial statements more difficult to compare to other companies. Emerging Growth Company The recently enacted JOBS Act is intended to reduce the regulatory burden on emerging growth companies. The Company meets the definition of an emerging growth company and so long as it qualifies as an emerging growth company, it will, among other things: be temporarily exempted from the internal control audit requirements Section 404(b) of the Sarbanes-Oxley Act be temporarily exempted from various existing and forthcoming executive compensation-related disclosures, for example: say-on-pay , pay-for-performance , and CEO pay ratio . be temporarily exempted from any rules that might be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or supplemental auditor discussion and analysis reporting; be temporarily exempted from having to solicit advisory say-on-pay, say-on-frequency and say-on-golden-parachute shareholder votes on executive compensation under Section 14A of the Securities Exchange Act of 1934, as amended; be permitted to comply with the SEC s detailed executive compensation disclosure requirements on the same basis as a smaller reporting company; and, be permitted to adopt any new or revised accounting standards using the same timeframe as private companies (if the standard applies to private companies). Our company will continue to be an emerging growth company until the earliest of: the last day of the fiscal year during which we have annual total gross revenues of $1 billion or more; the last day of the fiscal year following the fifth anniversary of the first sale of our common equity securities in an offering registered under the Securities Act; the date on which we issue more than $1 billion in non-convertible debt securities during a previous three-year period; or the date on which we become a large accelerated filer, which generally is a company with a public float of at least $700 million (Exchange Act Rule 12b-2). The purchase of the securities offered through this prospectus involves a high degree of risk. See section entitled "
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+PROSPECTUS SUMMARY 4
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+PROSPECTUS SUMMARY The following summary highlights information contained elsewhere in this prospectus or the documents incorporated by reference into this prospectus and does not contain all of the information that you should consider before investing in our common stock. You should read this entire prospectus and the documents incorporated by reference into this prospectus before making an investment decision. Our Company We are one of the largest industrial distributors in North America. We believe we have leading positions in the three distinct market sectors in which we specialize: Maintenance, Repair & Operations; Infrastructure & Power; and Specialty Construction. These market sectors are large and fragmented, and we believe they present opportunities for significant growth. We aspire to be the "First Choice" of customers, associates, suppliers and the communities in which we operate. This aspiration drives our relentless focus and is reflected in the customer and market centricity, speed and precision, intense teamwork, process excellence and trusted relationships that define our culture. We believe this aspiration distinguishes us from other distributors and has created value for our shareholders, driven above market growth and delivered attractive returns on invested capital. We estimate that the aggregate size of our currently addressable markets is approximately $115 billion annually. We define our currently addressable markets as the total dollars spent in markets where we currently offer products. We serve our markets with an integrated go-to-market strategy. We operate through approximately 650 locations across 47 U.S. states and seven Canadian provinces. We have more than 15,000 associates delivering localized, customer tailored products, services and expertise. We serve approximately 500,000 customers, which include contractors, maintenance professionals, home builders, industrial businesses, and government entities. Our broad range of end-to-end product lines and services include over one million stock keeping units ("SKUs") of quality, name-brand and proprietary brand products as well as value-add services supporting the entire lifecycle of a project from infrastructure and construction to maintenance, repair and operations. For fiscal 2013, we generated $8,487 million in Net sales, representing 6.8% growth over fiscal 2012, or 9.4% growth excluding the 53rd week of fiscal 2012 and the impact of the amended Crown Bolt agreement with The Home Depot, Inc. ("Home Depot"); $764 million of Adjusted EBITDA, representing 11.5% growth over fiscal 2012, or 21.3% growth excluding the 53rd week of fiscal 2012 and the impact of the amended Crown Bolt agreement with Home Depot; and incurred a Net loss of $218 million representing an improvement of 81.5% over fiscal 2012. For a reconciliation of GAAP measures to the Non-GAAP measures, including a reconciliation of Net income (loss), the most directly comparable financial measure under GAAP, to Adjusted EBITDA, see "Selected Consolidated Financial Data." We believe our long-standing customer relationships and competitive advantage stem from our knowledgeable associates, extensive product and service offerings, national footprint, integrated best-in-class technology, broad purchasing scale and strategic supplier relationships. We believe that our comprehensive supply chain solutions improve the effectiveness and efficiency of our customers' businesses. Our value-add services include customer training, material and product fabrication, kitting, jobsite delivery, will call pick up options, as well as onsite managed inventory, online material management and emergency response capabilities. Furthermore, we believe our product application knowledge, comprehensive product assortment, and sourcing expertise allow our customers to perform reliably and provide them the tools to enhance profitability. We reach our customers through a variety of sales channels, including professional outside and inside sales forces, call centers and branch supported direct marketing programs utilizing market specific product catalogs, and business unit websites. Our distribution network allows us to provide rapid, reliable, on-time delivery and customer pickup throughout the U.S. and Canada. Additionally, we believe our highly integrated, best-in-class technology provides leading e-commerce and integrated workflow capabilities for our customers, while providing us unparalleled pricing, budgeting, reporting and analytical capabilities across our Company. AMENDMENT NO. 1 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS AND INFORMATION This prospectus and the information incorporated by reference into this prospectus include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the forward-looking statements can be identified by the use of forward-looking terms such as "believes," "expects," "may," "will," "should," "could," "seeks," "intends," "plans," "estimates," "anticipates" or other comparable terms. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this prospectus or in the documents incorporated by reference into this prospectus and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth strategies and the industries in which we operate. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that forward looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industries in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this prospectus and the documents incorporated by reference into this prospectus. In addition, even if our results of operations, financial condition and liquidity, and the development of the industries in which we operate are consistent with the forward-looking statements contained in this prospectus and the documents incorporated by reference into this prospectus, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors could cause actual results to differ materially from those contained in or implied by the forward-looking statements, including those reflected in forward looking statements relating to our operations and business, the risks and uncertainties discussed in "Risk Factors" in this prospectus and those described from time to time in our other filings with the SEC. Factors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include: inherent risks of the maintenance, repair and operations market, infrastructure spending and the non-residential and residential construction markets; our ability to achieve profitability; our ability to service our debt and to refinance all or a portion of our indebtedness; limitations and restrictions in the agreements governing our indebtedness; the competitive environment in which we operate and demand for our products and services in highly competitive and fragmented industries; the loss of any of our significant customers; competitive pricing pressure from our customers; our ability to identify and acquire suitable acquisition candidates on favorable terms; cyclicality and seasonality of the maintenance, repair and operations market, infrastructure spending and the non-residential and residential construction markets; our ability to identify and develop relationships with a sufficient number of qualified suppliers and to maintain our supply chains; our ability to manage fixed costs; the development of alternatives to distributors in the supply chain; our ability to manage our working capital through product purchasing and customer credit policies; Table of Contents We believe customers view us as an integral part of the value chain due to our extensive product knowledge, expansive product availability and the ability to directly integrate with their systems and workflows. Since 2007 we have undertaken significant operating and growth initiatives at all levels. We developed and are implementing a multi-year strategy to optimize our business mix. This strategy includes entering new markets and product lines, streamlining and upgrading our process and technology capabilities, acquiring new capabilities and selling non-core business units. At the same time, we attracted what we believe to be "best of the best" talent capitalizing on relevant experience, teamwork and change navigation. With this transformational execution behind us, we believe we are well-positioned to continue to grow in excess of the markets in which we operate. Summary of Reportable Segments We operate through four reportable segments: Facilities Maintenance, Waterworks, Power Solutions and White Cap. Although these reportable segments are distinct and specialized to reflect the needs of their customers, we operate our Company with an integrated go-to-market strategy. Facilities Maintenance. Facilities Maintenance distributes maintenance, repair and operations ("MRO") products, provides value-add services and fabricates custom products for multifamily, hospitality, healthcare and institutional facilities. Waterworks. Waterworks distributes complete lines of water and wastewater transmission products, serving contractors and municipalities in the water and wastewater industries for non-residential and residential uses. Power Solutions. Power Solutions distributes electrical transmission and distribution products, power plant MRO supplies and smart-grid products, and arranges materials management and procurement outsourcing for the power generation and distribution industries. White Cap. White Cap distributes specialized hardware, tools, engineered materials and safety products to non-residential and residential contractors. (1)Adjusted EBITDA is our measure of profitability for our reportable segments as presented within our consolidated financial statements in accordance with GAAP. See Note 14 of the Notes to Consolidated Financial Statements included in the 2013 Form 10-K, incorporated by reference into this prospectus. (2)Adjusted EBITDA Margin is equal to Adjusted EBITDA divided by Net sales. (3)Growth is equal to growth in Adjusted EBITDA over fiscal 2012, excluding the 53rd week of fiscal 2012. (4)Management estimates based on market data and industry knowledge. Market share is based on our revenues relative to the estimated addressable market size. (5)Market position is based on our revenues relative to the estimated revenues of known competitors in addressable markets. Unless stated otherwise, market position refers to management's estimate of our market position in North America within the estimated addressable markets we serve. 3100 Cumberland Boulevard, Suite 1480 Atlanta, Georgia 30339 (770) 852-9000 (Address, including Zip Code, and Telephone Number, including Area Code, of Registrant's Principal Executive Offices) *Excludes HD Supply Canada. (1)Management estimates based on market data and industry knowledge. (2)Crown Bolt, Creative Touch Interiors, Repair & Remodel and HD Supply Canada, in addition to Corporate and Eliminations, comprise "Corporate & Other." (3)Figures do not foot due to rounding. Excludes HD Supply Canada. Maintenance, Repair & Operations In the Maintenance, Repair & Operations market sector, our Facilities Maintenance, Crown Bolt and Repair & Remodel business units serve customers across multiple industries by primarily delivering supplies and services needed to maintain and upgrade multifamily, hospitality, healthcare and institutional facilities. Facilities Maintenance and Crown Bolt are distribution center based models, while Repair & Remodel operates through retail outlets primarily serving cash and carry customers. We Ricardo J. Nunez, Esq. Senior Vice President, General Counsel and Corporate Secretary HD Supply Holdings, Inc. 3100 Cumberland Boulevard, Suite 1480 Atlanta, Georgia 30339 (770) 852-9000 (Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service) Table of Contents estimate that this market sector currently represents an addressable market in excess of $49 billion annually with demand driven primarily by ongoing maintenance requirements of a broad range of existing structures and traditional repair and remodeling construction activity across multiple industries. We believe Facilities Maintenance customers value speed and product availability over price. In addition, we believe that our leadership position in this sector positions us to capitalize on improving business conditions across our addressable market. For example, we expect to benefit from the relative stability of demand for MRO materials during periods of lower vacancy rates within multifamily housing and higher occupancy rates within hospitality. Infrastructure & Power In the Infrastructure & Power market sector, Waterworks and Power Solutions support both established infrastructure and new projects by meeting demand for critical supplies and services used to build and maintain water systems and electrical power generation, transmission and distribution infrastructure. We estimate that this market sector currently represents an addressable market in excess of $46 billion annually with demand in the U.S. driven primarily by an aging and overburdened national infrastructure, general population growth trends and the need for cost-effective energy distribution. The broad geographic presence of our business units, through a regionally organized branch distribution network, reduces our exposure to economic factors in any single region. We believe we have the potential to capitalize on a substantial backlog of deferred projects that will need to be addressed in the coming years as a result of our customers delaying much needed upgrades or repairs during the recent economic downturn as well as a recovery in the non-residential and residential construction end-markets. Specialty Construction In the Specialty Construction market sector, White Cap and Creative Touch Interiors ("CTI") serve professional contractors and trades by meeting their distinct and customized supply needs in non-residential, residential and industrial applications. We estimate that this market sector currently represents an addressable market in excess of $20 billion annually with demand driven primarily by residential construction, non-residential construction, industrial and repair and remodeling construction spending. White Cap is our primary business unit serving this sector through the broad national presence of its regionally organized branch distribution network. CTI serves its market through a network of branches and design centers. We believe we are well-positioned to benefit from the recovery from historical lows within the non-residential and residential construction end-markets. With a copy to: Steven J. Slutzky, Esq. Debevoise & Plimpton LLP 919 Third Avenue New York, New York 10022 (212) 909-6000 Patrick O'Brien, Esq. Marko Zatylny, Esq. Ropes & Gray LLP Prudential Tower 800 Boylston Street Boston, Massachusetts 02119 (617) 951-7000 Table of Contents Our Strengths We believe that we benefit significantly from the following competitive strengths: Collaborative results driven culture and exacting execution driving growth. Our culture of customer and market centricity, speed and precision, intense teamwork, process excellence and trusted relationships promotes continuous learning and drives our entire team to perform at the highest level. Rather than singularly investing and recognizing returns in one business unit, we leverage investments in one business unit across all of our other business units. Leadership positions with significant scale in large, fragmented markets. Our Facilities Maintenance, Power Solutions, Waterworks and White Cap business units are leading North American industrial distributors in each of the addressable markets they serve based on sales. We believe that our size and competitive position as well as the fragmentation and competitive dynamics of the markets we serve make them opportunity-rich for profitable growth. Specialized business model delivering a customer success based value proposition. We offer our customers a breadth of products and services tailored to their specific needs. Our local presence and intimate understanding of our customers allow us to optimize our sales coverage model. We also provide differentiated, value-add services to our customers. We believe that the breadth of our product and service offering provides significant competitive advantages versus smaller local and regional competitors, helping us earn new business and secure repeat business. Strategic diversity across customers, suppliers, geographic footprint, products and end-markets. We believe that by developing relationships with a diverse set of customers, we gain significant visibility into the future needs of our marketplace. Our broad base of approximately 500,000 customers has low concentration with no single customer representing more than 3% of our total sales and our top 10 customers representing only approximately 9% of our total sales during fiscal 2013. We maintain relationships with approximately 15,000 suppliers and maintain multiple suppliers for many of our products, thereby limiting the risk of product shortages. Our diverse geographic footprint of over 650 locations limits our dependence on any one region. We also believe that our diversity of end-market exposures is a key competitive strength, as our growth opportunities and ability to deploy resources are not constrained by any single end-market dynamic. We believe that we stand to benefit both from large end-markets that are characterized by stable long-term growth potential, as well as from end-markets that are exposed to cyclical dynamics. Highly efficient and well-invested operating platform driving high returns on invested capital. Through a series of efficiency improvements and investments in the business, we believe we have transformed our business into a highly efficient platform which is well-positioned for future growth. Our operating efficiency is evidenced by the improvement in our return on invested capital, which has increased from 9% in 2009 to 32% in 2013. Return on invested capital is a non-GAAP metric. For additional detail, including a calculation of return on invested capital, see "Selected Consolidated Financial Data." Transformational management team. HD Supply's executive management team has played a vital role in establishing our leading market share positions in each of our four main business units. Our CEO, Joseph DeAngelo, has over 30 years of global operating experience, including over 17 years in various leadership roles at General Electric Company ("GE") and Home Depot, including Chief Operating Officer. The rest of our executive management team has an average of nearly 10 years at HD Supply and its predecessors, and brings decades of experience from leading companies. Consistent themes at all levels of our management are long-tenured experience, focus on team chemistry and active presence in the field, which promote effective change. Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable 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, 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. (1)We define the relevant addressable market as the estimated total dollars spent in markets where a reportable segment offers products. Market growth figures are management estimates of changes in total spending in the relevant addressable market derived from third party data sources. (2)Segment growth based on organic sales growth (excluding acquisitions). HD Supply growth figures exclude the 53rd week of fiscal 2012. 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 (Do not check if a smaller reporting company) Smaller reporting company CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Amount to be Registered(1) Proposed Maximum Aggregate Offering Price Per Share(1)(2) Proposed Maximum Aggregate Offering Price(1)(2) Amount of Registration Fee(3) Common stock, $0.01 par value per share 34,500,000 $25.305 $873,022,500 $112,446 (1)Segment growth based on sales and Adjusted EBITDA growth. Both growth figures include acquisitions and exclude the 53rd week of fiscal 2012. (1)Includes shares/offering price of shares that may be sold upon exercise of the underwriters' option to purchase additional shares. (2)This amount represents the proposed maximum aggregate offering price of the securities registered hereunder. These figures are estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended. The price shown is the average of the high and low sale prices for HD Supply Holdings, Inc.'s common stock on March 27, 2014 as reported on the NASDAQ Global Select Market. (3)Previously paid. Table of Contents Our Strategy Our objective is to strengthen our competitive position, achieve above market rates of profitable growth and increase shareholder value through the following key strategies: Be the First Choice. Our aspiration to be the "First Choice" of customers, associates, suppliers and communities drives our strategy and defines our culture. We seek to strengthen existing customer relationships and cultivate new ones through our customer centric approach and dedication to their success. Our dedication to providing superior work environments, experiences and opportunities supports our efforts to be the "First Choice" of the most qualified and motivated associates in the industry. Similarly, we believe that we maintain excellent relationships with our suppliers and strive to be their first call when choosing a go-to-market strategy for their products. Consistent with our local presence and focus, we actively invest in the communities in which we operate, supporting organizations, programs and events that foster community development both financially and through the volunteer efforts of our associates. Continue to invest in specific, high-return initiatives. Over the past four years, we have invested more than $1 billion into specific, targeted operating and growth initiatives driving profitability and efficient growth. We will continue to leverage these initiatives and invest in additional growth initiatives. We expect these initiatives will help us maintain above market, profitable growth rates. Capitalize on accelerating growth across our multiple and varied end-markets. We have made significant investments and believe we can benefit from the recovery and growth in our end-markets. We have also strategically and operationally positioned ourselves to benefit from a recovery in our end-markets that are exposed to cyclical dynamics. We believe the maintenance, repair and operations market, infrastructure spending and the non-residential and residential construction markets are entering a series of inflection points which will accelerate in sequential, overlapping stages throughout the economic cycle, as they have historically. Additionally, we believe many of our customers delayed required upgrades or repairs during the recent economic downturn, and there is a substantial backlog of projects to be addressed in the coming years. We believe our ample supply capacity and significant operating leverage will result in growth across our various end-markets. Continue to invest in attracting, retaining and developing world class talent. To be the "First Choice," we will maintain and expand our already strong talent base. We develop our employees through specialized training and learning tools. In addition, we deliver attractive opportunities to our associates while spreading knowledge and expertise across our entire organization through frequently redeploying top talent between business units. We believe these opportunities are superior to those offered by much of our competition, and help us develop, attract and retain world class talent. Furthermore, our focus and culture have led to investments in a range of broader associate benefits, such as our "Be Well" program, through which our CEO has challenged each employee to achieve a specified level of physical health (as measured by body mass index and other health targets), which we track and reward across the organization. Continue our focus on operational excellence and speed and precision of execution. Our gross profit as a percentage of Net sales ("gross margin") has increased from 28.0% in fiscal 2009 to 29.1% in fiscal 2013 and our Selling, general and administrative expenses as a percentage of sales declined from 23.0% to 20.4% during the same time period. We emphasize sourcing, pricing discipline and working capital management across all of our business units. As a result of our discipline and ability to successfully leverage our fixed cost infrastructure, our financial performance has improved through the recent downturn. Our continued focus on operational excellence enables us to drive the speed and precision necessary to be the "First Choice." 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 this 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 Attract new customers and develop new market opportunities. We believe the comprehensive nature of our operations across a project lifecycle facilitates extensive, shared market awareness among our business leaders. We believe this widespread market insight enhances our customer relationships as it allows us to partner with customers in understanding their specific needs and providing quality products and services. We intend to capitalize on our market awareness of new projects to maximize sales across all of our business units. Our four principal business units can provide the materials and tools necessary to construct buildings and infrastructure above and below the ground, while also supplying the components needed to keep the operations well maintained. We believe this is the "HD Supply Advantage," or our differentiated ability to "supply the products and services to build your city and keep it running." Supplement strong organic growth with "tuck-in" acquisitions in core and adjacent markets. Our organic growth is complemented by select "tuck-in" acquisitions in core and adjacent markets to supplement our product set, geographic footprint and other capabilities. Our business development team selectively pursues acquisitions that are culturally compatible and meet our growth and business model criteria. As a result of our highly efficient operations, industry leading IT systems, strategically aligned supplier relationships and broad distribution platform, there are opportunities to achieve substantial synergies in our acquisitions, and thereby reduce our effective (post-synergy) transaction multiples. Ownership and Corporate Information Equity Sponsor Overview On August 30, 2007, investment funds associated with Clayton, Dubilier & Rice, Inc., The Carlyle Group and Bain Capital Partners, LLC (collectively the "Equity Sponsors") formed the HD Supply (previously named HD Supply Investment Holding, Inc.) and entered into a stock purchase agreement with Home Depot pursuant to which Home Depot agreed to sell to HD Supply, or to a wholly-owned subsidiary of HD Supply, certain intellectual property and all the outstanding common stock of HDS and the Canadian subsidiary CND Holdings, Inc. On August 30, 2007, through a series of transactions, HD Supply's direct wholly-owned subsidiary, HDS Holding Corporation, acquired direct control of HDS through the merger of its wholly-owned subsidiary, HDS Acquisition Corp., with and into HDS and CND Holdings, Inc. Through these transactions (the "2007 Transactions"), Home Depot was paid cash of $8.2 billion and 12.5% of HD Supply's then outstanding common stock. On July 2, 2013, we completed an initial public offering ("IPO") of 61,170,212 shares of our common stock on the NASDAQ Global Select Market ("NASDAQ"). As of February 2, 2014, investment funds associated with the Bain, Carlyle and CD&R (each as defined below and, collectively our "Equity Sponsors") owned approximately 57% of our outstanding capital stock without giving effect to outstanding options. The Equity Sponsors are in the business of making investments in companies, and may from time to time in the future acquire controlling interests in businesses that complement or directly or indirectly compete with certain portions of our business. If the Equity Sponsors pursue such acquisitions in our industry, those acquisition opportunities may not be available to us. Bain Capital Partners, LLC. Bain Capital Partners, LLC is a global private investment firm, whose affiliates include Bain Capital Partners, LLC (along with its associated private equity investment funds, or any successor to its investment management business, "Bain"), that manages several pools of capital including private equity, venture capital, public equity, credit products and absolute return investments with over $70 billion in assets under management. Since 1984, Bain's private equity affiliates have made over 260 investments in a variety of industries around the world. Currently, Bain has a team of over 250 investment professionals supporting its private equity investments and portfolio companies. The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold 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 or jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED APRIL 30, 2014 30,000,000 Shares HD Supply Holdings, Inc. Common Stock All of the shares of common stock of HD Supply Holdings, Inc. being sold in this offering are being sold by the selling stockholders identified in this prospectus. HD Supply Holdings, Inc. will not receive any of the proceeds from the sale of the shares being sold by the selling stockholders. The common stock of HD Supply Holdings, Inc. is listed on the NASDAQ Global Select Market under the symbol "HDS." The last reported sale price of our common stock on April 25, 2014 was $25.93 per share. See "Risk Factors" on page 17 to read about factors you should consider before buying shares of our common stock. Price to Public Underwriting Discounts and Commissions(1) Proceeds to Selling Stockholders Per Share $ $ $ Total $ $ $ (1)See "Underwriting" for additional compensation details. The underwriters also may purchase up to 4,500,000 additional shares from the selling stockholders at the offering price less the underwriting discounts and commissions. HD Supply Holdings, Inc. will not receive any of the proceeds from the shares of common stock sold by the selling stockholders pursuant to any exercise of the underwriters' option to purchase additional shares. Neither the Securities and Exchange Commission ("SEC") 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 underwriters expect to deliver the shares to purchasers on or about , 2014. BofA Merrill Lynch Barclays Credit Suisse J.P. Morgan Citigroup Deutsche Bank Securities Goldman, Sachs & Co. Morgan Stanley UBS Investment Bank Wells Fargo Securities Baird William Blair Raymond James BB&T Capital Markets SunTrust Robinson Humphrey Drexel Hamilton Guzman & Company The date of this prospectus is , 2014. Table of Contents Headquartered in Boston, Bain Capital, LLC has offices in New York, Palo Alto, Chicago, London, Luxembourg, Munich, Hong Kong, Shanghai, Tokyo, and Mumbai. The Carlyle Group. The Carlyle Group (along with its associated investment funds, or any successor to its investment management business, "Carlyle") is a global alternative asset manager with $189 billion of assets under management in 118 active funds and 100 fund of fund vehicles as of December 31, 2013. Carlyle invests across four segments Corporate Private Equity, Real Assets, Global Market Strategies and Solutions in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle employs more than 1,500 people in 34 offices across six continents. Select portfolio companies include: Nielsen, AMC, Allison Transmission, Axalta Coating Systems, and Getty Images. Clayton, Dubilier & Rice, LLC. Clayton, Dubilier & Rice, LLC (along with its associated investment funds, or any successor to its investment management business, "CD&R") is a private equity firm composed of a combination of financial and operating executives pursuing an investment strategy predicated on building stronger, more profitable businesses. Since its founding in 1978, CD&R has managed the investment of more than $19 billion in 59 businesses with an aggregate transaction value of more than $90 billion. CD&R has a disciplined and clearly defined investment strategy with a special focus on multi-location services and distribution businesses. CD&R has a long history of investing in market leading distribution businesses, including US Foods, the second largest broadline foodservice distributor in the U.S., Rexel, the leading distributor worldwide of electrical supplies, Diversey, a leading global manufacturer and distributor of commercial cleaning, sanitation and hygiene solutions, and AssuraMed, a specialty retailer and distributor of medical supplies. Table of Contents *Does not give effect to outstanding options. (1)Has pledged all of the capital stock of HDS as security for our outstanding indebtedness. (2)Borrower of our outstanding indebtedness. See "Description of Certain Indebtedness." (3)Domestic operating subsidiaries are guarantors of our outstanding indebtedness. See "Description of Certain Indebtedness." * * * * * HD Supply Holdings, Inc. is a Delaware corporation. Our principal executive offices are located at 3100 Cumberland Boulevard, Suite 1480, Atlanta, Georgia 30339, and our telephone number at that address is (770) 852-9000. Our website is www.hdsupply.com. Information on, and which can be accessed through, our website is not incorporated in this prospectus or the documents incorporated by reference into this prospectus. Table of Contents
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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 Kismet, Inc. ("Kismet" or the "Company") was incorporated in the State of Nevada on February 4, 2013. Our company plans to become an e-commerce marketplace that connects companies that need work done with people who want to work and get paid through our website located at, www.kismetcrowd.com, which is not yet operational. Our corporate headquarters are located at 1516 E Tropicana Ave, Suite 155, Las Vegas, Nevada 89119. The Company will be an Internet-based company that breaks down a task that a company wants completed into a smaller set of tasks that we can complete using our work platform. The goal of the Company is to utilize the proven business models, where users do small tasks for which computers lack aptitude for small amounts of money. Our strategy will utilize many of the same ideas, yet will capitalize on three key features: Content Moderation Services, Data Services, and Digital Transcription Services. Although we were only recently incorporated and have not yet commenced business operations, we believe that conducting this Offering will allow the Company 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 any of the shares being offered hereunder; however, we believe that investors in today's markets demand full transparency and by our registering this Offering and becoming a reporting company, we will be able to meet this demand. Currently, we are not a fully reporting company, and there is no public trading market for our Common Stock and no such market may ever develop, which may limit the Company s ability to raise funds through equity financings or to use its shares as consideration. However, management believes that the Company will be able to meet all requirements to be quoted on the OTC Bulletin Board including being current in all required filings with the Securities and Exchange Commission ("SEC") following the declared effectiveness of this Offering. Further, even though the Company s 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 Further, our sole officer and director has only recently become interested in creating an Internet-based company, and does not have any professional training or technical credentials in the development and maintenance of websites. Nevertheless, Mr. Kim has several years of management experience and intends to devote a significant amount of time and effort to the Company. He is in charge of overseeing all development strategies, supervising any and all future personnel, including any consultants or contractors that we will engage to assist in developing our website platform and the establishment of our future sales team. To this end, we intend to retain a qualified website developer on a contract basis to build the website platform that we envision. Although, we do not have any verbal or written agreements regarding the retention of any qualified website developer, we have been in contact with several graphic design companies and website developers in order to estimate the expected costs of our website launch. 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 financing to supplement cash flows, if any, generated by our products and services. We will seek out such financings as necessary to allow the Company to continue to grow our business operations and to cover such costs, excluding professional fees, associated with being a reporting Company with the SEC, although we will not be a fully reporting company. We estimate such costs to be approximately $40,000 for 12 months following this Offering. The Company has included such costs to become a publicly reporting company in its targeted expenses for working capital expenses and intends to seek out reasonable investments from friends, family and business acquaintances if it becomes necessary. At this point we have been funded by our sole officer and director, and have not received any firm commitments or indications from any family, friends or business acquaintances regarding any potential investment in the Company. Our current cash and working capital is not sufficient to cover our current estimated expenses of $40,000, 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. Given that this is a best efforts offering in which there is no assurance that we will be able to sell any securities, there is no guarantee that our company will be able to raise sufficient capital from this offering to market, grow, and meet our capital requirements for the year using the proceeds. If our best efforts offering is successful, though there is no guarantee in the success of our selling efforts, we believe we may generate sufficient funds from the offering to 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 $40,000 or less through our best efforts Offering, we will have to seek out additional capital from alternate sources to execute our business plan. This amount will allow us to cover our offering expenses and to develop and launch our website. Currently the Company does not have any outstanding financial obligations. 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. As we are a start-up company, it is unclear how much revenue our operations will generate; however, it is our hope that our revenues will exceed our costs. Our potential to generate revenue can be affected by the strength of our proposed website platform, our marketing and advertising strategies, the number of employees and consultants we will retain, and several other factors. These factors are directly related to the amount of proceeds we receive from this Offering, as the greater amount of proceeds we receive, the greater amount of capital we can use towards our business operations (see "Use of Proceeds" chart). Neither the Company, Mr. Kim, nor any other affiliated or unaffiliated entity of the Company or Company promoters has any plans to use the Company as a vehicle for a private company to become a reporting company once Kismet, Inc. becomes a reporting company, though not a fully reporting company. Additionally, we do not believe that the Company is a blank check company as defined in Section a(2) of Rule 419 under the Securities Act of 1933, as amended, because the Company has a specific business plan and has no plans or intentions to engage in a merger or acquisition with an unidentified company, companies, entity or person. We are an Emerging Growth Company as defined in the Jumpstart Our Business Startups 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 registration statement under this title; (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 exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes. We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act. For a further discussion of our Company, plan of operations, growth strategy and marketing strategy see the below section entitled "Description of Business". Table of Contents As an emerging growth company, we are entitled to the following exemptions from, and modifications of, the disclosure, accounting, auditing and other requirements that would otherwise apply. Reduced Financial Statement and MD&A Disclosure: Emerging growth companies are required to provide only two years of audited financial statements (instead of three) plus unaudited interim financial statements. If an emerging growth company is required to include separate financial statements for an acquired business, the maximum time period for which such separate financial statements must be provided is also two eyars, regardless of the significance of the acquisition under Regulation S-X. In addition, an emerging growth company need not present selected financial data in the Form S-1 or other registration statements or Exchange Act reports for any period prior to the earliest audited period present in its registration statement. Similarly, MD&A must cover only the fiscal period presented in the required financial statements. Over time, a third year of audited financial statements (and corresponding MD&A) and up to five years of selected financial data will be required in other registration statements and Exchange Act reports filed by the emerging growth company. Delayed Application of New Accounting Standards: Emerging growth companies are not subject to any accounting standards that are adopted or revised on or after April 5, 2012, unless and until these standards are required to be applied to non-public companies (companies that are not subject to the reporting requirements of the Exchange Act and have not filed a pending registration statement under the Securities Act), although emerging growth companies may elect to be subject to such accounting standards at the time they become applicable to public companies. This election must be made on an "all or nothing" basis and is irrevocable. Exemption from New PCAOB Audit Requirements: Emerging growth companies are exept from any future mandatory audit firm rotation requirement and any rules requiring that auditors supplement their audit reports with additional information about the audit or financial statements of the company (a so-called auditor discussion and analysis) that the PCAOB might adopt. Any other new auditing standards adopted by the PCAOB will not apply to audits of emerging growth companies unless the SEC determines that application of the new rules to audits of emerging growth companies is necessary or appropriate in the public interdt, after considering the protection of investors and whether the action will promote efficiency, competition, and capital formation. Reduced Executive Compensation Disclosures: An emerging growth company is allowed to provide the "scaled" executive compensation disclosures previously available only to smaller reporting companies. As a result, an emerging growth company need not provide CD compensation information is required only for three named executive officers (including the CEO) ; only three of the seven compensation tables otherwise required must be provided; the Summary Compensation Table is only required to cover two years (as opposed to three): and narrative disclosure of compensation policies and practices as they relate to risk management is not required. Expansion of Permitted Investor Communications: Emerging growth companies and their agents have more freedom to communicate with potential investors that are "qualified institutional buyers" (as defined by Rule 144A) or institutions that are "accredited investors" (as defined by Regulation D), both before and after the filing of a registration statement or other securities offering (including during the quiet period). Confidential Submission of Registration Statements: An emerging growth company is permitted to submit a draft Form S-1 (and amendments to the Form S-1) to the SEC for confidential review instead of filing it publicly. A Form S-1 that is confidentially submitted must be substantially complete, including all required financial statements, signed audit reports covering the audited financial statements presented in the Form S-1, and exhibits, but need not be signed by the company or its directors or principal officers, include consents from auditors or other experts, or be accompanied by the registration fee. Required signatures, consents, and the registration fee are provided upon the first public filing. The SEC review process for a confidential submission is generally the same as for a public filing. Confidential submissions are exempt from Freedom of Information Act requests, but the initial submission and all amendments must be filed publicly no later than twenty-one days before the road show commences (or twenty-one days before effective of the Form S-1, if there is no road show). This twenty-one day period is intended to give the market sufficient time to digest the Form S-1 before marketing of the offering commences. Relaxation of Research Analyst Restrictions: Research analysts have greater ability to communicate with investors and with the management of an emerging growth company in connection with the company registration statement. Research analysts are permitted to attend meetings with the company s management at which other broker-dealer personnel, including investment bankers participating in the registration statement, are present, and are also able to attend investor meetings arranged by investment bankers. In addition, brokers-dealers, including underwriters participating in the registration statement, may public research reports and make public appearances regarding the company both prior to and after the filing of a registration statement for an offering of common equity securities, during any prescribed post-offering blackout period, and during any blackout period prior to or after the expiration, termination, or waiver of an lockup period. However, most major investment banks remain constrained by the global settlement. Exemption from Internal Controls Audit Attestation: Emerging growth companies are exempt from the requirement under section 404(b) of the Sarbanes-Oxley Act that an independent registered public accounting firm audit and report on the effectiveness of a company s internal control over financial reporting (ICFR). However, emerging growth companies are not exempt from the requirement to maintain an effective system of ICFR and to provide an annual management report on the ICFR and a quarterly ICFR certification from the CEO and CFO. Exemption from Say-on-Pay, Say-on-Frequency, and Say-on-Parachute Requirements: Emerging growth companies are exempt from the requirements mandated by the Dodd-Frank Act that companies seek stockholder approval of an advisory vote on their executive compensation arrangements, including golden parachute compensation. Exemption from Additional Compensation Disclosures: Emerging growth companies are exempt from the Dodd-Frank Act requirements, which remain subject to SEC rulemaking, to include disclosures about the relationship between executive compensation and financial performance and the ratio between CEO compensation and median employee compensation. In general, an issuer that has a public float of less than $75 million qualifies as a smaller reporting company and, as a result, may avail itself of the scaled executive compensation provisions of Item 402. Under Item 10(f)(2)(iii), however, "once an issuer fails to qualify for smaller reporting company status, it will remain unqualified unless . . . its public float . . . was less than $50 million as of the last business day of its second fiscal quarter." As a result, unless the Commission or its staff issues rules or guidance to the contrary, Section 102(c) of the JOBS Act will not enable an existing issuer as of the time that the JOBS Act was enacted (i.e., that went public after December 8, 2011 and before the JOBS Act was signed into law) that is an Emerging Growth Company, but that has previously failed to qualify as a smaller reporting company, to take advantage of the scaled executive compensation disclosure provisions. The scaled disclosure requirements available to smaller reporting companies overlap with those available to emerging growth companies, but the provisions are not identical. The scaled disclosure requirements for smaller reporting companies may be available to us if and when we cease being an emerging growth company. In many cases, the disclosure requirements applicable to smaller reporting companies are less burdensome than those applicable to emerging growth companies, with a few notable exceptions, such as exemptions from the requirement to provide an auditor attestation report under Section 404(b) of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act), and exemptions from certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) relating to executive compensation. The exhibit filing requirement for all material contracts not made in the ordinary course of business, as well as the requirement that all issuers submit financial information in XBRL format for periodic reports and other public filings. the requirement in Exchange Act Section 14A(a) to conduct shareholder advisory votes on executive compensation and on the frequency of such votes; the requirement in Exchange Act Section 14A(b) to provide disclosure about and conduct shareholder advisory votes on golden parachute compensation; the requirement in Section 953(b) of the Dodd-Frank Act to provide disclosure of the ratio of the median annual total compensation of all employees of the issuer to the annual total compensation of the chief executive officer (when adopted); the requirement in Exchange Act Section 14(i) to provide disclosure of the relationship between executive compensation and issuer financial performance (when adopted); in the case of a new or revised financial accounting standard that has different compliance dates for public and private companies, the requirement to comply with any such financial accounting standard until the date that a private company is required to comply; and any rules of the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer (auditor discussion and analysis). While Section 102(c) of the JOBS Act permits an emerging growth company to comply with the smaller reporting company version of Item 402 of Regulation S-K, Section 102(c) does not permit an emerging growth company to comply with the smaller reporting company provisions of Item 303 of Regulation S-K. Instead, Section 102(c) permits an emerging growth company, in its MD&A, to discuss only those audited periods presented in its audited financial statements. Therefore, if in the registration statement for its initial public offering of common equity securities, an emerging growth company s audited financial statements cover only two years, as permitted by Section 7(a) of the Securities Act, then the company can limit its MD&A discussion to those two years. Unless it is a smaller reporting company, an emerging growth company is required to present three years of financial statements in its registration statement on Form 10 or Form 20-F. Section 7(a)(2)(A) of the Securities Act, which permits two years of financial statements, applies only to the registration statement for the initial public offering of common equity securities. Table of Contents SUMMARY OF THIS OFFERING The Issuer Kismet, Inc. Securities being offered Up to 4,000,000 shares of Common Stock, our Common Stock is described in further detail in the section of this prospectus titled "DESCRIPTION OF SECURITIES – Common Stock." Offering Type
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001576573_gulfstream_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001576573_gulfstream_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 you should consider before investing in our securities. You should read the entire prospectus, including Risk Factors and the consolidated financial statements and the related notes before making an investment decision. We, us, our company, our, Gulfstream and the Company refer to Gulfstream Capital Corporation, but do not include the shareholders of Gulfstream Capital Corporation. Business Overview We were incorporated under the laws of the State of Nevada on December 29, 2010. We are an exploration-stage company engaged in exploration in Saskatchewan Province, Canada, for commercially recoverable metal-bearing mineral deposits, such as diamond bearing kimberlite bodies. We have not yet identified any proven or probable mineral reserves, and only limited exploration activity has so far been undertaken, primarily by governmental bodies in Saskatchewan Province. Provided that we successfully identify commercializable mineral deposits, we intend to engage in a joint venture or partnership with a larger, more established mining operator to commence mining, processing and distributing the mineral deposits. Currently we have no operations, have been issued a going concern opinion and rely upon the sale of our securities and loans from our officers and directors to fund operations. Even if we sell the maximum number of securities offered by this prospectus, we will likely need from this require additional offerings from time to time to complete our exploration of the property. If we are unable to complete financing, we will have to find alternative sources, which may include private placements of securities, debt or loans from our officers or others. If we raise 50% of the funds through sales of the securities offered hereby, we will be able to only commence the initial phase of exploration. It is unlikely that we will be able to make our exploration commercially viable if we are unable to continue exploration. We believe we will need to raise a minimum of $40,000 from this offering in order to remove uncertainties surrounding our ability to continue as a going concern. We cannot guarantee that we will be able to raise enough money through this offering to stay in business. Whatever money we do raise, will be applied to the items set forth in the Use of Proceeds section of this prospectus. If we do not raise all of the money we need from this offering to complete our exploration of the property, we will have to find alternative sources of capital, like a second public offering, a private placement of securities, or loans from our officers or others. At the present time, we have not made any arrangements to raise additional cash, other than through this offering. If we need additional cash and can't raise it we will either have to suspend operations until we do raise the cash, or cease operations entirely. If we raise the maximum amount of money from this offering, it will last a year. If we raise less than the maximum amount, we do not believe the money will last a year. Even if all shares are sold in this offering we may not have sufficient available cash in order to maintain operations during the next twelve months without the need for additional funds. We are in the very early exploration stage and need the proceeds from this offering to start exploration. Our exploration program is explained in greater detail in the business section of this prospectus. Our officer, director and shareholder, Mr. Harry Hohenstein has advanced monies to the Company to assist with expenses arising from this offering. Mr. Hohenstein is currently owed $25,400 as a result of a loan to the Company on a non-interest bearing loan; the repayment of which is on a demand basis and without specific terms for repayment. No interest will be paid to him although interest may be required to be imputed for tax and financial reporting purposes. For more information on the priority and amount of his repayment please view the section of this Prospectus entitled Use of Proceeds.
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001580185_j-g_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001580185_j-g_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001581617_rhythm_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001581617_rhythm_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..bc6d31c727f4ab17001ce437f8681787f29438be
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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 investing in our common stock, you should read the entire prospectus carefully, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes. Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will convert into a Delaware corporation, change our name to Rhythm Pharmaceuticals, Inc. and engage in other related transactions. See "Conversion." Except where the context otherwise requires or where otherwise indicated, the terms "Rhythm," "we," "us," "our," "our company," "the company," and "our business" refer, prior to the Conversion discussed below, to Rhythm Holding Company, LLC (or, as applicable, its predecessor company) and its consolidated subsidiaries and, after the Conversion, to Rhythm Pharmaceuticals, Inc. and its consolidated subsidiaries. Business Overview We are a biopharmaceutical company focused on the development and commercialization of peptide therapeutics for the treatment of gastrointestinal, or GI, diseases, and genetic deficiencies that result in metabolic disorders. Our lead product candidate, relamorelin, is a potent, best-in-class, Phase 2 ghrelin agonist for the treatment of diabetic gastroparesis, a GI complication of diabetes, and other GI functional disorders. We are also developing a second product candidate, RM-493, which is a potent, first-in-class, Phase 2 ready melanocortin-4, or MC4, receptor agonist for the treatment of obesity caused by genetic deficiencies in the MC4 pathway. We believe our product candidates, which are both administered by subcutaneous injection, and for which we have exclusive worldwide rights, have the potential to treat these diseases for which there are currently limited therapeutic options. We believe that ghrelin and MC4 are compelling targets because of their critical role in regulating GI function and metabolism, and that peptide therapeutics are well-suited for activating these targets. Relamorelin targets the receptor for ghrelin, which is a naturally occurring hormone that plays a critical role in GI motility, or the movement of food through the GI tract, digestion and the absorption of nutrients. Prior drugs targeted the same GI motility disorders, primarily through either the serotonin or dopamine receptors, but had significant safety issues. First generation ghrelin agonists were small molecules with limited potency and efficacy. In contrast, the relamorelin peptide retains the specificity and functionality of the naturally occurring ghrelin peptide, and is designed to increase GI motility, with markedly greater potency than both naturally occurring ghrelin and the first generation small molecule agonists of ghrelin. RM-493 targets the receptor for MC4, which is a key pathway that regulates energy, homeostasis, and food intake. The first generation of MC4 agonists were predominantly small molecules that failed in clinical trials due to safety issues, particularly increases in blood pressure, and had limited efficacy. In contrast, the RM-493 peptide retains the specificity and functionality of the naturally occurring hormone that activates MC4, and our initial Phase 1 and Phase 2 clinical trials have shown promising evidence of weight loss without adversely increasing blood pressure. Amendment No. 1 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents We are responsible for the information contained in this prospectus. We have not authorized anyone to provide you with different information, and we take no responsibility for any other information others may give you. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than its date. TABLE OF CONTENTS Page Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001583991_vip_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001583991_vip_prospectus_summary.txt
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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. Company management has determined that it is in the best interests of the Company to become a reporting company under the Securities And Exchange Act of 1934, and endeavor to establish a public trading market for the Company common stock, because management believes: (i) it will increase the Company s profile as an active company in the Direct Response Marketing Market, giving it greater identity and recognition which will help in conducting its business: (ii) it will make it easier for the Company to obtain terms from vendors and negotiate licenses for products it selects to market; (iii) it will make it easier for the Company to attract additional equity capital, which the Company needs in order to further implement its business plan; and (iv) it will give existing shareholders who funded the Company on a private basis in the past, the opportunity to exit a part or all of their investment in the Company and diversify their investments. However, the Company is a development stage company; this offering will not raise additional capital for the Company since only the shares of selling shareholders are being registered; the Company will have to locate approximately one million dollars in additional capital over the next 12 months in order to fully pursue its business plan and there is no assurance it will be successful in doing so; being a public company entails significant additional expense which the Company will have to fund; there is currently no public market for the Company s common stock and one may never develop; and if a public market is created, it is likely the Company s common stock will be traded as a penny stock. As a result, prospective investors are cautioned to carefully read the risk factors set forth herein prior to making an investment decision. VIP Loyalty Corp. qualifies as an "emerging growth company" as defined in the Jumpstart our Business Startups Act (the "JOBS Act"), and will therefore be subject to reduced public company reporting requirements. An emerging growth company is a company with annual gross revenues of less than $1,000,000,000 during its most recently completed fiscal year. An emerging growth company retains its status and reduced regulatory and reporting requirements associated with it until the earliest of: the last day of the first fiscal year during which the Company has annual gross revenues of $1,000,000,000 or more; the last day of the first fiscal year following the fifth anniversary of the Company's initial public offering ("IPO"); the date on which the Company has, during the previous three year period, issued more than $1,000,000,000 in non-convertible debt; or the date on which the Company is deemed to be a large accelerated filer. The Company is an emerging growth company for purposes of the Securities Act and the Securities Exchange Act if the first sale of common equity securities of such issuer pursuant to an effective registration statement under the Securities Act occurred on or before December 8, 2011. The Company is exempt from certain regulatory and reporting requirements under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The JOBS Act facilitates the IPO process for emerging growth companies by exempting them from: Section 14A(a) and (b) of the Exchange Act implemented by Section 951 of the Dodd-Frank Act, which requires companies to hold shareholder advisory votes on executive compensation and golden parachute compensation; Section 14(i) of the Exchange Act, which will require companies to disclose the relationship between executive compensation actually paid and the financial performance of the company; Section 953(b)(1) of the Dodd-Frank Act, which will require companies to disclose the ratio between the annual total compensation of the chief executive officer and the median on the annual total compensation of all employees of the respective company; The requirement to provide certain other executive compensation disclosure under Item 402 of Regulation S-K, of which an emerging growth company will be required to comply only with the more limited provisions of Item 402 applicable to smaller reporting companies; An emerging growth company will not be required to provide an auditor's attestation report on internal financial reporting controls under Section 404(b) of the Sarbanes-Oxley Act of 2002; Calculation of Registration Fee Title of Each Class of Securities To be Registered Amount to be Registered Proposed Maximum Offering Price Per Share(1) Proposed Maximum Aggregate Offering Price(1) Amount of Registration Fee Common Stock, $.00001 par value(2) 1,875,000 $ 0.50 $ 937,500 $ 127.88 (1) Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(o) promulgated under the Securities Act of 1933, as amended. Includes stock to be sold by the selling stockholders. (2) The shares of common stock being registered hereunder are being registered for resale by certain selling stockholders named in the prospectus. 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 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 the offer or sale is not permitted. An emerging growth company will not have to comply with any rules that the Public Company Accounting Oversight Board might adopt requiring audit firm rotation or auditor discussion and analysis of the issuer's financial statements. Under the JOBS Act, emerging growth companies are subject to scaled financial disclosure requirements. Pursuant to these scaled requirements, emerging growth companies may: (i) provide only two rather than three years of audited financial statements in their IPO Registration Statement; (ii) (ii) provide selected financial data only for periods no earlier than those included in the IPO Registration Statement in all SEC filings, rather than the five years of selected financial date normally required; (iii) (iii) delay compliance with new or revised accounting standards that have different effective dates for public and private companies until they are made applicable to private companies; and (iv) be exempted from compliance with Section 404(b) of the Sarbanes-Oxley Act, which requires companies to receive an outside auditor's (iv) attestation regarding the issuer's internal controls. We have decided to take advantage of the exemptions provided to emerging growth companies as outlined above. 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, during the IPO offering process, emerging growth companies are exempt from: (i) restrictions on analyst research prior to and immediately after the IPO, even from an investment bank that is underwriting the IPO; (ii) (ii) certain restrictions on communications to institutional investors before filing the (iii) IPO registration statement; and (iii) the requirement initially to publicly file IPO Registration Statements. Emerging growth companies can confidentially file draft Registration Statements and any amendments with the SEC. Public filings of the draft documents must be made at least 21 days prior to commencement of the IPO "road show." Corporate Background and Our Business The Company is a development stage company that is in the process of implementing its business plan, but has had no revenues to date. We are not a blank check company and have no plans or intention to engage in a merger or acquisition with an unidentified company, companies, entity or person, nor do we nor any of our affiliates intend for the Company, once it is publicly traded, to be used as a vehicle for some other private company to become a publicly traded company. VIP Loyalty Corp. was incorporated in the State of Nevada on February 23, 2012. On June 30, 2012, the Company acquired all of the issued and outstanding shares of capital stock of VIPMEMBERS Corporation, a Nevada corporation ( VIP Members ), which was formed on October 20, 2010. VIP Members is now a wholly owned subsidiary of the Company. VIP Members' assets include the Un-Coupon , which is an exclusive patent pending customer loyalty program, designed, copyrighted, and trademarked by VIP Members that does not use highly discounted, prepaid paper coupons to entice new customers to a business. Through the use of SMS technologies, email, and social media, VIP Members provides businesses with tools to communicate with their clientele in a simple, yet personalized, manner. VIP Members gives these businesses the ability to treat all of their loyal customers like VIP s . The core value proposition of VIP Members is identifying each VIP s preferences and desire for recognition and special treatment from the businesses they choose to frequent. This VIP recognition and the unique relationship created between the customer and the merchant is the vital foundation for many successful businesses. The VIP Members system delivers highly personalized text messages and emails to the VIP Merchant s existing customers, engaging them with once or twice weekly offers called VIP Member Perks. These VIP Member Perks are based on their previous purchases and preferences. The above-described members services through the Un-Coupon are still in the development stage and not presently being used in the operations of the Company. The Company has not yet generated any revenue from these assets or services. Dealer Prospectus Delivery Obligation Until _____________, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. Subject to Completion Dated March 3, 2014 PROSPECTUS VIP Loyalty Corp. 1,875,000 Shares of Common Stock The selling stockholders named in this prospectus are offering 1,875,000 shares of common stock of VIP Loyalty Corp. at a price of $0.50 per common share. The selling stockholders currently hold 9.96% of our common stock. We will not receive any of the proceeds from the sale of these shares. The shares were acquired by the selling stockholders directly from us in a private offering of our common stock that was exempt from registration under the securities laws. The selling stockholders have set an offering price for these securities of $0.50 per common share This is a fixed price for the duration of the offering whether or not the common stock becomes quoted by a market maker on the Over-the-Counter Bulletin Board. The selling stockholders are an underwriter, within the meaning of Section 2(11) of the Securities Act. Any broker-dealers or agents that participate in the sale of the common stock or interests therein are also be deemed to be an "underwriter" within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit earned on any resale of the shares may be underwriting discounts and commissions under the Securities Act. The selling stockholders, who are an "underwriter" within the meaning of Section 2(11) of the Securities Act, are subject to the prospectus delivery requirements of the Securities Act. See Security Ownership of Certain Beneficial Owners for more information about the selling stockholders. Please note that this registration statement covers the sale of 9.96% of the Company s outstanding securities. Our common stock is presently not traded on any market or securities exchange. The offering price may not reflect the market price of our shares after the offering. AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. Please refer to Risk Factors on page 4 of this prospectus for details regarding the risks related to our financial condition and business model as well as risks generally associated with the Direct Responses Marketing Indusry. 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 UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. 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 is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Proceeds to the selling stockholders do not include offering costs, including filing fees, printing costs, legal fees, accounting fees, and transfer agent fees estimated at $30,000. The Company will pay these expenses. This Prospectus is dated March 3, 2014 VIP Members is a sharply focused, preference and permission based marketing service that works automatically on any mobile device, does not require downloading an app, and can save businesses literally thousands of dollars monthly in advertising costs. There are no written forms for customers or wait staff to fill out, and loyal customers opt-in to their favorite retailer s VIP Members loyalty program with a simple text message. VIP Members will then receive personalized messages on their mobile phone with the special offers, free favorite menu items or drinks, timely information, and offers from trusted businesses that already have a proven relationship with the customer. Businesses who have signed on to become VIP Merchants will pay a monthly, or quarterly, fee in advance. VIP Loyalty Corp. has developed a similar approach for the healthcare industry, called VIP Patients . VIP Patients utilizes SMS messages and emails to create a line of communication between the healthcare providers and their patients. Through the use of our software, doctors and other members of the healthcare community will be able to reach their patients in a quick, simple fashion. Whether it is to remind a patient of an upcoming appointment or to let patients know that there are appointment times available, doctors will be able to use VIP Patients to reach their clientele easily and efficiently. Patients will receive messages from their physicians regarding treatment, health tips, etc. VIP Patients not only saves members of the healthcare community time, but it also makes the process of scheduling appointments easier for patients. VIP Patients provides a real-time tool to assist patients with reminders for their medications, as well as prescribed treatments and health tips. Pricing for VIP Patients is structured exactly like VIP Members. VIP Loyalty Corp. owns www.vip-patients.com and www.vip-patients.net. Our current headquarters are located at 123 North Post Oak Lane, Suite 440, Houston, TX 77024. Our website is located at www.vipmembers.com. Our telephone number is 713-621-2737. Going Concern Our financial statements have been prepared assuming we will continue as a going concern. The Company has experienced a loss from operations during its development stage as a result of its investment necessary to achieve its operating plan. The Company's ability to continue as a going concern is contingent upon its ability to obtain additional capital to achieve its goals, and ultimately, to attain profitable operations. Management has been able, thus far, to finance the losses of the business through private placements of its common stock and the private issuance of debt, but future sources for additional capital are uncertain at this date. We project that the Company will need over the next 12 months one million dollars in additional working capital to meet short term liquidity requirements. See Risk Factors and Business herein. THE OFFERING Securities offered: 1,875,000 shares of common stock selling stockholders: Offering price: $0.50 per share Shares outstanding prior to the offering: 9,825,000 shares of common stock; Shares to be outstanding after the offering: 9,825,000 shares of common stock Use of proceeds: The Company will not receive any proceeds from the sale of the common stock by the selling stockholders. TABLE OF CONTENTS GENERAL 1 PROSPECTUS SUMMARY 1
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus carefully before making an investment decision, including the information included under the headings "Risk Factors," "Cautionary Statement Regarding Forward-Looking Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical and pro forma combined financial statements and the notes to those financial statements appearing elsewhere in this prospectus. The information presented in this prospectus, unless otherwise indicated, assumes that the underwriters do not exercise their option to purchase additional shares of common stock. In connection with RSP Permian, Inc.'s initial public offering (our "IPO"), which was completed in January 2014, and pursuant to the terms of a corporate reorganization, all of the interests in RSP Permian, L.L.C. were exchanged for shares of common stock of RSP Permian, Inc. Additionally, in connection with our IPO, certain owners of working interests and net profits interests in RSP Permian, L.L.C.'s oil and natural gas properties contributed all or substantially all of such interests to RSP Permian, Inc. in exchange for, among other things, shares of common stock of RSP Permian, Inc. See " Our IPO and Related Transactions" for more information regarding these contributions. These contributions, our IPO and the other transactions described in " Our IPO and Related Transactions" are collectively referred to in this prospectus as the "Transactions." Except as expressly stated or the context otherwise requires, references to our operations and assets give effect to the Transactions, and the terms "we," "us," "our" and "RSP" refer, prior to the Transactions, to RSP Permian, L.L.C. and, after the Transactions, to RSP Permian, Inc. and its subsidiary, RSP Permian, L.L.C. This prospectus includes certain terms commonly used in the oil and natural gas industry, which are defined elsewhere in Annex A to this prospectus. Our Company We are an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Dawson and Ector. Since our inception in 2010, we have participated in the drilling of over 330 vertical Wolfberry wells and served as the operator of over 190 of those wells. In late 2012, our primary focus shifted to drilling horizontal wells. We believe horizontal drilling provides more attractive returns on a majority of our acreage. We target the multiple oil and natural gas producing stratigraphic horizons, or stacked pay zones, on our properties. Beginning in 2012, we were among the first operators to successfully drill and complete a horizontal well in the core of the Midland Basin targeting the Wolfcamp B formation. In addition, we are the operator of what we believe is the first horizontal well completed in the Middle Spraberry shale in the Midland Basin, which came on production in the fourth quarter of 2013. We also believe we were the first operator to successfully drill and complete a horizontal well targeting the Lower Spraberry shale in the Permian Basin. We recently drilled our first successful horizontal well targeting the Wolfcamp A formation on a dual-well pad with a second completion into the Wolfcamp B formation, without any communication between the zones. Since initiating our horizontal drilling program, we have participated in the drilling and completion of 75 horizontal wells (36 of which we operate), which have targeted the Middle Spraberry, Lower Spraberry, Wolfcamp A, Wolfcamp B, Wolfcamp D (Cline) and Clearfork formations on our properties. In addition, we believe that our properties provide horizontal opportunities in several other intervals, such as the Jo Mill, Dean, Strawn, Atoka, Mississippian and Devonian formations. We have 12 horizontal wells we operate in various stages of drilling or completion that target four different Table of Contents The following table provides the high and low prices for NYMEX WTI and NYMEX Henry Hub prompt month contract prices and our differential to the average of those benchmark prices for the periods indicated. The differential varies, but our oil and natural gas normally sells at a discount to the NYMEX WTI and NYMEX Henry Hub price, respectively. Three Months Ended March 31, Year Ended December 31, 2014 2013 2013 2012 2011 Oil: NYMEX WTI High $ 104.92 $ 97.94 $ 110.53 $ 109.77 $ 113.93 NYMEX WTI Low 91.66 90.12 86.68 77.69 75.67 Average NYMEX WTI 98.61 94.41 98.02 94.15 95.11 Differential to Average NYMEX WTI (4.01 ) (9.76 ) (3.47 ) (6.23 ) (3.27 ) NGLs: NGL Realized Price as a % of Average NYMEX WTI 31 % 28 % 30 % 35 % 1 Natural Gas: NYMEX Henry Hub High $ 6.15 $ 4.07 4.46 $ 3.90 $ 4.85 NYMEX Henry Hub Low 4.01 3.11 3.11 1.91 2.99 Average NYMEX Henry Hub 4.72 3.48 3.73 2.83 4.03 Differential to Average NYMEX Henry Hub (0.87 ) (0.74 ) (0.36 ) (0.11 ) Table of Contents percentage of the average NYMEX price for the years indicated. Management uses the realized price to NYMEX margin analysis to analyze trends in our oil and natural gas revenues. Year Ended December 31, 2012 2011 Average realized oil price ($/Bbl) $ 87.92 $ 91.84 Average NYMEX ($/Bbl) 94.15 95.11 Differential to NYMEX (6.23 ) (3.27 ) Average realized oil price to NYMEX percentage 93 % 97 % Average realized NGL price ($/Bbl) $ 32.94 1 Average NYMEX ($/Bbl) 94.15 $ 95.11 Average realized NGL price to NYMEX percentage 35 % 1 Average realized natural gas price ($/Mcf)1 $ 2.72 $ 7.44 Average NYMEX ($/Mcf) 2.83 4.03 Differential to NYMEX (0.11 ) 1 Average realized natural gas price to NYMEX percentage 96 % Amendment No. 3 to Form S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents completeness of this information. Some data is also based on our good faith estimates. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled "Risk Factors." These and other factors could cause results to differ materially from those expressed in these publications. Trademarks and Trade Names We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties' trademarks, service marks, trade names or products in this prospectus is not intended to, and does not imply, a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the , TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, service marks and trade names. Table of Contents horizontal zones on our properties, primarily from multi-well, multi-zone pads to increase our capital efficiency. We expect the remainder of our horizontal wells to be drilled in 2014 on multi-well pads that target multiple horizons on our properties. Currently, all four of our horizontal rigs are drilling from multi-well, multi-zone pads. We believe our vertical drilling program is a strong complement to our horizontal drilling program, and we plan to continue to drill vertical Wolfberry wells. In areas where we drill horizontal wells, vertical drilling, in concert with horizontal drilling, allows us to optimize total hydrocarbon recovery on our acreage, while continuing to provide attractive returns on a standalone basis. In addition, on certain sections of our acreage, vertical drilling provides the most attractive returns. Further, the combination of horizontal and vertical drilling enables us to hold our acreage through our continuous development program. We are currently operating four horizontal rigs and two vertical rigs. We expect to add a fifth horizontal rig during the fourth quarter of 2014 and a sixth horizontal rig during the first quarter of 2015. We expect that approximately 75% of our 2014 drilling and completion budget will be devoted to the drilling of horizontal wells. The Permian Basin is an attractive operating area due to its multiple horizontal and vertical target horizons, favorable operating environment, high oil and liquids-rich natural gas content, substantial existing infrastructure, well-developed network of oilfield service providers, long-lived reserves with consistent reservoir quality and historically high drilling success rates. Operators in the Permian Basin have produced more than 29 billion barrels of oil and 75 trillion cubic feet of natural gas over the past 90 years, and the Permian Basin is estimated to contain recoverable oil and natural gas reserves exceeding that which has already been produced. With oil production of over 960 MBbls/d from over 80,000 wells during 2013, production from the Permian Basin represented 50% of the crude oil produced in Texas and approximately 17% of the crude oil produced onshore in the continental United States during such period. According to the Energy Information Administration of the U.S. Department of Energy, the Spraberry Trend Area, which encompasses the Midland Basin, ranks as the largest onshore oilfield in the continental United States by proved reserves and oil production. We were formed in October 2010 by our management team and an affiliate of Natural Gas Partners ("NGP"), a family of energy-focused private equity investment funds. Prior to our formation, the founding members of our management team successfully built and sold multiple NGP-sponsored oil and natural gas companies. In December 2010, we acquired 15,800 net acres in the Permian Basin with production at the time of acquisition of approximately 1,500 net Boe/d from 107 wells. See " Our IPO and Related Transactions" for information regarding our acquisitions and other transactions since December 2010. We have assembled a multi-year inventory of horizontal and vertical drilling projects. As of June 30, 2014, we had identified 1,572 horizontal drilling locations on our acreage based on approximately 750 to 1,050 foot spacing between wells in the same horizontal zone. Additionally, based on our evaluation of applicable geologic and engineering data, as of June 30, 2014, we had 280 identified vertical drilling locations on 40-acre spacing and an additional 645 identified vertical drilling locations based on 20-acre downspacing. We intend to grow our reserves and production through development drilling, exploitation and exploration activities on our properties and through acquisitions that meet our strategic and financial objectives, targeting oil-weighted reserves. The following table provides a summary of our target horizontal zones and vertical drilling inventory as of June 30, 2014. While our near term drilling program will be focused primarily on the Middle Spraberry, Lower Spraberry, Wolfcamp A and Wolfcamp B intervals underlying our properties, based on our and other operators' well results and our analysis of geologic and engineering data, we believe the Wolfcamp D (Cline) interval is prospective and expect it will be integrated into our future drilling program. We also believe we have the potential to increase our multi-year drilling inventory RSP Permian, Inc. (Exact name of registrant as specified in its charter) 1Our total identified drilling locations include 313 locations associated with proved undeveloped reserves as of December 31, 2013. We have estimated our drilling locations based on well spacing assumptions for the areas in which we operate and other criteria. The drilling locations on which we actually drill will depend on the availability of capital, regulatory approvals, commodity prices, costs, actual drilling results and other factors. Any drilling activities we are able to conduct on these identified locations may not be successful and may not result in our ability to add additional proved reserves to our existing proved reserves. See "Risk Factors Our identified drilling locations are scheduled out over many years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling. In addition, we may not be able to raise the substantial amount of capital that would be necessary to drill such locations." 2Our target horizontal location count implies approximately 750 to 1,050 foot spacing between wells in the same horizontal zone. 3We define short laterals as horizontal lateral lengths ranging from approximately 4,500 to 5,500 feet and long laterals as horizontal lateral lengths ranging from approximately 6,500 to 10,000 feet. The average lateral length of our target horizontal locations is approximately 6,700 feet. 4In addition to these target horizontal zones, we believe we have the potential to increase our multi-year drilling inventory through horizontal downspacing and with additional horizontal locations in the Clearfork, Jo Mill, Dean, Strawn, Atoka, Mississippian and Devonian formations. 5As of June 30, 2014, seven and 103 of our 2,497 total target horizontal and vertical locations are associated with acreage that will expire in 2014 and 2015, respectively, unless either production is established within the spacing units covering such acreage or the lease is renewed or extended under continuous drilling provisions prior to such dates. Table of Contents which have an average assumed lateral length of approximately 6,400 feet, and 428 MBoe (approximately 65% oil, 18% NGLs and 17% natural gas) for our Middle Spraberry wells, which have an average assumed lateral length of approximately 5,000 feet. Estimated Total Proved Reserves Oil (MMBbls) NGLs (MMBbls) Natural Gas (Bcf) Total (MMBoe) % Oil % Liquids1 % Developed Average Net Production (Boe/d) R/P Ratio (Years)2 Midland Basin 34.9 10.2 52.7 53.9 65 84 40 9,339 Delaware (State or other jurisdiction of incorporation or organization) 1311 (Primary Standard Industrial Classification Code Number) 90-1022997 (IRS Employer Identification Number) 3141 Hood Street, Suite 500 Dallas, Texas 75219 (214) 252-2700 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Scott McNeill Chief Financial Officer 3141 Hood Street, Suite 500 Dallas, Texas 75219 (214) 252-2700 (Name, address, including zip code, and telephone number, including area code, of agent for service) Table of Contents Based on our current drilling schedule, we do not expect the acreage associated with any of our target locations to expire. In the event leases for such acreage expire, however, we would lose our right to develop the related locations. See "Risk Factors Our identified drilling locations are scheduled out over many years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling. In addition, we may not be able to raise the substantial amount of capital that would be necessary to drill such locations." As of December 31, 2013, none of our 313 locations associated with proved undeveloped reserves is associated with acreage that will expire prior to scheduled drilling. During 2013, we spent approximately $216 million of capital, which included $170 million to drill and complete operated wells, $37 million for our participation in the drilling and completion of non-operated wells and $9 million on infrastructure. Our 2014 capital budget for drilling, completion, recompletion and infrastructure is approximately $425 million. Our capital budget excludes acquisitions. We intend to allocate our 2014 capital budget approximately as follows: $360 million, or 85%, for the drilling and completion of operated wells; $40 million, or 9%, for our participation in the drilling and completion of non-operated wells; and $25 million, or 6%, for infrastructure. As of March 31, 2014, we have spent approximately $57 million to drill and complete operated wells, $7 million for our participation in the drilling and completion of non-operated wells and $2 million on infrastructure. Because we are the operator of a high percentage of our acreage, the amount and timing of these capital expenditures are largely discretionary. We could choose to defer a portion of these planned 2014 capital expenditures depending on a variety of factors, including the success of our drilling activities; prevailing and anticipated prices for oil, NGLs and natural gas; the availability of necessary equipment, infrastructure and capital; the receipt and timing of required regulatory permits and approvals; drilling, completion and acquisition costs; and the level of participation by other working interest owners. For the three months ended March 31, 2014, our average net daily production was 9,339 Boe/d (approximately 71% oil, 17% NGLs and 12% natural gas), of which 32% was from horizontal well production and 68% was from vertical well production. As of March 31, 2014, we produced from 35 horizontal and 501 vertical wells and were the operator of approximately 94% of our net acreage. Copies to: Douglas E. McWilliams Christopher G. Schmitt Vinson & Elkins L.L.P. 1001 Fannin Street, Suite 2500 Houston, Texas 77002 J. Michael Chambers David J. Miller Latham & Watkins LLP 811 Main Street, Suite 3700 Houston, Texas 77002 Approximate date of commencement of proposed sale of the securities 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: 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 Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company 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 this 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 through horizontal downspacing and with additional horizontal locations in zones not included in our target horizontal zones, such as the Clearfork, Jo Mill, Dean, Strawn, Atoka, Mississippian and Devonian formations. We believe our large, contiguous acreage position allows us to optimize our horizontal and vertical development programs to maximize our resource recovery on a per 640-acre section basis and thus our returns. Identified Drilling Locations1 Target Horizontal Locations2 Short Laterals3 Long Laterals3 Total Target Horizontal Zones4: Middle Spraberry 117 295 412 Lower Spraberry 112 289 401 Wolfcamp A 77 149 226 Wolfcamp B 82 199 281 Wolfcamp D (Cline) 77 175 252 Total Target Horizontal Locations 465 1,107 1,572 Vertical Locations 40-acre 20-acre Total Vertical Locations 280 645 925 Total Target Horizontal and Vertical Locations 2,497 1Our calculation of our Effective Horizontal Acreage is an inexact estimate. We cannot assure you that any amount of our Effective Horizontal Acreage listed above in each of our target horizontal zones is prospective for that zone. Additionally, we cannot ascertain what portion of our Effective Horizontal Acreage will ever be drilled. See
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+SUMMARY OF PROSPECTUS You should read the following summary together with the more detailed business information, financial statements and related notes that appear elsewhere in this Prospectus. In this Prospectus, unless the context otherwise denotes, references to "we," "us," "our", I IN THE SKY , and Company are to I IN THE SKY INC.
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+Prospectus Summary 1
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+S-1/A 1 d616743ds1a.htm S-1/A S-1/A Table of Contents As filed with the Securities and Exchange Commission on April 1, 2014 Registration No. 333-192542 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Amendment No. 6 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ENABLE MIDSTREAM PARTNERS, LP (Exact name of registrant as specified in its charter) Delaware 4922 72-1252419 (State or jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.) One Leadership Square 211 North Robinson Avenue Suite 950 Oklahoma City, Oklahoma 73102 (405) 525-7788 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Mark C. Schroeder General Counsel 1111 Louisiana Street Houston, Texas 77002 (713) 207-1111 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Gerald M. Spedale Jason A. Rocha Baker Botts L.L.P. 910 Louisiana Street Houston, Texas 77002 (713) 229-1234 Robert J. Joseph Jones Day 77 West Wacker Drive Chicago, Illinois 60601 (312) 269-4176 Sean T. Wheeler Ryan J. Maierson Latham & Watkins LLP 811 Main Street, Suite 3700 Houston, Texas 77002 (713) 546-5400 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 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. 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 (Do not check if a smaller reporting company) Smaller reporting company CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Proposed Maximum Aggregate Offering Price(1)(2) Amount of Registration Fee(3) Common units representing limited partner interests $603,750,000 $77,763 (1) Includes common units that the underwriters have the option to purchase. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) of the Securities Act of 1933. (3) The total registration fee includes $64,400 that was previously paid for the registration of $500,000,000 of proposed maximum aggregate offering price in the filing of the Registration Statement on November 26, 2013 and $13,363 for the registration of an additional $103,750,000 of proposed maximum aggregate offering price registered hereby. 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 Securities and Exchange Commission, acting pursuant to Section 8(a), may determine. Table of Contents TABLE OF CONTENTS Page SUMMARY 1
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+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 Sugar Creek Financial Corp. The shares being offered will be issued by New Sugar Creek, a Maryland corporation. Upon completion of the conversion, New Sugar Creek will become the successor corporation to Old Sugar Creek and the parent holding company for Tempo Bank. New Sugar Creek 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 Sugar Creek Financial Corp. and Sugar Creek MHC. Old Sugar Creek is a federally chartered corporation that owns all of the outstanding shares of common stock of Tempo Bank. Old Sugar Creek s common stock is currently quoted on the OTC Bulletin Board under the symbol SUGR. We expect that New Sugar Creek s common stock will be quoted on the OTC Bulletin Board under the symbol SUGRD for a period of 20 trading days after the completion of the offering. Thereafter, the symbol will be SUGR. At September 30, 2013, Old Sugar Creek had consolidated total assets of $88.4 million, net loans of $73.5 million, total deposits of $72.6 million and total stockholders equity of $10.2 million. As of the date of this prospectus, Old Sugar Creek had 895,027 shares of common stock outstanding. At completion of the conversion and offering, Old Sugar Creek will cease to exist. Sugar Creek MHC is the federally chartered mutual holding company of Old Sugar Creek. Sugar Creek MHC s sole business activity is the ownership of 498,784 shares of common stock of Old Sugar Creek, or 55.7% of the common stock outstanding as of the date of this prospectus. After completion of the conversion, Sugar Creek MHC will cease to exist. Tempo Bank. Tempo Bank is a federally chartered savings bank that operates from two full-service locations in Trenton and Breese, Illinois. We offer a variety of deposit and loan products to individuals and small businesses in our market area. Trenton and Breese are in western Clinton County, Illinois, approximately 35 miles east of St. Louis, Missouri. Our principal executive offices are located at 28 West Broadway, Trenton, Illinois 62293 and our telephone number is (618) 224-9228. Our web site address is www.tempobank.com. Information on our web site should not be considered a part of this prospectus. Our Business We operate as a community bank. Our primary business is generating funds from deposits and investing such funds in loans in our market area. Retail Lending. Our primary line of business is originating loans to consumers in our market area. The largest segment of our loan portfolio is owner-occupied single-family mortgage loans. We also offer nonowner-occupied single-family mortgage loans and consumer loans. These retail loans constituted 92.0% of our total loan portfolio at September 30, 2013. Commercial Lending. Our loan portfolio includes multi-family and commercial real estate loans and land loans. These commercial loans constituted 8.0% of our total loan portfolio at September 30, 2013. 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. 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 Sugar Creek shareholders as of , 2014 are asked to vote on the plan of conversion. Under the plan of conversion, Tempo Bank will convert from the mutual holding company form of organization to the stock holding company form, and as part of such conversion, New Sugar Creek will offer for sale, in the form of shares of its common stock, Sugar Creek MHC s 55.7% ownership interest in Old Sugar Creek. In addition to the shares of common stock to be issued to those who purchase shares in the offering, public shareholders of Old Sugar Creek as of the completion of the conversion and offering will receive shares of New Sugar Creek common stock in exchange for their existing shares of Old Sugar Creek common stock based on an exchange ratio that will result in Old Sugar Creek s existing public shareholders owning approximately the same percentage of New Sugar Creek common stock as they owned of Old Sugar Creek immediately prior to the conversion and offering. Shareholders also are asked to vote on the following informational proposals with respect to the articles of incorporation of New Sugar Creek: Approval of a provision in New Sugar Creek s articles of incorporation requiring a super-majority vote to approve certain amendments to New Sugar Creek s articles of incorporation; and Approval of a provision in New Sugar Creek s articles of incorporation to limit the voting rights of shares beneficially owned in excess of 10% of New Sugar Creek s outstanding voting stock. The provisions of New Sugar Creek s articles of incorporation which are summarized as informational proposals were approved as part of the process in which the board of directors of Old Sugar Creek 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 Sugar Creek s articles 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 Sugar Creek, 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 a proposal to adjourn the special meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to approve the plan of conversion. Q. What is the conversion? A. Tempo Bank is converting from a mutual holding company structure to a fully-public stock holding company ownership structure. Currently, Sugar Creek MHC owns 55.7% of Old Sugar Creek s common stock. The remaining 44.3% of Old Sugar Creek s common stock is owned by public shareholders. As a result of the conversion, our newly formed company, also called Sugar Creek Financial Corp., will become the parent of Tempo Bank. Shares of common stock of New Sugar Creek, representing the 55.7% ownership interest of Sugar Creek MHC in Old Sugar Creek, are being offered for sale to eligible depositors of Tempo Bank and, possibly, to the public. At the completion of the conversion and offering, public shareholders of Old Sugar Creek will exchange their shares of Old Sugar Creek common stock for shares of common stock of New Sugar Creek. After the conversion and offering are completed, Tempo Bank will be a wholly-owned subsidiary of New Sugar Creek, and 100% of the common stock of New Sugar Creek will be owned by public shareholders. As a result of the conversion and offering, Old Sugar Creek and Sugar Creek MHC will cease to exist. 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. Special Meeting of Shareholders Date, Time and Place; Record Date The special meeting of Old Sugar Creek shareholders is scheduled to be held at , Illinois at .m., local time, on , 2014. Only Old Sugar Creek shareholders of record as of the close of business on , 2014 are entitled to notice of, and to vote at, the special 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 special meeting: 1. Approval of the plan of conversion; 2. An informational proposal regarding approval of a provision in New Sugar Creek s articles of incorporation requiring a super-majority vote to approve certain amendments to New Sugar Creek s articles of incorporation; 3. An informational proposal regarding approval of a provision in New Sugar Creek s articles of incorporation to limit the voting rights of shares beneficially owned in excess of 10% of New Sugar Creek s outstanding voting stock; 4. The approval of the adjournment of the special meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to approve the plan of conversion. The provisions of New Sugar Creek s articles of incorporation which are summarized as informational proposals 2 and 3 were approved as part of the process in which the board of directors of Old Sugar Creek 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 Sugar Creek s articles 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 Sugar Creek, 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. 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 Sugar Creek, including shares held by Sugar Creek MHC and a majority of the votes eligible to be cast by shareholders of Old Sugar Creek, excluding shares held by Sugar Creek MHC. Informational Proposals 2 and 3. 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 4: Approval of the adjournment of the special meeting. We must obtain the affirmative vote of the majority of the shares represented at the special meeting and entitled to vote to adjourn the special meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to approve the proposal to approve the plan of conversion. As of the record date, there were shares of Old Sugar Creek common stock outstanding, of which Sugar Creek MHC owned 498,784. The directors and executive officers of Old Sugar Creek (and their affiliates), as a group, beneficially owned shares of Old Sugar Creek common stock, representing % of the outstanding shares of Old Sugar Creek common stock and % of the shares held by persons other than Sugar Creek as of such date. Sugar Creek MHC and our directors and executive officers intend to vote their shares in favor of the plan of conversion. Table of Contents TABLE OF CONTENTS Page THE OFFERING 1 Securities Offered 1 Election to Purchase New Sugar Creek Common Stock in the Stock Offering 1 Value of Plan Assets 1 Method of Directing Your Investment Election 2 Time for Directing Your Investment Election 2 Irrevocability of Your Investment Election and Restrictions on Transferability 2 Purchase Price of New Sugar Creek Common Stock 2 Nature of a Participant s Interest in New Sugar Creek Common Stock 2 Voting and Tender Rights of New Sugar Creek Common Stock 2 One-time Election 2 DESCRIPTION OF THE 401(k) PLAN 3 Introduction 3 Eligibility and Participation 3 Contributions Under the 401(k) Plan 3 401(k) Plan Investments 4 Benefits Under the 401(k) Plan 5 Withdrawals and Distributions from the 401(k) Plan 5 ADMINISTRATION OF THE 401(k) PLAN 6 Trustees 6 Reports to 401(k) Plan Participants 6 Plan Administrator 6 Amendment and Termination 6 Merger, Consolidation or Transfer 7 Federal Income Tax Consequences 7 Restrictions on Resale 8 SEC Reporting and Short-Swing Profit Liability 8 Financial Information Regarding Plan Assets 9 LEGAL OPINION 9 Table of Contents THE OFFERING Securities Offered Sugar Creek Financial Corp. ( New Sugar Creek ) is offering participation interests in the Tempo Bank Employees Savings & Profit Sharing Plan (the 401(k) Plan ). The participation interests represent indirect ownership of New Sugar Creek s common stock through the 401(k) Plan. Assuming a purchase price of $7 per share, the 401(k) Plan may acquire up to 128,000 shares of New Sugar Creek common stock in the stock offering (the Common Stock ). Your investment in stock units representing an ownership interest in the common stock of New Sugar Creek in the offering through the Sugar Creek Financial Corp. Stock Fund ( Employer Stock Fund ) available under the 401(k) Plan is governed by certain subscription rights and purchase limitations. See The Conversion and Stock Offering Subscription Offering and Subscription Rights and Limitations on Purchases of Shares in the prospectus attached to this prospectus supplement. This prospectus supplement contains information regarding the 401(k) Plan. The attached prospectus contains information regarding the Stock Offering and the financial condition, results of operations and business of Tempo Bank and its affiliates. The address of the principal executive office of Tempo Bank is 28 West Broadway, Trenton, Illinois 62293. The telephone number of Tempo Bank is (618) 224-9228. Election to Purchase New Sugar Creek Common Stock in the Stock Offering If you elect to participate in the Stock Offering using all or a portion of your 401(k) Plan funds (excluding funds currently invested in the Employer Stock Fund) you must complete and submit the blue investment form included with this prospectus supplement ( Investment Form ) to . See Method for Directing Your Investment Election and Time for Directing Your Investment Election for detailed information on how to participate in the Stock Offering using your 401(k) Plan funds. All 401(k) plan participants are eligible to direct the 401(k) Plan trustee to use all or a portion of their 401(k) Plan assets (excluding funds currently invested in the Employer Stock Fund) to purchase stock units representing an ownership interest in the Common Stock. However, your order for stock units representing an ownership interest in the Common Stock will be filled based on your subscription rights. New Sugar Creek has granted subscription rights to the following persons in the following order of priority: (1) persons with $50 or more on deposit at Tempo Bank as of the close of business on September 30, 2012; (2) persons with $50 or more on deposit at Tempo Bank as of the close of business on December 31, 2013 who are not eligible in Category 1; and (3) Tempo Bank s depositors as of the close of business on who are not eligible in the other categories noted and borrowers as of September 19, 1989 whose loans continue to be outstanding on . If you fall into one of the above subscription offering categories, you have subscription rights to direct the trustee to purchase stock units representing an ownership interest in the Common Stock. To the extent shares of Common Stock remain available after filling offers in the subscription offering, shares will be available in a community offering. The limitations on the total amount of Common Stock that you may direct the trustee to purchase in the Stock Offering, as described in the prospectus (see The Conversion and Stock Offering Limitations on Purchases of Shares ), will be calculated based on the aggregate amount that you subscribed for: (a) through your 401(k) Plan account and (b) through your sources of funds outside of the 401(k) Plan. Whether you place an order through the 401(k) Plan, outside the 401(k) Plan, or both, the number of shares of Common Stock, if any, that you receive will be determined based on the total number of subscriptions, your purchase priority and the allocation priorities described in the prospectus. If, as a result of the calculation, you are allocated insufficient shares to fill all of your orders, available shares will be allocated between orders on a pro rata basis. Value of Plan Assets As of September 30, 2013, the market value of the 401(k) Plan assets equaled approximately $900,000 (excluding funds invested in the Employer Stock Fund). All 401(k) Plan participants have received a benefit statement reflecting the value of his or her beneficial interest in the 401(k) Plan as of September 30, 2013. The value of the 401(k) Plan assets represents past contributions made to the 401(k) Plan on your behalf, plus or minus earnings or losses on the contributions, less previous withdrawals. Table of Contents [ONE TIME SPECIAL ELECTION] TEMPO BANK EMPLOYEES SAVINGS & PROFIT SHARING PLAN INVESTMENT FORM Name of Plan Participant: Social Security Number: 1. Instructions. In connection with the Stock Offering, you may direct up to 100% of your current 401(k) Plan account balance (excluding funds currently invested in the Sugar Creek Financial Corp. common stock) into the Employer Stock Fund. The percentage of your 401(k) Plan account (up to 100%) transferred into the Employer Stock Fund will be used to purchase stock units representing an ownership interest in shares of New Sugar Creek common stock in the Stock Offering ( Common Stock ). To direct a transfer of the funds credited to your 401(k) Plan account to the Employer Stock Fund, you must complete, sign and submit this form to by on . Current Tempo Bank employees should return their forms through inter-office mail. Former Tempo Bank employees should return their forms using the business reply envelope that has been provided. A representative for the Plan Administrator will retain a copy of this form and return a copy to you. If you need any assistance in completing this form, please contact at (618) 224-9228. If you do not complete and return this form to by on , the funds credited to your account under the 401(k) Plan will continue to be invested in accordance with your prior investment directions, or in accordance with the terms of the Plan if no investment directions have been provided. 2. Investment Directions. I hereby authorize the Plan Administrator to direct the Trustee to invest the following percentages (in multiples of not less than 1%) of my 401(k) Plan account balance in the Employer Stock Fund: Fund Name SSgA Target Retirement Inc NL Fund ______ % SSgA Target Retirement 2010 NL Fund ______ % SSgA Target Retirement 2015 NL Fund ______ % SSgA Target Retirement 2020 NL Fund ______ % SSgA Target Retirement 2025 NL Fund ______ % SSgA Target Retirement 2030 NL Fund ______ % SSgA Target Retirement 2035 NL Fund ______ % SSgA Target Retirement 2040 NL Fund ______ % SSgA Target Retirement 2045 NL Fund ______ % SSgA Target Retirement 2050 NL Fund ______ % SSgA Target Retirement 2055 NL Fund ______ % SSgA Conservative Balanced SL Fund ______ % SSgA Moderate Balanced SL Fund ______ % SSgA Aggressive Balanced SL Fund ______ % Invesco Stable Value Trust Fund ______ % SSgA Short Term Investment Fund ______ % SSgA Government Short Term Investment Fund ______ % SSgA US Inflation Prot Bond NL Fund ______ % SSgA US Long Treasury Index NL Fund ______ % SSgA US Bond Index NL Fund ______ % SSgA S&P 500 Index NL Fund ______ % SSgA S&P LargeCap Value Index SL Fund ______ % SSgA S&P LargeCap Growth Index SL Fund ______ % SSgA S&P MidCap Index SL Fund ______ % SSgA Russell SmallCap Value Index SL Fund ______ % SSgA Nasdaq-100 Index NL Fund ______ % SSgA Reit Index NL Fund ______ % SSgA International Index NL Fund ______ % Employer Stock Fund (Tempo Bank) ______ % I understand that my election to transfer funds to the Employer Stock Fund to purchase stock units representing a beneficial interest in shares of Common Stock in the Stock Offering is irrevocable. I understand that the funds transferred to the Employer Stock Fund will be divisible by $7.00, the per share price for the common stock offering in the Stock Offering. Table of Contents PROSPECTUS (Proposed holding company for Tempo Bank) Up to 616,072 Shares of Common Stock (Subject to increase to 708,483 shares) Sugar Creek Financial Corp., a newly formed Maryland corporation that is referred to as New Sugar Creek throughout this prospectus, is offering common stock for sale in connection with the conversion of Tempo Bank from the mutual holding company form of organization to the stock form of organization. We are offering up to 616,072 shares of common stock for sale on a best efforts basis, subject to certain conditions. We must sell a minimum of 455,358 shares to complete the offering. All shares are offered at a price of $7.00 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 Sugar Creek. Most of the terms of this offering are required by regulations of the Board of Governors of the Federal Reserve System. We may sell up to 708,483 shares because of demand for the shares of common stock or changes in market conditions without giving you further notice or the opportunity to change or cancel your order. The shares we are offering represent the 55.7% ownership interest in Sugar Creek Financial Corp., a federal corporation that is referred to as Old Sugar Creek throughout this prospectus, now owned by Sugar Creek MHC. The remaining 44.3% interest in Old Sugar Creek currently owned by the public will be exchanged for shares of common stock of New Sugar Creek. The 396,243 shares of Old Sugar Creek currently owned by the public will be exchanged for between 352,463 shares and 476,861 shares of common stock of New Sugar Creek (subject to increase to 548,390 shares if we sell 708,483 shares in the offering) so that Old Sugar Creek s existing public shareholders will own approximately the same percentage of New Sugar Creek common stock as they owned of Old Sugar Creek s common stock immediately before the conversion. Old Sugar Creek and Sugar Creek 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 Tempo Bank and Tempo Bank 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 Clinton, Madison and St. Clair Counties, Illinois, then to shareholders of Old Sugar Creek 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 New Sugar Creek 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 [ :00 p.m.], Central time, on [Date 1], 2014. 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], 2014 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 [Date 3], 2016. Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [Date 2], 2014, or the number of shares of common stock to be sold is increased to more than 708,483 shares or decreased to less than 455,358 shares. If we extend the offering beyond [Date 2], 2014, 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 Tempo Bank s passbook savings rate or cancel your deposit account withdrawal authorization. If we intend to sell fewer than 455,358 shares or more than 708,483 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 Tempo Bank and will earn interest at Tempo Bank s passbook savings rate, which is currently [ ]%. Old Sugar Creek s common stock is currently quoted on the OTC Bulletin Board under the symbol SUGR. We expect that New Sugar Creek s common stock will be quoted on the OTC Bulletin Board under the trading symbol SUGRD for a period of 20 trading days after the completion of the offering. Thereafter, the trading symbol will be SUGR. We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012. 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: $7.00 Minimum Midpoint Maximum Maximum, as Adjusted Number of shares 455,358 535,715 616,072 708,483 Gross offering proceeds $ 3,187,506 $ 3,750,005 $ 4,312,504 $ 4,959,381 Estimated offering expenses, excluding selling agent fees $ 725,000 $ 725,000 $ 725,000 $ 725,000 Estimated selling agent fees (1)(2) $ 200,000 $ 200,000 $ 200,000 $ 200,000 Estimated net proceeds $ 2,262,506 $ 2,825,005 $ 3,387,504 $ 4,034,381 Estimated net proceeds per share $ 4.97 $ 5.27 $ 5.50 $ 5.69 (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 and The Conversion and Offering Marketing Arrangements. (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 Old Sugar Creek, for which no selling agent commissions would be paid, the maximum selling agent fees and commissions would be $165,067 at the minimum, $227,167 at the maximum, and $262,875 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. Keefe, Bruyette & Woods a Stifel Company For assistance, please contact the Stock Information Center at The date of this prospectus is , 2014 Table of Contents Our Business Strategy Our mission is to operate as a well-capitalized profitable community-oriented financial institution. Highlights of our business strategy are discussed below. Continue to emphasize the origination of single-family, owner occupied lending. Our primary lending activity is the origination of residential real estate loans secured by homes in our market area. We are a portfolio lender and generally do not sell loans in the secondary market. We intend to continue emphasizing the origination of single-family, owner occupied loans after completion of the offering. At September 30, 2013, 77.7% of our total loans were single-family, owner occupied loans. We believe our emphasis on single-family, owner occupied lending, which carries a lower credit risk than single-family, non-owner occupied, commercial and multi-family real estate lending, contributes to our high asset quality. Enhancing core earnings by increasing lower cost transaction and savings accounts and continued emphasis on operational efficiencies. Checking, savings and money market accounts are a lower cost source of funds than certificates of deposits, and we have made a concerted effort to increase lower-cost transaction deposit accounts and reduce our dependence on traditional higher cost certificates of deposit. Our ratio of certificates of deposit to total deposits has decreased from 62.8% at March 31, 2011 to 45.4% at September 30, 2013. We intend to continue to market our core transaction accounts and savings accounts, emphasizing additional product offerings and our high quality service. Maintaining our single-family non-owner occupied loans. As the St. Louis market continues to grow eastward to the communities we serve in Illinois, we anticipate that there will be many single-family non-owner occupied loan opportunities that we may pursue with our conservative underwriting guidelines. At September 30, 2013, single-family non-owner occupied loans comprised 12.1% of total loans. We believe this type of lending helps diversify our balance sheet, improve our interest rate risk exposure and increase our presence in our market area. Further, with the additional capital raised in the offering, we expect to continue to pursue larger lending relationships typically associated with single-family non-owner occupied real estate lending. Loans secured by residential investment rental properties represent a unique credit risk to us and, as a result, we adhere to specific underwriting guidelines for such loans. See Our Business Loan Underwriting Risks Single-Family Non-owner Occupied Residential Loans. Continue to use conservative underwriting practices to maintain the high quality of our loan portfolio. We believe that maintaining high asset quality is a key to long-term financial success. We have sought to grow our loan portfolio while keeping nonperforming assets to a minimum. We use underwriting standards that we believe are conservative and we diligently monitor collection efforts, At September 30, 2013, our non-performing loans were 2.3% of our loan portfolio. Although we intend to continue our efforts to originate single-family non-owner occupied loans and, to a lesser extent, commercial and multi-family loans after the offering, we intend to maintain our philosophy of managing large loan exposures through our conservative approach to lending. Building core deposits by expanding our branch network into growing communities in our market area. Although most of the communities in Clinton County are rural and have an agricultural-based economy, there are many communities in our market area, in particular eastern St. Clair County and southeastern Madison County, that are experiencing population growth and economic expansion. We intend to pursue growth of core deposit relationships by expanding into these growing communities through acquisitions, or de novo branching. While we currently have no specific plans to acquire a financial institution or branch or open a de novo branch, the capital raised in the offering will enable us to identify and pursue potential acquisitions or, should suitable acquisition opportunities not emerge, undertake de novo branching. Remaining a community-oriented institution. We were established in 1889 and have been operating continuously since that time. We have been, and continue to be, committed to meeting the financial needs of the communities in which we operate and remain dedicated to providing customer service as a means to attract and retain customers. We deliver personalized service and respond with flexibility to customer needs. We believe that our community orientation is attractive to our customers and distinguishes us from the large banks that operate in our area. Description of the Conversion In 2007, we reorganized Tempo Bank into a stock savings bank with a mutual holding company structure and formed Old Sugar Creek as the mid-tier holding company for Tempo Bank. In connection with the reorganization, we sold a minority interest in Old Sugar Creek common stock to our depositors, our borrowers, our employee stock ownership plan and Table of Contents 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. The primary reasons for the conversion and offering are to eliminate the uncertainties associated with the mutual holding company structure under financial reform legislation, transition us to a more familiar and flexible organizational structure, enhance our regulatory capital position, facilitate future mergers and acquisitions, and improve the liquidity of our shares of common stock. 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 Sugar Creek common stock, including shares held by Sugar Creek MHC and (2) the holders of a majority of the outstanding shares of Old Sugar Creek common stock entitled to vote at the special meeting, excluding shares held by Sugar Creek 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. Q. How do I vote? A. You should sign your proxy card and return it in the enclosed proxy reply envelope. Alternatively, you may vote by telephone or via the internet, by following instructions on your proxy card. 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 Sugar Creek 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 Sugar Creek common stock will be canceled and exchanged for shares of common stock of New Sugar Creek, a newly formed Maryland 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 Sugar Creek s existing public shareholders owning approximately 43.6% of New Sugar Creek s common stock, which is the same percentage of Old Sugar Creek common stock currently owned by existing public shareholders as adjusted to reflect the assets of Sugar Creek MHC. Q: Does the exchange ratio depend on the market price of Old Sugar Creek common stock? A: No, the exchange ratio will not be based on the market price of Old Sugar Creek common stock. Therefore, changes in the price of Old Sugar Creek common stock between now and the completion of the conversion and offering will not affect the calculation of the exchange ratio. Table of Contents Our Company Old Sugar Creek is, and New Sugar Creek following the completion of the conversion and offering will be, the unitary savings and loan holding company for Tempo Bank, a federally chartered savings bank. Tempo Bank is headquartered in Trenton, Illinois and operates two full-service locations in Trenton and Breese, Illinois. Our common stock is listed on the OTC Bulletin Board under the symbol SUGR. At September 30, 2013, Old Sugar Creek had consolidated total assets of $88.4 million, net loans of $73.5 million, total deposits of $72.6 million and total stockholders equity of $10.2 million. Our principal executive offices are located at 28 West Broadway, Trenton, Illinois 62293 and our telephone number is (618) 229-9228. Our web site address is www.tempobank.com. Information on our website should not be considered a part of this proxy statement. The Conversion Description of the Conversion [SAME AS OFFERING PROSPECTUS] Reasons for the Conversion and Offering [SAME AS OFFERING PROSPECTUS] Conditions to Completing the Conversion and Offering [SAME AS OFFERING PROSPECTUS] The Exchange of Existing Shares of Old Sugar Creek Common Stock [SAME AS OFFERING PROSPECTUS] Effect of the Conversion on Shareholders of Old Sugar Creek The following table compares historical information for Old Sugar Creek with similar information on a pro forma and per equivalent Old Sugar Creek share basis. The information listed as per equivalent Old Sugar Creek 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 Sugar Creek does not currently pay a regular cash dividend on its common stock. Old Sugar Creek Historical Pro Forma Exchange Ratio Per Equivalent Old Sugar Creek Share Book value per share at September 30, 2013: Sale of 455,358 shares Sale of 535,715 shares Sale of 616,072 shares Sale of 708,483 shares Earnings per share for the six months ended September 30, 2013: Sale of 455,358 shares Sale of 535,715 shares Sale of 616,072 shares Sale of 708,483 shares Price per share (1): Sale of 455,358 shares Sale of 535,715 shares Sale of 616,072 shares Sale of 708,483 shares (1) At December 3, 2013, which was the day of the adoption of the plan of conversion. Table of Contents Method of Directing Your Investment Election If you wish to use your 401(k) Plan funds to participate in the Stock Offering please complete, sign the enclosed blue Investment Form and submit it to before the investment deadline noted below. The blue Investment Form allows you to liquidate a percentage of your beneficial interest in the assets of the 401(k) Plan (in multiples not less than 1%) and use those funds to invest in the Stock Offering. Prior to purchasing New Sugar Creek common stock in the Stock Offering, the trustee will hold your liquidated funds in a money market fund earning market rates of interest. Only funds divisible by $7.00, the per share price of Common Stock, will be used to purchase shares of Common Stock in the Stock Offering. Time for Directing Your Investment Election The deadline for submitting your Investment Form to is , . Irrevocability of Your Investment Election and Restrictions on Transferability Once you submit your Investment Form to Tempo Bank, you cannot change your investment election. You may be able to change your investments in other investment funds under the 401(k) Plan, subject, however, to the terms of the 401(k) Plan and any blackout notices to the contrary that you receive from the Plan Administrator. If you are an officer of Tempo Bank or New Sugar Creek the shares of Common Stock you purchase in the Stock Offering may not be sold for a period of one year following the close of the Stock Offering, except in the event of your death or unless approved by the Federal Deposit Insurance Corporation. Shares purchased through the Employer Stock Fund after the close of the Stock Offering will be free of this restriction. Purchase Price of New Sugar Creek Common Stock The 401(k) Plan trustee will use the funds transferred to the Employer Stock Fund to purchase shares of Common Stock in the Stock Offering. The 401(k) Plan trustee will pay the same price for shares of Common Stock as all other persons who purchase shares of Common Stock in the Stock Offering. If there is not enough Common Stock available in the Stock Offering to fill all subscriptions, the Common Stock will be apportioned and the trustee may not be able to purchase all of the Common Stock you requested. Nature of a Participant s Interest in New Sugar Creek Common Sock The 401(k) Plan trustee will hold the Common Stock in the name of the 401(k) Plan. The 401(k) Plan trustee will credit shares of Common Stock acquired at your direction to your account under the 401(k) Plan. Your interest in the Employer Stock Fund will be credited in units. Voting and Tender Rights of New Sugar Creek Common Sock The 401(k) Plan trustee will exercise voting and tender rights attributable to all Common Stock held in the Employer Stock Fund, as directed by participants with interests in the Employer Stock Fund. With respect to each matter as to which holders of Stock units representing an ownership interest in the Common Stock have a right to vote, you will have voting instruction rights that reflect your proportionate interest in the Employer Stock Fund. The number of shares of Common Stock held in the Employer Stock Fund voted for and against each matter will be proportionate to the number of voting instruction rights exercised. If there is a tender offer for Common Stock, the 401(k) Plan allots each participant a number of tender instruction rights reflecting each participant s proportionate interest in the Employer Stock Fund. The percentage of shares of Common Stock held in the Employer Stock Fund that will be tendered will be the same as the percentage of the total number of tender instruction rights exercised in favor of the tender offer. The remaining shares of Common Stock held in the Employer Stock Fund will not be tendered. The 401(k) Plan provides that participants will exercise their voting instruction rights and tender instruction rights on a confidential basis. One-time Election Participants in the 401(k) Plan can only invest in Stock units representing an interest in the Common Stock in connection with the Stock Offering. No purchases will be made after the close of the Stock Offering, however, you will be able to transfer funds from the Employer Stock Fund to the other 401(k) Plan investments subject to IRS and SEC rules and regulations. Table of Contents 3. Purchaser Information. The ability of a 401(k) Plan participant to purchase New Sugar Creek stock in the Stock Offering is based upon the participant s subscription rights in the Stock Offering. Please indicate your status (check one): Check here if you had $50.00 or more on deposit at Tempo Bank as of the close of business on September 30, 2012. Check here if you had $50 or more on deposit at Tempo Bank as of the close of business on December 31, 2013 and are not eligible in Category 1. Check here if you are Tempo Bank s depositor as of the close of business on September , 1989 who are not eligible in the other categories noted, and borrower as of whose loan continue to be outstanding on . 4. Acknowledgment of Participant. I understand that this Investment Form shall be subject to all of the terms and conditions of the 401(k) Plan. I acknowledge that I have received a copy of the Prospectus and the Prospectus Supplement. I acknowledge further that my investment election on this form is irrevocable. Signature of Participant Date Acknowledgment of Receipt by Administrator. This Investment Form was received by the Plan Administrator and will become effective on the date noted below. By: Date THE PARTICIPATION INTERESTS REPRESENTED BY THE COMMON STOCK OFFERED HEREBY ARE NOT DEPOSIT ACCOUNTS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY AND ARE NOT GUARANTEED BY SUGAR CREEK FINANCIAL CORP. OR TEMPO BANK. THE COMMON STOCK IS SUBJECT TO AN INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL INVESTED. PLEASE COMPLETE AND RETURN TO AT TEMPO BANK BY ON . Table of Contents Table of Contents community members in the offering. The majority of Old Sugar Creek s shares were issued to Sugar Creek MHC, a mutual holding company organized under federal law. As a mutual holding company, Sugar Creek MHC does not have any shareholders, does not hold any significant assets other than the common stock of Old Sugar Creek, 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 Tempo Bank s common stock will be owned by New Sugar Creek, and all of New Sugar Creek 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 Sugar Creek and Sugar Creek MHC will cease to exist. After the conversion and offering, our ownership structure will be as follows: As part of the conversion, we are offering for sale common stock representing the ownership interest of Old Sugar Creek that is currently held by Sugar Creek MHC. At the conclusion of the conversion and offering, existing public shareholders of Old Sugar Creek will receive shares of common stock in New Sugar Creek in exchange for their existing shares of common stock of Old Sugar Creek, based upon an exchange ratio of 0.8895 to 1.2035 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 708,483 shares in the offering and the exchange ratio will be increased to 1.3840. 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 Sugar Creek s existing public shareholders owning 43.6% of New Sugar Creek common stock, which is based on the 44.3% ownership interest that existing public shareholders currently own of Old Sugar Creek common stock adjusted to reflect the net assets of Sugar Creek MHC, without giving effect to cash paid in lieu of issuing fractional shares or shares that existing shareholders may purchase in the offering. 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 Tempo Bank s passbook savings rate and all deposit account withdrawal authorizations will be canceled. Table of Contents 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 Sugar Creek, the actual exchange ratio will depend on the number of shares of New Sugar Creek 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 0.8895 and 1.2035 (subject to increase to 1.384) shares of New Sugar Creek common stock for each share of Old Sugar Creek common stock you own on the date of the completion of the conversion and offering. For example, if you own 100 shares of Old Sugar Creek common stock, and the exchange ratio is 1.0465 (at the midpoint of the offering range), after the conversion and offering you will receive 104 shares of New Sugar Creek common stock and $4.55 in cash, the value of the fractional share, based on the $7.00 per share purchase price in the offering. Shareholders who hold shares in street name at a brokerage firm or are held in book-entry form by our transfer agent will receive these funds in their accounts. Shareholders who hold stock certificates will receive a check in the mail. Q. Should I submit my stock certificates now? A. No. If you hold a stock certificate for Old Sugar Creek 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 Sugar Creek 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 Tempo Bank 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 Sugar Creek 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 a.m. to p.m. Central time, Monday through Friday. Order forms must be received (not postmarked) no later than p.m., Central time on , 2014. 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 Tempo Bank upon written request to the Corporate Secretary and is available for inspection at the offices of Tempo Bank and the Federal Reserve Board. Table of Contents How We Determined the Offering Range and Exchange Ratio [SAME AS OFFERING PROSPECTUS] Possible Change in Offering Range [SAME AS OFFERING PROSPECTUS] How We Intend to Use the Proceeds of the Offering [SAME AS OFFERING PROSPECTUS] Benefits of the Conversion to Management [SAME AS OFFERING PROSPECTUS] Purchases by Directors and Executive Officers [SAME AS OFFERING PROSPECTUS] Market for New Sugar Creek s Common Stock [SAME AS OFFERING PROSPECTUS] Our Dividend Policy [SAME AS OFFERING PROSPECTUS] Dissenters Rights Shareholders of Old Sugar Creek do not have dissenters rights in connection with the conversion and offering. Differences in Shareholder Rights As a result of the conversion, existing shareholders of Old Sugar Creek will become shareholders of New Sugar Creek. The rights of shareholders of New Sugar Creek will be less than the rights shareholders currently have. The decrease in shareholder rights results from differences between the articles of incorporation and bylaws of New Sugar Creek and the charter and bylaws of Old Sugar Creek and from distinctions between Maryland and federal law. The differences in shareholder rights under the articles of incorporation and bylaws of New Sugar Creek are not mandated by Maryland 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 Sugar Creek s articles 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 articles of incorporation and bylaws; limitation on the right to vote shares; a majority of shareholders required to call special meetings of shareholders; and greater lead time required for shareholders to submit business proposals or director nominations. Table of Contents DESCRIPTION OF THE 401(k) PLAN Introduction Tempo Bank adopted the 401(k) Plan effective . Tempo Bank intends for the 401(k) Plan to comply, in form and in operation, with all applicable provisions of the Internal Revenue Code and the Employee Retirement Income Security Act of 1974, as amended ( ERISA ). Tempo Bank may amend the 401(k) Plan from time to time in the future to ensure continued compliance with these laws. Tempo Bank may also amend the 401(k) Plan from time to time in the future to add, modify, or eliminate certain features of the plan, as it sees fit. Federal law provides you with various rights and protections as a participant in the 401(k) Plan, which is governed by ERISA. However, the Pension Benefit Guaranty Corporation does not guarantee your benefits under the 401(k) Plan. Reference to Full Text of the Plan. The following portions of this prospectus supplement summarize the material provisions of the 401(k) Plan. Tempo Bank qualifies this summary in its entirety by reference to the full text of the 401(k) Plan. You may obtain copies of the 401(k) Plan document, including any amendments to the plan and a summary plan description, by contacting at . You should carefully read the 401(k) Plan documents to understand your rights and obligations under the 401(k) Plan. Eligibility and Participation Tempo Bank employees are eligible to participate in the 401(k) Plan on the first day of the month coinciding with or next following the date an employee completes one (1) year of service. A year of service is defined as a consecutive 12-month period in which an employee completes 1,000 hours of employment. As of September 30, 2013, of the eligible employees of Tempo Bank participated in the 401(k) Plan. Contributions Under the 401(k) Plan Employee Pre-Tax Contributions. As a 401(k) Plan participant, you may defer a percentage of your salary (1% to 20%) into the 401(k) Plan, however, the most you may contribute on a before tax basis in any Plan Year is $17,500 for 2013 (this amount may be adjusted annually by law). For purposes of the Plan, salary is defined as the wages paid to you by Tempo Bank. It includes, among other things, overtime, commissions and bonuses. The maximum amount of your salary that may be used for purposes of the 401(k) Plan is $255,000 for the 2013 Plan Year. In addition to pre-tax salary deferrals, you may make catch up contributions if you are currently age 50 or will be 50 before the end of the calendar year. The catch up contribution limit for 2013 is $5,500. You are always 100% vested in your elective deferrals. Matching Contributions. The 401(k) Plan currently provides that Tempo Bank will make matching contributions on behalf of each eligible participant with respect to each eligible participant s elective deferrals. If you elect to defer funds into the 401(k) Plan, Tempo Bank currently matches 100% of up to the first 4% of salary you defer into the 401(k) Plan. Tempo Bank makes matching contributions only to those participants who actively defer a percentage of their compensation into the 401(k) Plan. Rollover Contributions. Tempo Bank allows employees who receive a distribution from a previous employer s tax-qualified employee benefit plan to deposit that distribution into a Rollover Contribution account under the 401(k) Plan, provided the rollover contribution satisfies IRS requirements. For additional information on Rollover Contributions see the Summary Plan Description for the 401(k) Plan. Table of Contents The normal business operations of Tempo Bank will continue without interruption during the conversion and offering, and the same officers and directors who currently serve Tempo Bank in the mutual holding company structure will serve New Sugar Creek and Tempo Bank in the fully converted stock form. Reasons for the Conversion and Offering Our primary reasons for the conversion and offering are the following: Eliminate the uncertainties associated with the mutual holding company structure under financial reform legislation; Transition us to a more familiar and flexible organizational structure; Enhance our regulatory capital position; Facilitate future mergers and acquisitions; and Improve the liquidity of our shares of common stock. Terms of the Offering We are offering between 455,358 and 616,072 shares of common stock in a subscription offering to eligible depositors and borrowers of Tempo Bank 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 Clinton, Madison and St. Clair Counties, Illinois, 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 708,483 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], 2014, or the number of shares of common stock to be sold is increased to more than 708,483 shares or decreased to less than 455,358 shares. If we extend the offering beyond [Date 2], 2014, 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 Tempo Bank s passbook savings rate or cancel your deposit account withdrawal authorization. If we intend to sell fewer than 455,358 shares or more than 708,483 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. 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 $7.00 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 An investment in the common stock of New Sugar Creek involves a degree of risk, including the possible loss of principal. You should carefully read and consider the information set forth in Risk Factors before purchasing shares of New Sugar Creek common stock. How We Determined the Offering Range and Exchange Ratio Federal regulations require that the aggregate purchase price of the securities sold in the offering be based upon our estimated pro forma market value after the conversion (i.e., taking into account the expected receipt of proceeds from the sale Table of Contents Tax Consequences (page ) [SAME AS OFFERING PROSPECTUS] Questions Questions about voting may be directed to our proxy information agent, , at ( ) . Table of Contents 401(k) Plan Investments Effective September 30, 2013, the 401(k) Plan offers the following investment choices: Annual Rates of Return as of December 31, Fund Name 2010 2011 2012 SSgA Target Retirement Funds: SSgA Target Retirement Inc NL Fund % % % SSgA Target Retirement 2010 NL Fund SSgA Target Retirement 2015 NL Fund SSgA Target Retirement 2020 NL Fund SSgA Target Retirement 2025 NL Fund SSgA Target Retirement 2030 NL Fund SSgA Target Retirement 2035 NL Fund SSgA Target Retirement 2040 NL Fund SSgA Target Retirement 2045 NL Fund SSgA Target Retirement 2050 NL Fund SSgA Target Retirement 2055 NL Fund SSgA Conservative Balanced SL Fund SSgA Moderate Balanced SL Fund SSgA Aggressive Balanced SL Fund Invesco Stable Value Trust Fund SSgA Short Term Investment Fund SSgA Government Short Term Investment Fund SSgA US Inflation Prot Bond NL Fund SSgA US Long Treasury Index NL Fund SSgA US Bond Index NL Fund SSgA S&P 500 Index NL Fund SSgA S&P LargeCap Value Index SL Fund SSgA S&P LargeCap Growth Index SL Fund SSgA S&P MidCap Index SL Fund SSgA Russell SmallCap Value Index SL Fund SSgA Nasdaq-100 Index NL Fund SSgA Reit Index NL Fund SSgA International Index NL Fund Employer Stock Fund (Tempo Bank) SSgA Target Retirement Funds. The funds seek to offer complete, low cost investment strategies with asset allocations which become more conservative as you near retirement. You simply select the fund with a date closest to when you expect to retire and invest accordingly. SSgA Conservative Balanced SL Fund. The fund seeks to offer a broad diversification and a disciplined rebalancing process by investing approximately 20% of the fund s assets in U.S. stocks, 5% in international stocks and 75% in U.S. bonds. SSgA Moderate Balanced SL Fund. The fund seeks to offer a broad diversification and a disciplined rebalancing process by investing approximately 45% of the fund s assets in U.S. stocks, 10% in international stocks and 45% in U.S. bonds. SSgA Aggressive Balanced SL Fund. The fund seeks to offer a broad diversification and a disciplined rebalancing process by investing approximately 70% of the fund s assets in U.S. stocks, 15% in international stocks and 15% in U.S. bonds. Invesco Stable Value Trust Fund. The primary investment objective of the Fund will be to seek the preservation of principal and to provide interest income reasonably obtained under prevailing market conditions and rates, consistent with seeking to maintain required liquidity. SSgA Short Term Investment Fund. The fund seeks to offer safety of principal and a competitive yield to maximize current income. Table of Contents of securities in the offering), as determined by an independent appraisal. In accordance with the regulations of the Federal Reserve Board, a valuation range is established which ranges from 15% below to 15% above this pro forma market value. We have retained RP Financial, LC., which is experienced in the evaluation and appraisal of financial institutions, to prepare the appraisal. RP Financial has indicated that in its valuation as of January 17, 2014, New Sugar Creek s common stock s estimated full market value was $6.7 million, resulting in a valuation range from $5.7 million at the minimum to $7.7 million at the maximum. This results in an offering range of $3.2 million to $4.3 million, with a midpoint of $3.8 million. RP Financial will receive fees totaling $25,000 for its appraisal report, plus $2,500 for any appraisal updates (of which there will be at least one) and reimbursement of out-of-pocket expenses. The appraisal was based in part upon Old Sugar Creek s financial condition and results of operations, the effect of the additional capital we will raise from the sale of common stock in this offering, and an analysis of a peer group of ten publicly traded savings and loan holding companies that RP Financial considered comparable to Old Sugar Creek. A list of the appraisal peer group companies is set forth in The Conversion and Offering How We Determined the Offering Range and the $7.00 Purchase Price. In preparing its appraisal, RP Financial considered the information in this prospectus, including our financial statements. RP Financial also considered the following factors, among others: our historical and projected operating results and financial condition, including, but not limited to, net interest income, the amount and volatility of interest income and interest expense relative to changes in market conditions and interest rates, asset quality, levels of loan loss provisions, the amount and sources of noninterest income, and the amount of noninterest expense; the economic, demographic and competitive characteristics of our market area, including, but not limited to, employment by industry type, unemployment trends, trends in the local real estate markets, size and growth of the population, trends in household and per capita income, and deposit market share; a comparative evaluation of our operating and financial statistics with those of other similarly-situated, publicly-traded savings associations and savings association holding companies, which included a comparative analysis of balance sheet composition, income statement and balance sheet ratios, credit and interest rate risk exposure; the effect of the capital raised in this offering on our net worth and earnings potential, including, but not limited to, the increase in consolidated equity resulting from the offering, the estimated increase in earnings resulting from the investment of the net proceeds of the offering and the estimated impact on consolidated equity and earnings resulting from adoption of the proposed employee stock benefit plans; and the trading market for Old Sugar Creek common stock and securities of comparable institutions and general conditions in the market for such securities. Four measures that some investors use to analyze whether a stock might be a good investment are the ratio of the offering price to the issuer s book value and tangible book value and the ratio of the offering price to the issuer s earnings and core earnings. RP Financial considered these ratios in preparing its appraisal, among other factors. Book value is the same as total equity and represents the difference in value between the issuer s assets and liabilities. Tangible book value is equal to total equity minus intangible assets. Core earnings, for purposes of the appraisal, was defined as net earnings after taxes, excluding the after-tax portion of income from non-recurring items. In applying each of the valuation methods, RP Financial considered adjustments to our pro forma market value based on a comparison of New Sugar Creek with the peer group. RP Financial made downward adjustments for earnings, asset growth, liquidity of the stock and stock market conditions. No adjustments were made for financial condition, primary market area, dividend policy, management or the effect of government regulations and regulatory reform. Factors supporting the downward valuation adjustment for earnings included our lower profitability ratios, implied greater interest rate risk, and perceived more limited earnings growth potential. A downward valuation adjustment for asset growth was applied based in part on our recent asset shrinkage in comparison to asset growth by the peer group. A downward adjustment for liquidity was applied based on our lower expected market capitalization and number of common shares to be outstanding, along with the expectation that our shares will trade on the OTC Bulletin Board, versus the peer group, all of whom trade on NASDAQ. The valuation adjustment for stock market conditions took into consideration the prevailing stock market environment for the common stock of thrifts and their holding companies, which has increased in recent periods based on the performance of industry indices, but such increases have generally been relatively less than the stock market as a whole. Table of Contents
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+Table of Contents certain third party investigator-reported interim data from some of our trials, including interim data for which we have not yet independently reviewed the source data. We also sometimes rely on such investigator-reported interim data in making business decisions. Independent review of the data could fail to confirm the investigator-reported interim data, which may lead to revisions in disclosed clinical trial results in the future. Any such revisions that reveal more negative data than previously disclosed investigator-reported interim data could have an adverse impact on our business prospects and the trading price of our common stock. Such revisions could also reduce investor confidence in investigator-reported interim data that we disclose in the future. If any of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms. Switching or adding additional CROs involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new CRO begins work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter similar challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition, and prospects. The market opportunities for our product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small. Cancer therapies are sometimes characterized as first line, second line, or third line, and the FDA often approves new therapies initially only for third line use. When cancer is detected early enough, first line therapy is sometimes adequate to cure the cancer or prolong life without a cure. Whenever first line therapy, usually chemotherapy, hormone therapy, surgery, or a combination of these, proves unsuccessful, second line therapy may be administered. Second line therapies often consist of more chemotherapy, radiation, antibody drugs, tumor targeted small molecules, or a combination of these. Third line therapies can include bone marrow transplantation, antibody and small molecule targeted therapies, more invasive forms of surgery, and new technologies. We expect to initially seek approval of our product candidates as a third line therapy for patients who have failed other approved treatments. Subsequently, for those products that prove to be sufficiently beneficial, if any, we would expect to seek approval as a second line therapy and potentially as a first line therapy, but there is no guarantee that our product candidates, even if approved, would be approved for second line or first line therapy. In addition, we may have to conduct additional clinical trials prior to gaining approval for second line or first line therapy. Our projections of both the number of people who have the cancers we are targeting, as well as the subset of people with these cancers in a position to receive third line therapy and who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, or market research and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these cancers. The number of patients may turn out to be lower than expected. Additionally, the potentially addressable patient population for our product candidates may be limited or may not be amenable to treatment with our product candidates. For instance, with our CD19 product candidates we expect to initially target a small patient population that suffers from ALL and certain types of aggressive NHL. Even if we obtain significant market share for our product candidates, because the potential target populations are small, we may never achieve profitability without obtaining regulatory approval for additional indications, including use as a first or second line therapy. Our market opportunities may also be limited by competitor treatments that may enter the market. See the risk factor below We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. Table of Contents We plan to seek orphan drug status for some or all of our CD19 product candidates, but we may be unable to obtain such designations or to maintain the benefits associated with orphan drug status, including market exclusivity, which may cause our revenue, if any, to be reduced. Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the United States will be recovered from sales in the United States for that drug or biologic. Orphan drug designation must be requested before submitting a BLA. In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages, and user-fee waivers. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a BLA, to market the same biologic for the same indication for seven years, except in limited circumstances such as a showing of clinical superiority to the product with orphan drug exclusivity or if FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. As a result, even if one of our drug candidates receives orphan exclusivity, the FDA can still approve other drugs that have a different active ingredient for use in treating the same indication or disease. Furthermore, the FDA can waive orphan exclusivity if we are unable to manufacture sufficient supply of our product. We plan to seek orphan drug designation for some or all of our CD19 product candidates in specific orphan indications in which there is a medically plausible basis for the use of these products, including relapsed/refractory ALL and relapsed/refractory NHL indications. We have obtained orphan drug designation for each of JCAR015 and JCAR014 for the treatment of ALL. Even when we obtain orphan drug designation, exclusive marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan designated indication and may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. In addition, although we intend to seek orphan drug designation for other product candidates, we may never receive such designations. We plan to seek but may fail to obtain breakthrough therapy designation for some or all of our CD19 product candidates. In 2012, the FDA established a breakthrough therapy designation which is intended to expedite the development and review of products that treat serious or life-threatening diseases when preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The designation of a product candidate as a breakthrough therapy provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate and ensure collection of appropriate data needed to support approval; more frequent written correspondence from FDA about such things as the design of the proposed clinical trials and use of biomarkers; intensive guidance on an efficient drug development program, beginning as early as Phase I; organizational commitment involving senior managers; and eligibility for rolling review and priority review. Breakthrough therapy designation does not change the standards for product approval. We intend to seek breakthrough therapy designation for some or all of our CD19 product candidates for the treatment of ALL and aggressive NHL, but there can be no assurance that we will receive breakthrough therapy designation. Our Table of Contents collaborator MSK obtained breakthrough therapy designation for JCAR015 for r/r ALL, but we will have to seek such designation separately under our own IND, which we may not receive. In addition, although we intend to seek breakthrough therapy designation for other product candidates, we may never receive such designations. We currently have no marketing and sales organization and have no experience in marketing products. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to generate product revenue. We currently have no sales, marketing, or commercial product distribution capabilities and have no experience in marketing products. We intend to develop an in-house marketing organization and sales force, which will require significant capital expenditures, management resources, and time. We will have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train, and retain marketing and sales personnel. If we are unable or decide not to establish internal sales, marketing and commercial distribution capabilities for any or all products we develop, we will likely pursue collaborative arrangements regarding the sales and marketing of our products. However, there can be no assurance that we will be able to establish or maintain such collaborative arrangements, or if we are able to do so, that they will have effective sales forces. Any revenue we receive will depend upon the efforts of such third parties, which may not be successful. We may have little or no control over the marketing and sales efforts of such third parties, and our revenue from product sales may be lower than if we had commercialized our product candidates ourselves. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates. There can be no assurance that we will be able to develop in-house sales and commercial distribution capabilities or establish or maintain relationships with third-party collaborators to successfully commercialize any product in the United States or overseas, and as a result, we may not be able to generate product revenue. A variety of risks associated with operating our business internationally could materially adversely affect our business. We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we, and any potential collaborators in those jurisdictions, will be subject to additional risks related to operating in foreign countries, including: differing regulatory requirements in foreign countries; unexpected changes in tariffs, trade barriers, price and exchange controls, and other regulatory requirements; economic weakness, including inflation, or political instability in particular foreign economies and markets; compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; foreign taxes, including withholding of payroll taxes; foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; difficulties staffing and managing foreign operations; workforce uncertainty in countries where labor unrest is more common than in the United States; Table of Contents potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign laws; challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and business interruptions resulting from geo-political actions, including war and terrorism. These and other risks associated with our planned international operations may materially adversely affect our ability to attain or maintain profitable operations. We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. The biopharmaceutical industry, and the rapidly evolving market for developing genetically engineered T cells in particular, is characterized by intense competition and rapid innovation. Our competitors may be able to develop other compounds or drugs that are able to achieve similar or better results. Our potential competitors include major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, and other research institutions. Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations as well as established sales forces. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized, or less costly than our product candidates or may develop proprietary technologies or secure patent protection that we may need for the development of our technologies and products. Specifically, genetically engineering T cells faces significant competition in both the CAR and TCR technology space from multiple companies and their collaborators, such as Novartis/University of Pennsylvania, Bluebird bio/Celgene/Baylor College of Medicine, Kite Pharma/National Cancer Institute, Cellectis/Pfizer, Adaptimmune/GSK, and Intrexon/Ziopharm. We face competition from non-cell based treatments offered by other companies such as Amgen, AstraZeneca, Bristol-Myers, Incyte, Merck, and Roche. Even if we obtain regulatory approval of our product candidates, we may not be the first to market and that may affect the price or demand for our product candidates. Additionally, the availability and price of our competitors products could limit the demand and the price we are able to charge for our product candidates. We may not be able to implement our business plan if the acceptance of our product candidates is inhibited by price competition or the reluctance of physicians to switch from existing methods of treatment to our product candidates, or if physicians switch to other new drug or biologic products or choose to reserve our product candidates for use in limited circumstances. Additionally, a competitor could obtain orphan product exclusivity from the FDA with respect to such competitor s product. If such competitor product is determined to be the same product as one of our product candidates, that may prevent us from obtaining approval from the FDA for such product candidate for the same indication for seven years, except in limited circumstances. For additional information regarding our competition, see the section of this prospectus captioned Business Competition. Table of Contents We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy. Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract, motivate and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our management, particularly our chief executive officer, Hans Bishop, and our scientific and medical personnel. The loss of the services of any of our executive officers, other key employees, and other scientific and medical advisors, and our inability to find suitable replacements, could result in delays in product development and harm our business. We conduct our operations at our facility in Seattle, Washington, in a region that is headquarters to many other biopharmaceutical companies and many academic and research institutions. Competition for skilled personnel is intense and the turnover rate can be high, which may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all. We expect that we will need to recruit talent from outside of our region, and doing so may be costly and difficult. To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided restricted stock and stock option grants that vest over time. The value to employees of these equity grants that vest over time may be significantly affected by movements in our stock price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies. Although we have employment agreements with our key employees, these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice. We do not maintain key man insurance policies on the lives of all of these individuals or the lives of any of our other employees. We will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth. As of September 30, 2014, we had 70 employees, most of whom are full-time. As our development and commercialization plans and strategies develop, and as we transition into operating as a public company, we must add a significant number of additional managerial, operational, sales, marketing, financial, and other personnel. Future growth will impose significant added responsibilities on members of management, including: identifying, recruiting, integrating, maintaining, and motivating additional employees; managing our internal development efforts effectively, including the clinical and FDA review process for our product candidates, while complying with our contractual obligations to contractors and other third parties; and improving our operational, financial and management controls, reporting systems, and procedures. Our future financial performance and our ability to commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities. Our efforts to manage our growth are complicated by the fact that all of our executive officers other than our chief executive officer have joined us since January 2014. This lack of long-term experience working together may adversely impact our senior management team s ability to effectively manage our business and growth. We currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants to provide certain services. There can be no assurance that the services of these independent organizations, advisors and consultants will continue to be available to us on a Table of Contents timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed, or terminated, and we may not be able to obtain regulatory approval of our product candidates or otherwise advance our business. There can be no assurance that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, if at all. If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development, and commercialization goals. Our success payment obligations to FHCRC and MSK may result in dilution to our stockholders, may be a drain on our cash resources, or may cause us to incur debt obligations to satisfy the payment obligations. We have agreed to make success payments to each of FHCRC and MSK pursuant to the terms of our agreements with each of those entities. These success payments will be based on increases in the estimated fair value of our common stock, payable in cash or publicly-traded equity at our discretion. The term of these obligations may last up to 11 years. Success payments will be owed (if applicable) after measurement of the value of our common stock in connection with the following valuation dates during the success payment period: (1) the date on which we complete an initial public offering of our common stock, or our shares otherwise become publicly traded; (2) the date on which we sell, lease, transfer or exclusively license all or substantially all of our assets to another company; (3) the date on which we merge or consolidate with or into another entity (other than a merger in which our pre-merger stockholders own a majority of the shares of the surviving entity), (4) any date on which ARCH Venture Fund VII, L.P. or C.L. Alaska L.P. transfers a majority of its shares of company capital stock held by it on such date to a third party; (5) the second anniversary of any event described in the preceding clauses (1), (2), (3) or (4), but only upon a request by FHCRC made within 20 calendar days after receiving written notice from us of such event; and (6) the last day of the 11 year period. The amount of a success payment is determined based on whether the value of our common stock meets or exceeds certain specified threshold values ascending, in the case of FHCRC, from $20.00 per share to $160.00 per share and, in the case of MSK, from $40.00 per share to $120.00 per share, in each case subject to adjustment for any stock dividend, stock split, combination of shares, or other similar events. Each threshold is associated with a success payment, ascending, in the case of FHCRC, from $10 million at $20.00 per share to $375 million at $160.00 per share and, in the case of MSK, from $10 million at $40.00 per share to $150 million at $120.00 per share, payable if such threshold is reached. The maximum aggregate amount of success payments to FHCRC is $375 million and to MSK is $150 million. The amount of success payments payable to FHCRC will be reduced by certain indirect costs paid by us to FHCRC related to collaboration projects conducted by FHCRC. See the section of this prospectus captioned Business Licenses and Third-Party Research Collaborations for further discussion of these success payments. This offering will trigger a possible success payment to each of FHCRC and MSK. However, we will not be able to determine until the first anniversary of the closing of this offering (or a 90-day grace period following such anniversary, at our option if we are contemplating a capital market transaction during such grace period) whether any such payment is required to be made and the amount of such payment. The value of any such initial public offering success payment will be determined by the average trading price of a share of our common stock over the consecutive 90-day period preceding such determination date. For example, the first payment due to FHCRC would be due if the average trading price of the share of our common stock over the consecutive 90-day period preceding the determination is at least $20.00 per share, subject to adjustment for any stock dividend, stock split, combination of shares, and other similar events. In order to satisfy our obligations to make these success payments, if and when they are triggered, we may issue equity securities that may cause dilution to our stockholders, or we may use our existing cash or incur debt obligations to satisfy the success payment obligation in cash, which may adversely affect our financial position. Table of Contents The success payment obligations to FHCRC and MSK may cause GAAP operating results to fluctuate significantly from quarter to quarter, which may reduce the usefulness of our GAAP financial statements. Our success payment obligations to FHCRC and MSK are recorded as a liability on our balance sheet. Under generally accepted accounting principles in the United States, or GAAP, we are required to estimate the fair value of this liability as of each quarter end and changes in estimated fair value are amortized to expense over the remaining term of the collaboration agreement. Factors that may lead to increases or decreases in the estimated fair value of this liability include, among others, changes in the value of the common stock, change in volatility, changes in the applicable term of the success payments, changes in the risk free rate, and changes in the estimated indirect costs related to the collaboration projects conducted by FHCRC that are creditable against FHCRC success payments. As a result, our operating results and financial condition as reported by GAAP may fluctuate significantly from quarter to quarter and from year to year and may reduce the usefulness of our GAAP financial statements. As of September 30, 2014 the estimated fair values of the liabilities associated with the success payments were $6.4 million and $2.5 million related to FHCRC and MSK, respectively. We have entered into collaborations and may form or seek collaborations or strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements. We may form or seek strategic alliances, create joint ventures or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to our product candidates and any future product candidates that we may develop. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business. For example, in December 2014, we entered into an exclusive license agreement with Opus Bio pursuant to which Opus Bio has agreed to grant us an exclusive, worldwide, sublicenseable license under certain patent rights related to a CD22-directed CAR product candidate, subject to certain specified conditions. If the conditions on the effectiveness of the license agreement are satisfied, we will be obligated to issue to Opus Bio 1,602,564 shares of our capital stock. In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy. Further, collaborations involving our product candidates, such as our collaborations with third-party research institutions, are subject to numerous risks, which may include the following: collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration; collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities; collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates; a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to their marketing and distribution; Table of Contents collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our product candidates, or that result in costly litigation or arbitration that diverts management attention and resources; collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property. As a result, if we enter into collaboration agreements and strategic partnerships or license our products or businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, which could delay our timelines or otherwise adversely affect our business. We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction. Any delays in entering into new collaborations or strategic partnership agreements related to our product candidates could delay the development and commercialization of our product candidates in certain geographies for certain indications, which would harm our business prospects, financial condition, and results of operations. If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may evaluate various acquisitions and strategic partnerships, including licensing or acquiring complementary products, intellectual property rights, technologies, or businesses. Any potential acquisition or strategic partnership may entail numerous risks, including: increased operating expenses and cash requirements; the assumption of additional indebtedness or contingent liabilities; the issuance of our equity securities; assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; the diversion of our management s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition; retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships; risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; and our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs. Table of Contents In addition, if we undertake acquisitions, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense. Moreover, we may not be able to locate suitable acquisition opportunities and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business. Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships, and alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us. If we, our CROs or our CMOs use hazardous and biological materials in a manner that causes injury or violates applicable law, we may be liable for damages. Our research and development activities involve the controlled use of potentially hazardous substances, including chemical and biological materials, by us or third parties, such as CROs and CMOs. We and such third parties are subject to federal, state, and local laws and regulations in the United States governing the use, manufacture, storage, handling, and disposal of medical and hazardous materials. Although we believe that our and such third parties procedures for using, handling, storing, and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury resulting from medical or hazardous materials. As a result of any such contamination or injury, we may incur liability or local, city, state, or federal authorities may curtail the use of these materials and interrupt our business operations. In the event of an accident, we could be held liable for damages or penalized with fines, and the liability could exceed our resources. We do not have any insurance for liabilities arising from medical or hazardous materials. Compliance with applicable environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development and production efforts, which could harm our business, prospects, financial condition, or results of operations. Our internal computer systems, or those used by our third-party research institution collaborators, CROs or other contractors or consultants, may fail or suffer security breaches. Despite the implementation of security measures, our internal computer systems and those of our future CROs and other contractors and consultants are vulnerable to damage from computer viruses and unauthorized access. Although to our knowledge we have not experienced any such material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Likewise, we rely on our third-party research institution collaborators for research and development of our product candidates and other third parties for the manufacture of our product candidates and to conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on our business. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidates could be delayed. Table of Contents Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses. Our operations, and those of our third-party research institution collaborators, CROs, CMOs, suppliers, and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics, and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured. In addition, we rely on our third-party research institution collaborators for conducting research and development of our product candidates, and they may be affected by government shutdowns or withdrawn funding. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. We rely on third-party manufacturers to produce and process our product candidates on a patient-by-patient basis. Our ability to obtain clinical supplies of our product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption. All of our operations including our corporate headquarters are located in a single facility in Seattle, Washington. Damage or extended periods of interruption to our corporate, development or research facilities due to fire, natural disaster, power loss, communications failure, unauthorized entry or other events could cause us to cease or delay development of some or all of our product candidates. Although we maintain property damage and business interruption insurance coverage on these facilities, our insurance might not cover all losses under such circumstances and our business may be seriously harmed by such delays and interruption. If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates. We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in: decreased demand for our products; injury to our reputation; withdrawal of clinical trial participants and inability to continue clinical trials; initiation of investigations by regulators; costs to defend the related litigation; a diversion of management s time and our resources; substantial monetary awards to trial participants or patients; product recalls, withdrawals or labeling, marketing or promotional restrictions; loss of revenue; exhaustion of any available insurance and our capital resources; Table of Contents the inability to commercialize any product candidate; and a decline in our share price. Our inability to obtain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or with collaborators. Although we currently carry $5.0 million of clinical trial insurance, the amount of such insurance coverage may not be adequate, we may be unable to maintain such insurance, or we may not be able to obtain additional or replacement insurance at a reasonable cost, if at all. Our insurance policies may also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise. Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2013, we had federal net operating loss carryforwards of approximately $5.6 million, which will expire in 2033. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an ownership change (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited. As a result of our most recent private placements and other transactions that have occurred since our incorporation in August 2013, we may have experienced, and, in connection with this offering, may experience, such an ownership change. We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which changes are outside our control. As a result, our ability to use our pre-change net operating loss carryforwards and other pre-change tax attributes to offset post-change taxable income or taxes may be subject to limitation. Risks Related to Government Regulation The FDA regulatory approval process is lengthy, time-consuming, and inherently unpredictable, and we may experience significant delays in the clinical development and regulatory approval, if any, of our product candidates. The research, testing, manufacturing, labeling, approval, selling, import, export, marketing, and distribution of drug products, including biologics, are subject to extensive regulation by the FDA and other regulatory authorities in the United States. We are not permitted to market any biological drug product in the United States until we receive a Biologics License from the FDA. We have not previously submitted a BLA to the FDA, or similar approval filings to comparable foreign authorities. A BLA must include extensive preclinical and clinical data and supporting information to establish that the product candidate is safe, pure, and potent for each desired indication. The BLA must also include significant information regarding the chemistry, manufacturing, and controls for the product, and the manufacturing facilities must complete a successful pre-license inspection. We expect the novel nature of our product candidates to create further challenges in obtaining regulatory approval. For example, the FDA has limited experience with commercial development of genetically modified T cell therapies for cancer. The FDA may also require a panel of experts, referred to as an Advisory Committee, to deliberate on the adequacy of the safety and efficacy data to support licensure. The opinion of the Advisory Committee, although not binding, may have a significant impact on our ability to obtain licensure of the product candidates based on the completed clinical trials. Accordingly, the regulatory approval pathway for our product candidates may be uncertain, complex, expensive, and lengthy, and approval may not be obtained. Table of Contents In addition, clinical trials can be delayed or terminated for a variety of reasons, including delays or failures related to: obtaining regulatory approval to begin a trial, if applicable; the availability of financial resources to begin and complete the planned trials; reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; obtaining approval at each clinical trial site by an independent institutional review board, or IRB; recruiting suitable patients to participate in a trial in a timely manner; having patients complete a trial or return for post-treatment follow-up; clinical trial sites deviating from trial protocol, not complying with cGCPs, or dropping out of a trial; addressing any patient safety concerns that arise during the course of a trial; addressing any conflicts with new or existing laws or regulations; adding new clinical trial sites; or manufacturing qualified materials under cGMPs for use in clinical trials. Patient enrollment is a significant factor in the timing of clinical trials and is affected by many factors. See the risk factor above If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected for additional information on risks related to patient enrollment. Further, a clinical trial may be suspended or terminated by us, the IRBs for the institutions in which such trials are being conducted, the Data Monitoring Committee for such trial, or the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. If we experience termination of, or delays in the completion of, any clinical trial of our product candidates, the commercial prospects for our product candidates will be harmed, and our ability to generate product revenue will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down our product development and approval process and jeopardize our ability to commence product sales and generate revenue. Our third-party research institution collaborators may also experience similar difficulties in completing ongoing clinical trials and conducting future clinical trials of product candidates. Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions. Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, but a failure or Table of Contents delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the United States, including additional preclinical studies or clinical trials as clinical studies conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. If we fail to comply with the regulatory requirements in international markets and/or to receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed. Even if we receive regulatory approval of our product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our product candidates. If our product candidates are approved, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy, and other post-market information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities. Manufacturers and manufacturers facilities are required to comply with extensive FDA, and comparable foreign regulatory authority, requirements, including ensuring that quality control and manufacturing procedures conform to current Good Manufacturing Practices, or cGMP, and in certain cases Good Tissue Practices, or cGTP, regulations. As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any BLA, other marketing application, and previous responses to inspection observations. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality control. Any regulatory approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase IV clinical trials and surveillance to monitor the safety and efficacy of the product candidate. The FDA may also require a REMS program as a condition of approval of our product candidates, which could entail requirements for long-term patient follow-up, a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA or a comparable foreign regulatory authority approves our product candidates, we will have to comply with requirements including submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs and cGCPs for any clinical trials that we conduct post-approval. The FDA may impose consent decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution Table of Contents restrictions or other restrictions under a REMS program. Other potential consequences include, among other things: restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market, or voluntary or mandatory product recalls; fines, warning letters, or holds on clinical trials; refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals; product seizure or detention, or refusal to permit the import or export of our product candidates; and injunctions or the imposition of civil or criminal penalties. The FDA strictly regulates marketing, labeling, advertising, and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. The policies of the FDA and of other regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability. In addition, if we were able to obtain accelerated approval of any of our CD19 product candidates, the FDA would require us to conduct a confirmatory study to verify the predicted clinical benefit and additional safety studies. The results from the confirmatory study may not support the clinical benefit, which would result in the approval being withdrawn. While operating under accelerated approval, we will be subject to certain restrictions that we would not be subject to upon receiving regular approval. Even if we obtain regulatory approval of our product candidates, the products may not gain market acceptance among physicians, patients, hospitals, cancer treatment centers, and others in the medical community. The use of engineered T cells as a potential cancer treatment is a recent development and may not become broadly accepted by physicians, patients, hospitals, cancer treatment centers, and others in the medical community. We expect physicians in the large bone marrow transplant centers to be particularly influential, and we may not be able to convince them to use our product candidates for many reasons. For example, certain of the product candidates that we will be developing target a cell surface marker that may be present on cancer cells as well as non-cancerous cells. It is possible that our product candidates may kill these non-cancerous cells, which may result in unacceptable side effects, including death. Additional factors will influence whether our product candidates are accepted in the market, including: the clinical indications for which our product candidates are approved; physicians, hospitals, cancer treatment centers, and patients considering our product candidates as a safe and effective treatment; the potential and perceived advantages of our product candidates over alternative treatments; Table of Contents the prevalence and severity of any side effects; product labeling or product insert requirements of the FDA or other regulatory authorities; limitations or warnings contained in the labeling approved by the FDA; the timing of market introduction of our product candidates as well as competitive products; the cost of treatment in relation to alternative treatments; the amount of upfront costs or training required for physicians to administer our product candidates; the availability of adequate coverage, reimbursement, and pricing by third-party payors and government authorities; the willingness of patients to pay out-of-pocket in the absence of coverage and reimbursement by third-party payors and government authorities; relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; and the effectiveness of our sales and marketing efforts. In addition, although we are not utilizing embryonic stem cells or replication competent vectors, adverse publicity due to the ethical and social controversies surrounding the therapeutic use of such technologies, and reported side effects from any clinical trials using these technologies or the failure of such trials to demonstrate that these therapies are safe and effective may limit market acceptance our product candidates. If our product candidates are approved but fail to achieve market acceptance among physicians, patients, hospitals, cancer treatment centers or others in the medical community, we will not be able to generate significant revenue. Even if our products achieve market acceptance, we may not be able to maintain that market acceptance over time if new products or technologies are introduced that are more favorably received than our products, are more cost effective or render our products obsolete. Coverage and reimbursement may be limited or unavailable in certain market segments for our product candidates, which could make it difficult for us to sell our product candidates profitably. Successful sales of our product candidates, if approved, depend on the availability of adequate coverage and reimbursement from third-party payors. In addition, because our product candidates represent new approaches to the treatment of cancer, we cannot accurately estimate the potential revenue from our product candidates. Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors are critical to new product acceptance. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drugs and treatments they will cover and the amount of reimbursement. Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor s determination that use of a product is: a covered benefit under its health plan; Table of Contents safe, effective and medically necessary; appropriate for the specific patient; cost-effective; and neither experimental nor investigational. In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors. As a result, obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and cost-effectiveness data for the use of our products on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained. Even if we obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain profitability or may require co-payments that patients find unacceptably high. Additionally, third-party payors may not cover, or provide adequate reimbursement for, long-term follow-up evaluations required following the use of our genetically modified products. Patients are unlikely to use our product candidates unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our product candidates. Because our product candidates have a higher cost of goods than conventional therapies, and may require long-term follow up evaluations, the risk that coverage and reimbursement rates may be inadequate for us to achieve profitability may be greater. We intend to seek approval to market our product candidates in both the United States and in selected foreign jurisdictions. If we obtain approval in one or more foreign jurisdictions for our product candidates, we will be subject to rules and regulations in those jurisdictions. In some foreign countries, particularly those in the EU, the pricing of biologics is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after obtaining marketing approval of a product candidate. In addition, market acceptance and sales of our product candidates will depend significantly on the availability of adequate coverage and reimbursement from third-party payors for our product candidates and may be affected by existing and future health care reform measures. Healthcare legislative reform measures may have a material adverse effect on our business and results of operations. Third-party payors, whether domestic or foreign, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the health care system that could impact our ability to sell our products profitably. In particular, in 2010, the Affordable Care Act was enacted, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program, extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations, subjected manufacturers to new annual fees and taxes for certain branded prescription drugs, and provided incentives to programs that increase the federal government s comparative effectiveness research. In addition, other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into Table of Contents effect in April 2013, and will remain in effect through 2024 unless additional Congressional action is taken. In January 2013, the American Taxpayer Relief Act of 2012, was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. We cannot predict the initiatives that may be adopted in the future. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect: the demand for our product candidates, if we obtain regulatory approval; our ability to set a price that we believe is fair for our products; our ability to generate revenue and achieve or maintain profitability; the level of taxes that we are required to pay; and the availability of capital. Any denial in coverage or reduction in reimbursement from Medicare or other government programs may result in a similar denial or reduction in payments from private payors, which may adversely affect our future profitability. Our employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We are exposed to the risk of fraud, misconduct or other illegal activity by our employees, independent contractors, consultants, commercial partners and vendors. Misconduct by these parties could include intentional, reckless and negligent conduct that fails to: comply with the laws of the FDA and other similar foreign regulatory bodies; provide true, complete and accurate information to the FDA and other similar foreign regulatory bodies; comply with manufacturing standards we have established; comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws; or report financial information or data accurately or to disclose unauthorized activities to us. If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase. These laws may impact, among other things, our current activities with principal investigators and research patients, as well as proposed and future sales, marketing and education programs. In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions. Table of Contents We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, physician payment transparency laws and health information privacy and security laws. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties. If we obtain FDA approval for any of our product candidates and begin commercializing those products in the United States, our operations may be directly, or indirectly through our customers, subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, the federal False Claims Act, and physician sunshine laws and regulations. These laws may impact, among other things, our proposed sales, marketing, and education programs. In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct our business. The laws that may affect our ability to operate include: the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs; federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid, or other third-party payors that are false or fraudulent or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government; the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization; the federal Physician Payment Sunshine Act, created under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, and its implementing regulations, which require manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children s Health Insurance Program to report annually to the U.S. Department of Health and Human Services, or HHS, information related to payments or other transfers of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers. Table of Contents Additionally, we are subject to state and foreign equivalents of each of the healthcare laws described above, among others, some of which may be broader in scope and may apply regardless of the payor. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. In addition, recent health care reform legislation has strengthened these laws. For example, the Affordable Care Act, among other things, amends the intent requirement of the federal Anti-Kickback and criminal healthcare fraud statutes. As a result of such amendment, a person or entity no longer needs to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation. Moreover, the Affordable Care Act provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act. Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations. In addition, the approval and commercialization of any of our product candidates outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws. Risks Related to Intellectual Property We depend on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business. We are dependent on patents, know-how, and proprietary technology, both our own and licensed from others. Any termination of these licenses could result in the loss of significant rights and could harm our ability to commercialize our product candidates. See the section of this prospectus captioned Business Intellectual Property and Licenses and Third-Party Research Collaboration Agreements for additional information regarding our license agreements. Disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including those relating to: the scope of rights granted under the license agreement and other interpretation-related issues; whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the license agreement; our right to sublicense patent and other rights to third parties under collaborative development relationships; whether we are complying with our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates; and the allocation of ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and by us and our partners. Table of Contents If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates. We are generally also subject to all of the same risks with respect to protection of intellectual property that we license as we are for intellectual property that we own, which are described below. If we or our licensors fail to adequately protect this intellectual property, our ability to commercialize our products could suffer. We depend, in part, on our licensors to file, prosecute, maintain, defend, and enforce patents and patent applications that are material to our business. Patents relating to our product candidates are controlled by certain of our licensors. Each of our licensors generally has rights to file, prosecute, maintain, and defend the patents we have licensed from such licensor. We generally have the first right to enforce our patent rights, although our ability to settle such claims often requires the consent of the licensor. If our licensors or any future licensees having rights to file, prosecute, maintain, and defend our patent rights fail to conduct these activities for patents or patent applications covering any of our product candidates, our ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors from making, using, or selling competing products. We cannot be certain that such activities by our licensors have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents or other intellectual property rights. Pursuant to the terms of the license agreements with some of our licensors, the licensors may have the right to control enforcement of our licensed patents or defense of any claims asserting the invalidity of these patents and, even if we are permitted to pursue such enforcement or defense, we cannot ensure the cooperation of our licensors. We cannot be certain that our licensors will allocate sufficient resources or prioritize their or our enforcement of such patents or defense of such claims to protect our interests in the licensed patents. Even if we are not a party to these legal actions, an adverse outcome could harm our business because it might prevent us from continuing to license intellectual property that we may need to operate our business. In addition, even when we have the right to control patent prosecution of licensed patents and patent applications, enforcement of licensed patents, or defense of claims asserting the invalidity of those patents, we may still be adversely affected or prejudiced by actions or inactions of our licensors and their counsel that took place prior to or after our assuming control. We may not be successful in obtaining or maintaining necessary rights to product components and processes for our product development pipeline. We own or license from third parties certain intellectual property rights necessary to develop our product candidates. The growth of our business will likely depend in part on our ability to acquire or in-license additional proprietary rights. For example, our programs may involve additional product candidates that may require the use of additional proprietary rights held by third parties. Our product candidates may also require specific formulations to work effectively and efficiently. These formulations may be covered by intellectual property rights held by others. We may be unable to acquire or in-license any relevant third-party intellectual property rights that we identify as necessary or important to our business operations. The effectiveness of our license from Opus Bio to certain patent rights related to a CD22-directed CAR product candidate is conditioned on obtaining (1) the consent of the NIH to a sublicense to us of certain NIH patents and (2) the agreement of the National Cancer Institute to separate the activities under its agreement with Opus Bio exclusively relating to CD22 and enter into a separate agreement with us relating to such activities on materially similar terms as such agreement and incorporate such activities into its agreement with us. We cannot assure you that those conditions will be achieved or that the license to the CD22-directed CAR product candidate will ever become effective. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all, which would harm our business. We may need to cease use of the compositions or methods covered by such third-party intellectual property rights, and may need to seek to develop alternative approaches that do not infringe on such intellectual property rights which may entail additional costs and development delays, even if we were able to develop such alternatives, which may not be feasible. Even if we are able to obtain a license under such intellectual property rights, any such license may be non-exclusive, which may allow our competitors access to the same technologies licensed to us. Table of Contents Additionally, we sometimes collaborate with academic institutions to accelerate our preclinical research or development under written agreements with these institutions. Typically, these institutions provide us with an option to negotiate a license to any of the institution s rights in technology resulting from the collaboration. Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us. If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program. If we are unable to successfully obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development of such program and our business and financial condition could suffer. The licensing and acquisition of third-party intellectual property rights is a competitive practice, and companies that may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or attractive in order to commercialize our product candidates. More established companies may have a competitive advantage over us due to their larger size and cash resources or greater clinical development and commercialization capabilities. There can be no assurance that we will be able to successfully complete such negotiations and ultimately acquire the rights to the intellectual property surrounding the additional product candidates that we may seek to acquire. If our license agreement with Opus Bio becomes effective, we will be dependent on intellectual property sublicensed to us by Opus Bio from the National Institutes of Health, or the NIH, for development of the licensed CD22-directed CAR product candidate. Failure to meet our own obligations to Opus Bio and the NIH may result in the loss of our rights to such intellectual property, which could harm our business. Under our license agreement with Opus Bio, the effectiveness of which is subject to certain conditions, we would be obligated to make certain pass-through payments to the NIH as well as to meet certain development benchmarks within certain time periods. We may be unable to make these payments or meet these benchmarks or may breach our other obligations under this license agreement, which could lead to the termination of the license agreement. One of the conditions on this agreement s effectiveness is that the NIH agree that our sublicense from Opus Bio will become a direct license from the NIH if the license agreements between the NIH and Opus Bio terminate. If we choose to waive this condition, then our sublicense will only survive termination of the license agreement between the NIH and Opus Bio, and become a direct license, if the NIH consents. In addition, the NIH has the right to require us to grant mandatory sublicenses to the intellectual property licensed from the NIH under certain specified circumstances, including if it is necessary to meet health and safety needs that we are not reasonably satisfying or if it is necessary to meet requirements for public use specified by federal regulations. Any required sublicense of these licenses could result in the loss of significant rights and could harm our ability to commercialize licensed products. We could be unsuccessful in obtaining or maintaining adequate patent protection for one or more of our products or product candidates. We anticipate that we will file additional patent applications both in the United States and in other countries, as appropriate. However, we cannot predict: if and when any patents will issue; the degree and range of protection any issued patents will afford us against competitors, including whether third parties will find ways to invalidate or otherwise circumvent our patents; whether others will apply for or obtain patents claiming aspects similar to those covered by our patents and patent applications; or whether we will need to initiate litigation or administrative proceedings to defend our patent rights, which may be costly whether we win or lose. Table of Contents Composition of matter patents for biological and pharmaceutical products such as CAR or TCR product candidates are generally considered to be the strongest form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use. We cannot be certain, however, that the claims in our pending patent applications covering the composition of matter of our product candidates will be considered patentable by the United States Patent and Trademark Office, or the USPTO, or by patent offices in foreign countries, or that the claims in any of our issued patents will be considered valid and enforceable by courts in the United States or foreign countries. Method of use patents protect the use of a product for the specified method. This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method. Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products off-label for those uses that are covered by our method of use patents. Although off-label prescriptions may infringe or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute. The strength of patents in the biotechnology and pharmaceutical field can be uncertain, and evaluating the scope of such patents involves complex legal and scientific analyses. The patent applications that we own or in-license may fail to result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries. Even if the patents do successfully issue, third parties may challenge the validity, enforceability, or scope thereof, which may result in such patents being narrowed, invalidated, or held unenforceable. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property or prevent others from designing their products to avoid being covered by our claims. If the breadth or strength of protection provided by the patent applications we hold with respect to our product candidates is threatened, this could dissuade companies from collaborating with us to develop, and could threaten our ability to commercialize, our product candidates. Further, if we encounter delays in our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced. Because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our product candidates. Furthermore, for U.S. applications in which all claims are entitled to a priority date before March 16, 2013, an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. For U.S. applications containing a claim not entitled to priority before March 16, 2013, there is a greater level of uncertainty in the patent law in view of the passage of the America Invents Act, which brought into effect significant changes to the U.S. patent laws, including new procedures for challenging pending patent applications and issued patents. Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information. In addition to the protection afforded by patents, we seek to rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce, and any other elements of our product discovery and development processes that involve proprietary know-how, information, or technology that is not covered by patents. Trade secrets, however, may be difficult to protect. We seek to protect our proprietary processes, in part, by entering into confidentiality agreements with our employees, consultants, outside scientific advisors, contractors, and collaborators. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, outside scientific advisors, contractors, and collaborators might intentionally or inadvertently disclose our trade secret information to competitors. In addition, competitors may otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, or misappropriation of our intellectual property by third Table of Contents parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results, and financial condition. Third-party claims of intellectual property infringement against us or our collaborators may prevent or delay our product discovery and development efforts. Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, derivation, and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions. Recently, due to changes in U.S. law referred to as patent reform, new procedures including inter partes review and post-grant review have been implemented. As stated above, this reform adds uncertainty to the possibility of challenge to our patents in the future. Numerous U.S. and foreign issued patents and pending patent applications owned by third parties exist in the fields in which we are developing our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may give rise to claims of infringement of the patent rights of others. Although we have conducted analyses of the patent landscape with respect to our CD19 product candidates, and based on these analyses, we believe that we will be able to commercialize our CD19 product candidates, third parties may nonetheless assert that we infringe their patents, or that we are otherwise employing their proprietary technology without authorization, and may sue us. For instance, Novartis Pharmaceutical Corporation has asserted in writing its belief that we infringe the following patents controlled by Novartis Pharmaceutical Corporation: U.S. Patent Nos. 7,408,053, 7,205,101, 7,527,925, and 7,442,525. There may be third-party patents of which we are currently unaware with claims to compositions, formulations, methods of manufacture, or methods of use or treatment that cover our product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies or the manufacture, use, or sale of our product candidates infringes upon these patents. If any such third-party patents were held by a court of competent jurisdiction to cover our technologies or product candidates, the holders of any such patents may be able to block our ability to commercialize the applicable product candidate unless we obtain a license under the applicable patents, or until such patents expire or are finally determined to be held invalid or unenforceable. Such a license may not be available on commercially reasonable terms or at all. If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, our ability to commercialize our product candidates may be impaired or delayed, which could in turn significantly harm our business. Third parties asserting their patent rights against us may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of management and other employee resources from our business, and may impact our reputation. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys fees for willful infringement, obtain one or more licenses from third parties, pay royalties, or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure. In that event, we would be unable to further develop and commercialize our product candidates, which could harm our business significantly. We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world. We have limited intellectual property rights outside the United States, and, in particular, some of our patents directed to CAR constructs do not extend outside of the United States. Filing, prosecuting, maintaining Table of Contents and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can have a different scope and strength than do those in the United States. In addition, the laws of some foreign countries, such as China, Brazil, Russia, India, and South Africa, do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement rights are not as strong as those in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or adequate to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, such as China, Brazil, Russia, India, and South Africa, do not favor the enforcement of patents, trade secrets and other intellectual property, particularly those relating to biopharmaceutical products, which could make it difficult in those jurisdictions for us to stop the infringement or misappropriation of our patents or other intellectual property rights, or the marketing of competing products in violation of our proprietary rights. Proceedings to enforce our patent and other intellectual property rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business. Furthermore such proceedings could put our patents at risk of being invalidated, held unenforceable, or interpreted narrowly, could put our patent applications at risk of not issuing, and could provoke third parties to assert claims of infringement or misappropriation against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming, and unsuccessful. Competitors may infringe our patents or the patents of our licensors. To cease such infringement or unauthorized use, we may be required to file patent infringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding or a declaratory judgment action against us, a court may decide that one or more of our patents is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceeding could put one or more of our patents at risk of being invalidated, held unenforceable, or interpreted narrowly and could put our patent applications at risk of not issuing. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. For example, we are party in Trustees of the University of Pennsylvania v. St. Jude Children s Research Hospital, Civil Action No. 2:13-cv-01502-SD (E.D. Penn.), which concerns in part U.S. Patent No. 8,399,645, or the 645 Patent, which we licensed from St. Jude Children s Research Hospital, or St. Jude. Together with St. Jude, we are adverse to the Trustees of the University of Pennsylvania and Novartis Pharmaceutical Corporation in that litigation. The outcome of the case and the timing of its resolution are uncertain, and may result in the invalidation of the 645 Patent. We have incurred substantial expenses in connection with this litigation and will continue to do so until the litigation is resolved. For further information regarding this litigation, see the section of this prospectus captioned Business Legal Proceedings. Interference or derivation proceedings provoked by third parties or brought by the USPTO may be necessary to determine the priority of inventions with respect to, or the correct inventorship of, our patents or patent applications or those of our licensors. An unfavorable outcome could result in a loss of our current patent Table of Contents rights and could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Litigation, interference, or derivation proceedings may result in a decision adverse to our interests and, even if we are successful, may result in substantial costs and distract our management and other employees. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court or before the USPTO or comparable foreign authority. If we or one of our licensing partners initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, inter partes review, post-grant review, and equivalent proceedings in foreign jurisdictions, such as opposition or derivation proceedings. Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover and protect our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity of our patents, for example, we cannot be certain that there is no invalidating prior art of which we, our patent counsel, and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection could have a material adverse impact on our business. Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products. As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involves, both technological and legal complexity, and is therefore costly, time-consuming, and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. For example, in a recent case, Assoc. for Molecular Pathology v. Myriad Genetics, Inc., the U.S. Supreme Court held that certain claims to naturally-occurring substances are not patentable. Although we do not believe that any of the patents owned or licensed by us will be found invalid based on this decision, we cannot predict how future decisions by the courts, the U.S. Congress, or the USPTO may impact the value of our patents. We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties. We have received confidential and proprietary information from third parties. In addition, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies. We may be Table of Contents subject to claims that we or our employees, consultants, or independent contractors have inadvertently or otherwise used or disclosed confidential information of these third parties or our employees former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial cost and be a distraction to our management and employees. Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application process. Although an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees, and failure to properly legalize and submit formal documents. In any such event, our competitors might be able to enter the market, which would have a material adverse effect on our business. The lives of our patents may not be sufficient to effectively protect our products and business. Patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after its first effective filing date. Although various extensions may be available, the life of a patent, and the protection it affords, is limited. Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from biosimilar or generic medications. Our issued patents will expire on dates ranging from 2015 to 2031, subject to any patent extensions that may be available for such patents. If patents are issued on our pending patent applications, the resulting patents are projected to expire on dates ranging from 2022 to 2035. In addition, although upon issuance in the United States a patent s life can be increased based on certain delays caused by the USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution. If we do not have sufficient patent life to protect our products, our business and results of operations will be adversely affected. We may face competition from biosimilars, which may have a material adverse impact on the future commercial prospects of our product candidates. Even if we are successful in achieving regulatory approval to commercialize a product candidate faster than our competitors, we may face competition from biosimilars. In the United States, the Biologics Price Competition and Innovation Act of 2009 created an abbreviated approval pathway for biological products that are demonstrated to be highly similar, or biosimilar, to or interchangeable with an FDA-approved biological product. This new pathway could allow competitors to reference data from innovative biological products 12 years after the time of approval of the innovative biological product. This data exclusivity does not prevent another company from developing a product that is highly similar to the innovative product, generating its own data, and seeking approval. Data exclusivity only assures that another company cannot rely upon the data within the innovator s application to support the biosimilar product s approval. In his proposed budget for fiscal year 2014, President Obama proposed to cut this 12-year period of exclusivity down to seven years. He also proposed to prohibit additional periods of exclusivity due to minor changes in product formulations, a practice often referred to as evergreening. It is possible that Congress may take these or other measures to reduce or eliminate periods of exclusivity. The Biologics Price Competition and Innovation Act of 2009 is complex and only beginning to be interpreted and implemented by the FDA. As a result, its ultimate impact, implementation, and meaning is subject to uncertainty. Although it is uncertain when any such processes may be fully adopted by the FDA, any such processes could have a material adverse effect on the future commercial prospects for our product candidates. Table of Contents In Europe, the European Commission has granted marketing authorizations for several biosimilars pursuant to a set of general and product class-specific guidelines for biosimilar approvals issued over the past few years. In Europe, a competitor may reference data supporting approval of an innovative biological product, but will not be able to get it on the market until 10 years after the time of approval of the innovative product. This 10-year marketing exclusivity period will be extended to 11 years if, during the first eight of those 10 years, the marketing authorization holder obtains an approval for one or more new therapeutic indications that bring significant clinical benefits compared with existing therapies. In addition, companies may be developing biosimilars in other countries that could compete with our products. If competitors are able to obtain marketing approval for biosimilars referencing our products, our products may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences. We may be subject to claims challenging the inventorship of our patents and other intellectual property. Although we are not currently experiencing any claims challenging the inventorship of our patents or ownership of our intellectual property, we may in the future be subject to claims that former employees, collaborators, or other third parties have an interest in our patents or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. Risks Related to Our Common Stock and this Offering We expect that our stock price will fluctuate significantly and investors may not be able to resell their shares at or above the initial public offering price. The trading price of our common stock following this offering may be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. In addition to the factors discussed in this Risk Factors section and elsewhere in this prospectus, these factors include: adverse results or delays in the planned clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates; any delay in our regulatory filings for our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority s review of such filings, including without limitation the FDA s issuance of a refusal to file letter or a request for additional information; regulatory or legal developments in the United States and other countries, especially changes in laws or regulations applicable to our products, including clinical trial requirements for approvals; our inability to obtain or delays in obtaining adequate product supply for any approved product or inability to do so at acceptable prices; any failure to commercialize our product candidates or if the size and growth of the markets we intend to target fail to meet expectations; additions or departures of key scientific or management personnel; Table of Contents unanticipated serious safety concerns related to cancer immunology or the use of our product candidates; introductions or announcements of new products offered by us or significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our collaborators or our competitors and the timing of such introductions or announcements; our ability to effectively manage our growth; our ability to successfully treat additional types of cancers or at different stages; changes in the structure of healthcare payment systems; our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; publication of research reports about us or our industry, or immunotherapy in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; market conditions in the pharmaceutical and biotechnology sectors or the economy generally; our ability or inability to raise additional capital through the issuance of equity or debt or collaboration arrangements and the terms on which we raise it; trading volume of our common stock; disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; and significant lawsuits, including patent or stockholder litigation. The stock market in general, and market prices for the securities of biopharmaceutical companies like ours in particular, have from time to time experienced volatility that often has been unrelated to the operating performance of the underlying companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our operating performance. In several recent situations when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders were to bring a lawsuit against us, the defense and disposition of the lawsuit could be costly and divert the time and attention of our management and harm our operating results. An active trading market for our common stock may not develop. Prior to this offering, there has been no public market for our common stock and an active trading market for our shares may never develop or be sustained following this offering. The initial price to public for our common stock was determined through negotiations with the underwriters, and the negotiated price may not be indicative of the market price of the common stock after the offering. Further, CL Alaska, L.P. has indicated an intent to purchase up to approximately $25 million in this offering, and Hal V. Barron, M.D., one of our directors, has expressed an interest in purchasing up to 100,000 shares of our common stock in this offering. To the extent CL Alaska, L.P. and our director purchase shares in this offering, fewer shares may be actively traded in the public market because each of CL Alaska, L.P. and our director will be restricted from selling any shares CL Alaska, L.P. or the director purchase by restrictions under applicable securities laws and the lock-up agreements described in the sections of this prospectus captioned Shares Eligible for Future Sale and Underwriting, which would reduce the liquidity of the market for our common stock. The lack of an active market may impair investors ability to sell their shares at the time they wish to sell them or at a price that they consider reasonable, may reduce the market value of their shares and may impair our ability to raise capital. Table of Contents If securities or industry analysts do not publish research reports about our business, or if they issue an adverse opinion about our business, our stock price and trading volume 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. We do not currently have and may never obtain research coverage by securities and industry analysts. If no or few analysts commence research coverage of us, or one or more of the analysts who cover us issues an adverse opinion about our company, our stock price would likely decline. If one or more of these analysts ceases research coverage of us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Future sales of our common stock in the public market could cause our stock price to fall. Our stock price could decline as a result of sales of a large number of shares of our common stock after this offering or the perception that these sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. Upon completion of this offering, 85,397,445 shares of our common stock will be outstanding (86,784,945 shares of common stock will be outstanding assuming exercise in full of the underwriters option to purchase additional shares), based on our shares outstanding as of September 30, 2014, including 10,777,637 shares of restricted stock that have been awarded to certain of our employees, directors, and consultants. All shares of common stock expected to be sold in this offering will be freely tradable without restriction or further registration under the Securities Act unless held by our affiliates, as that term is defined in Rule 144 under the Securities Act. The resale of the remaining 76,147,445 shares, or 89.2% of our outstanding shares after this offering, is currently prohibited or otherwise restricted as a result of securities law provisions, market standoff agreements entered into by our stockholders with us or lock-up agreements entered into by our stockholders with the underwriters; however, subject to applicable securities law restrictions and excluding shares of restricted stock that will remain unvested, these shares will be able to be sold in the public market beginning 180 days after the date of this prospectus. In addition, 9,231,339 shares of unvested restricted stock were issued and outstanding as of September 30, 2014 will become available for sale immediately upon the vesting of such shares, as applicable, and the expiration of any applicable market stand-off or lock-up agreements. Shares issued upon the exercise of stock options outstanding under our equity incentive plans or pursuant to future awards granted under those plans will become available for sale in the public market to the extent permitted by the provisions of applicable vesting schedules, any applicable market stand-off and lock-up agreements, and Rule 144 and Rule 701 under the Securities Act. For more information see the section of this prospectus captioned Shares Eligible for Future Sale. Upon completion of this offering, the holders of approximately 63,909,395 shares, or 74.84% (or 65,511,959 shares, or 75.30%, if the license with Opus Bio becomes effective), of our common stock, will have rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register the offer and sale of all shares of common stock that we may issue under our equity compensation plans. Once we register the offer and sale of shares for the holders of registration rights and shares to be issued under our equity incentive plans, they can be freely sold in the public market upon issuance, subject to the lock-up agreements described in the section of this prospectus captioned Underwriting. In addition, in the future, we may issue additional shares of common stock or other equity or debt securities convertible into common stock in connection with a financing, acquisition, litigation settlement, employee arrangements or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and could cause our stock price to decline. Table of Contents Our principal stockholders and management own a significant percentage of our stock and will be able to exercise significant influence over matters subject to stockholder approval. Our executive officers, directors and principal stockholders, together with their respective affiliates, beneficially owned approximately 65.4% of our capital stock as of September 30, 2014, and upon completion of this offering, that same group will beneficially own at least 58.3% of our capital stock, of which 5.5% will be beneficially owned by our executive officers (assuming no exercise of the underwriters option to purchase additional shares). Moreover, one of the holders of more than 5% of our capital stock, CL Alaska, L.P., has indicated an intent to purchase up to approximately $25 million in shares of our common stock, and Hal V. Barron, M.D., one of our directors, has expressed an interest in purchasing 100,000 shares of our common stock in this offering. All such shares would be purchased at the initial public offering price and on the same terms as the other purchasers in this offering. If each investor purchases all the shares such investor has indicated an intent to purchase, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates will beneficially own approximately 59.8% of our outstanding voting stock upon the closing of this offering (based on the assumed initial public offering price of $22.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and assuming no exercise of the underwriters option to purchase additional shares and no exercise of outstanding options). Accordingly, after this offering, our executive officers, directors and principal stockholders will be able to determine the composition of the board of directors, retain the voting power to approve all matters requiring stockholder approval, including mergers and other business combinations, and continue to have significant influence over our operations. This concentration of ownership could have the effect of delaying or preventing a change in our control or otherwise discouraging a potential acquirer from attempting to obtain control of us that you may believe are in your best interests as one of our stockholders. This in turn could have a material adverse effect on our stock price and may prevent attempts by our stockholders to replace or remove the board of directors or management. Our management team has broad discretion to use the net proceeds from this offering and its investment of these proceeds may not yield a favorable return. They may invest the proceeds of this offering in ways with which investors disagree. We expect to use the net proceeds from this offering (1) to advance JCAR015 through a Phase II clinical trial and filing of a BLA for the treatment of r/r ALL, (2) to advance JCAR017 through a Phase I/II clinical trial and into a potential registration trial in r/r NHL, (3) to further develop any additional product candidates that we select, (4) to expand our internal research and development capabilities, (5) to establish manufacturing capabilities, and (6) for working capital and other general corporate purposes. We may also use a portion of the net proceeds to acquire, license and invest in complementary products, technologies or businesses; however, we currently have no agreements or commitments to complete any such transaction. However, within the scope of our plan, and in light of the various risks to our business that are set forth in this section, our management will have broad discretion over the use of proceeds from this offering, and we could spend the proceeds from this offering in ways our stockholders may not agree with or that do not yield a favorable return, if at all. If we do not invest or apply the proceeds of this offering in ways that improve our operating results, we may fail to achieve expected financial results, which could cause our stock price to decline. Anti-takeover provisions in our charter documents and under Delaware or Washington law could make an acquisition of us difficult, limit attempts by our stockholders to replace or remove our current management and adversely affect our stock price. Provisions of our certificate of incorporation and bylaws to be effective upon consummation of this offering may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our stock. Among other things, the certificate of incorporation and bylaws will: permit the board of directors to issue up to 5,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate; Table of Contents provide that the authorized number of directors may be changed only by resolution of the board of directors; provide that all vacancies, including newly-created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; divide the board of directors into three classes; provide that a director may only be removed from the board of directors by the stockholders for cause; require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and may not be taken by written consent; provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner, and meet specific requirements as to the form and content of a stockholder s notice; prevent cumulative voting rights (therefore allowing the holders of a plurality of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); require that, to the fullest extent permitted by law, a stockholder reimburse us for all fees, costs and expenses incurred by us in connection with a proceeding initiated by such stockholder in which such stockholder does not obtain a judgment on the merits that substantially achieves the full remedy sought; provide that special meetings of our stockholders may be called only by the chairman of the board, our chief executive officer (or president, in the absence of a chief executive officer) or by the board of directors; and provide that stockholders will be permitted to amend the bylaws only upon receiving at least two-thirds of the total votes entitled to be cast by holders of all outstanding shares then entitled to vote generally in the election of directors, voting together as a single class. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any interested stockholder for a period of three years following the date on which the stockholder became an interested stockholder. Likewise, because our principal executive offices are located in Washington, the anti-takeover provisions of the Washington Business Corporation Act may apply to us under certain circumstances now or in the future. These provisions prohibit a target corporation from engaging in any of a broad range of business combinations with any stockholder constituting an acquiring person for a period of five years following the date on which the stockholder became an acquiring person. See the section of this prospectus captioned Description of Capital Stock Anti-Takeover Effects of Delaware and Washington Law and Our Certificate of Incorporation and Bylaws for additional information. Table of Contents Our bylaws will provide that any current or former stockholder bringing an unsuccessful action against us or our officers or directors may be obligated to reimburse us for any costs we have incurred in connection with such unsuccessful action. Our bylaws will provide that under certain circumstances the fees, costs, and expenses that we incur in connection with actions or proceedings brought by any current or former stockholder, any current or former director, or any person acting on behalf of such stockholder or director, which we collectively refer to as claiming parties, may be shifted to such persons. If a claiming party asserts any claim, initiates any proceeding, or joins, offers substantial assistance to, or has a direct financial interest in any claim or proceeding against us or any of our directors or officers (including any proceeding purportedly filed on behalf of us or any stockholder), and such claiming party (or the third party that received substantial assistance from a claiming party or in whose claim or proceeding such claiming party has a direct financial interest) is unsuccessful in obtaining a judgment on the merits that substantially achieves, in substance and amount, the full remedy sought, then such claiming party may be obligated to reimburse us and our officers and directors for all fees, costs and expenses of every kind and description, including but not limited to all reasonable attorneys fees and other litigation expenses, that we or our officers or directors may incur in connection with such claim, suit, action, or proceeding. Our fee-shifting bylaw is not limited to specific types of actions, but is rather potentially applicable to the fullest extent permitted by law. Fee-shifting bylaws are relatively new and untested. The case law and potential legislative action on fee shifting bylaws are evolving and there exists considerable uncertainty regarding the validity of, and potential judicial and legislative responses to, such bylaws. For example, it is unclear whether our ability to invoke our fee-shifting bylaw in connection with claims under the federal securities laws, including claims related to this offering, would be pre-empted by federal law. Similarly, it is unclear how courts might apply the standard that a claiming party must obtain a judgment that substantially achieves, in substance and amount, the full remedy sought. The application of our fee shifting bylaw in connection with such claims, if any, will depend in part on future developments of the law. We cannot assure you that we will or will not invoke our fee-shifting bylaw in any particular dispute, including any claims related to this offering. In addition, given the unsettled state of the law related to fee-shifting bylaws, such as ours, we may incur significant additional costs associated with resolving disputes with respect to such bylaw, which could adversely affect our business and financial condition. If a stockholder that brings any such claim, suit, action or proceeding is unable to obtain the required judgment, the attorneys fees and other litigation expenses that might be shifted to a claiming party are potentially significant. This fee-shifting bylaw, therefore, may dissuade or discourage current or former stockholders (and their attorneys) from initiating lawsuits or claims against us or our directors and officers. In addition, it may impact the fees, contingency or otherwise, required by potential plaintiffs attorneys to represent our stockholders or otherwise discourage plaintiffs attorneys from representing our stockholders at all. As a result, this bylaw may limit the ability of stockholders to affect the management and direction of our company, particularly through litigation or the threat of litigation. Our certificate of incorporation will provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. Our certificate of incorporation will provide that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws, any action to interpret, apply, enforce, or determine the validity of our certificate of incorporation or bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine. The choice of forum provision may limit a stockholder s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may Table of Contents discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition. We will incur increased costs by being a public company. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting requirements. We also anticipate that we will incur costs associated with relatively recently adopted corporate governance requirements, including requirements of the SEC and NASDAQ. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We also expect that these rules and regulations may 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. We are currently evaluating and monitoring developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. We are an emerging growth company, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies. We could remain an emerging growth company for up to five years, or until the earliest of (1) the last day of the first fiscal year in which our annual gross revenue exceeds $1 billion, (2) 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 (3) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period. So long as we remain an emerging growth company, we expect to avail ourselves of the exemption from the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404. When our independent registered public accounting firm is required to undertake an assessment of our internal control over financial reporting, the cost of our compliance with Section 404 will correspondingly increase. Moreover, if we are not able to comply with the requirements of Section 404 applicable to us in a timely manner, or if we or our independent registered public accounting firm identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources. Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements that are based on management s beliefs and assumptions and on information currently available to management. Some of the statements in the section captioned Prospectus Summary, Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations, Business and elsewhere in this prospectus contain forward-looking statements. In some cases, you can identify forward-looking statements by the following words: may, will, could, would, should, expect, intend, plan, anticipate, believe, estimate, predict, project, potential, continue, ongoing or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this prospectus, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements in this prospectus include, but are not limited to, statements about: the success, cost and timing of our product development activities and clinical trials; our ability and the potential to successfully advance our technology platform to improve the safety and effectiveness of our existing product candidates; the potential for our identified research priorities to advance our CAR and TCR technologies; the ability and willingness of our third-party research institution collaborators to continue research and development activities relating to our product candidates; our ability to obtain and maintain regulatory approval of our CD19 product candidates and any other product candidates, and any related restrictions, limitations and/or warnings in the label of an approved product candidate; the ability to license additional intellectual property relating to our product candidates, including intellectual property relating to a CD22-directed CAR product candidate, under which we will receive a license only if certain conditions are satisfied rendering our agreement with Opus Bio, Inc. effective, and to comply with our existing license agreements; our ability to commercialize our products in light of the intellectual property rights of others; our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates; the commercialization of our product candidates, if approved; our plans to research, develop and commercialize our product candidates; our ability to attract collaborators with development, regulatory and commercialization expertise; future agreements with third parties in connection with the commercialization of our product candidates and any other approved product; the size and growth potential of the markets for our product candidates, and our ability to serve those markets; the rate and degree of market acceptance of our product candidates; Table of Contents regulatory developments in the United States and foreign countries; our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately; the success of competing therapies that are or may become available; our ability to attract and retain key scientific or management personnel; the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act; our use of the proceeds from this offering; and our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates. In addition, you should refer to the Risk Factors section of this prospectus for a discussion of other important factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. This prospectus contains estimates, projections and other information concerning our industry, our business, and the markets for our products and product candidates, including data regarding the estimated size of those markets, their projected growth rates, the perceptions and preferences of patients and physicians regarding certain therapies and other prescription, prescriber and patient data, as well as data regarding market research, estimates and forecasts prepared by our management. We obtained the industry, market and other data throughout this prospectus from our own internal estimates and research, as well as from industry publications and research, surveys and studies conducted by third parties. Table of Contents USE OF PROCEEDS We estimate that the net proceeds to us from the sale of the shares of our common stock in this offering will be approximately $186.0 million, or approximately $214.4 million if the underwriters exercise their option to purchase additional shares in full, based upon an assumed initial public offering price of $22.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses. Each $1.00 increase (decrease) in the assumed initial public offering price of $22.00 per share would increase (decrease) the net proceeds to us from this offering by approximately $8.6 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of 1,000,000 shares in the number of shares offered by us would increase (decrease) the net proceeds to us from this offering by approximately $20.5 million, assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We do not expect that a change in the initial public offering price or the number of shares by these amounts would have a material effect on our uses of the proceeds from this offering, although it may accelerate the time at which we will need to seek additional capital. We currently expect to use the net proceeds from this offering as follows: $30.0 million to advance JCAR015 through a Phase II clinical trial and the filing of a Biologics License Application for the treatment of r/r ALL; $25.0 million to advance JCAR017 through a Phase I/II clinical trial and into a potential registration trial in r/r NHL; $27.5 million to further develop any additional product candidates that we select; $42.5 million to expand our internal research and development capabilities; $20.0 million to establish manufacturing capabilities; and the remainder for working capital and other general corporate purposes. We expect to also use a portion of the net proceeds to acquire, license and invest in complementary products, technologies or businesses; however, we currently have no agreements or commitments to complete any such transaction. If the conditions on the effectiveness of our license agreement with Opus Bio, Inc. are satisfied, we intend to use our existing cash resources to fund the $20.0 million cash payment we will owe the licensor. We cannot provide an accurate estimate as to how far into a potential registration trial of JCAR017 in r/r NHL the allocated proceeds will allow us to reach because any such estimate depends on the clinical trial design, which cannot be developed until we receive a substantial amount of data from our planned Phase I clinical trial for JCAR017. In addition, we cannot specify with certainty all of the particular uses for the net proceeds to be received upon the closing of this offering. Due to uncertainties inherent in the product development process, it is difficult to estimate the exact amounts of the net proceeds that will be used for any particular purpose. We may use our existing cash and the future payments, if any, generated from any future collaboration agreements to fund our operations, either of which may alter the amount of net proceeds used for a particular purpose. In addition, the amount, allocation and timing of our actual expenditures will depend upon numerous factors, including the results of our research and development efforts, the timing and success of clinical trials, the timing of regulatory submissions, and the amount of cash, if any, we generate from any future collaboration agreements. Accordingly, we will have broad discretion in using these proceeds. Pending their uses, we plan to invest the net proceeds of this offering in short-term, interest-bearing, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government. Table of Contents DIVIDEND POLICY We have never declared or paid any cash dividends on our common stock or any other securities. We anticipate that we will retain all available funds and any future earnings, if any, for use in the operation of our business and do not anticipate paying cash dividends in the foreseeable future. In addition, future debt instruments may materially restrict our ability to pay dividends on our common stock. Payment of future cash dividends, if any, will be at the discretion of the board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements of current or then-existing debt instruments and other factors the board of directors deems relevant. Table of Contents CAPITALIZATION The following table summarizes our cash and capitalization as of September 30, 2014: on an actual basis; on a pro forma basis to reflect (1) the automatic conversion of all of our outstanding convertible preferred stock into 59,909,397 shares of our common stock and (2) the filing and effectiveness of our amended and restated certificate of incorporation, which will occur immediately prior to the closing of this offering; and on a pro forma as-adjusted basis to further reflect the sale and issuance by us of 9,250,000 shares of common stock in this offering at an assumed initial public offering price of $22.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses. Investors should read the information in this table together with the financial statements and related notes to those statements, as well as the sections of this prospectus captioned Selected Financial Data and Management s Discussion and Analysis of Financial Condition and Results of Operations. As of September 30, 2014 Actual Pro Forma(1) Pro Forma As Adjusted(1)(2) (in thousands, except share and per share amounts) Cash $ 237,834 $ 237,834 $ 423,834 Convertible preferred stock, $0.0001 par value per share; 243,658,977 authorized, 59,909,397 shares issued and outstanding, actual; no shares authorized, no shares issued or outstanding, pro forma and pro forma as adjusted $ 387,695 $ $ Stockholders equity (deficit): Common stock, $0.0001 par value per share, 400,000,000 shares authorized, 7,006,709 shares issued and outstanding, actual; 495,000,000 shares authorized, 66,916,106 shares issued and outstanding, pro forma; and 495,000,000 shares authorized, 76,166,106 shares issued and outstanding, pro forma as adjusted 1 7 8 Preferred stock, $0.0001 par value per share, no shares authorized, issued or outstanding, actual; 5,000,000 shares authorized, no shares issued or outstanding, pro forma and pro forma as adjusted Additional paid-in capital 387,689 573,688 Accumulated deficit (154,410 ) (154,410 ) (154,410 ) Total stockholders (deficit) equity (154,409 ) 233,286 419,286 Total capitalization $ 249,362 $ 249,362 $ 435,362 (1) Does not reflect the potential payment by us of $20.0 million in cash and the issuance of 1,602,564 shares of our capital stock to Opus Bio, Inc., or Opus Bio, each of which is conditioned on the effectiveness of the December 2014 license agreement pursuant to which Opus Bio has agreed to grant us a license to a CD22-directed CAR product candidate. The impact of this offering on the success payment liabilities has been excluded from the pro forma presentations. Please refer to Management s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Policies and Significant Judgments and Estimates Success Payments elsewhere in this prospectus for a discussion of the estimated expense expected to be recognized in the financial statements in the quarter in which a successful initial public offering occurs. (2) Each $1.00 increase (decrease) in the assumed initial public offering price of $22.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of pro forma as adjusted cash, additional paid-in capital, total stockholders equity, and total capitalization by approximately $8.6 million, assuming Table of Contents that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of shares we are offering. An increase (decrease) of 1,000,000 in the number of shares we are offering would increase (decrease) each of pro forma as adjusted cash, additional paid-in capital, total stockholders equity, and total capitalization by approximately $20.5 million, assuming the assumed initial public offering price per share, as set forth on the cover page of this prospectus, remains the same. The pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing. The outstanding share information in the table above excludes the following shares as of September 30, 2014: An aggregate of 1,602,564 shares of common stock issuable to Opus Bio, Inc., or Opus Bio, conditioned on the effectiveness of the related license agreement pursuant to which Opus Bio has agreed to grant us a license to a CD22-directed CAR product candidate; 9,231,339 shares of common stock outstanding subject to vesting as of September 30, 2014, which shares were issued pursuant to our 2013 Equity Incentive Plan, which shares may become available for issuance under our 2014 Equity Incentive Plan if such shares are forfeited; 3,136,898 shares of common stock reserved for future issuance upon the exercise of stock options outstanding or pursuant to future awards under our 2013 Equity Incentive Plan as of September 30, 2014, which shares will become available for issuance under our 2014 Equity Incentive Plan upon effectiveness of such plan to the extent such shares are not subject to outstanding awards as of such date or, with respect to options outstanding, may become available to the extent such options expire unexercised; 6,200,000 shares of common stock reserved for issuance under the 2014 Equity Incentive Plan, which will become effective on the date of this prospectus, and any future automatic increase in shares reserved for issuance under this plan; and 1,500,000 shares of common stock reserved for issuance under the 2014 Employee Stock Purchase Plan, and any future automatic increase in shares reserved for issuance under this plan. Table of Contents DILUTION Investors purchasing our common stock in this offering will experience immediate and substantial dilution in the pro forma net tangible book value of their shares of common stock. Dilution in pro forma net tangible book value represents the difference between the public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after the offering. Historical net tangible book value (deficit) represents our total tangible assets (total assets less intangible assets) less total liabilities and fair value of our convertible preferred stock divided by the number of outstanding shares of common stock. As of September 30, 2014, our historical net tangible book deficit was $154.4 million, or $22.04 per share. After giving effect to the automatic conversion of our outstanding convertible preferred stock into an aggregate of 59,909,397 shares of common stock immediately prior to the closing of this offering, our pro forma net tangible book value as of September 30, 2014 was $233.3 million, or $3.49 per share. After giving further effect to the sale and issuance of 9,250,000 shares of our common stock in this offering at an assumed initial public offering price of $22.00 per share, the midpoint of the price range set forth on the cover of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of September 30, 2014 would have been approximately $419.3 million, or $5.50 per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $2.01 per share to existing stockholders and an immediate dilution of $16.50 per share to new investors participating in this offering. The following table illustrates this dilution on a per share basis to new investors: Assumed initial price to public per share $ 22.00 Historic net tangible book value (deficit) per share as of September 30, 2014 $ (22.04 ) Pro forma increase in net tangible book value (deficit) per share as of September 30, 2014 25.53 Pro forma net tangible book value per share as of September 30, 2014 $ 3.49 Increase in net tangible book value per share attributable to investors participating in the offering 2.01 Pro forma as adjusted net tangible book value per share after this offering 5.50 Dilution per share to investors participating in this offering $ 16.50 Each $1.00 increase (decrease) in the assumed initial public offering price of $22.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value by approximately $8.6 million, or approximately $0.11 per share, and increase (decrease) in the dilution per share to investors participating in this offering by approximately $(0.11) per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase of 1,000,000 in the number of shares offered by us would increase our pro forma as adjusted net tangible book value by approximately $20.5 million, or $0.20 per share, and decrease the dilution per share to investors participating in this offering by $(0.20) per share, assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, a decrease of 1,000,000 shares in the number of shares offered by us would decrease our pro forma as adjusted net tangible book value by approximately $20.5 million, or $0.20 per share, and increase the dilution per share to investors participating in this offering by $0.20 per share, assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and will adjust based on the actual initial price to public and other terms of this offering determined at pricing. If the underwriters exercise their option in full to purchase 1,387,500 additional shares of common stock in this offering, the pro forma as adjusted net tangible book value per share after the offering would be $5.77 per Table of Contents share, the incremental increase in the pro forma net tangible book value per share to existing stockholders would be $0.27 per share and the pro forma dilution to new investors participating in this offering would be $16.23 per share. The following table summarizes, on the pro forma as adjusted basis described above as of September 30, 2014, the differences between the number of shares of common stock purchased from us, the total consideration and the weighted-average price per share paid by existing stockholders and by investors participating in this offering at an assumed initial public offering price of $22.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us: Shares Purchased Total Consideration (in thousands) Weighted- Average Price Per Share Number Percent Amount Percent Existing stockholders before this offering(1) 66,916,106 87.9 % $ 314,315 60.7 % $ 4.70 Investors participating in this offering 9,250,000 12.1 203,500 39.3 % 22.00 Total 76,166,106 100.0 % $ 517,815 100.0 % $ 6.80 (1) CL Alaska, L.P., one of our existing stockholders, has indicated an intent to purchase up to approximately $25 million in shares of our common stock in this offering at the initial public offering price and on the same terms as the other purchasers in this offering. The presentation in this table regarding ownership by existing stockholders does not give effect to any purchases in this offering by such investor. See the footnotes to the beneficial ownership table in the section captioned Principal Stockholders for more details. Each $1.00 increase (decrease) in the assumed initial public offering price of $22.00 per share would increase (decrease) total consideration paid by new investors by approximately $9.3 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase (decrease) of 1,000,000 in the number of shares offered by us would increase (decrease) total consideration paid by new investors by approximately $22.0 million, assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The outstanding share information in the tables above excludes the following shares as of September 30, 2014: An aggregate of 1,602,564 shares of common stock issuable to Opus Bio, Inc., or Opus Bio, conditioned on the effectiveness of the related license agreement pursuant to which Opus Bio has agreed to grant us a license to a CD22-directed CAR product candidate; 9,231,339 shares of common stock outstanding subject to vesting as of September 30, 2014, which shares were issued pursuant to our 2013 Equity Incentive Plan, which shares may become available for issuance under our 2014 Equity Incentive Plan if such shares are forfeited; 3,136,898 shares of common stock reserved for future issuance upon the exercise of stock options outstanding or pursuant to future awards under our 2013 Equity Incentive Plan as of September 30, 2014, which shares will become available for issuance under our 2014 Equity Incentive Plan upon effectiveness of such plan to the extent such shares are not subject to outstanding awards as of such date or, with respect to options outstanding, may become available to the extent such options expire unexercised; 6,200,000 shares of common stock reserved for issuance under the 2014 Equity Incentive Plan, which will become effective on the date of this prospectus, and any future automatic increase in shares reserved for issuance under this plan; and Table of Contents 1,500,000 shares of common stock reserved for issuance under the 2014 Employee Stock Purchase Plan, and any future automatic increase in shares reserved for issuance under this plan. To the extent that new options are issued under the equity benefit plans or we issue additional shares of common stock in the future, there will be further dilution to investors participating in this offering. Table of Contents SELECTED FINANCIAL DATA The following selected statement of operations data for the period from August 5, 2013 to December 31, 2013 and the balance sheet data as of December 31, 2013 have been derived from audited financial statements included elsewhere in this prospectus. The selected statement of operations data for the nine months ended September 30, 2014 and the balance sheet data as of September 30, 2014 have been derived from unaudited interim financial statements included elsewhere in this prospectus. In the opinion of management, the unaudited interim financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the financial statements. Historical results are not necessarily indicative of the results that may be expected in the future and the results for the nine months ended September 30, 2014 are not necessarily indicative of results to be expected for the full year or any other period. You should read the following selected financial and other data below in conjunction with the financial statements and related notes included elsewhere in this prospectus and the sections of this prospectus captioned Management s Discussion and Analysis of Financial Condition and Results of Operations. Period from August 5, 2013 to December 31, 2013 Nine Months Ended September 30, 2014 (in thousands, except share and per share amounts) Statement of Operations Data: Operating expenses: Research and development $ 46,245 $ 22,447 General and administrative 4,238 13,384 Litigation 1,195 4,987 Total operating expenses 51,678 40,818 Loss from operations (51,678 ) (40,818 ) Other income (expense)(1) (142 ) (10,718 ) Net loss and comprehensive loss $ (51,820 ) $ (51,536 ) Net loss attributable to common stockholders: Net loss and comprehensive loss $ (51,820 ) $ (51,536 ) Deemed dividends upon issuance of convertible preferred stock, non-cash(2) (67,464 ) Net loss attributable to common stockholders $ (51,820 ) $ (119,000 ) Net loss per share attributable to common stockholders, basic and diluted $ (14.16 ) $ (17.50 ) Weighted average common shares outstanding, basic and diluted 3,658,687 6,798,672 Pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)(3) $ (5.40 ) $ (3.06 ) Pro forma weighted average common shares outstanding, basic and diluted (unaudited)(3) 9,603,444 38,924,422 (1) Includes the change in value of our convertible preferred stock options associated with our Series A convertible preferred stock financing and Series A-2 convertible preferred stock financing. Refer to the caption Convertible Preferred Stock Option in note 1 of our unaudited interim financial statements for the nine months ended September 30, 2014 appearing elsewhere in this prospectus. (2) We recorded deemed dividends of an aggregate of $67.5 million in the nine months ended September 30, 2014 related to the amount by which the fair value of the convertible preferred stock we issued during the period exceeded the actual cash proceeds from the sale and issuance of such convertible preferred stock. Refer to the caption Deemed Dividends Upon Issuance of Convertible Preferred Stock, Non-Cash in note 1 of our unaudited interim financial statements for the nine months ended September 30, 2014 appearing elsewhere in this prospectus for a description of the deemed dividends recorded upon issuance of convertible preferred stock. Table of Contents (3) Refer to note 2 of our audited financial statements for the period from August 5, 2013 to December 31, 2013, and note 1 of our unaudited interim financial statements for the nine months ended September 30, 2014, appearing elsewhere in this prospectus for a description of the method used to calculate basic and diluted net loss per share attributable to common stockholders and basic and diluted pro forma net loss per share attributable to common stockholders. The impact of this offering on the success payment liabilities has been excluded from the pro forma presentations. Please refer to Management s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Policies and Significant Judgments and Estimates Success Payments elsewhere in this prospectus for a discussion of the estimated expense expected to be recognized in the financial statements in the quarter in which a successful initial public offering occurs. As of December 31, 2013 As of September 30, 2014 (in thousands) Balance Sheet Data: Cash $ 35,966 $ 237,834 Working capital 25,007 224,566 Total assets 40,094 249,362 Total liabilities 11,193 16,076 Convertible preferred stock(1) 72,583 387,695 Accumulated deficit(1) (51,820 ) (154,410 ) Total stockholders deficit (43,682 ) (154,409 ) (1) See note (2) to the selected statement of operations data above. The non-cash deemed dividends were recorded as an increase in convertible preferred stock of $67.5 million, a decrease in additional paid-in capital of $16.4 million, and an increase in accumulated deficit of $51.1 million. Table of Contents MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of financial condition and operating results together with the section captioned Selected Financial Data and our financial statements and the related notes to those statements included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth in the section of the prospectus captioned Risk Factors and elsewhere in this prospectus, our actual results may differ materially from those anticipated in these forward-looking statements. Overview We are building a fully-integrated biopharmaceutical company focused on developing cell-based cancer immunotherapies based on our chimeric antigen receptor, or CAR, and high-affinity T cell receptor, or TCR, technologies to genetically engineer T cells to recognize and kill cancer cells. We have shown compelling evidence of tumor shrinkage in clinical trials using multiple cell-based product candidates to address refractory B cell lymphomas and leukemias. Before the end of 2015, we plan to begin a Phase II trial that could support accelerated U.S. regulatory approval in relapsed/refractory B cell acute lymphoblastic leukemia, a Phase I trial in relapsed/refractory B cell non-Hodgkin s lymphoma, and Phase I trials for at least five additional product candidates that target different cancer-associated proteins in hematological and solid organ cancers. We have assembled a talented group of scientists, engineers, clinicians, directors, and other advisers who consolidate and develop technologies and intellectual property from some of the world s leading research institutions, including the Fred Hutchinson Cancer Research Center, or FHCRC, the Memorial Sloan Kettering Cancer Center, or MSK, and the Seattle Children s Research Institute, or SCRI. In October 2013, we acquired substantially all of the assets of ZetaRx BioSciences, Inc., or ZetaRx, including patent license agreements with FHCRC and the City of Hope. In October 2013, we acquired a license to specific patent rights owned by, and entered into a collaboration agreement with, FHCRC. In November 2013, we acquired a license to specific patent rights owned by, and entered into a master sponsored research agreement, and a master clinical study agreement with, MSK. In December 2013, we obtained control over, and the right to a majority of any recovery above a certain threshold from, the causes of action owned by St. Jude Children s Research Hospital, or St. Jude, in Trustees of the University of Pennsylvania v. St. Jude Children s Research Hospital, Civil Action No. 2:13-cv-01502-SD (E.D. Penn.), as well as a license to specific patent rights owned by St. Jude, including U.S. Patent No. 8,399,645. In February 2014, we acquired a license to specific patent rights owned by, and a sponsored research agreement with, SCRI. In December 2014, we entered into an exclusive license agreement with Opus Bio, Inc., or Opus Bio, the effectiveness of which is subject to certain conditions, and pursuant to which Opus Bio has agreed to grant us an exclusive license under certain patent rights related to a CD22-directed CAR product candidate. See the section of this prospectus captioned Business Licenses and Third-Party Research Collaborations for more information about the foregoing agreements. Table of Contents We have agreed to make success payments to each of FHCRC and MSK pursuant to the terms of our collaboration agreements with each of those entities. For additional information regarding these success payments, see the section captioned Critical Accounting Polices and Significant Judgments and Estimates Success Payments. We are devoting significant resources to process development and manufacturing in order to optimize the safety and efficacy of our product candidates, as well as our cost of goods and time to market. To date, we have leveraged our relationships with our founding institutions for manufacturing for our clinical trials; however, we intend to establish and operate our own manufacturing facility and use facilities operated by one or more contract manufacturing organizations, or CMOs, to meet the demand needs of clinical supply and commercial launch. Our goal is to carefully manage our fixed cost structure, maximize optionality, and drive long-term cost of goods as low as possible. The use of a CMO with established good manufacturing processes, or GMP, infrastructure will increase the speed with which capacity can be brought on-line. We plan to complement the use of a CMO by establishing our own GMP manufacturing facility to be brought on-line after the CMO. We believe that operating our own manufacturing facility will provide us with enhanced control of material supply for both clinical trials and the commercial market, will enable the more rapid implementation of process changes, and will allow for better long-term margins. To date, we have not generated any revenue. In the future, we may generate revenue from product sales, collaboration agreements, strategic alliances and licensing arrangements, or a combination of these. We expect that any revenue we generate will fluctuate from quarter to quarter and year to year as a result of the timing and amount of license fees, milestones, reimbursement of costs incurred and other payments and product sales, to the extent any are successfully commercialized. If we fail to complete the development of our product candidates in a timely manner or obtain regulatory approval of them, our ability to generate future revenue, and our results of operations and financial position, would be materially adversely affected. Critical Accounting Policies and Significant Judgments and Estimates Our management s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us 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, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management s judgments and estimates. Research and Development Expenses We record expense for research and development costs to operations as incurred. Research and development expenses represent costs incurred by us for the discovery and development of our product candidates and include: salaries and personnel-related costs, including non-cash stock-based compensation, external research and development expenses incurred under arrangements with third parties, such as contract research organizations, or CROs, CMOs, academic and non-profit institutions and consultants, license fees and other expenses, which include direct and allocated expenses for laboratory, facilities and other supplies. Research and development costs also include the estimated fair value of the potential liability associated with our success payments to FHCRC and MSK which are described below under Success Payments. Table of Contents As part of the process of preparing financial statements, we are required to estimate and accrue expenses, a significant portion of which are research and development expenses. Costs for certain research and development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites. This process involves the following: communicating with our applicable internal personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost; estimating and accruing expenses in our financial statements as of each balance sheet date based on facts and circumstances known to us at the time; and periodically confirming the accuracy of our estimates with selected service providers and making adjustments, if necessary. Examples of estimated research and development expenses that we accrue include: clinical trial costs; external research and development expenses incurred under arrangements with third parties, such as CROs, CMOs, academic and non-profit institutions and consultants; license fees for technology which has not reached technological feasibility and does not have an alternative future use; and other expenses, which include direct and allocated expenses for laboratory and other costs. We base our expense accruals related to clinical trials on patient enrollment and our estimates of the services received and efforts expended pursuant to contracts with multiple research institutions that conduct and manage clinical trials on our behalf. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on several factors, such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates. For service contracts entered into that include a nonrefundable prepayment for service the upfront payment is deferred and recognized in the statement of operations as the services are rendered. To date, we have not experienced significant changes in our estimates of accrued research and development expenses after a reporting period. However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical trials and other research activities. Stock-Based Compensation We measure and recognize compensation expense for restricted stock and stock options granted to our employees and directors based on the date of grant and recognize the corresponding compensation expense of those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. We have also granted restricted stock awards that vest in conjunction with certain performance conditions to certain key employees and directors. At each reporting date, we are required to evaluate whether the achievement of the performance condition is probable. Compensation expense is recorded over the appropriate service period based on our assessment of accomplishing each performance provision or the occurrence of other events that may have caused the awards to accelerate and vest. We also grant stock-based awards to certain non-employees. Compensation expense for stock-based awards granted to non-employees and Table of Contents directors for non-board related services is accounted for based on the fair value of such services received or the equity instrument issued, whichever is more reliably measured. We are required to estimate the fair value of the common stock underlying our stock-based awards when performing fair value calculations. The fair value of the common stock underlying our stock-based awards was determined on each grant date by our board of directors, taking into account input from management and independent third-party valuation analyses. Our board of directors is comprised of a majority of non-employee directors with significant experience investing in and operating companies in the biotechnology industry. All stock-based awards are intended to be granted at a price no less than the fair value per share of our common stock, based on information known to us on the date of grant. In the absence of a public trading market for our common stock, on each grant date we determine the fair value of our common stock using methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or the AICPA Guide. Because our common stock is not currently publicly traded, the board of directors exercises significant judgment in determining the fair value of our common stock. Changes in judgments could have a material impact on our results of operations and financial position. Following completion of this offering and so long as our common stock is publicly traded, estimates regarding the fair value of our common stock will not be necessary. For valuations after the completion of this initial public offering, we will determine the fair value of each share of common stock based on the closing price of our common stock as reported by The NASDAQ Global Select Market on the date of grant. Until we began granting stock options in September 2014, our board of directors considered various objective and subjective factors, with input from management, to determine the value of our common stock, including: the hiring of key personnel; our financial condition as of such date; the status of our research and development efforts; the status of strategic transactions, including the acquisition of intellectual property and technology; the public trading price or private sale price of comparable companies; the lack of marketability of our common stock as a private company;
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001595140_trhf-co_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001595140_trhf-co_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..37190cd3274fe583752a8ff671efef3ef85eb1d4
--- /dev/null
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@@ -0,0 +1,91 @@
+PROSPECTUS SUMMARY
+
+ 
+
+AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, WE, US, OUR, AND LAGOON GROUP CORP. REFERS TO LAGOON 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.
+
+ 
+
+LAGOON GROUP CORP.
+
+ 
+
+We are a development stage company and intend to commence operations in the distribution of teeth whitening products in Ecuador. Lagoon Group Corp. was incorporated in Nevada on September 24, 2013. 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 $24,000 for the next twelve months as described in our Plan of Operations. We expect our operations to begin to generate
+
+ considerable
+
+ revenues during months 6-12 after completion of this offering. However, there is no assurance that we will generate any
+
+considerable
+
+revenue in the first 12 months after completion our offering or ever generate any
+
+considerable
+
+revenue. Being a development stage company, we have very limited operating history. If we are unable to raise a minimum funding of $24,000 required to conduct our business over the next 12 months, our business may fail. After twelve months period we may need additional financing. Our principal executive offices are located at Rodriguez y Valenzuela LT 91-2B, Urb. Comarca, Quito, Ecuador. Our phone number is (702) 475-5771.
+
+From inception until the date of this filing, we have had limited operating activities. Our financial statements from inception (September 24, 2013) through September 30, 2014, reports
+
+$2,000 in
+
+revenue
+
+ and a net loss of $8,935. Our independent registered public accounting firm has issued an audit opinion for Lagoon Group Corp. which includes a statement expressing substantial doubt as to our ability to continue as a going concern. To date, we have formed the Company, developed our business plan and entered into a Marketing and Sales Distribution Agreement with Arturo Rodrigo Perea Lozano, dated June 5, 2014. Pursuant to the Marketing and Sales Distribution Agreement, we will non-exclusively sell Crest 3D White Whitestrips to the distributor, the distributor will market, sell and distribute the Crest 3D White Whitestrips in Ecuador. The distributor has no obligation to buy any products from us. The agreement is for one year beginning June 5, 2014. As of today,
+
+as a result of the June 5th agreement with Arturo Rodrigo Perea Lozano we have recognized the $2,000 of revenue.
+
+. 
+
+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. The company is publicly offering its shares to raise funds in order for our business to develop its operations and increase its likelihood of commercial success.
+
+THE OFFERING
+
+The Offering
+
+This is a self-underwritten, direct primary offering with no minimum purchase requirement.
+
+The Issuer:
+
+ 
+
+LAGOON GROUP CORP.
+
+Securities Being Offered:
+
+ 
+
+8,000,000 shares of common stock.
+
+Price Per Share:
+
+ 
+
+$0.01
+
+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 8,000,000 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 8,000,000 shares registered under the Registration Statement of which this Prospectus is part. 
+
+ 
+
+Gross Proceeds
+
+ 
+
+$80,000
+
+Securities Issued and Outstanding:
+
+There are 10,000,000 shares of common stock issued and outstanding as of the date of this prospectus, held by our sole officer and director, Anastasiia Iurova 
+
+ 
+
+Subscriptions
+
+All subscriptions once accepted by us are irrevocable.
+
+Registration Costs
+
+We estimate our total offering registration costs to be approximately $7,000.
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001595262_ims_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001595262_ims_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..6fd1b31a26ec10bc1fd1e216e073634da63e7929
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2014/CIK0001595262_ims_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus summary 1
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001598772_pq_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001598772_pq_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2014/CIK0001598772_pq_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001598964_new_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001598964_new_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..25537c6c0499059bd22c52f34cced60f12c1f4ae
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2014/CIK0001598964_new_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY The following summary highlights selected information from this prospectus and may not contain all the information that is important to you. To understand our business and this offering fully, you should read this entire prospectus carefully, including the financial statements and the related notes beginning on page F-1. When we refer in this prospectus to the Company, we, us, and our, we mean New Horizon Equity Group, Inc., a Nevada corporation. This prospectus contains forward-looking statements and information relating to New Horizon Equity Group, Inc. See Cautionary Note Regarding Forward Looking Statements on page 11. Our Company New Horizon Equity Group was formed by Mr. Tracy Smith in 2013 as a C Corporation with the specific goal of bringing new and struggling companies to fruition both locally and nationwide. New Horizon has developed a stable of services specifically aimed at developing our clients organizations. Through resources both internally and through our strategic partnerships, we provide planning and engineering services, legal consulting, contracting and servicing, media and marketing planning, and capital and funding. New Horizon targets new and struggling small and medium sized business in need of restructuring or development. Through December 31, 2013, the Company has a net loss of $5,780. The company has only one officer and director who will devote approximately 10 hours per month to the Company. The Company can operate even if no proceeds are generated from this offering but the growth of the company and speed of the implementation of the Company s business plan will be slowed substantially. If the Company raises 25% of the proceeds, marketing efforts will be at a minimum and the Company anticipates that it will be approximately 12 months prior to the Company being able to generate a net profit. . If the Company raises 50% of the proceeds, marketing efforts will be at a medium level and the Company anticipates that it will be approximately 10 months prior to the Company being able to generate a net profit. . If the Company raises 75% of the proceeds, marketing efforts will be at a medium/high level and the Company anticipates that it will be approximately 8 months prior to the Company being able to generate a net profit. . If the Company raises 100% of the proceeds, marketing efforts will be at a maximum level under the business plan and the Company anticipates that it will be approximately 6 months prior to the Company being able to generate a net profit. Our executive offices are located at 980 9th Street, 16th Floor, Sacramento, CA 95814. Our telephone number is (844) 300-5500. The Offering This prospectus covers up to 1,000,000 shares to be issued and sold by the company at a price of $5.50 per share in a direct public offering. ABOUT THIS OFFERING Securities Being Offered Up to 1,000,000 shares of common stock of New Horizon Equity Group, Inc. to be sold by the company at a price of $5.50 per share. Initial Offering Price The company will sell up to 1,000,000 shares at a price of $5.50 per share. The company will offer and sell the shares of its common stock at a price of $5.50 per share in a direct offering to the public. The offering will conclude when the company has sold all of the 1,000,000 shares of common stock offered by it or a maximum of 180 days. The company may, in its sole discretion, decide to terminate the registration of the shares offered by the company. Terms of the Offering An investment in our common stock is highly speculative and involves a high degree of risk. See Risk Factors beginning on page 4. Termination of the Offering The offering will be open for 180 days.
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diff --git a/parsed_sections/prospectus_summary/2014/CIK0001599489_veritiv_prospectus_summary.txt b/parsed_sections/prospectus_summary/2014/CIK0001599489_veritiv_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..9a2fc7dced504d851a43e63abba05240ef260354
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2014/CIK0001599489_veritiv_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY The following summary highlights information contained elsewhere in this prospectus relating to the Transactions. You should read this entire prospectus including the risk factors, our and Unisource s management s discussion and analysis of financial condition and results of operations, our and Unisource s historical financial statements, and our unaudited pro forma condensed combined financial statements and the respective notes to those historical and pro forma financial statements. Our historical combined financial data have been prepared on a carve-out basis to reflect the operations, financial condition and cash flows specifically allocable to the xpedx business of International Paper during all periods shown. Our pro forma combined financial data adjust our historical combined financial data to give effect to the Transactions and our anticipated post-Transactions capital structure. Except as otherwise indicated or the context otherwise requires, the information included in this prospectus assumes the completion of the Transactions. The Companies xpedx xpedx is a leading business-to-business printing, packaging and facility supplies and equipment distribution business. Through its three operating segments, Print, Packaging and Facility Solutions, xpedx offers an extensive portfolio of nationally recognized, high quality public and private brands of paper, graphics, packaging and facility supplies primarily in the United States and Mexico. The Print segment includes the sale and distribution of printing and communication papers, publishing papers, digital papers, specialty papers, graphics consumables, wide format papers and substrates, graphics equipment and related equipment installation and service. The Packaging segment includes the design, sourcing, sale and distribution of customized packaging and packing equipment and the sale and distribution of custom and standard corrugated boxes, shrink and stretch films, tape, strapping, cushioning, labels, bags, mailers, molded fiber, bio-polymer and plastics and packaging equipment and related equipment installation and service. The packaging segment also includes fulfillment and contract packaging services. The Facility Solutions segment markets and sells products necessary to maintain large public facilities, including hand towel and bathroom tissue, cleaning chemicals, disinfectants, skin care products, safety and hazard products, trash bags and receptacles, sanitary maintenance supplies, facilities maintenance equipment and related equipment installation and service. Products and equipment are sourced from approximately 6,000 vendors in the United States and approximately 600 vendors in Mexico as of December 31, 2013, with xpedx serving as an important distribution channel for these vendors. As of December 31, 2013, the xpedx network consists of 86 strategically located distribution centers in 39 states and Mexico and a fleet of approximately 1,500 trucks and trailers travelling approximately 32 million miles annually in the United States. xpedx markets and distributed these supplies, products and services to more than 58,000 customer locations as of December 31, 2013, including printers, publishers, data centers, manufacturers, higher education institutions, contract packaging/fulfillment providers, healthcare facilities, print design agencies, sporting and performance arenas, retail stores, government agencies, property managers and building service contractors, through more than 1,150 sales professionals, equipment representatives and service technicians. Unisource Unisource is a leading distributor of printing and business paper products, packaging supplies and equipment, and facility supplies and equipment, primarily in the United States and Canada, with additional Table of Contents international operations in Europe, Asia and Latin America. Through its six business units, U.S. Distribution, Canada Distribution, Graphic Communications, Rollsource, PaperPlus and Unisource Global Solutions, Unisource operates in four primary product categories: Print, Packaging, Facility Supplies and Other. The Print product category includes the sale and distribution of high-quality commercial printing, writing, copying and digital printing paper to commercial printers, retailers, publishers, business form manufacturers, direct mail firms and the digital printing industry, as well as corporate and retail copy centers, in-plant print facilities, government institutions and other paper-intensive businesses. The Packaging product category includes the sale and distribution of consumer goods packaging, packaging for industrial or manufacturing components and point-of-sale displays, as well as the sale and distribution of single function or fully automated packaging machines. The Facility Supplies product category includes the sale and distribution of products such as towels, tissues, wipers and dispensers, can liners, commercial cleaning chemicals, soaps and sanitizers, sanitary maintenance supplies and equipment, safety and hazard supplies, and shampoos and amenities from leading manufacturers. In the Other category, Unisource provides third-party logistics services, which includes freight brokerage, material handling, warehousing and kitting. Products and equipment are sourced in North America, Europe and Asia from approximately 2,800 vendors in the United States, approximately 600 vendors in Canada and approximately 100 vendors in Europe and Asia, with Unisource serving as an important North American distribution channel for many of these vendors. Unisource sells its products to a diverse customer base of approximately 48,000 customers, based on customer bill-to locations, including building service contractors, catalog and direct mail providers, commercial printers, consumer goods providers, cruise lines, food processors, healthcare providers, higher education institutions, government agencies, fulfillment, hotels and resorts, manufacturers and property managers, through approximately 760 sales representatives. Unisource provides supply chain management through its 93 distribution centers, providing next-day services to most major metropolitan areas in the United States and Canada. Transaction Rationale Size and Scale By combining two well-established businesses, we anticipate that the Transactions will create a North American business-to-business distribution company with a broad geographic reach, extensive product offerings and a differentiated and leading service platform. On a combined basis, the two companies conduct business with more than half of the Fortune 500 companies and their subsidiaries in the United States and Canada. We expect the Transactions to strengthen the combined company s relationships with suppliers and customers by: expanding our reach to multi-location customers that value a broader, national footprint; enhancing our supply chain capabilities with greater scale; and providing greater sourcing strategies. Expertise We anticipate that the combined company will be able to deliver a greater breadth of expertise in the following: Print a fully integrated national distributor with expertise in paper, graphics, equipment and print management. On a combined basis, management estimates that coated paper, uncoated paper, text, cover and writing, coated board and carbonless would have been the combined company s top five product categories in the print market in 2013 and would have represented approximately 49%, 29%, 9%, 3% and 3% of sales, respectively; Table of Contents Packaging a full service platform for designing, sourcing and delivering commodity and specialty packaging, which we believe will enable the combined company to provide solutions to customers at every point in the packaging process, including design, engineering, materials, equipment, workflow and logistics. On a combined basis, management estimates corrugated, support materials, films, cushioning and tapes would have been the combined company s top five product categories in the packaging market in 2013 and would have represented approximately 24%, 24%, 18%, 9% and 9% of sales, respectively; Facility Solutions a comprehensive facility solution to help customers maintain a safe, clean, healthy and productive environment. On a combined basis, management estimates towels, tissues and wipes, food service, chemicals (cleaning), can liners and office and school supplies would have been the combined company s top five product categories in the facilities solutions market in 2013 and would have represented approximately 33%, 21%, 9%, 8% and 8% of sales, respectively; and Other a third-party logistics service, including supply chain solutions, freight brokerage, warehousing and kitting. Synergies We expect that the Merger will provide significant opportunities for the combined company to capture cost savings and other synergies. We are targeting annual cost savings and other synergies in the range of approximately $150 million to $225 million, which we anticipate will be fully realized by the end of 2018. We anticipate cost savings and other synergies in the following areas: overhead, strategic sourcing, supply chain efficiencies, optimizing the ability to service customers and reduction of fixed costs (e.g. warehouse rationalization). We currently expect the one-time costs associated with achieving these cost savings and other synergies to be approximately $225 million over a five-year period. We currently expect to realize 15-25% of the net synergies from this transaction in fiscal 2015, 50-60% in fiscal 2016 and 80-90% in fiscal 2017. Stable Platform with Improved Strategic Prospects We expect that the combination of xpedx and Unisource will strengthen the combined company s overall business platform and provide improved opportunities for strategic options as a combined enterprise. Additional advantages to the combination include: xpedx s and Unisource s complementary businesses; minimal customer overlap between the businesses; strong relationships with each company s customers and suppliers; better positioning the combined company to manage through the secular decline in the print segment; and an enterprise better able to take advantage of strategic opportunities, including acquisitions. Strategies Following the completion of the Transactions, we intend to enhance the combined company s strong market position by implementing the following key elements of our business strategy: Continue to Pursue Distribution Excellence We believe the combined company s supply chain and enterprise capabilities will enhance its customer and supplier relationships and enable it to maintain the strong market positions that the xpedx and Unisource businesses enjoy in the print, packaging and facilities solutions markets. The combined company intends to foster a culture of continuous improvement to drive its employees to provide exceptional value to customers and suppliers. Table of Contents Capitalize on Growth Opportunities to Maintain Leadership Position Print: We expect the combined company to leverage its scale and leading market position to continue to offer a comprehensive selection of paper products to its customers and to seek operational efficiencies. Packaging: We expect that the combined company will focus on providing value-added services to its customers, including kitting and packaging design. The combined company expects to expand its packaging design capabilities through design centers which allow customers to design custom packaging, environmentally-friendly products and molded fiber solutions. The combined company also plans to increase the number of sales professionals to help accelerate growth in this business segment as demand for packaging expands. The combined company believes its national footprint will allow it to effectively serve its customers. Facility Solutions: The facilities solutions businesses of both xpedx and Unisource have historically provided customers with a wide range of products, including products under private label brands, a higher margin business that we expect the combined company will seek to grow. We also believe the facility solutions segment will provide opportunities for the combined company to cross-sell its products to Packaging customers and leverage its national footprint to serve large customers. Maintain Sales and Improve Profitability The combined company expects to focus on achieving the cost savings and synergies presented by combining the xpedx and Unisource businesses, including streamlining the combined company to eliminate redundancies. While we expect that sales for the combined company will be relatively flat over the next few years with some variation within the segments, we anticipate the combined company will concentrate on opportunities to grow its sales and improve profitability. Management of the combined company further expects that Adjusted EBITDA in 2014 for the combined business will be approximately $135 million to $145 million, and expects incremental annual improvements in Adjusted EBITDA over the next few years, with an expected improvement of approximately $100 million by the end of 2017, driven primarily by anticipated realization of cost savings and synergies. No assurances can be given that the combined company will achieve these results. See Risk Factors Risks Relating to the Transactions Actual results may be materially lower than the financial forecasts contained in this prospectus. Industry Overview We expect that the consummation of the Transactions will create a North American market leader by combining two leaders of the printing, packaging and facility supplies and equipment distribution business. We believe over the next several years the packaging and facilities solutions markets will experience moderate growth while the print market will remain flat or decline, triggering a shift in business mix to higher margin growth segments. The markets we serve are highly fragmented, which we believe will allow the combined company to leverage its scale to expand. Print The print market has declined over the last few years as demand for paper and related products has waned due to the widespread use of email and permanent product substitution. Despite these challenges, we expect the combined company to capitalize on emerging trends, including wide format printing, synthetic substrates, direct sales to corporate end users and the demand from retail and small order printers. In addition, we expect the combined company will have a leading market position in the fragmented print market. The combined company would have accounted for more than one-third of the distributor-served print market in the United States and Canada in 2013, based on industry data from the American Forest and Paper Association, and RISI and internal management estimates of revenue and volume. Management believes that the combined company s Table of Contents approximate 20% to 30% market share of the wider print market (excluding newsprint), inclusive of both distributor-served and direct-from-manufacturer represents an opportunity to grow share in underserved channels. Management estimates that on a combined basis, printing and publishing, retail trade, manufacturing, distribution and graphic design and advertising would have been the combined company s top five end markets in the print market in fiscal 2013 and would have represented approximately 46%, 14%, 4%, 4% and 4% of sales, respectively. Packaging The packaging market includes, among other products and services, the design, sourcing, sale and distribution of customized multi-substrate packaging and packaging equipment and the sale and distribution of custom and standard corrugated boxes. Packaging consumption in North America in 2012 was estimated to be valued at more than $170 billion. Of that, paperboard, flexible packaging and other packaging materials was valued at more than $90 billion, giving the combined company an estimated market share of less than 3%. The distributor-served share of the packaging market is low, giving a market participant that brings high levels of value and service, along with access to many manufacturers and substrates, an opportunity to increase its share. The paperboard packaging market is dominated by corrugated packaging. Based on management s estimates, the North American market for corrugated packaging was worth more than $35 billion in 2012, giving the combined company an estimated market share of less than 2%. Demand for corrugated packaging is expected to increase over the next five years, according to industry sources. Management estimates that on a combined basis, manufacturing, retail trade, food manufacturing, distribution and transporting and warehousing would have been the combined company s top five end markets in the packaging market in fiscal 2013 and would have represented approximately 24%, 12%, 10%, 10% and 8% of sales, respectively. Facility Solutions The downstream markets that have driven, and which we expect will continue to drive, growth in the facility solutions distribution industry, include janitorial/building services, higher education and healthcare. Increased enrollment in higher education and the aging United States population has led to increased demand for janitorial supplies in these institutional environments. We expect that the combined company s vast product catalog, customized site surveys for higher education environments and team of healthcare facility advisors, combined with its approximate 6% market share in the United States and Canada in 2012, position it to be a leader in the growing facilities solutions market. Management estimates that on a combined basis, retail trade, distribution, entertainment and hospitality, manufacturing and healthcare would have been the combined company s top five end markets in the facilities solutions market in fiscal 2013 and would have represented approximately 23%, 14%, 9%, 8% and 7% of sales, respectively. Risk Factors We face numerous risks related to, among other things, our business operations, our strategies, general economic conditions, competitive dynamics of the industry, our level of indebtedness, the legal and regulatory environment in which we operate, and our status as an independent public company following the Transactions. These risks are set forth in detail under the heading Risk Factors. If any of these risks should materialize, they could have a material adverse effect on our business, financial condition, results of operations or cash flows. We encourage you to review these risk factors carefully. Furthermore, this prospectus contains forward-looking statements that involve risks, uncertainties and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those under the headings Risk Factors and Note Regarding Forward-Looking Statements and Information. Table of Contents Summary of the Transactions We provide below a summary of the Transactions. See The Transactions for a more detailed description. The following chart illustrates our organizational structure following the Transactions. Table of Contents The Distribution Distributing company International Paper Company. After the Distribution, International Paper will not own any shares of SpinCo. Distributed company Veritiv Corporation, referred to herein as SpinCo. Record date Record ownership will be determined as of 5:00 p.m., New York City time, on June 20, 2014. Distribution date The distribution date is expected to be on or about July 1, 2014. Distribution ratio Each share of International Paper common stock outstanding as of the record date will entitle its holder to receive a number of shares of SpinCo common stock determined by a formula based on the number of International Paper shares of common stock outstanding at 5:00 p.m. New York City time, on the record date. Each such holder will receive a number of SpinCo shares of common stock equal to the percentage of the total number of SpinCo shares of common stock outstanding as of the time of the Distribution as is equal to a fraction, (a) the numerator of which is the total number of issued and outstanding International Paper shares of common stock held by such holder as of the record date and (b) the denominator of which is the total number of International Paper shares of common stock issued and outstanding as of the record date (excluding treasury shares held by International Paper and any other International Paper shares otherwise held by International Paper or one of its subsidiaries). Based on the number of International Paper shares of common stock outstanding as of June 9, 2014, we expect the distribution ratio to be approximately 0.0188 shares of SpinCo common stock for each share of International Paper common stock. Promptly after the record date, we will issue a press release disclosing the actual distribution ratio. Although the number of International Paper shares of common stock outstanding may increase or decrease prior to the record date and as a result the distribution ratio may change, it will nonetheless result in International Paper shareholders as of the record date and their transferees owning approximately 51%, and the UWWH Stockholder owning approximately 49%, of the shares of SpinCo common stock on a fully-diluted basis immediately following the Merger. Securities to be distributed All of the shares of common stock of SpinCo outstanding immediately prior to the Merger will be distributed pro rata to International Paper shareholders who hold International Paper common stock as of the record date. On the distribution date, 8,160,000 shares of our common stock will be distributed to International Paper shareholders. The number of SpinCo shares that International Paper will ultimately distribute to its shareholders will be reduced to the extent that cash payments are to be made in lieu of fractional shares, as described below. Table of Contents The Distribution On the distribution date, International Paper will cause the distribution agent to distribute the shares of SpinCo common stock to the International Paper shareholders as of the record date. The distribution of shares of SpinCo common stock will be made in book-entry form. It is expected that it will take the distribution agent up to three business days to electronically issue SpinCo shares to you or your bank or brokerage firm on your behalf by way of direct registration in book-entry form. You will not be required to make any payment, surrender or exchange your International Paper common stock or take any other action to receive your SpinCo common stock. No fractional shares Holders of International Paper common stock will not receive any fractional shares of SpinCo common stock. In lieu of fractional shares of SpinCo, International Paper shareholders will receive a cash payment. To that end, the distribution agent will aggregate and sell whole shares that otherwise would have been distributed as fractional shares of SpinCo in the open market at prevailing market prices and distribute the aggregate cash proceeds of the sales, net of brokerage fees and similar costs, pro rata to each International Paper shareholder who would otherwise have been entitled to receive a fractional share of SpinCo, as applicable, in the Distribution. Recipients of cash in lieu of fractional shares will not be entitled to any interest on payments made in lieu of fractional shares. See The Transactions Manner of Effecting the Distribution. The receipt of cash in lieu of fractional shares generally will be taxable to the recipient shareholders that are subject to U.S. federal income tax as described in The Transactions Material U.S. Federal Income Tax Consequences of the Transactions. Conditions to the Distribution The Distribution is subject to a number of important conditions. Under the terms of the Contribution and Distribution Agreement, the consummation of the Distribution is conditioned upon (i) SpinCo s receipt of the proceeds from the completion of the special payment financing in an amount sufficient to pay the special payment, and International Paper s receipt of the special payment from SpinCo, (ii) the satisfaction (or waiver by International Paper) of each of the conditions to International Paper s obligation to effect the closing of the transactions contemplated by the Merger Agreement (other than the consummation of the Distribution) and (iii) each of International Paper, SpinCo and Unisource having irrevocably confirmed to the other that each of the conditions to its obligations to effect the closing of the Merger has been satisfied or waived and that it is prepared to proceed with the Merger. For a more detailed description of the Merger conditions see The Merger Agreement Conditions to Consummation of the Merger. Special payment adjustment Pursuant to the Contribution and Distribution Agreement, SpinCo is required to make a special payment to International Paper of $400 million, subject to adjustment based on estimates of changes in the net working capital and net indebtedness of the xpedx business and Unisource, and the transaction expenses of Unisource. If the sum of Table of Contents the changes in the net working capital and net indebtedness of the xpedx business represents a positive change in the value of the xpedx business, the special payment to International Paper will be increased by such amount. If that amount represents a negative change in the value of the xpedx business, the special payment to International Paper will be reduced by such amount. Pursuant to the Contribution and Distribution Agreement and the Merger Agreement, if the sum of the Unisource transaction expenses in excess of $15 million and changes in the net working capital and net indebtedness of Unisource represents a positive change in the value of Unisource, SpinCo shall pay such amount to the UWWH Stockholder. If that amount represents a negative change in the value of Unisource, the special payment to International Paper will be increased by a corresponding amount. See The Contribution and Distribution Agreement and the Ancillary Agreements Contribution and Distribution Agreement Working Capital and Net Indebtedness Adjustments. Earnout Payment The Contribution and Distribution Agreement provides that in 2020 the combined company may be required to pay to International Paper an earnout payment of up to $100 million if the combined company s aggregate EBITDA for its 2017, 2018 and 2019 fiscal years exceeds an agreed-upon target, subject to certain adjustments. The amount of the earnout payment, if owed by the combined company, will be an amount equal to (i) the excess of the combined company s aggregate EBITDA for its 2017, 2018 and 2019 fiscal years over the agreed-upon target, (ii) multiplied by four divided by three, capped at $100 million in the aggregate. The earnout payment may also be due in certain other circumstances. See The Contribution and Distribution Agreement and the Ancillary Agreements Contribution and Distribution Agreement Earnout Payment. Trading market and symbol We have applied to list our common stock on the NYSE under the ticker symbol VRTV . We anticipate that, on or shortly before the record date for the Distribution, trading of SpinCo common stock will begin on a when-issued basis and will continue up to and including the distribution date. See The Transactions Listing and Trading of Our Common Stock. Dividend policy We do not currently expect to declare or pay dividends on our common stock for the foreseeable future. See Dividend Policy. Tax consequences of the Distribution to International Paper shareholders International Paper has received a private letter ruling from the IRS to the effect that the Distribution will qualify as tax-free under Sections 355 and 361 of the Code. The IRS ruling also provides that the Merger, the Subsidiary Merger and certain internal transactions undertaken in anticipation of the Distribution will qualify for tax-free treatment under the Code. In addition to obtaining the IRS ruling, International Paper expects to receive an opinion from Debevoise confirming the tax-free status of the Distribution for U.S. federal Table of Contents income tax purposes, which opinion will rely on the IRS ruling as to matters covered by the IRS ruling. The IRS ruling and such opinion will rely on certain facts and assumptions, and certain representations and undertakings, provided by us, International Paper and Unisource regarding the past and future conduct of our respective business and other matters. Assuming that the Distribution qualifies as tax-free under Section 355 of the Code, for U.S. federal income tax purposes no gain or loss will be recognized by an International Paper shareholder upon the receipt of our common stock pursuant to the Distribution, except for any gain or loss attributable to cash received in lieu of a fractional share. See The Transactions Material U.S. Federal Income Tax Consequences of the Transactions and Risk Factors Risks Relating to the Transactions If the spin-off does not qualify as a tax-free spin-off under Section 355 of the Code, including as a result of subsequent acquisitions of stock of International Paper or SpinCo, then International Paper and/or the International Paper shareholders may be required to pay substantial U.S. federal income taxes. Each International Paper shareholder is urged to consult his, her or its tax advisor as to the specific tax consequences of the Distribution to that shareholder, including the effect of any state, local or non-U.S. tax laws and of changes in applicable tax laws. Relationship with International Paper after the spin-off We have entered into the Contribution and Distribution Agreement and shortly before the Distribution, we expect to enter into other agreements with International Paper related to the Transactions. These agreements will govern the relationship between SpinCo and International Paper subsequent to the completion of the Distribution and provide for the allocation between SpinCo and International Paper of various assets, liabilities and obligations (including employee benefits and tax-related assets and liabilities). The Contribution and Distribution Agreement, in particular, provides for the settlement or extinguishment of certain obligations between SpinCo and International Paper. We will enter into a Transition Services Agreement pursuant to which International Paper will provide certain services to SpinCo, and SpinCo will provide certain services to International Paper, on a transitional basis. Further, we have entered into the Tax Matters Agreement with International Paper which governs the rights and obligations of International Paper and SpinCo for certain tax liabilities with respect to periods or portions thereof ending on or before the date of the Distribution. The Tax Matters Agreement also contains certain restrictions with respect to the intended tax-free status of the Transactions and indemnification obligations on the part of SpinCo if the Transactions are not tax-free. We will enter into a supply agreement with International Paper pursuant to which International Paper will supply xpedx LLC with Table of Contents certain printing and communications papers and coated paperboard and xpedx LLC will supply International Paper with certain products, in each case, for a period of 18 months. We describe these and related arrangements in greater detail under The Contribution and Distribution Agreement and the Ancillary Agreements and describe some of the risks of these arrangements under Risk Factors Risks Relating to the Transactions. Distribution Agent Computershare Inc., a Delaware corporation and its fully owned subsidiary, Computershare Trust Company, N.A., a national banking association. The Merger Structure of the Merger UWWH will merge with and into SpinCo, with SpinCo continuing as the surviving corporation, and xpedx Intermediate, which will be SpinCo s direct, wholly-owned subsidiary, will merge with and into UWW, with UWW surviving the Subsidiary Merger as SpinCo s direct, wholly-owned subsidiary. We expect the Mergers to be consummated sequentially and immediately following the Distribution and on the terms and subject to the other conditions of the Merger Agreement. The Merger Agreement provides that the Mergers will take place on the date of the Distribution (such date, the Closing Date ). Primary purposes of the Transactions International Paper determined that the Transactions would be in the best interests of International Paper and its shareholders because the Transactions would provide a number of key benefits, including primarily: (i) greater strategic focus of resources and management s efforts for each of International Paper and for the combined company, (ii) the special payment, (iii) direct and differentiated access by each of International Paper and the combined company to capital resources and (iv) increased value to International Paper s shareholders, in particular the combined company s anticipated value on a stand-alone basis. In assessing and approving the Transactions, International Paper considered the unavailability of alternative transactions that would produce similar or better results for International Paper and its shareholders, and the spinoff s facilitating the strategic combination of the xpedx and Unisource businesses. See The Transactions International Paper s Reasons for the Transactions. Consideration for the Merger SpinCo shareholders will not receive any consideration in the Merger, and SpinCo will remain the parent company for the combined company. Each UWWH share of common stock outstanding as of July 1, 2014 will be converted into the right to receive a number of shares of SpinCo common stock in a private placement transaction, that will result in International Paper s shareholders as of the record date and their transferees owning approximately 51% of the common stock of SpinCo, and the UWWH Stockholder owning approximately 49%, on a fully-diluted basis immediately following the Merger. Table of Contents Approval of the Merger No vote by International Paper shareholders is required or is being sought in connection with the Transactions. International Paper, as the sole shareholder of SpinCo, has already approved the Merger. Conditions to the Merger The obligations of each party to consummate the Merger are subject to the satisfaction or waiver (to the extent permitted by applicable law) of certain conditions, including: the Contribution and Distribution having occurred pursuant to the terms of the Contribution and Distribution Agreement; SpinCo s receipt of the proceeds from the special financing in an amount sufficient to pay the special payment, and International Paper s receipt of the special payment from SpinCo; International Paper s receipt of one or more private letter rulings from the IRS, which rulings shall be in full force and effect on the Closing Date, to the effect that (i) the transactions that comprise the Distribution will qualify as a reorganization within the meaning of Section 368(a)(1)(D) of the Code, (ii) International Paper will recognize no gain or loss under Section 361(c) of the Code upon the Distribution and (iii) International Paper s shareholders will recognize no gain or loss under Section 355(a) of the Code upon the receipt of SpinCo shares in the Distribution; the receipt by International Paper s board of directors of customary solvency and surplus opinions of a nationally recognized investment banking or appraisal firm; the effectiveness of the registration statement on Form S-1, of which this prospectus forms a part, and the approval of the listing of SpinCo common stock on the NYSE, subject to official notice of the issuance; and the absence of any order issued by any governmental authority of competent jurisdiction or other legal impediment preventing or making illegal the consummation of the Transactions. In addition, International Paper, SpinCo, xpedx Intermediate and xpedx LLC s obligations to consummate the Merger are subject to the satisfaction or waiver (to the extent permitted by applicable law) of the following additional conditions, among others: the representations and warranties of the UWWH Stockholder, UWWH and UWW, disregarding all materiality or material adverse effect qualifications, being true and correct in all respects as of the effective time of the Merger as if made as of the effective time of the Merger (except to the extent such representations and warranties address matters as of a particular date, in which case as of such date), except where the failure to be true and correct has not had or would not, individually or in the aggregate, reasonably be expected to have, a material adverse effect on UWWH, its subsidiaries or the financial condition or results of operations of UWWH, taken as a whole, subject to certain exceptions, or the Table of Contents ability of UWWH to consummate the Transactions and to perform its obligations under the Merger Agreement and the Transaction Agreements (a UWWH MAE ) (other than certain representations and warranties which must be true and correct in all respects); the covenants and agreements being performed by the UWWH Stockholder, UWWH and UWW in all material respects at or prior to the effective time of the Merger (other than certain covenants and agreements which must be performed in all respects); the delivery by UWWH of an officer s certificate certifying the satisfaction of the above conditions; the absence of a UWWH MAE since June 30, 2013; the receipt of a spin-off tax opinion by International Paper and SpinCo from legal counsel; the receipt of a tax opinion by International Paper and SpinCo from legal counsel to the effect that the Merger will constitute a reorganization for federal income tax purposes within the meaning of Section 368(a) of the Code; the entrance into and delivery of the applicable Transaction Agreements by the UWWH Stockholder and UWWH, which are in full force and effect; the delivery by the UWWH Stockholder of a certification that it is not a foreign person; and the termination of the advisory agreement among UWWH, UWW and Bain Capital, without liability to SpinCo or its subsidiaries. Furthermore, UWWH and UWW s obligations to consummate the Merger are subject to the satisfaction or waiver (to the extent permitted by applicable law) of the following additional conditions, among others: the representations and warranties of International Paper, SpinCo, xpedx Intermediate and xpedx LLC, disregarding all materiality or material adverse effect qualifiers, being true and correct in all respects as of the effective time of the Merger as if made as of the effective time of the Merger (except to the extent such representations and warranties address matters as of a particular date, in which case as of such date), except where their failure to be true and correct has not had or would not, individually or in the aggregate, reasonably be expected to have, a material adverse effect on the xpedx business, SpinCo and its subsidiaries, International Paper or any of International Paper s subsidiaries with respect to the xpedx business or the financial condition or results of operations of the xpedx business, taken as a whole, subject to certain exceptions, or the ability of International Paper or SpinCo and its subsidiaries to consummate the Transactions and to perform its obligations under the Merger Agreement and the Transaction Agreements (a SpinCo MAE ) (other than certain representations and warranties which must be true and correct in all respects); Table of Contents the covenants and agreements being performed by International Paper, SpinCo, xpedx Intermediate and xpedx LLC in all material respects at or prior to the effective time of the Merger (other than certain covenants and agreements, which must be performed in all respects); the delivery by each of International Paper and SpinCo of an officer s certificate certifying the satisfaction of the above conditions; the absence of any SpinCo MAE since June 30, 2013; the receipt of a tax opinion by UWWH s legal counsel, to the effect that (i) the Merger will constitute a reorganization for federal income tax purposes within the meaning of Section 368(a) of the Code and (ii) the Subsidiary Merger will qualify as a transfer of property to Unisource within the meaning of Section 351(a) of the Code; the entrance into and delivery of the applicable Transaction Agreements by International Paper, SpinCo, xpedx Intermediate and xpedx LLC, which are in full force and effect. Furthermore, the effective date of the registration statement of which this prospectus forms a part will be no earlier than the date on which SpinCo, as the surviving corporation, would be reasonably able to meet its obligations and requirements as a public company with securities listed on the NYSE and is otherwise reasonably prepared to operate as a standalone entity taking into account all resources available to it under the Transaction Agreements and on commercially reasonable terms from third parties. Termination of the Merger Agreement The Merger Agreement may be terminated by: the mutual written consent of International Paper and UWWH; either of International Paper or UWWH if the effective time of the Merger has not occurred on or before January 5, 2015, unless the failure to effect the Merger by that date is due to the failure of the party seeking to terminate the Merger Agreement to perform its obligations set forth in the Merger Agreement; UWWH, if there has been a material breach by International Paper or SpinCo of any of its representations, warranties, covenants or agreements contained in the Merger Agreement, or any such representation and warranty has become untrue in any material respect, and such breach or inaccuracy has not been cured within 30 business days following notice of such breach (so long as UWWH is not then in material breach of any covenant, representation or warranty or other agreement contained in the Merger Agreement which breach would cause the closing conditions of International Paper or SpinCo not to be satisfied if the closing were to occur at the time of termination); Table of Contents International Paper, if there has been a material breach by UWWH of any of its representations, warranties, covenants or agreements contained in the Merger Agreement, or any such representation and warranty has become untrue in any material respect, and such breach or inaccuracy has not been cured within 30 business days following notice of such breach (so long as International Paper is not then in material breach of any covenant, representation or warranty or other agreement contained in the Merger Agreement which breach would cause the closing conditions of UWWH or the UWWH Stockholder not to be satisfied if the closing were to occur at the time of termination); and any of the parties if any law or order of any governmental authority preventing or prohibiting the completion of the Transactions has become final and nonappealable. Termination fees and expenses The Merger Agreement provides that, upon termination of the Merger Agreement under specified circumstances, certain termination fees may be payable: If International Paper terminates the Merger Agreement as described in the fourth bullet of the preceding section and an acquisition proposal for UWWH has commenced or is publicly disclosed, proposed or announced or otherwise communicated to UWWH or the UWWH Stockholder prior to such termination and within 15 months following such termination, UWWH or any of its subsidiaries enters into a definitive agreement with respect to such proposal, then UWWH must pay International Paper a $6 million termination fee. If UWWH terminates the Merger Agreement as described in the third bullet of the preceding section and an acquisition proposal for xpedx has commenced or is publicly disclosed, proposed or announced or otherwise communicated to International Paper or the International Paper shareholders prior to such termination and within 15 months following such termination, International Paper or SpinCo enters into a definitive agreement with respect to such proposal, then International Paper must pay UWWH a $6 million termination fee. Tax consequences to International Paper shareholders International Paper shareholders are not expected to recognize any gain or loss for U.S. federal income tax purposes as a result of the Merger. Each International Paper shareholder is urged to consult his, her or its tax advisor as to the specific tax consequences of the Merger to that shareholder, including the effect of any state, local or non-U.S. tax laws and of changes in applicable tax laws. Accounting Treatment of the Transactions SpinCo will be the accounting acquiror in the Merger. Accordingly, SpinCo will apply acquisition accounting to the assets acquired and liabilities assumed of Unisource upon consummation of the Merger. See The Transactions Accounting Treatment and Considerations. Table of Contents Financing The ABL Facility In connection with the Transactions, we will enter into an asset-based revolving facility that will provide for revolving loans in an aggregate principal amount of up to $1,400.0 million (subject to availability under a borrowing base). In connection with the Transactions, subsidiaries of SpinCo will borrow approximately $698.9 million under the ABL Facility, assuming the closing of the Transactions as of March 31, 2014. The proceeds of the initial borrowings under the ABL Facility will be used to make the special payment to International Paper, to refinance certain existing indebtedness of Unisource and to pay related fees and expenses. See Description of Material Indebtedness. Market and Industry Data This prospectus includes estimates regarding market and industry data and forecasts, which are based on publicly available information, industry publications and surveys, reports from government agencies, reports by market research firms and our own estimates based on our management s knowledge of and experience in the market sectors in which we compete. We have not independently verified market and industry data from third party sources. Trademarks We use various trademarks, service marks and brand names that we deem particularly important to the advertising activities and operation of our various lines of business and some of these marks are registered in the United States and, in some cases, other jurisdictions. This prospectus also refers to the brand names, trademarks or service marks of other companies. All brand names and other trademarks or service marks cited in this prospectus are the property of their respective holders. * * * * * Veritiv Corporation is a Delaware corporation. Prior to the Transactions, our principal executive offices are located at 6400 Poplar Avenue, Memphis, Tennessee 38197, and our telephone number at that address is (901) 419-9000. Following the Transactions, we expect our principal executive offices will be located in the greater Atlanta, Georgia area, and we expect to maintain a significant presence at Unisource s and xpedx s current operational headquarters in Norcross, Georgia and Loveland, Ohio, respectively. Our website is www.veritivcorp.com. Information on, and which can be accessed through, our website is not incorporated in this prospectus. Table of Contents
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+This summary highlights aspects of our business and the notes. You should, however, carefully read the entire prospectus, including the information presented under the section entitled Risk Factors and our consolidated financial statements and the notes thereto incorporated by reference into this prospectus before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements as a result of certain factors, including those set forth under Risk Factors and Forward-Looking Statements. Unless the context otherwise requires or indicates, references to Biomet, the Company, we, us and our refer to Biomet, Inc. and its subsidiaries. Our Company General Biomet, Inc., an Indiana corporation incorporated in 1977, is one of the largest orthopedic medical device companies in the United States and worldwide with operations in more than 50 locations throughout the world and distribution in approximately 90 countries. Our principal subsidiaries include Biomet U.S. Reconstruction, LLC; Biomet Orthopedics, LLC; Biomet Manufacturing, LLC; Biomet Europe BV; EBI, LLC; Biomet 3i, LLC; Biomet International Ltd.; Biomet Microfixation, LLC; Biomet Sports Medicine, LLC; Biomet Trauma, LLC; and Biomet Biologics, LLC. We design, manufacture and market surgical and non-surgical products used primarily by orthopedic surgeons and other musculoskeletal medical specialists. We operate in one reportable business segment, musculoskeletal products, which includes the design, manufacture and marketing of products in six major categories: Knees, Hips, Sports, Extremities, Trauma, or S.E.T., Spine, Bone Healing and Microfixation, Dental and Cement, Biologics and Other Products. We have three geographic markets: United States, Europe and International. Corporate Information Biomet is incorporated in the State of Indiana. Our principal executive offices are located at 56 East Bell Drive, Warsaw, Indiana 46582. Our website address is www.biomet.com. The information contained on our website or that can be accessed through our website will not be deemed to be incorporated into this prospectus or the registration statement of which this Table of Contents FORWARD-LOOKING STATEMENTS Some of the statements made under the headings Summary and elsewhere in this prospectus contain forward-looking statements within the meaning of U.S. federal securities laws, including Section 27A of the Securities Act and Section 21E of the Exchange Act. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements generally preceded by, followed by or that include the words believe, could, expect, forecast, intend, may, anticipate, plan, predict, possibly, project, potential, estimate, should, will, or similar expressions. These statements include, but are not limited to, statements related to: the timing and number of planned new product introductions; the effect of anticipated changes in the size, health and activities of the population or on the demand for our products; assumptions and estimates regarding the size and growth of certain market categories; our ability and intent to expand in key international markets; the timing and anticipated outcome of clinical studies; assumptions concerning anticipated product developments and emerging technologies; the future availability of raw materials; the anticipated adequacy of our capital resources to meet the needs of our business; our continued investment in new products and technologies; the ultimate marketability of products currently being developed; our ability to successfully implement new technologies and transition certain manufacturing operations, including transitions to China; our ability to manage working capital and generate adequate cash flows to service outstanding debt; our ability to sustain sales and earnings growth; our success in achieving timely approval or clearance of our products with domestic and foreign regulatory entities; our success in implementing our operational improvement programs; the stability of certain foreign economic markets; the effect of foreign currency fluctuations on our results; the impact of anticipated changes in the musculoskeletal industry and our ability to react to and capitalize on those changes; our ability to successfully implement desired organizational changes; the impact of our managerial changes; our ability to take advantage of technological advancements; our reliance on our private equity stockholders; our $5,831.7 million of total indebtedness outstanding as of February 28, 2014, and our ability to incur additional indebtedness in the future; and our inability to generate sufficient cash in order to meet our debt service obligations. Any forward-looking statements contained in this prospectus are based upon our historical performance and on our current plans, estimates and expectations in light of information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us, our Principal Stockholders, the underwriters or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. You should not place undue reliance on any forward-looking statement and should consider the following factors, as well as the factors discussed elsewhere in this prospectus, including under Risk Factors . We believe that these factors include: changes in general economic conditions and interest rates; changes in the availability of capital and financing sources; changes in competitive conditions and prices in our markets; changes to the regulatory environment for our products, including national health care reform; the effects of incurring or having incurred a substantial amount of indebtedness under our 6.500% senior notes, 6.500% senior subordinated notes and senior secured credit facilities; the effects upon us of complying with the covenants contained in our senior secured credit facilities and the indentures governing our 6.500% senior notes and 6.500% senior subordinated notes; restrictions that the terms and conditions of our 6.500% senior notes and 6.500% senior subordinated notes and our senior secured credit facilities may place on our ability to respond to changes in our business or take certain actions; changes in the relationship between supply of and demand for our products; fluctuations in costs of raw materials and labor; Table of Contents prospectus forms a part, and investors should not rely on any such information in deciding whether to purchase the notes. We have included our website address in this prospectus only as an inactive textual reference and do not intend it to be an active link to our website. For additional information, contact our Corporate Communications department at (574) 372-1514. Ownership and Corporate Structures LVB Acquisition, Inc., or Parent, owns all of our issued and outstanding capital stock. LVB Acquisition Holding, LLC ( Holding ) owns 97.19% of the issued and outstanding capital stock of Parent. Substantially all the equity interests in Holding are owned, directly or indirectly, by a consortium of private equity funds affiliated with The Blackstone Group, Goldman, Sachs & Co., Kohlberg Kravis Roberts & Co. and TPG Global, LLC (together with its affiliates, TPG ), and their co-investors (jointly, the Sponsors ). Table of Contents the effect of foreign currency fluctuations on our results; changes in other significant operating expenses; decreases in sales of our principal product lines; slowdowns or inefficiencies in our product research and development efforts; increases in expenditures related to increased government regulation of our business; developments adversely affecting our sales activities inside or outside the United States; decreases in reimbursement levels by our customers, including certain of our foreign government customers that are experiencing financial distress; difficulties in transitioning certain manufacturing operations to China and other locations; challenges in effectively implementing restructuring and cost saving initiatives; increases in cost-containment efforts from managed care organizations and other third-party payors; loss of our key management and other personnel or inability to attract such management and other personnel; increases in costs of retaining existing independent sales agents of our products; potential future goodwill and/or intangible impairment charges; inability to obtain, protect or enforce our intellectual property rights; unanticipated expenditures related to litigation; and failure to comply with the terms of the DPA (as defined elsewhere in this prospectus). We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events. MARKET AND INDUSTRY DATA This prospectus includes industry data and forecasts that we obtained from industry and government publications and surveys, studies conducted by third parties, public filings and internal company sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of the included information. Statements as to our ranking, market position and market estimates are based on independent industry publications, government publications, third party forecasts and management s estimates and assumptions about our markets and our internal research. While we are not aware of any misstatements regarding our market, industry or similar data presented herein, such data involve risks and uncertainties and are subject to change based on various factors, including those discussed in Cautionary Note Regarding Forward-Looking Statements and Risk Factors in this prospectus. TERMS USED IN THIS PROSPECTUS Unless otherwise noted or indicated by the context, in this prospectus: The term guarantors , as of the date of this prospectus with respect to both the senior notes and the senior subordinated notes, means Biomet 3i, LLC, Biomet Biologics, LLC, Biomet Europe Ltd., Biomet Fair Lawn, LLC, Biomet Florida Services, LLC, Biomet International Ltd, Biomet Leasing, Inc., Biomet Manufacturing, LLC, Biomet Microfixation, LLC, Biomet Orthopedics, LLC, Biomet Spine, LLC, Biomet Sports Medicine, LLC, Biomet U.S. Reconstruction, LLC, Biomet Trauma, LLC, Cross Medical Products, LLC, EBI Holdings, LLC, EBI, LLC, EBI Medical Systems, LLC, Electro-Biology, LLC, Implant Innovations Holdings, LLC, Interpore Cross International, LLC, Interpore Spine Ltd., Kirschner Medical Corporation, Lanx, Inc. and Lanx Sales, LLC. However, since each of our current and future wholly owned domestic restricted subsidiaries that is a guarantor of our senior secured credit facilities will fully and unconditionally guarantee the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis, the identities of the guarantors may change from time to time without notice. See Description of Senior Notes Guarantees and Description of Senior Subordinated Notes Guarantees. The term senior notes indenture refers to the Senior Notes Indenture dated as of August 8, 2012 among Biomet, Inc., the Guarantors listed therein and Wells Fargo Bank, National Association and the First Supplemental Indenture, dated as of October 2, 2012 among Biomet, Inc., the Guarantors listed therein and Wells Fargo Bank, National Association, collectively. The term senior subordinated notes indenture refers to the Senior Subordinated Notes Indenture dated as of October 2, 2012 among Biomet, Inc., the Guarantors listed therein and Wells Fargo Bank, National Association. The term indentures refers to the senior notes indenture and senior subordinated notes indenture, collectively. Table of Contents Summary of the Terms of the Notes The following summary contains basic information about the notes and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of the notes, you should read the section of the prospectus entitled Description of Senior Notes and Description of Senior Subordinated Notes. For purposes of this summary and the Description of Senior Notes and Description of Senior Subordinated Notes, references to the Company, Biomet, the issuer, we, our and us refer only to Biomet, Inc. and not to its subsidiaries. Issuer Biomet, Inc. Notes Offered Senior Notes $1,825 million in aggregate principal amount of 6.500% Senior Notes due 2020. Senior Subordinated Notes $800 million in aggregate principal amount of 6.500% Senior Subordinated Notes due 2020. Maturity Dates The senior notes will mature on August 1, 2020. The senior subordinated notes will mature on October 1, 2020. Interest Rates Interest on the notes will be payable in cash and will accrue at a rate of 6.500% per annum. Interest Payment Dates Senior Notes August 1 and February 1, commencing February 1, 2013. Senior Subordinated Notes April 1 and October 1, commencing April 1, 2013. Guarantees Each of our existing and future wholly-owned domestic restricted subsidiaries has jointly, severally and unconditionally guaranteed the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis, in each case to the extent such subsidiaries guarantee our senior secured credit facilities. Table of Contents EXPLANATORY NOTE This Registration Statement relates to the previously filed Registration Statement on Form S-1 (File No. 333-188262) (the Previous Registration Statement ) of Biomet, Inc. ( Biomet ). Biomet filed the Previous Registration Statement to register the following securities issued by Biomet and guaranteed by the guarantors named in the Registration Statement: $1,825,000,000 6.500% Senior Notes due 2020 (the Senior Notes ) and $800,000,000 6.500% Senior Subordinated Notes due 2020 (the Senior Subordinated Notes ). There were no applicable registration fees required to be paid at the time of the original filing of the Previous Registration Statement. This Registration Statement has two purposes: First, to register subsidiary guarantees of the Senior Notes and the Senior Subordinated Notes by certain additional subsidiaries (the Additional Subsidiary Guarantors ) of Biomet, and to include the Additional Subsidiary Guarantors as registrants; and Second, to update the Previous Registration Statement pursuant to Section 10(a)(3) of the Securities Act to incorporate by reference the consolidated financial statements and the notes thereto included in Biomet Annual Report on Form 10-K for the fiscal year ended May 31, 2013 (as updated in the Current Report on Form 8-K filed on April 11, 2014) and to update certain other information in the Registration Statement. Pursuant to Rule 429 under the Securities Act of 1933, as amended, this Registration Statement, upon effectiveness, will serve as a post-effective amendment to the Previous Registration Statement. Table of Contents Ranking Senior Notes The senior notes are our senior unsecured obligations and rank pari passu in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto; are senior in right of payment to any future indebtedness that is expressly subordinated in right of payment thereto (including our senior subordinated notes); and are effectively junior to our existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. Similarly, the guarantees of the senior notes are such guarantors senior unsecured obligations and rank pari passu in right of payment with all existing and future indebtedness of each guarantor that is not expressly subordinated thereto; are senior in right of payment to any future indebtedness of each guarantor that is expressly subordinated in right of payment thereto; and are effectively junior to all existing and future secured indebtedness of each guarantor to the extent of the value of the collateral securing such indebtedness. Senior Subordinated Notes The senior subordinated notes are our senior subordinated unsecured obligations and rank junior in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto (including the senior notes); rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and are senior in right of payment to any future subordinated indebtedness and effectively junior to our existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. Similarly, the guarantees of the senior subordinated notes are such guarantors senior subordinated unsecured obligations, and rank junior in right of payment with all existing and future indebtedness of each guarantor that is not expressly subordinated thereto; rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and are senior in right of payment to any future indebtedness of each guarantor that is expressly subordinated in right of payment thereto and effectively junior to all existing and future secured indebtedness of each guarantor to the extent of the value of the collateral securing such indebtedness. Table of Contents The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED APRIL 11, 2014 PRELIMINARY PROSPECTUS $1,825,000,000 6.500% Senior Notes due 2020 $800,000,000 6.500% Senior Subordinated Notes due 2020 NOTES OFFERED $1,825.0 million of our 6.500% Senior Notes due 2020, which we refer to as the senior notes. $800.0 million of our 6.500% Senior Subordinated Notes due 2020, which we refer to as the senior subordinated notes. We refer to the senior notes and the senior subordinated notes collectively as the notes. MATURITY The senior notes will mature on August 1, 2020. The senior subordinated notes will mature on October 1, 2020. INTEREST Senior notes: Interest is payable in cash and accrues at the rate of 6.500% per annum. Senior subordinated notes: Interest is payable in cash and accrues at the rate of 6.500% per annum. INTEREST PAYMENT DATES Senior notes: August 1 and February 1, commencing February 1, 2013. Senior subordinated notes: April 1 and October 1, commencing April 1, 2013. REDEMPTION We may redeem some or all of the senior notes on or after August 1, 2015 at redemption prices described in this prospectus. We may redeem some or all of the notes on or after October 1, 2015 at redemption prices described in this prospectus. CHANGE OF CONTROL Upon certain change of control events, each holder of notes may require us to purchase all or a portion of such holder s notes as described in this prospectus. GUARANTEES Each of our existing and future wholly-owned domestic restricted subsidiaries will jointly, severally and unconditionally guarantee the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis, in each case to the extent such subsidiaries guarantee our senior secured credit facilities. RANKING The senior notes and the related guarantees will be our senior unsecured obligations and will rank pari passu in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto; be senior in right of payment to any future indebtedness that is expressly subordinated in right of payment thereto (including our senior subordinated notes); and be effectively junior to our and our guarantors existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. The senior subordinated notes will be our senior subordinated unsecured obligations and will rank junior in right of payment with all of our existing and future indebtedness that is not expressly subordinated in right of payment thereto (including the senior notes); rank pari passu in right of payment to any of our existing and future senior subordinated indebtedness and other obligations; and be senior in right of payment to any future subordinated indebtedness and effectively junior to our and our guarantors existing and future secured indebtedness (including the borrowings under our senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness and to all existing and future liabilities of our non-guarantor subsidiaries. See Risk Factors beginning on page 7 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 any affiliates of Goldman, Sachs & Co. in connection with offers and sales of the notes related to market-making transactions in the notes effected from time to time. Goldman, Sachs & Co. or its affiliates 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 , 2014. We are responsible for the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with additional information or information different from that contained in this prospectus and we take no responsibility for any other information that others may give you. This prospectus does not offer to sell nor ask for offers to buy any of the securities in any jurisdiction where it is unlawful, where the person making the offer is not qualified to do so, or to any person who cannot legally be offered the securities. You should not assume that the information contained in or incorporated by reference in this prospectus is accurate as of any date other than the date on the front cover of this prospectus or the date of any document incorporated by reference herein. Table of Contents Optional Redemption Senior Notes At any time prior to August 1, 2015, we may redeem up to 35% of the aggregate principal amount of the senior notes with the net proceeds of certain equity offerings at the redemption price set forth in this prospectus, plus accrued and unpaid interest, if any, to the redemption date. At any time prior to August 1, 2015, we may redeem the senior notes, in whole or in part, at our option, at a redemption price equal to 100% of their principal amount plus a make-whole premium and accrued and unpaid interest, if any, to the date of redemption. On and after August 1, 2015, we may redeem some or all of the senior notes at any time at the redemption prices set forth in this prospectus plus accrued and unpaid interest, if any, to the date of redemption. See Description of Senior Notes Optional Redemption. Senior Subordinated Notes At any time prior to October 1, 2015, we may redeem up to 40% of the aggregate principal amount of the senior subordinated notes with the net proceeds of certain equity offerings at the redemption price set forth in this prospectus, plus accrued and unpaid interest, if any, to the redemption date. At any time prior to October 1, 2015, we may redeem the senior subordinated notes, in whole or in part, at our option, at a redemption price equal to 100% of their principal amount plus a make-whole premium and accrued and unpaid interest, if any, to the date of redemption. On and after October 1, 2015, we may redeem some or all of the senior subordinated notes at any time at the redemption prices set forth herein plus accrued and unpaid interest, if any, to the date of redemption. See Description of Senior Subordinated Notes Optional Redemption. Change of Control Upon certain change of control events, each holder of notes may require us to purchase all or a portion of such holder s notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the purchase date. See Description of Senior Notes Repurchase at the Option of Holders Change of Control and the definition of Change of Control under Description of Senior Notes Certain Definitions, and Description of Senior Subordinated Notes Repurchase at the Option of Holders Change of Control and the definition of Change of Control under Description of Senior Subordinated Notes Certain Definitions. Table of Contents Certain Covenants The indentures governing the notes contain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: pay dividends on, redeem or repurchase capital stock or make other restricted payments; make investments; incur indebtedness or issue certain equity; create certain liens; incur obligations that restrict the ability of our subsidiaries to make dividend or other payments to us; enter into transactions with our affiliates; create or designate unrestricted subsidiaries; and consolidate, merge or transfer all or substantially all of our assets. These covenants are subject to important exceptions and qualifications, which are described under the headings Description of Senior Notes and Description of Senior Subordinated Notes in this prospectus. Certain of these covenants will be suspended if the notes are assigned an investment grade rating by Standard & Poor s Rating Services ( Standard & Poor s ) and Moody s Investors Services, Inc. ( Moody s ) and no default has occurred and is continuing. If either rating on the notes should subsequently decline to below investment grade or a default occurs and is continuing, the suspended covenants will be reinstated. Listing We do not intend to list the notes on any securities exchange. Governing Law The notes are governed by, and construed in accordance with, the laws of the State of New York. Trustee Wells Fargo Bank, National Association
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+PROSPECTUS SUMMARY 1
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+PROSPECTUS SUMMARY AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, "WE," "US," "OUR," AND "UNI LINE CORP." REFERS TO UNI LINE CORP. THE FOLLOWING SUMMARY PROVIDES A BRIEF OVERVIEW OF THE KEY ASPECTS OF THE OFFERING. YOU SHOULD READ THE ENTIRE PROSPECTUS BEFORE MAKING AN INVESTMENT DECISION TO PURCHASE OUR COMMON STOCK. UNI LINE CORP. We are a development stage company and we are in the business of selling freshly squeezed juice from mobile stands in London, United Kingdom. Taking advantage of mobility of our juice stands we are going to place them at what we believe to be popular tourist places including strip centers, power centers and shopping malls during the colder period of the year and sport sites events. At present moment we do not have customers or juice stands and we currently have minimal operations. We intend to place such juice stands in places we believe are popular places for tourists and places with high volume of people traffic. Being a development stage company, we have no revenues and have limited operating history. Uni Line Corp. was incorporated in Nevada on September. 5, 2013. To date we have prepared a business plan, signed a lease agreement and purchased one juice maker as a test model (without any equipment such as a refrigerator and stand). (Commercial Juice Extractor). Our principal executive office is located at Barons Court Road flat 1, London W14 9DU, Great Britain. Our phone number is +44 020 3287 6608. We are a company without revenues and have just recently started our operations; we have minimal assets and have incurred losses since inception. The Company's monthly burn rate (from inception through May 31, 2014) is $968.22 and at such rate, based upon current cash on hand, the Company's present capital will last 2 1/2 months. Our financial statements for the period from September 5, 2013 (date of inception) to May 31, 2014, report no revenues and a net loss of $8,252. As of May 31, 2014 we had $ 1,198 in cash on hand. As of the date of this prospectus we had $686.12 in cash on hand. Our independent registered public accountant has issued an audit opinion for Uni Line Corp. which includes a statement expressing substantial doubt as to our ability to continue as a going concern. If we are unable to obtain additional working capital our business may fail. To date, the only operations we have engaged in are the development of a business plan and the purchase of a juice maker. We intend to use the net proceeds from this offering to develop our business operations (See "Description of Business" and "Use of Proceeds"). Being a development stage company, we have very limited operating history. Proceeds from this offering are required for us to proceed with our business plan over the next twelve months. We require minimum funding of $25,000 to conduct our proposed operations and pay all expenses for a minimum period of one year including expenses associated with maintaining a reporting status with the SEC. If we raise $25,000 in this offering, we plan to open one juice stand. If we are unable to obtain minimum funding of $25,000, our business may fail. Even if we raise $100,000 from this offering or more, we may need more funds to develop growth strategy and to continue maintaining a reporting status. 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. Roman Ehlert, our president, devotes approximately 20 hours/week to the business and he has no prior experience managing a public company nor does Mr. Ehlert have experience in our industry. Mr. Ehlert owns 100% of our outstanding shares of common stock and will own 44% of our shares of common stock if 100% of the shares registered are sold. Accordingly, Mr. Ehlert will have significant influence in determining the outcome of all corporate transactions or other matters. The interests of Mr. Ehlert may differ from the interests of the other shareholders and may result in corporate decisions that are disadvantageous to other shareholders.. If necessary, Roman Ehlert, our president, has verbally agreed to lend funds to pay for the registration process and lend funds to implement our business plan and to help maintain a reporting status with the SEC in the form of a non-secured loan for the next twelve months. However, there is no written loan agreement to such effect and no guarantee that Mr. Ehlert will make such loans to the Company. 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. THE OFFERING The Issuer: UNI LINE CORP. Securities Being Offered: 10,000,000 shares of common stock Price Per Share: $0.01 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. Gross Proceeds if 100% of the shares are sold $100,000 Gross Proceeds if 75% of the shares are sold $75,000 Gross Proceeds if 50% of the shares are sold $50,000 Gross Proceeds if 25% of the shares are sold $25,000 Securities Issued and Outstanding: There are 6,000,000 shares of common stock issued and outstanding as of the date of this prospectus, held solely by our sole officer and director, Roman Ehlert. Registration Costs: We estimate our total offering registration costs to be approximately $10,000. Risk Factors: See "Risk Factors" and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in shares of our common stock. SUMMARY FINANCIAL INFORMATION The summarized financial data presented below is derived from, and should be read in conjunction with, our audited financial statements and related notes from September 5, 2013 (date of inception) to May 31, 2014, included on Page F-1 in this prospectus. FINANCIAL SUMMARY May 31, 2014 ($) ---------------- Cash and Deposits 1,198 Equipment 1,150 Total Assets 2,348 Total Liabilities 4,600 Total Stockholder's Equity (2,252) STATEMENT OF OPERATIONS Accumulated From September 05, 2013 to May 31, 2014 ($) ---------------- Total Expenses 8,252 Net Loss for the Period (8,252) Net Loss per Share 0
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+Table of Contents In addition to our sales compensation model, our ability to recruit, train and retain effective sales personnel could be harmed by additional factors, including: any adverse publicity regarding us, our solar energy systems, our distribution channel, or our industry; lack of interest in, or the technical failure of, our solar energy systems; lack of a compelling product or income opportunity that generates interest for potential new sales personnel, or perception that other product or income opportunities are more attractive; any negative public perception of our sales personnel and direct-selling businesses in general; any regulatory actions or charges against us or others in our industry; general economic and business conditions; and potential saturation or maturity levels in a given market which could negatively impact our ability to attract and retain sales personnel in such market. We are subject to significant competition for the recruitment of sales personnel from other direct-selling companies and from other companies that sell solar energy systems in particular. It is therefore continually necessary to innovate and enhance our direct-selling and service model as well as to recruit and retain new sales personnel. If we are unable to do so, our business will be adversely affected. A failure to hire and retain a sufficient number of employees in key functions would constrain our growth and our ability to timely complete our customers projects. To support our growth, we need to hire, train, deploy, manage and retain a substantial number of skilled installers and electricians in the relevant markets. Competition for qualified personnel in our industry is increasing, particularly for skilled electricians and other personnel involved in the installation of solar energy systems. We also compete with the homebuilding and construction industries for skilled labor. As these industries seek to hire additional workers, our cost of labor may increase. In addition, we compensate our installers and electricians based on the number of solar energy systems they install. Companies with whom we compete to hire installers may offer an hourly rate or equity incentive component, which certain installers may prefer. Shortages of skilled labor could significantly delay a project or otherwise increase our costs. While we do not currently have any unionized employees, we have expanded, and may continue to expand, into areas such as the Northeast, where labor unions are more prevalent. The unionization of our labor force could also increase our labor costs. Because we are a licensed electrical contractor in every jurisdiction in which we operate, we are required to employ licensed electricians. As we expand into new markets, we are required to hire and/or contract with seasoned licensed electricians in order for the company to qualify for the requisite state and local licenses. Because of the high demand for these seasoned licensed Table of Contents electricians, these individuals currently or in the future may demand greater compensation. In addition, our inability to attract and retain these qualifying electricians may adversely impact our ability to continue operations in current markets or expand into new areas. If we cannot meet our hiring, retention and efficiency goals, we may be unable to complete our customers projects on time, in an acceptable manner or at all. Any significant failures in this regard would materially impair our growth, reputation, business and financial results. If we are required to pay higher compensation than we anticipate, these greater expenses may also adversely impact our financial results and the growth of our business. Historically, we have only provided our offerings to residential customers, which could put us at a disadvantage relative to companies who also compete in other markets. We have historically only provided our offerings to residential customers. We compete with companies who sell solar panels in the commercial and government markets, in addition to the residential market. While we are considering the option of expanding into markets outside of the residential market, such as the small business market, and while we believe that in the future we may have opportunities to expand our operations into other markets, there are no assurances that our design and installation systems will work for non-residential customers or that we will be able to compete successfully with companies with historical presences in such markets. Additionally, there is intense competition in the residential solar energy market in the markets in which we operate. As new entrants continue to enter into these markets, we may be unable to gain or maintain market share and we may be unable to compete with companies that earn revenue in both the residential market and non-residential markets. We face competition from traditional regulated electric utilities, from less-regulated third party energy service providers and from new renewable energy companies. The solar energy and renewable energy industries are both highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete with large traditional utilities. We believe that our primary competitors are the traditional utilities that supply electricity to our potential customers. Traditional utilities generally have substantially greater financial, technical, operational and other resources than we do. As a result, these competitors may be able to devote more resources to the research, development, promotion and sale of their products or respond more quickly to evolving industry standards and changes in market conditions than we can. Traditional utilities could also offer other value-added products or services that could help them to compete with us even if the cost of electricity they offer is higher than ours. In addition, a majority of utilities sources of electricity is non-solar, which may allow utilities to sell electricity more cheaply than electricity generated by our solar energy systems. We also compete with companies that are not regulated like traditional utilities but that have access to the traditional utility electricity transmission and distribution infrastructure pursuant to state and local pro-competitive and consumer choice policies. These energy service companies are able to offer customers electricity supply-only solutions that are competitive with our solar energy system options on both price and usage of renewable energy technology while avoiding the long-term agreements and physical installations that our current fund-financed business model requires. This may limit our ability to attract new customers, particularly those who wish to avoid long-term contracts or have an aesthetic or other objection to putting solar panels on their roofs. Table of Contents We also compete with solar companies with business models that are similar to ours. In addition, we compete with solar companies in the downstream value chain of solar energy. For example, we face competition from purely finance driven organizations that acquire customers and then subcontract out the installation of solar energy systems, from installation businesses that seek financing from external parties, from large construction companies and utilities, and increasingly from sophisticated electrical and roofing companies. Some of these competitors specialize in the residential solar energy market, and some may provide energy at lower costs than we do. Further, some of our competitors are integrating vertically in order to ensure supply and to control costs. Many of our competitors also have significant brand name recognition and have extensive knowledge of our target markets. For us to remain competitive, we must distinguish ourselves from our competitors by offering an integrated approach that successfully competes with each level of products and services offered by our competitors at various points in the value chain. If our competitors develop an integrated approach similar to ours including sales, financing, engineering, manufacturing, installation, maintenance and monitoring services, this will reduce our marketplace differentiation. As the solar industry grows and evolves, we will also face new competitors who are not currently in the market. Our industry is characterized by low technological barriers to entry and well-capitalized companies could choose to enter the market and compete with us. Our failure to adapt to changing market conditions and to compete successfully with existing or new competitors will limit our growth and will have a material adverse effect on our business and prospects. Developments in alternative technologies or improvements in distributed solar energy generation may materially adversely affect demand for our offerings. Significant developments in alternative technologies, such as advances in other forms of distributed solar power generation, storage solutions such as batteries, the widespread use or adoption of fuel cells for residential or commercial properties or improvements in other forms of centralized power production may materially and adversely affect our business and prospects in ways we do not currently anticipate. Any failure by us to adopt new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay deployment of our solar energy systems, which could result in product obsolescence, the loss of competitiveness of our systems, decreased revenue and a loss of market share to competitors. We depend on a limited number of suppliers of solar energy system components and technologies to adequately meet anticipated demand for our solar energy systems. Due to the limited number of suppliers in our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, imposition of tariffs or duties or other limitation in our ability to obtain components or technologies we use could result in sales and installation delays, cancellations and loss of market share. We purchase solar panels, inverters and other system components from a limited number of suppliers, making us susceptible to quality issues, shortages and price changes. In 2013, Trina Solar Limited and Yingli Green Energy Americas, Inc. accounted for substantially all of our solar photovoltaic module purchases and Enphase Energy, Inc. accounted for all of our inverter purchases. If we fail to develop, maintain and expand our relationships with these or other suppliers, our ability to adequately meet anticipated demand for our solar energy systems may be adversely affected, or we may only be able to offer our systems at higher costs or after delays. If Table of Contents one or more of the suppliers that we rely upon to meet anticipated demand ceases or reduces production due to its financial condition, acquisition by a competitor or otherwise, is unable to increase production as industry demand increases or is otherwise unable to allocate sufficient production to us, it may be difficult to quickly identify alternate suppliers or to qualify alternative products on commercially reasonable terms, and our ability to satisfy this demand may be adversely affected. There are a limited number of suppliers of solar energy system components and technologies. While we believe there are other sources of supply for these products available, transitioning to a new supplier may result in additional costs and delays in acquiring our solar products and deploying our systems. These issues could harm our business or financial performance. In addition, the acquisition of a component supplier or technology provider by one of our competitors could limit our access to such components or technologies and require significant redesigns of our solar energy systems or installation procedures and have a material adverse effect on our business. For example, the recent acquisition of Zep Solar, Inc., who sold us virtually all of the racking systems used in our hardware in 2013, by one of our competitors and the resulting limitation in our ability to acquire Zep Solar, Inc. products required us to redesign certain aspects of our systems to accommodate alternative racking hardware. While we are in the process of diversifying our racking providers, it is possible that sales and installation delays, cancellations and loss of market share may occur before we complete our transition to alternate suppliers. These risks are compounded by the fact that some of our investment funds require the use of designated equipment, and our inability to obtain any such required equipment could limit our ability to finance solar energy systems that we intend to place in those funds. There have also been periods of industry-wide shortages of key components, including solar panels, in times of rapid industry growth. The manufacturing infrastructure for some of these components has a long lead-time, requires significant capital investment and relies on the continued availability of key commodity materials, potentially resulting in an inability to meet demand for these components. The solar industry is currently experiencing rapid growth and, as a result, shortages of key components, including solar panels, may be more likely to occur, which in turn may result in price increases for such components. Even if industry-wide shortages do not occur, suppliers may decide to allocate key components with high demand or insufficient production capacity to more profitable customers, customers with long-term supply agreements or customers other than us and our supply of such components may be reduced as a result. Typically, we purchase the components for our solar energy systems on an as-needed basis and do not operate under long-term supply agreements. All of these purchases under these purchase orders are denominated in U.S. dollars. Since our revenue is also generated in U.S. dollars we are mostly insulated from currency fluctuations. However, since our suppliers often incur a significant amount of their costs by purchasing raw materials and generating operating expenses in foreign currencies, if the value of the U.S. dollar depreciates significantly or for a prolonged period of time against these other currencies this may cause our suppliers to raise the prices they charge us, which could harm our financial results. Since we purchase almost all of the solar photovoltaic modules we use from China, we are particularly exposed to exchange rate risk from increases in the value of the Chinese Renminbi. In addition, the U.S. government has recently imposed tariffs on solar cells manufactured in China and is investigating pricing practices concerning solar panels manufactured in China and Taiwan that contain solar cells produced in other countries, at the conclusion of which it could impose additional tariffs or duties. Any such tariffs or duties, or Table of Contents shortages, delays, price changes or other limitation in our ability to obtain components or technologies we use could limit our growth, cause cancellations or adversely affect our profitability, and result in loss of market share and damage to our brand. Our operating results may fluctuate from quarter to quarter, which could make our future performance difficult to predict and could cause our operating results for a particular period to fall below expectations, resulting in a severe decline in the price of our common stock. Our quarterly operating results are difficult to predict and may fluctuate significantly in the future. We have experienced seasonal and quarterly fluctuations in the past. However, given that we are an early-stage company operating in a rapidly growing industry, the true extent of these fluctuations may have been masked by our recent growth rates and thus may not be readily apparent from our historical operating results and may be difficult to predict. For example, the amount of revenue we recognize in a given period from our customer contracts is dependent in part on the amount of energy generated by solar energy systems under such contracts. As a result, revenue derived from power purchase agreements is impacted by seasonally shorter daylight hours in winter months. In addition, our ability to install solar energy systems is impacted by weather, as for example during the winter months in the Northeastern United States. Such delays can impact the timing of when we can install and begin to generate revenue from solar energy systems. As such, our past quarterly operating results may not be good indicators of future performance. In addition to the other risks described in this Risk Factors section, the following factors could cause our operating results to fluctuate: the expiration or initiation of any rebates or incentives; significant fluctuations in customer demand for our offerings; our ability to complete installations in a timely manner; the availability and costs of suitable financing; the amount and timing of sales of SRECs; our ability to continue to expand our operations, and the amount and timing of expenditures related to this expansion; actual or anticipated changes in our growth rate relative to our competitors; announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments; changes in our pricing policies or terms or those of our competitors, including traditional utilities; and actual or anticipated developments in our competitors businesses or the competitive landscape. Table of Contents For these or other reasons, the results of any prior quarterly or annual periods should not be relied upon as indications of our future performance. In addition, our actual revenue, key operating metrics and other operating results in future quarters may fall short of the expectations of investors and financial analysts, which could have an adverse effect on the trading price of our common stock. Our business has benefited from the declining cost of solar panels, and our financial results may be harmed now that the cost of solar panels has stabilized and could increase in the future. The declining cost of solar panels and the raw materials necessary to manufacture them has been a key driver in the price we charge for electricity and customer adoption of solar energy. According to industry experts, solar panel and raw material prices are not expected to continue to decline at the same rate as they have over the past several years. In addition, growth in the solar industry and the resulting increase in demand for solar panels and the raw materials necessary to manufacture them may also put upward pressure on prices. The resulting prices could slow our growth and cause our financial results to suffer. In addition, in the past we have purchased virtually all of the solar panels used in our solar energy systems from manufacturers based in China which have benefited from favorable governmental policies by the Chinese government. If this governmental support were to decrease or be eliminated, our ability to purchase these products on competitive terms or to access specialized technologies from China could be restricted. Even if this support were to continue, the U.S. government could impose additional tariffs on solar cells manufactured in China. In 2012, the U.S. government imposed anti-dumping tariffs on Chinese crystalline silicon photovoltaic cells on a manufacturer specific basis with rates ranging from approximately 18.3% to 250.0%, and applicable countervailing duty rates ranging from approximately 14.8% to 16.0%. In January 2014, the U.S. government broadened its investigation of Chinese pricing practices in this area to include solar panels and modules produced in China containing solar cells manufactured in other countries. On June 10, 2014, the U.S. government issued a preliminary determination of countervailing subsidies by China and has proposed duties ranging from 18.6% to 35.2% on Chinese solar companies importing certain solar products into the United States, including our solar panel suppliers. On July 25, 2014, the U.S. government issued a separate preliminary determination imposing antidumping duties on imports of certain solar products from China. Although the exact applicability remains unclear, these duties are at rates of 26.3% to 165% for affected Chinese products, including our solar panel supplier Trina Solar. The U.S. government issued a separate preliminary determination relating to imports of solar products from Taiwan, with duties at rates from 20.9% to 27.6% for affected Taiwanese products (although we do not currently purchase Taiwanese products). To the extent that the U.S. government makes a final determination that U.S. market participants experience harm from these Chinese pricing practices, such solar panels and modules could become subject to these or additional tariffs. These combined tariffs would make such solar cells less competitively priced in the United States, and the Chinese and Taiwanese manufacturers may choose to limit the amount of solar equipment they sell into the United States. As a result, it may be easier for solar cell manufacturers located outside of China or Taiwan to increase the prices of the solar cells they sell into the United States. If we are required to pay higher prices, accept less favorable terms or purchase solar panels or other system components from alternative, higher-priced sources, our financial results will be adversely affected. Table of Contents The residual value of our solar energy systems at the end of the associated term of the lease or power purchase agreement may be lower than projected today and adversely affect our financial performance and valuation. We intend to amortize the costs of our solar energy systems over 30 years for accounting purposes, which exceeds the period of the component warranties and the corresponding payment streams from our contracts with our customers. If we incur repair and maintenance costs on these systems after the warranties have expired and if they then fail or malfunction we will be liable for the expense of repairing these systems without a chance of recovery from our suppliers. In addition, we typically bear the cost of removing the solar energy systems at the end of the term of the customer contract if the customer does not renew his or her contract at the end of its term. Furthermore, it is difficult to predict how future environmental regulations may affect the costs associated with the removal, disposal or recycling of our solar energy systems. If the residual value of the systems is less than we expect at the end of the customer contract, after giving effect to any associated removal and redeployment costs, we may be required to accelerate all or some of the remaining unamortized costs. This could materially impair our future operating results and estimated retained value. We act as the licensed general contractor for our customers and are subject to risks associated with construction, cost overruns, delays, regulatory compliance and other contingencies, any of which could have a material adverse effect on our business and results of operations. We are a licensed contractor in every market we service and we are responsible for every customer installation. We are the general contractor, electrician, construction manager and installer for all our solar energy systems. We may be liable to customers for any damage we cause to their home, belongings or property during the installation of our systems. For example, we penetrate our customers roofs during the installation process and may incur liability for the failure to adequately weatherproof such penetrations following the completion of installation of solar energy systems. In addition, because the solar energy systems we deploy are high-voltage energy systems, we may incur liability for the failure to comply with electrical standards and manufacturer recommendations. Because our profit on a particular installation is based in part on assumptions as to the cost of such project, cost overruns, delays or other execution issues may cause us to not achieve our expected results or cover our costs for that project. In addition, the installation of solar energy systems is subject to oversight and regulation in accordance with national, state and local laws and ordinances relating to building, fire and electrical codes, safety, environmental protection, utility interconnection and metering, and related matters. We also rely on certain of our employees to maintain professional licenses in many of the jurisdictions in which we operate, and our failure to employ properly licensed personnel could adversely affect our licensing status in those jurisdictions. It is difficult and costly to track the requirements of every authority having jurisdiction over our operations and our solar energy systems. Any new government regulations or utility policies pertaining to our systems, or changes to existing government regulations or utility policies pertaining to our systems, may result in significant additional expenses to us and our customers and, as a result, could cause a significant reduction in demand for our systems. Table of Contents Compliance with occupational safety and health requirements and best practices can be costly, and noncompliance with such requirements may result in potentially significant monetary penalties, operational delays and adverse publicity. The installation of solar energy systems requires our employees to work at heights with complicated and potentially dangerous electrical systems. The evaluation and modification of buildings as part of the installation process requires our employees to work in locations that may contain potentially dangerous levels of asbestos, lead, mold or other materials known or believed to be hazardous to human health. We also maintain a fleet of more than 350 trucks and other vehicles to support our installers and operations. There is substantial risk of serious injury or death if proper safety procedures are not followed. Our operations are subject to regulation under the U.S. Occupational Safety and Health Act, or OSHA, the U.S. Department of Transportation, or DOT, and equivalent state laws. Changes to OSHA or DOT requirements, or stricter interpretation or enforcement of existing laws or regulations, could result in increased costs. If we fail to comply with applicable OSHA regulations, even if no work-related serious injury or death occurs, we may be subject to civil or criminal enforcement and be required to pay substantial penalties, incur significant capital expenditures or suspend or limit operations. Because our installation employees are compensated on a per project basis, they are incentivized to work more quickly than installers that are compensated on an hourly basis. While we have not experienced a high level of injuries to date, this incentive structure may result in higher injury rates than others in the industry and could accordingly expose us to increased liability. In the past, we have had workplace accidents and received citations from OSHA regulators for alleged safety violations, resulting in fines. Any such accidents, citations, violations, injuries or failure to comply with industry best practices may subject us to adverse publicity, damage our reputation and competitive position and adversely affect our business. Problems with product quality or performance may cause us to incur expenses, may lower the residual value of our solar energy systems and may damage our market reputation and adversely affect our financial results. We agree to maintain the solar energy systems installed on our customers homes during the length of the term of our customer contracts, which is typically 20 years. We are exposed to any liabilities arising from the systems failure to operate properly and are generally under an obligation to ensure that each system remains in good condition during the term of the agreement. As part of our operations and maintenance work, we provide a pass-through of the inverter and panel manufacturers warranty coverage to our customers, which generally range from 10 to 25 years. One of these third-party manufacturers could cease operations and no longer honor these warranties, leaving us to fulfill these potential obligations to our customers or to our fund investors without underlying warranty coverage. In most of our investment funds, the fund itself would bear this cost; however, in certain funds we would bear this cost with respect to such major equipment. Even if the investment fund bears the direct expense of such replacement equipment, we could suffer financial losses associated with a loss of production from the solar energy systems. Beginning in 2014, we began structuring some customer contracts as solar energy system leases. To be competitive in the market our solar energy system leases contain a performance guarantee in favor of the lessee. Leases with performance guarantees require us to refund money to the lessee if the solar energy system fails to generate the minimum amount of electricity in a 12-month period. We may also suffer financial losses associated with such refunds if a performance guarantee payment is triggered. Table of Contents Although we have not had material claims in the past, we may incur material claims in the future. Our failure to accurately predict future claims could result in unexpected volatility in our financial condition. Because of the limited operating history of our solar energy systems, we have been required to make assumptions and apply judgments regarding a number of factors, including our anticipated rate of warranty claims, and the durability, performance and reliability of our solar energy systems. We have made these assumptions based on the historic performance of similar systems or on accelerated life cycle testing. Our assumptions could prove to be materially different from the actual performance of our systems, causing us to incur substantial expense to repair or replace defective solar energy systems in the future or to compensate customers for systems that do not meet their production guarantees. Equipment defects, serial defects or operational deficiencies also would reduce our revenue from power purchase agreements because the customer payments under such agreements are dependent on system production or require us to make refunds under the performance guarantees under our leases. Any widespread product failures or operating deficiencies may damage our market reputation and adversely impact our financial results. We are responsible for providing maintenance, repair and billing on solar energy systems that are owned or leased by our investment funds on a fixed fee basis, and our financial performance could be adversely affected if our cost of providing such services is higher than we project. We typically provide a five-year workmanship warranty to our investment funds for every system sold thereto. We are also generally obligated to cover the cost of maintenance, repair and billing on any solar energy systems that we sell or lease to our investment funds. We are subject to a maintenance services agreement under which we are required to operate and maintain the system, and perform customer billing services for a fixed fee that is calculated to cover our future expected maintenance and servicing costs of the solar energy systems in each investment fund over the term of the lease or power purchase agreement with the covered customers. If our solar energy systems require an above-average amount of repairs or if the cost of repairing systems were higher than our estimate, we would need to perform such repairs without additional compensation. If our solar energy systems, a majority of which are located in California and Hawaii, are damaged in the event of a natural disaster beyond our control, such as an earthquake, tsunami or hurricane, losses could be outside the scope of insurance policies or exceed insurance policy limits, and we could incur unforeseen costs that could harm our business and financial condition. We may also incur significant costs for taking other actions in preparation for, or in reaction to, such events. When required to do so under the terms of a particular investment fund, we purchase property and business interruption insurance with industry standard coverage and limits approved by the investor s third-party insurance advisors to hedge against such risk, but such coverage may not cover our losses, and we have not acquired such coverage for all of our funds. Product liability claims against us or accidents could result in adverse publicity and potentially significant monetary damages. If one of our solar energy systems injured someone, then we could be exposed to product liability claims. In addition, it is possible that our products could injure our customer or third parties, or that our products could cause property damage as a result of product malfunctions, defects, improper installation, fire or other causes. We rely on our general liability insurance to cover product liability claims. Any product liability claim we face could be expensive to defend and divert Table of Contents management s attention. The successful assertion of product liability claims against us could result in potentially significant monetary damages, penalties or fines, subject us to adverse publicity, damage our reputation and competitive position and adversely affect sales of our systems and other products. In addition, product liability claims, injuries, defects or other problems experienced by other companies in the residential solar industry could lead to unfavorable market conditions to the industry as a whole, and may have an adverse effect on our ability to attract new customers, thus affecting our growth and financial performance. Failure by our component suppliers to use ethical business practices and comply with applicable laws and regulations may adversely affect our business. We do not control our suppliers or their business practices. Accordingly, we cannot guarantee that they follow ethical business practices such as fair wage practices and compliance with environmental, safety and other local laws. A lack of demonstrated compliance could lead us to seek alternative suppliers, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions of our operations. Violation of labor or other laws by our suppliers or the divergence of a supplier s labor or other practices from those generally accepted as ethical in the United States or other markets in which we do business could also attract negative publicity for us and harm our business. Damage to our brand and reputation, or change or loss of use of our brand, would harm our business and results of operations. We depend significantly on our reputation for high-quality products, best-in-class customer service and the brand name Vivint Solar to attract new customers and grow our business. If we fail to continue to deliver our solar energy systems within the planned timelines, if our offerings do not perform as anticipated or if we damage any of our customers properties or delay or cancel projects, our brand and reputation could be significantly impaired. Future technical improvements may allow us to offer lower prices or offer new technology to new customers; however, technical limitations in our current solar energy systems may prevent us from offering such lower prices or new technology to our existing customers. The inability of our current customers to benefit from technological improvements could cause our existing customers to lower the value they perceive our existing products offer and impair our brand and reputation. We have focused particular attention on growing our direct sales force, leading us in some instances to take on candidates who we later determined did not fit our company culture. This has led to instances of customer complaints, some of which have affected our digital footprint on rating websites such as that for the Better Business Bureau. If we cannot manage our hiring and training processes to avoid these issues, our reputation may be harmed and our ability to attract new customers would suffer. Given our past relationship with our sister company Vivint and the similarity in our names, customers may associate us with any problems experienced with Vivint, such as complaints with the Better Business Bureau. Because we have no control over Vivint, we may not be able to take remedial action to cure any issues Vivint has with its customers, and our brand and reputation may be harmed if we are mistaken for the same company. In addition, if we were to no longer use, lose the right to continue to use, or if others use, the Vivint Solar brand, we could lose recognition in the marketplace among customers, suppliers Table of Contents and partners, which could affect our growth and financial performance, and would require financial and other investment, and management attention in new branding, which may not be as successful. Marketplace confidence in our liquidity and long-term business prospects is important for building and maintaining our business. Our financial condition, operating results and business prospects may suffer materially if we are unable to establish and maintain confidence about our liquidity and business prospects among consumers and within our industry. Our solar energy systems require ongoing maintenance and support. If we were to reduce operations, even years from now, buyers of our systems from years earlier might have difficulty in having us repair or service our systems, which remain our responsibility under the terms of our customer contracts. As a result, consumers may be less likely to purchase our solar energy systems now if they are uncertain that our business will succeed or that our operations will continue for many years. Similarly, suppliers and other third parties will be less likely to invest time and resources in developing business relationships with us if they are not convinced that our business will succeed. Accordingly, in order to build and maintain our business, we must maintain confidence among customers, suppliers and other parties in our liquidity and long-term business prospects. We may not succeed in our efforts to build this confidence. If we fail to manage our recent and future growth effectively, we may be unable to execute our business plan, maintain high levels of customer service or adequately address competitive challenges. We have experienced significant growth in recent periods with the cumulative capacity of our solar energy systems growing from 14.8 megawatts as of December 31, 2012 to 129.7 megawatts as of June 30, 2014, and we intend to continue to expand our business significantly within existing markets and in a number of new locations in the future. This growth has placed, and any future growth may place, a significant strain on our management, operational and financial infrastructure. In particular, we will be required to expand, train and manage our growing employee base and scale and otherwise improve our IT infrastructure in tandem with that headcount growth. Our management will also be required to maintain and expand our relationships with customers, suppliers and other third parties and attract new customers and suppliers, as well as manage multiple geographic locations. In addition, our current and planned operations, personnel, IT and other systems and procedures might be inadequate to support our future growth and may require us to make additional unanticipated investment in our infrastructure. Our success and ability to further scale our business will depend, in part, on our ability to manage these changes in a cost-effective and efficient manner. If we cannot manage our growth, we may be unable to take advantage of market opportunities, execute our business strategies or respond to competitive pressures. This could also result in declines in quality or customer satisfaction, increased costs, difficulties in introducing new offerings or other operational difficulties. Any failure to effectively manage growth could adversely impact our business and reputation. Table of Contents We may not realize the anticipated benefits of past or future acquisitions, and integration of these acquisitions may disrupt our business and management. We acquired Solmetric Corporation in January 2014 and in the future we may acquire additional companies, project pipelines, products or technologies or enter into joint ventures or other strategic initiatives. We may not realize the anticipated benefits of this acquisition or any other future acquisition, and any acquisition has numerous risks. These risks include the following: difficulty in assimilating the operations and personnel of the acquired company; difficulty in effectively integrating the acquired technologies or products with our current technologies; difficulty in maintaining controls, procedures and policies during the transition and integration; disruption of our ongoing business and distraction of our management and employees from other opportunities and challenges due to integration issues; difficulty integrating the acquired company s accounting, management information and other administrative systems; inability to retain key technical and managerial personnel of the acquired business; inability to retain key customers, vendors and other business partners of the acquired business; inability to achieve the financial and strategic goals for the acquired and combined businesses; incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating results; potential failure of the due diligence processes to identify significant issues with product quality, intellectual property infringement and other legal and financial liabilities, among other things; potential inability to assert that internal controls over financial reporting are effective; and potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions. Mergers and acquisitions of companies are inherently risky and, if we do not complete the integration of acquired businesses successfully and in a timely manner, we may not realize the anticipated benefits of the acquisitions to the extent anticipated, which could adversely affect our business, financial condition or results of operations. Table of Contents The loss of one or more members of our senior management or key employees may adversely affect our ability to implement our strategy. We depend on our experienced management team, and the loss of one or more key executives could have a negative impact on our business. In particular, we are dependent on the services of our chief executive officer, Greg Butterfield. We also depend on our ability to retain and motivate key employees and attract qualified new employees. None of our key executives are bound by employment agreements for any specific term and we do not maintain key person life insurance policies on any of our executive officers. In addition, two-thirds of the outstanding options to purchase shares of our common stock granted to our key executives and other employees under our 2013 Omnibus Incentive Plan will vest if Blackstone receives a return on its invested capital at pre-established thresholds, subject to the employee s continued service through the receipt of such return. While this offering would not itself constitute an event that would trigger vesting, subsequent sales by Blackstone of our common stock after we are public could result in the vesting of such options. As a result, the retention incentives associated with these options could lapse for all employees holding these options under our 2013 Omnibus Incentive Plan at the same time or times. This decrease in retention incentive could cause significant turnover after these options vest. We may be unable to replace key members of our management team and key employees if we lose their services. Integrating new employees into our team could prove disruptive to our operations, require substantial resources and management attention and ultimately prove unsuccessful. An inability to attract and retain sufficient managerial personnel who have critical industry experience and relationships could limit or delay our strategic efforts, which could have a material adverse effect on our business, financial condition, results of operations and prospects. The execution of our business plan and development strategy may be seriously harmed if integration of our senior management team is not successful. Since August 2013, we have experienced and we may continue to experience significant changes in our senior management team. Specifically, eight members of our senior management team, including our chief executive officer and chief financial officer, have joined us since August 2013 and only one member of our senior management team has prior experience in the distributed solar energy industry. This lack of long-term experience working together and limited experience in the distributed solar energy industry may adversely impact our senior management team s ability to effectively manage our business and accurately forecast our results, including revenue from our distributed solar energy systems and sales. The requirements of being a public company may strain our resources, divert management s attention and affect our ability to attract and retain qualified board members and officers. As a public company, we will be subject to the reporting requirements of the Exchange Act, the listing requirements of the New York Stock Exchange, or NYSE, and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results and maintain effective disclosure controls and procedures and internal control over financial reporting. To maintain and, if required, improve our disclosure controls and procedures and internal Table of Contents control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management s attention may be diverted from other business concerns which could harm our business and operating results. Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future which will increase our costs and expenses. Moreover, our independent registered public accounting firm identified a material weakness in our internal control over financial reporting in connection with the preparation, audits and interim reviews of our consolidated financial statements, and if we fail to remediate this material weakness or, in the future, we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources. We also expect that being a public company will make it more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified executive officers and members of our board of directors, particularly to serve on our audit committee and compensation committee. We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies. Third parties, including our competitors, may own patents or other intellectual property rights that cover aspects of our technology or business methods. Such parties may claim we have misappropriated, misused, violated or infringed third party intellectual property rights, and, if we gain greater recognition in the market, we face a higher risk of being the subject of claims that we have violated others intellectual property rights. Any claim that we violate a third party s intellectual property rights, whether with or without merit, could be time-consuming, expensive to settle or litigate and could divert our management s attention and other resources. If we do not successfully settle or defend an intellectual property claim, we could be liable for significant monetary damages and could be prohibited from continuing to use certain technology, business methods, content or brands. To avoid a prohibition, we could seek a license from third parties, which could require us to pay significant royalties, increasing our operating expenses. If a license is not available at all or not available on reasonable terms, we may be required to develop or license a non-violating alternative, either of which could require significant effort and expense. If we cannot license or develop a non-violating alternative, we would be forced to limit or stop sales of our offerings and may be unable to effectively compete. Any of these results would adversely affect our business, results of operations, financial condition and cash flows. To deter other companies from making intellectual property claims against us or to gain leverage in settlement negotiations, we may be forced to significantly increase the size of our intellectual property portfolio through internal efforts and acquisitions from third parties, both of which could require significant expenditures. However, a robust intellectual property portfolio may provide little or no deterrence, particularly for patent holding companies or other patent owners that have no relevant product revenues. Table of Contents We use open source software in our solutions, which may restrict how we distribute our offerings, require that we release the source code of certain software subject to open source licenses or subject us to possible litigation or other actions that could adversely affect our business. We currently use in our solutions, and expect to continue to use in the future, software that is licensed under so-called open source, free or other similar licenses. Open source software is made available to the general public on an as-is basis under the terms of a non-negotiable license. We currently combine our proprietary software with open source software but not in a manner that we believe requires the release of the source code of our proprietary software to the public. We do not plan to integrate our proprietary software with open source software in ways that would require the release of the source code of our proprietary software to the public, however, our use and distribution of open source software may entail greater risks than use of third-party commercial software. Open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. In addition, if we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar offerings with lower development effort and time and ultimately could result in a loss of sales. We may also face claims alleging noncompliance with open source license terms or infringement or misappropriation of proprietary software. These claims could result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to change our software, any of which would have a negative effect on our business and operating results. In addition, if the license terms for open source software that we use change, we may be forced to re-engineer our solutions, incur additional costs or discontinue the sale of our offerings if re-engineering could not be accomplished on a timely basis. Although we monitor our use of open source software to avoid subjecting our offerings to unintended conditions, few courts have interpreted open source licenses, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our offerings. We cannot guarantee that we have incorporated open source software in our software in a manner that will not subject us to liability, or in a manner that is consistent with our current policies and procedures. The installation and operation of solar energy systems depends heavily on suitable solar and meteorological conditions. If meteorological conditions are unexpectedly unfavorable, the electricity production from our solar energy systems may be substantially below our expectations and our ability to timely deploy new systems may be adversely impacted. The energy produced and revenue and cash receipts generated by a solar energy system depend on suitable solar, atmospheric and weather conditions, all of which are beyond our control. Furthermore, components of our systems, such as panels and inverters, could be damaged by severe weather, such as hailstorms or lightning. Although we maintain insurance to cover for many such casualty events, our investment funds would be obligated to bear the expense of repairing the damaged solar energy systems, sometimes subject to limitations based on our ability to successfully make warranty claims. Our economic model and projected returns on our systems require us to achieve certain production results from our systems and, in some cases, we guarantee these results for both our consumers and our investors. If the systems underperform for any reason, our financial results could suffer. Sustained unfavorable weather also could delay our installation of solar energy systems, leading to increased expenses and decreased revenue and Table of Contents cash receipts in the relevant periods. Weather patterns could change, making it harder to predict the average annual amount of sunlight striking each location where we install a solar energy system. This could make our solar energy systems less economical overall or make individual systems less economical. Any of these events or conditions could harm our business, financial condition, results of operations and prospects. Disruptions to our solar monitoring systems could negatively impact our revenues and increase our expenses. Our ability to accurately charge our customers for the energy produced by our solar energy systems depends on customers maintaining a broadband internet connection so that we may receive data regarding solar energy systems production from their home networks. We could incur significant expenses or disruptions of our operations in connection with failures of our solar monitoring systems, including failures of our customers home networks that would prevent us from accurately monitoring solar energy production. In addition, sophisticated hardware and operating system software and applications that we procure from third parties may contain defects in design or manufacture, including bugs and other problems that could unexpectedly interfere with the operation of our systems. The costs to us to eliminate or alleviate viruses and bugs, or any problems associated with failures of our customers home networks could be significant, and the efforts to address these problems could result in interruptions, delays or cessation of service that may impede our sales, distribution or other critical functions. We have in the past experienced periods where some of our customers networks have been unavailable and, as a result, we have been forced to estimate the production of their solar energy systems. Such estimates may prove inaccurate and could cause us to underestimate the power being generated by our solar energy systems and undercharge our customers, thereby harming our results of operations. We are exposed to the credit risk of our customers. Our solar energy customers purchase energy or lease solar energy systems from us pursuant to one of two types of long-term contracts: a power purchase agreement or a lease. The power purchase agreement and lease terms are typically for 20 years, and require the customer to make monthly payments to us. Accordingly, we are subject to the credit risk of our customers. As of June 30, 2014, the average FICO score of our customers was approximately 750. As of June 30, 2014, customer defaults, in the aggregate, have been immaterial; however, we expect that the risk of customer defaults will increase as we grow our business. Due to the immaterial amount of customer defaults, our reserve for this exposure is minimal and our future exposure may exceed the amount of such reserves. The Office of the Inspector General of the U.S. Department of Treasury has issued subpoenas to a number of significant participants in the rooftop solar energy installation industry and may take further action based on this ongoing investigation or for other reasons. In July 2012, other companies that are significant participants in both the solar industry and the U.S. Treasury grant program received subpoenas from the U.S. Department of Treasury s Office of the Inspector General to deliver certain documents in their possession related to their applications for U.S. Treasury grants and communications with certain other solar development companies or certain firms that appraise solar energy property for U.S. Treasury grant application purposes. The Inspector General is working with the Civil Division of the U.S. Department of Table of Contents Justice to investigate the administration and implementation of the U.S. Treasury grant program, including possible misrepresentations concerning the fair market value of the solar power systems submitted in grant applications by companies in the solar industry. While we have not been a direct target of this investigation to date, given our participation in the U.S. Treasury grant program, the Inspector General or the Department of Justice could broaden the investigation to include us. If it were broadened to include us, the period of time necessary to resolve the investigation would be uncertain, and the matter could require significant management and financial resources that could otherwise be devoted to the operation of our business. The Department of Justice could also decide to bring a civil action to recover amounts it believes were improperly paid to us. If it were successful in asserting this action, it could have a material adverse effect on our business, liquidity, financial condition and prospects. A failure to comply with laws and regulations relating to our interactions with current or prospective residential customers could result in negative publicity, claims, investigations, and litigation, and adversely affect our financial performance. Our business substantially focuses on contracts and transactions with residential customers. We must comply with numerous federal, state and local laws and regulations that govern matters relating to our interactions with residential consumers, including those pertaining to privacy and data security, consumer financial and credit transactions, home improvement contracts, warranties, and door-to-door solicitation. These laws and regulations are dynamic and subject to potentially differing interpretations, and various federal, state and local legislative and regulatory bodies may expand current laws or regulations, or enact new laws and regulations, regarding these matters. Changes in these laws or regulations or their interpretation could dramatically affect how we do business, acquire customers, and manage and use information we collect from and about current and prospective customers and the costs associated therewith. We strive to comply with all applicable laws and regulations relating to our interactions with residential customers. It is possible, however, that these requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Our non-compliance with any such law or regulations could also expose the company to claims, proceedings, litigation and investigations by private parties and regulatory authorities, as well as substantial fines and negative publicity, each of which may materially and adversely affect our business. We have incurred, and will continue to incur, significant expenses to comply with such laws and regulations, and increased regulation of matters relating to our interactions with residential consumers could require us to modify our operations and incur significant additional expenses, which could have an adverse effect on our business, financial condition and results of operations. Any unauthorized access to, or disclosure or theft of personal information we gather, store or use could harm our reputation and subject us to claims or litigation. We receive, store and use personal information of our customers, including names, addresses, e-mail addresses, credit information and other housing and energy use information. We also store and use personal information of our employees. In addition, we currently utilize certain shared information and technology systems with Vivint. We take certain steps in an effort to protect the security, integrity and confidentiality of the personal information we collect, store or transmit, but there is no guarantee that inadvertent or unauthorized use or disclosure will not occur or that third parties will not gain unauthorized access to this information despite our efforts. Because techniques used to obtain unauthorized access or sabotage systems change frequently Table of Contents and generally are not identified until they are launched against a target, we and our suppliers or vendors, including Vivint, may be unable to anticipate these techniques or to implement adequate preventative or mitigation measures. Unauthorized use or disclosure of, or access to, any personal information maintained by us or on our behalf, whether through breach of our systems, breach of the systems of our suppliers or vendors, including Vivint, by an unauthorized party, or through employee or contractor error, theft or misuse, or otherwise, could harm our business. If any such unauthorized use or disclosure of, or access to, such personal information were to occur, our operations could be seriously disrupted and we could be subject to demands, claims and litigation by private parties, and investigations, related actions, and penalties by regulatory authorities. In addition, we could incur significant costs in notifying affected persons and entities and otherwise complying with the multitude of federal, state and local laws and regulations relating to the unauthorized access to, or use or disclosure of, personal information. Finally, any perceived or actual unauthorized access to, or use or disclosure of, such information could harm our reputation, substantially impair our ability to attract and retain customers and have an adverse impact on our business, financial condition and results of operations. We are involved, and may become involved in the future, in legal proceedings that, if adversely adjudicated or settled, could adversely affect our financial results. We are, and may in the future become, party to litigation. For example, in December 2013 one of our former sales representatives filed a class-action lawsuit on behalf of himself and all similarly situated plaintiffs against us in the Superior Court of the State of California, County of San Diego. This action alleges certain violations of the California Labor Code and the California Business and Professions Code based on, among other things, alleged improper classification of sales representatives and sales managers, failure to pay overtime compensation, failure to provide meal periods, failure to provide accurate itemized wage statements, failure to pay wages on termination and failure to reimburse expenses. The complaint seeks unspecified damages including penalties and attorneys fees in addition to wages and overtime. On or about January 24, 2014, we filed an answer denying the allegations in the complaint and asserting various affirmative defenses. In addition, on or about September 16, 2014, two of our former installation technicians, on behalf of themselves and individuals the plaintiffs claim to be similarly situated, filed a purported class action complaint in the Superior Court of the State of California, County of San Diego. Similar to the above complaint, this action alleges certain violations of the California Labor Code and the California Business and Professions Code based on, among other things, alleged improper classification of installer technicians, installer helpers, electrician technicians and electrician helpers, failure to pay minimum and overtime wages, failure to provide accurate itemized wage statements, and failure to provide wages on termination. While we intend to defend against these actions vigorously, the ultimate outcomes of these cases are presently not determinable as they are in a preliminary phase. We may become party to similar types of disputes in other jurisdictions. In general, litigation claims can be expensive and time consuming to bring or defend against and could result in settlements or damages that could significantly affect financial results and the conduct of our business. It is not possible to predict the final resolution of the litigation to which we currently are or may in the future become party, and the impact of certain of these matters on our business, prospects, financial condition, liquidity, results of operations and cash flows. Table of Contents Risks Related to our Relationship with Vivint Vivint provides us with certain key services for our business. If Vivint fails to perform its obligations to us or if we do not find appropriate replacement services, we may be unable to perform these services or implement substitute arrangements on a timely and cost-effective basis on terms favorable to us. We have historically relied on the technical, administrative and operational support of Vivint to run our business. In addition, Vivint has made available to us revolving lines of credit in the aggregate amount of up to $70.0 million. Some of the Vivint resources we are using include office space, information and technology resources and systems, purchasing services, operational and fleet services and marketing services. In addition, historically we have recruited a majority of our sales personnel from Vivint. In conjunction with this offering, we are in the process of separating our operations from those of Vivint and either creating our own financial, administrative, operational and other support systems or contracting with third parties to replace Vivint s systems and services that will not be provided to us under the terms of the transition services agreement between us and Vivint described in the section of this prospectus captioned Certain Relationships and Related Party Transactions Agreements with Vivint Expected Agreements with Vivint Transition Services Agreement. The implementation of new software support systems requires significant management time, support and cost, and there are inherent risks associated with implementing, developing, improving and expanding our core systems. We cannot be sure that these systems will be fully or effectively implemented on a timely basis, if at all. If we do not successfully implement these systems, our operations may be disrupted and our operating results could be harmed. In addition, the new systems may not operate as we expect them to, and we may be required to expend significant resources to correct problems or find alternative sources for performing these functions. In order to successfully transition to our own systems, services and service providers and operate as a stand-alone business, we will enter into various agreements with Vivint in connection with the consummation of this offering. See the section of this prospectus captioned Certain Relationships and Related Party Transactions Agreements with Vivint Expected Agreements with Vivint. These include a master framework agreement providing the overall terms of the relationship and a transition services agreement detailing various information technology and back office support services that Vivint will provide. Vivint will provide each service until we agree that support from Vivint is no longer required for that service. The services provided under the transition services agreement may not be sufficient to meet our needs and we may not be able to replace these services at favorable costs and on favorable terms, if at all. Any failure or significant downtime in our own financial or administrative systems or in Vivint s financial or administrative systems during the transition period and any difficulty in separating our operations from Vivint s operations and integrating newly developed or acquired services into our business could result in unexpected costs, impact our results or prevent us from paying our suppliers and employees and performing other technical, administrative and operations services on a timely basis and could materially harm our business, financial condition, results of operations and cash flows. Our historical financial information may not be representative of future results as a stand-alone public company. The historical financial information we have included in this prospectus does not necessarily reflect what our financial position, results of operations or cash flows would have been Table of Contents had we operated separately from Vivint during the historical periods presented. The historical costs and expenses reflected in our consolidated financial statements include charges to certain corporate functions historically provided to us by Vivint. We and Vivint believe these charges are reasonable reflections of the historical utilization levels of these services in support of our business, however, these charges may not include all of the expenses that would have been incurred had we operated separately from Vivint during the historical periods presented. As a result, our historical financial information is not necessarily indicative of our future results of operations, financial position, cash flows or costs and expenses. Our inability to resolve any disputes that arise between us and Vivint with respect to our past and ongoing relationships may adversely affect our financial results, and such disputes may also result in claims for indemnification. Disputes may arise between Vivint and us in a number of areas relating to our past and ongoing relationships, including the following: intellectual property, labor, tax, employee benefits, indemnification and other matters arising from our separation from Vivint; employee retention and recruiting; our ability to use, modify and enhance the intellectual property that we have licensed from Vivint; business combinations involving us; pricing for shared and transitional services; exclusivity arrangements; the nature, quality and pricing of products and services Vivint agrees to provide to us; and business opportunities that may be attractive to both Vivint and us. In conjunction with this offering, we are entering into certain agreements with Vivint as set forth in the section of this prospectus captioned Certain Relationships and Related Party Transactions Agreements with Vivint Expected Agreements with Vivint. Pursuant to the terms of the Non-Competition Agreement we are entering into with Vivint, we and Vivint each define our areas of business and our competitors, and agree not to directly or indirectly engage in the other s business for three years. Such agreement may limit our ability to pursue attractive opportunities that we may have otherwise pursued. Additionally, such agreement prohibits, for a period of five years, either Vivint or us from soliciting for employment any member of the other s executive or senior management team, or any of the other s employees who primarily manage sales, installation or services of the other s products and services. The commitment not to solicit those employees lasts for 180 days after such employee finishes employment with us or Vivint. Historically we have recruited a majority of our sales personnel from Vivint. This agreement may require us to obtain personnel from other sources, and may limit our ability to continue scaling our business if we are unable to do so. Table of Contents Pursuant to the terms of the Marketing and Customer Relations Agreement we are entering into with Vivint, we and Vivint are required to compensate one another for sales leads that result in sales. Vivint may direct sales leads to other solar companies in markets in which we have not entered. However, once we enter a market, Vivint must exclusively direct to us all leads for customers and potential customers with an interest in solar. Vivint s ability to sell leads to other solar providers in markets where we are not currently operating may adversely affect our ability to scale rapidly if we subsequently enter into such market as many of Vivint s customers with solar inclinations may have already been referred to another solar company by the time we enter into such market. We may not be able to resolve any potential conflicts relating to these agreements or otherwise, and even if we do, the resolution may be less favorable than if we were dealing with an unaffiliated party. In addition, we will have indemnification obligations under the intercompany services agreements we will enter into with Vivint, and disputes between us and Vivint may result in claims for indemnification. However, we do not currently expect that these indemnification obligations will materially affect our potential liability compared to what it would be if we did not enter into these agreements with Vivint. Risks Related to this Offering An active, liquid and orderly trading market for our common stock may not develop, our stock price may be volatile, and you may be unable to sell your shares at or above the offering price you paid. Prior to this offering, there has not been a public market for our common stock. We cannot predict the extent to which a trading market will develop or how liquid that market might become. The initial public offering price for our common stock will be determined by negotiations between us, the selling stockholder and representatives of the underwriters and may not be indicative of prices that will prevail in the trading market after the offering closes. The market price of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section and others beyond our control, including: changes in laws or regulations applicable to our industry or offerings; additions or departures of key personnel; the failure of securities analysts to cover our common stock after this offering; actual or anticipated changes in expectations regarding our performance by investors or securities analysts; price and volume fluctuations in the overall stock market; volatility in the market price and trading volume of companies in our industry or companies that investors consider comparable; share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; our ability to protect our intellectual property and other proprietary rights; Table of Contents sales of our common stock by us or our stockholders; the expiration of contractual lock-up agreements; litigation or disputes involving us, our industry or both; major catastrophic events; and general economic and market conditions. Further, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. In addition, the stock prices of many renewable energy companies have experienced wide fluctuations that have often been unrelated to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may cause the market price of our common stock to decline. If the market price of our common stock after this offering does not exceed the initial public offering price, you may not realize any return on your investment and may lose some or all of your investment. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. 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. As an emerging growth company within the meaning of the Securities Act, we will utilize certain modified disclosure requirements, and we cannot be certain if these reduced requirements will make our common stock less attractive to investors. We are an emerging growth company, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies including, but not limited to, not being required to have our independent registered public accounting firm audit our internal control over financial reporting under 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. We have in this prospectus utilized, and we plan in future filings with the SEC to continue to utilize, the modified disclosure requirements available to emerging growth companies. As a result, our stockholders may not have access to certain information they may deem important. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can utilize the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of 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. Table of Contents We could remain an emerging growth company for up to five years, or until the earliest of (1) the last day of the first fiscal year in which our annual gross revenue exceeds $1 billion, (2) 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 (3) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period. Our stock price could decline due to the large number of outstanding shares of our common stock eligible for future sale. Sales of substantial amounts of our common stock in the public market following this offering, or the perception that these sales could occur, could cause the market price of our common stock to decline. These sales could also make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. Upon completion of this offering, we will have 105,303,122 outstanding shares of common stock based on the number of shares outstanding as of June 30, 2014 after giving effect to the issuance and sale by us of an aggregate of 9,703,122 shares of our common stock to 313 Acquisition LLC and two of our directors in August and September 2014 and assuming no exercise of outstanding options after June 30, 2014. The shares sold pursuant to this offering will be immediately tradable without restriction, excluding any shares sold under our reserved share program. We, the selling stockholder and all of our directors and officers, as well as the other holders of substantially all shares of our common stock outstanding immediately prior to the completion of this offering, have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their common stock until 180 days following the date of this prospectus, except with the prior written consent of the representatives of the underwriters. After the expiration of the 180 day restricted period, these shares may be sold in the public market in the United States, subject to prior registration in the United States, if required, or reliance upon an exemption from U.S. registration, including, in the case of shares held by affiliates or control persons, compliance with the volume restrictions of Rule 144. Participants in the reserved share program, which provides for the sale of up to 5% of the shares offered by this prospectus, have agreed to similar restrictions for 180 days following the date of this prospectus, which restrictions may be waived with the prior written consent of the representatives of the underwriters. Number of Shares and % of Total Outstanding Date Available for Sale into Public Markets 19,570,000 or 18.6% Immediately after this offering (comprised of the shares sold in this offering other than shares sold as part of the reserved share program). 85,733,122 or 81.4% From time to time after the date 180 days after the date of this prospectus due to contractual obligations and lock-up agreements, upon expiration of their respective holding periods under Rule 144. However, the underwriters can waive the provisions of these lock-up agreements and allow these stockholders to sell their shares at any time, provided their respective holding periods under Rule 144 have expired. In addition, 676,467 shares reserved for future issuance under our Long-Term Incentive Plan will issue, vest and be immediately tradable without restriction on the date that is six months after the closing of this offering. An additional 2,705,889 shares reserved for future issuance under our Long-Term Incentive Plan will issue, vest and be immediately tradable without restriction at the Table of Contents later of (1) the date our sponsor and its affiliates achieve a specified return on their invested capital and (2) the date that is six months after the closing of this offering. On the date that is 18-months after the closing of this offering, 676,467 shares reserved for future issuance under our Long-Term Incentive Plan will issue, vest and be immediately tradable without restriction. For more information regarding the shares reserved under our Long Term Incentive Plan see the section of this prospectus under the caption Shares Eligible for Future Sale. Further, options to purchase 9,728,681 shares remained outstanding as of June 30, 2014, one-third of which are subject to ratable time-based vesting over a five year period and will become immediately tradable once vested. The remaining two-thirds are subject to vesting upon certain performance conditions and the achievement of certain investment return thresholds by 313 Acquisition LLC and will vest and become immediately tradable as follows: (1) one-half of the shares vest (a) if 313 Acquisition LLC receives cash proceeds with respect to its holdings of our common stock in an amount that equals $250 million more than its cumulative investment in our common stock (which amount shall be equal to $75 million plus any amounts invested after November 16, 2012) or (b) if 240 days after the completion of this offering, our aggregate equity market capitalization exceeds $1 billion and (2) one-half of the shares vest when 313 Acquisition LLC receives cash proceeds with respect to its holdings of our common stock in an amount that equals $500 million more than its cumulative investment in our common stock (which amount shall be equal to $75 million plus any amounts invested after November 16, 2012). Following the date that is 180 days after the completion of this offering, stockholders owning an aggregate of 84,703,122 shares will be entitled, under contracts providing for registration rights, to require us to register shares of our common stock owned by them for public sale in the United States, subject to the restrictions of Rule 144. In addition, we intend to file a registration statement to register the approximately 22,917,647 shares previously issued or reserved for future issuance under our equity compensation plans and agreements. Upon effectiveness of that registration statement, subject to the satisfaction of applicable exercise periods and, in certain cases, lock-up agreements with the representatives of the underwriters referred to above, the shares of common stock issued upon exercise of outstanding options will be available for immediate resale in the United States in the open market. Sales of our common stock as restrictions end or pursuant to registration rights may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. These sales also could cause our stock price to fall and make it more difficult for you to sell shares of our common stock. Our sponsor and its affiliates control us and their interests may conflict with ours or yours in the future. Immediately following this offering, 313 Acquisition LLC, which is controlled by our sponsor and its affiliates, will beneficially own approximately 78% of our common stock, or 75% if the underwriters exercise their option to purchase additional shares in full. Moreover, under our organizational documents and the stockholders agreement with 313 Acquisition LLC that will be in effect by the completion of this offering, for so long as our existing owners and their affiliates retain significant ownership of us, we will agree to nominate to our board individuals designated by our sponsor, whom we refer to as the sponsor directors. In addition, for so long as 313 Acquisition LLC continues to own shares representing a majority of the total voting power, we will agree to nominate to our board individuals appointed by Summit Partners and Todd Pedersen. Even when our sponsor and its affiliates and certain of its co-investors cease to own shares of our stock representing a majority of the Table of Contents total voting power, for so long as our sponsor and its affiliates continue to own a significant percentage of our stock our sponsor will still be able to significantly influence the composition of our board of directors and the approval of actions requiring stockholder approval. In addition, under the stockholders agreement, affiliates of our sponsor will have consent rights with respect to certain actions involving our company, provided a certain aggregate ownership threshold is maintained collectively by our sponsor and its affiliates, together with Summit Partners, Todd Pedersen and Alex Dunn and their respective affiliates. Accordingly, for such period of time, our sponsor and certain of its co-investors will have significant influence with respect to our management, business plans and policies, including the appointment and removal of our officers. In particular, for so long as our sponsor and its affiliates continue to own a significant percentage of our stock, our sponsor will be able to cause or prevent a change of control of our company or a change in the composition of our board of directors and could preclude any unsolicited acquisition of our company. The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of common stock as part of a sale of our company and ultimately might affect the market price of our common stock. Our sponsor and its affiliates engage in a broad spectrum of activities, including investments in the energy sector. In the ordinary course of their business activities, our sponsor and its affiliates may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. For example, affiliates of our sponsor regularly invest in utility companies that compete with solar energy and renewable energy companies such as ours. In addition, affiliates of our sponsor own interests in one of the largest solar power developers in India and may in the future make other investments in solar power, including in the United States. Our certificate of incorporation will provide that none of our sponsor, any of its affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his or her director and officer capacities) or his or her affiliates will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. Our sponsor also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. In addition, our sponsor may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you. We have elected to take advantage of the controlled company exemption to the corporate governance rules for NYSE-listed companies, which could make our common stock less attractive to some investors or otherwise harm our stock price. Because we qualify as a controlled company under the corporate governance rules for NYSE-listed companies, we are not required to have a majority of our board of directors be independent, nor are we required to have a compensation committee or an independent nominating function. In light of our status as a controlled company, in the future we could elect not to have a majority of our board of directors be independent or not to have a compensation committee or nominating and governance committee. Accordingly, should the interests of 313 Acquisition LLC or our sponsor differ from those of other stockholders, the other stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance rules for NYSE-listed companies. Our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price. Table of Contents Our management will have broad discretion over the use of the proceeds from this offering and may not apply the proceeds of this offering in ways that increase the value of your investment. Our management will have broad discretion to use the net proceeds we receive from this offering and you will be relying on its judgment regarding the application of these proceeds. We expect to use the net proceeds from this offering as described under the section of this prospectus captioned Use of Proceeds. However, management may not apply the net proceeds of this offering in ways that increase the value of your investment. Provisions in our certificate of incorporation, bylaws, stockholders agreement and under Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock. Our certificate of incorporation, bylaws and stockholders agreement contain provisions that could depress the trading price of our common stock by discouraging, delaying or preventing a change of control of our company or changes in our management that the stockholders of our company may believe advantageous. These provisions include: establishing a classified board of directors so that not all members of our board of directors are elected at one time; authorizing blank check preferred stock that our board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt; limiting the ability of stockholders to call a special stockholder meeting; limiting the ability of stockholders to act by written consent; providing that the board of directors is expressly authorized to make, alter or repeal our bylaws; establishing advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; requiring our sponsor to consent to certain actions, as described under the section of this prospectus captioned Certain Relationships and Related Party Transactions Agreements with Our Sponsor Stockholders Agreement, for so long as our sponsor, Summit Partners, Todd Pedersen and Alex Dunn or their respective affiliates collectively own, in the aggregate, at least 30% of our outstanding shares of common stock; the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class, if Blackstone and its affiliates beneficially own, in the aggregate, less than 30% in voting power of the stock of the Company entitled to vote generally in the election of directors; and that certain provisions may be amended only by the affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of stock of the Table of Contents Company entitled to vote thereon, voting together as a single class, if Blackstone and its affiliates beneficially own, in the aggregate, less than 30% in voting power of the stock of the Company entitled to vote generally in the election of directors. If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline. The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, our stock price would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA This prospectus contains forward-looking statements that are based on our management s beliefs and assumptions and on information currently available to management. Some of the statements under Prospectus Summary, Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations and Business and elsewhere in this prospectus contain forward-looking statements. Forward-looking statements include all statements that are not historical facts and can be identified by words such as: may, will, could, would, should, expect, intend, plan, anticipate, believe, estimate, predict, project, potential, continue, ongoing and similar expressions that convey uncertainty of future events or outcomes, although not all forward-looking statements contain these words. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this prospectus, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements in this prospectus include, but are not limited to, statements about: federal, state and local regulations and policies governing the electric utility industry; the regulatory regime for our offerings and for third-party owned solar energy systems; technical limitations imposed by operators of the power grid; the continuation of tax rebates, credits and incentives, including changes to the rates of the ITC beginning in 2017; the calculation of estimated nominal contracted payments remaining, retained value, and certain other metrics based on forward-looking projections; the price of utility-generated electricity and electricity from other sources; our ability to finance the installation of solar energy systems; our ability to sustain and manage growth; our ability to further penetrate existing markets, expand into new markets and expand into markets for non-residential solar energy systems; our relationship with Vivint and our sponsor; our expected use of proceeds from this offering; our ability to manage our supply chain; the cost of solar panels and the residual value of solar panels after the expiration of our customer contracts; Table of Contents our ability to maintain our brand and protect our intellectual property; and our expectations regarding remediation of the material weakness in our internal control over financial reporting. In addition, you should refer to the Risk Factors section of this prospectus for a discussion of other important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Further, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all, or as predictions of future events. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. This prospectus contains market data and industry forecasts that were obtained from industry publications. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Table of Contents USE OF PROCEEDS We estimate that we will receive net proceeds of approximately $320.4 million from our sale of the 20,600,000 shares of common stock offered by us in this offering, based upon an assumed initial public offering price of $17.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting $21.0 million in estimated underwriting discounts and commissions and estimated offering expenses of $8.8 million to be paid by us. Each $1.00 increase or decrease in the assumed initial public offering price of $17.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, net proceeds to us from the offering by approximately $19.4 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting an incremental $1.2 million in underwriting discounts and commissions. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of 1,000,000 shares in the number of shares offered by us would increase (decrease) the net proceeds to us from this offering by approximately $16.0 million, assuming the assumed initial public offering price remains the same, and after deducting an incremental $1.0 million in underwriting discounts and commissions. We will not receive any of the proceeds from the sale of common stock by the selling stockholder pursuant to the underwriters option to purchase additional shares, although we will bear the costs, other than the underwriting discounts and commissions, associated with the sale of these shares. Approximately $58.8 million of the net proceeds received by us from this offering will be used to repay revolver borrowings incurred under revolving lines of credit with Vivint. We plan to use the remaining net proceeds that we receive in this offering for working capital and general corporate purposes. We may also use a portion of the net proceeds to acquire, license and invest in complementary products, technologies or businesses; however, we currently have no agreements or commitments to complete any such transaction. As of June 30, 2014, we had an aggregate of $57.3 million in debt outstanding under the revolving lines of credit referred to above, which we incurred for working capital purposes. Such borrowings currently accrue interest at a rate of 7.5% or 12% per year and mature on January 1, 2016 and January 1, 2017 respectively, unless, in each case, the maturity is accelerated as a result of a change of control or an event of default. Our management will have broad discretion in the application of the net proceeds that we receive in this offering, and investors will be relying on the judgment of our management regarding the treatment of these proceeds. Pending the uses described above, we plan to invest the net proceeds that we receive in this offering in short-term and intermediate-term investment-grade interest-bearing securities, such as certificates of deposit, commercial paper, money market accounts or direct or guaranteed obligations of the U.S. government. Table of Contents DIVIDEND POLICY We have never declared or paid any dividends on our capital stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. In addition, the terms of our future debt instruments may prohibit us from paying cash dividends on our common stock. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws and provisions of our debt instruments and organizational documents, after taking into account our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant. Table of Contents CAPITALIZATION The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2014 on an actual basis, and a pro forma as adjusted basis to reflect (1) the issuance and sale by us of an aggregate of 9,703,122 shares of our common stock to 313 Acquisition LLC and two of our directors in August and September 2014, (2) the incurrence of an aggregate of $87.0 million of term loan borrowings under our aggregation credit facility, net of discount of $8.7 million, and the repayment of an aggregate of $75.5 million of term borrowings under our credit facility in September 2014, (3) the filing and effectiveness of our certificate of incorporation immediately prior to the closing of this offering, (4) our sale of 20,600,000 shares of common stock in this offering at an assumed initial public offering price of $17.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting $21.0 million in underwriting discounts and commissions and estimated offering expenses of $8.8 million and (5) our receipt of the net proceeds from that sale after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us and the application of such proceeds, including the repayment of $57.3 million of borrowings outstanding as of June 30, 2014.
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+This summary highlights information contained elsewhere in this prospectus, but it does not contain all of the information that you may consider important in making your investment decision. Therefore, you should read the entire prospectus carefully, including, in particular, the Risk Factors section beginning on page 14 of this prospectus and the financial statements and related notes included elsewhere in this prospectus before making an investment decision. Overview We are a leading specialty provider of property and casualty insurance operating in two niche markets across the United States. In our Program Services segment, we leverage our A (Excellent) A.M. Best rating, expansive licenses and reputation to provide access to the U.S. property and casualty insurance market in exchange for a ceding fee. In our Lender Services segment, we specialize in providing collateral protection insurance, or CPI, which insures personal automobiles, light trucks, SUVs and other vehicles held as collateral for loans made by credit unions, banks and specialty finance companies. Our founding shareholders started our CPI business in 1973 and our Program Services business in 1979. Both of these businesses have a long track record of profitable operations. Our Program Services segment generates significant fee income, in the form of ceding fees, by offering issuing carrier capacity to both specialty general agents or other producers ( GAs ), who sell, control, and administer books of insurance business that are supported by third parties that assume reinsurance risk, or reinsurers, domestic and foreign insurers and institutional risk investors ( capacity providers ) that want to access specific lines of U.S. property and casualty insurance business. Issuing carrier arrangements refer to our business in which we write insurance on behalf of a capacity provider and then reinsure the risk under these policies with the capacity provider in exchange for ceding fees. Our broad licensing authority, strong A.M. Best A (Excellent) rating, which is the third highest out of fifteen rating categories used by A.M. Best, and track record of over 25 years of profitable operations allow us to act as the policy-issuing carrier for business produced by GAs or insurers. According to A.M. Best, A ratings are assigned to insurers that have an excellent ability to meet their ongoing financial obligations to policyholders. We reinsure substantially all of the underwriting and operating risks in connection with our issuing carrier arrangements to our capacity providers. In many cases, we hold significant collateral to secure the associated reinsurance recoverables. We have ceded over $10 billion in premiums over 25 years with no unpaid reinsurance recoverables. Because we generally only write in these lines on a fronting or issuing carrier basis, GAs and reinsurers can be confident that we will not compete with them with respect to the business they write through us. In exchange for providing our insurance capacity, licensing and rating to our GA and capacity provider clients, we receive ceding fees averaging in excess of 5% of gross written premiums. For the year ended December 31, 2013, our Program Services segment generated approximately $691 million in gross written premium, $32.9 million of earned ceding fees and $20.5 million in pre-tax income. Our Lender Services segment generates premium from providing collateral protection insurance, or CPI, to our credit union, bank and specialty finance clients. Our principal product in this segment is CPI. Lenders purchase CPI to provide coverage for automobiles or other vehicles of borrowers who do not uphold their obligation to insure the collateral underlying the loan. Our lender clients pay us directly for CPI and then add the cost of CPI to the borrower s loan. Our CPI business is fully vertically integrated: we manage all aspects of the CPI business cycle, including sales and marketing, policy issuance, policy administration, underwriting and claims handling. We believe that we are the only vertically integrated CPI provider focused primarily on this product offering, and that the breadth and flexibility of our services enable us to provide our lender clients with responsive and customized policy terms, services and reporting to better serve their needs. We service our CPI clients through InsurTrak, our proprietary technology platform that allows both us and our clients to track and manage a CPI program. We believe our InsurTrak system is highly scalable with the capacity to service a much larger volume of business without significant changes to the system. As of June 30, 2014, we had over 600 CPI clients and were servicing over 3.9 million CPI loans. We have an exclusive relationship with CUNA Mutual to provide CPI. CUNA Mutual is a leading insurance company focused on providing a range of insurance products to credit unions in the U.S. This alliance provides us access to approximately 95% of the nation s credit unions through CUNA Mutual s substantial sales force and has AMENDMENT NO. 3 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents CERTAIN IMPORTANT INFORMATION This Prospectus You should rely only on the information contained in this prospectus. We have not authorized any other person to provide you with information that is different from that contained in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. The selling shareholders are offering to sell and seeking offers to buy our common stock only in jurisdictions where such offers and sales are permitted. You should assume that 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 stock. Our business, financial condition, results of operations and prospects may have changed since that date. Information contained on our website, or any other website operated by us, is not part of this prospectus. Frequently Used Terms In this prospectus, unless the context suggests otherwise: references to the Company, we, us or our refer to State National Companies, Inc. and all of its consolidated subsidiaries; references to State National refer solely to State National Companies, Inc.; references to our insurance company subsidiaries refer to State National Insurance Company, Inc., a Texas-domiciled insurance company ( SNIC ), and its wholly-owned subsidiaries, National Specialty Insurance Company, a Texas-domiciled insurance company ( NSIC ) and United Specialty Insurance Company, a Delaware-domiciled insurance company ( USIC ). State National Intermediate Holdings, Inc. ( SNIH ) is an indirect subsidiary of State National and an intermediate holding company of SNIC and its wholly-owned subsidiaries, NSIC and USIC; all share amounts indicated herein have been adjusted to reflect a 736 for 1 stock split in the form of a stock dividend of shares of our common stock that was effected prior to the completion of the private placement; references to Program Services refer to the business segment through which we leverage our A (Excellent) A.M. Best rating, expansive licenses and reputation to provide access to the U.S. property and casualty insurance market in exchange for a ceding fee; references to expansive licenses refer to the broad licensing of our insurance subsidiaries to write insurance in the U.S. SNIC and NSIC are admitted carriers licensed to write property and casualty business in all 50 states and the District of Columbia. USIC is an admitted carrier in Delaware and is eligible to write surplus lines in all 50 states and the District of Columbia. references to issuing carrier arrangements refer to our fronting business in our Program Services segment in which we write insurance on behalf of a capacity provider and then reinsure the risk under these policies with the capacity provider in exchange for ceding fees; references to capacity providers refer to the foreign and domestic reinsurers, insurers and institutional risk investors that access U.S. property and casualty insurance market through our Program Services or issuing carrier business; references to GAs refer to general agents who sell, control and administer books of insurance business that are supported by third-party reinsurers; references to ceding fees refer to the fees we collect and earn in our Program Services segment from our GAs to compensate us for acting as the issuing carrier. These fees do not represent compensation for underwriting and policy acquisition expenses, because we do not incur those costs in our issuing carrier arrangements; (1) Adjusted net income is considered a non-GAAP financial measure because it reflects the following adjustments to net income, which is the most directly comparable measure calculated in accordance with GAAP: the pro forma provision for income taxes as if the Company had been treated as a C Corporation for each period presented, and the exclusion (net of tax benefit) of the increase in the Company s deferred tax asset as a result of the conversion to C Corporation status, the amount of founder special compensation and the non-recurring offering-related expenses and contract modification expense related to the amendment to our alliance agreement with CUNA Mutual. Management believes this measure is helpful to investors because it provides comparability in evaluating core financial performance between periods. For a reconciliation showing the STATE NATIONAL COMPANIES, INC. (Exact name of registrant as specified in its charter) Table of Contents references to Lender Services refer to the business segment through which we provide CPI and certain ancillary insurance products to credit unions, banks and specialty finance companies; references to CPI refer to collateral protection insurance, which insures personal automobiles, light trucks, SUVs and other vehicles held as collateral for loans made by credit unions, banks and specialty finance companies; references to reinsurer refer to a company that assumes reinsurance risk; references to quota share reinsurance refer to reinsurance under which the insurer (the ceding company ) transfers, or cedes, a fixed percentage of liabilities, premium and related losses for each policy covered on a pro rata basis in accordance with the terms and conditions of the relevant agreement; and private placement refers to our June 25, 2014 sale of 31,050,000 shares of our common stock in a private placement exempt from registration under the Securities Act of 1933, as amended (the Securities Act ). All of the trade names and trademarks included in this prospectus are the property of their respective owners. Market and Industry Data Market and industry data used in this prospectus have been obtained from independent sources and publications as well as from research reports prepared for other purposes. Forward-looking information obtained from these sources is subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this prospectus. Table of Contents effects of these adjustments to net income, see Management s Discussion and Analysis of Financial Condition and Results of Operation Results of Operations Consolidated Results of Operations. Our Business Segments and Services We have two primary business segments, Program Services and Lender Services. Program Services Our Program Services segment is an issuing carrier business. We leverage our A (Excellent) A.M. Best rating, expansive licenses and reputation to provide access to the U.S. property and casualty insurance market to capacity providers in exchange for a ceding fee. Through our issuing carrier business, we write a wide variety of insurance products, principally including general liability insurance, commercial liability insurance, commercial multi-peril insurance, property insurance and workers compensation insurance. We are able to reinsure substantially all of the underwriting and operating risks associated with our issuing carrier arrangements to our capacity providers. We mitigate the credit risk of our capacity providers generally by either selecting well capitalized, highly rated authorized reinsurers or requiring that the reinsurer post substantial collateral to secure the reinsured risks. Lender Services Our Lender Services segment specializes in providing CPI, which insures personal automobiles and other vehicles held as collateral for loans made by credit unions, banks and specialty finance companies. Our lender clients pay us directly for CPI and then add the cost of CPI to the loans of borrowers who do not uphold their obligation to the lender to insure the collateral underlying the loan. We also provide ancillary insurance products that currently are not actively marketed. Our Competitive Strengths We believe that our specialized business model provides us with the following competitive strengths: Successful and Focused U.S. Specialty Platform. We have a track record of over 25 years of success in the CPI and issuing carrier markets in the U.S. with leading market positions in these two businesses. We believe that our focus on these two niche markets provides us with the opportunity for achieving superior long-term growth and profitability. Our pre-tax income in our Program Services segment was $24.0 million, $21.1 million and $20.5 million for the years ending December 31, 2011, 2012 and 2013, respectively. Our pre-tax income in our Lender Services segment was $8.6 million, $9.9 million and $15.8 million for the years ending December 31, 2011, 2012 and 2013, respectively. Efficient, Fee-Based Issuing Carrier Business Model. We have a specialized issuing carrier model providing specialty GAs and capacity providers with access to our A (Excellent) rating from A.M. Best, expansive licensing and reputation in exchange for ceding fees averaging in excess of 5% of gross premiums written. For 2013, our Program Services segment generated approximately $691 million of gross written premium and approximately $39.7 million of ceding fees, of which approximately $32.9 million was earned during 2013. We have ceded over $10 billion in premiums over 25 years with no unpaid reinsurance recoverables. We reinsure substantially all liabilities associated with our issuing carrier arrangements and require our GAs (with capacity providers either providing some of these services directly or being responsible for the performance by the GAs) to handle all the services associated with policy administration, claims handling, cash handling, underwriting and other traditional insurance company services. As a result, we generally retain little risk other than the credit risk of the capacity provider, and we incur minimal incremental expense on additional premium volume produced. Using our model, we are able to generate significant gross written premiums on a relatively small capital base compared to other insurance carriers. We believe that our long track record of success in this market and credibility with A.M. Best enables us to maintain our A rating with a relatively high operating leverage that we expect would be difficult for a competitor to obtain. Vertical Integration and Proprietary Technology in CPI Business. We believe that we are the only fully vertically integrated CPI provider focused primarily on this product offering, in that our operations cover sales, policy issuance, policy administration, underwriting, claims handling and all other aspects of the CPI business cycle. Our integration enables us to provide our lender clients with responsive and customized policy terms, services and reporting to better serve their needs. We believe that other CPI market participants that contract out distribution, policy issuance or other functions of the business are not as well positioned to adapt to market Delaware 6331 26-0017421 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 1900 L. Don Dodson Drive Bedford, Texas 76021 (817) 265-2000 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Table of Contents and product changes and offer customized solutions as we are. In addition, our proprietary insurance tracking system, InsurTrak, delivers real-time visibility to us and our clients into current borrower insurance information. This versatile and scalable system can be easily customized for each client at little incremental cost to us. As of June 30, 2014, we were monitoring insurance status for approximately 3.9 million CPI loans for over 600 lender clients. Profitable, Low Risk Business Model. Through our specialized Program Services and Lender Services businesses, we are able to generate profits with limited underwriting risk in our insurance subsidiaries. We have operated our business profitably for over 25 years. We are able to do this in our Program Services business by generating significant ceding fees on gross premiums written and reinsuring substantially all of the risk inherent in the issuing carrier arrangement to our capacity providers, except for the credit risk of the capacity providers, which we mitigate by careful client selection, credit underwriting and, in many cases, significant collateral requirements. Our Program Services business earned ceding fees of approximately $32.9 million, $32.4 million and $30.5 million for the years ended December 31, 2013, 2012 and 2011, respectively. Because we control all aspects of the CPI business operations, we can readily customize our product coverage and reporting to each client. We underwrite each of our lender client accounts and have the ability to move quickly to reprice the business in response to market or financial changes. Our fully vertically integrated CPI business historically has had high frequency but low severity losses and has produced attractive net combined ratios of 85.1%, 91.4% and 93.1% for the years ended December 31, 2013, 2012 and 2011, respectively. The net combined ratio is the sum of the net loss ratio and the net expense ratio, as each is described below, and is a measure of the overall profitability of our Lender Services business, measuring its underwriting profitability and operational efficiency. Strong Competitive Position. We believe that our long track record with A.M. Best, insurance regulators and business partners, our specialized business model with significant operating leverage, our experience in assessing and monitoring credit risks and our willingness to refrain from writing primary business that competes with our capacity providers create meaningful market requirements for competitors that may desire to enter the Program Services business. We also believe that our fully vertically integrated CPI business, proprietary technology platform, access to approximately 95% of the credit union market through our exclusive relationship with CUNA Mutual and our 40-year track record of focusing on the CPI market give us a significant competitive advantage in our Lender Services business. Proven Leadership and Experienced Management Team. We have a highly experienced and capable management team that is led by Terry Ledbetter, our co-founder and Chairman, President and Chief Executive Officer. Our senior executives have an average of over 22 years of experience with us. Our management team enjoys strong relationships, experience and reputation with rating agencies, insurance regulators and business partners. Utilizing our profitable, specialized business model, our management has positioned us for further growth in the future. Our Growth Strategies We intend to continue our profitable growth by focusing on the following strategies: Capitalize on Positive Market Opportunities. We believe that recently improved macroeconomic conditions, including rate hardening in property and casualty insurance lines and increasing automobile sales, should provide us with more growth opportunities in both of our business segments. Recent downgrades of certain insurance companies have, and we believe that future downgrades of other insurance companies will, create increased demand for our issuing carrier capacities. We believe that the increased role of capital markets alternatives to reinsurance, the capitalization of recent hedge fund-backed reinsurers and the growth of the off-shore reinsurance market generally, including syndicates of Lloyd s of London and Bermuda-based reinsurers, should drive demand for our services, as these firms typically do not have direct access to the U.S. market. In our CPI business, we believe that organic growth from our existing lender clients is, and potential new business from banks and specialty finance companies, will be, driven by overall growth in lenders portfolios as a result of rising automobile sales, higher average auto loan sizes and increasing credit availability. David M. Cleff Executive Vice President of Business Affairs, General Counsel and Secretary 1900 L. Don Dodson Drive Bedford, Texas 76021 (817) 265-2000 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: J. Brett Pritchard Locke Lord LLP 111 South Wacker Drive Chicago, Illinois 60606 (312) 443-0700 Table of Contents Expand Direct Relationships with Capacity Providers and Specialty GAs. Historically, our issuing carrier capacity has been constrained by the size of our capital base, and we have relied on our relationship-driven channels to generate new issuing carrier business with only a modest sales and marketing effort. In addition, we have historically relied on brokers to identify GAs in need of an issuing carrier. With the additional capital from the private placement, we can address what we believe is increased demand from domestic and international carriers and institutional risk investors. We are seeking to further institutionalize the sales process by building more direct relationships with GAs and capacity providers and by hiring fully-dedicated sales staff. Recent meetings by our senior executives with capacity providers in London and Bermuda and a direct marketing campaign with GAs have produced new business and viable leads. We plan to continue such efforts to further expand our issuing carrier business. Expand Our CPI Business within the Banking and the Specialty Finance Company Market. Because of our exclusive relationship with CUNA Mutual, we have focused our CPI business primarily on credit unions. As a result, our penetration in the CPI market for banks and specialty finance companies is low. However, we believe that the CPI market for banks, particularly regional and smaller banks, and specialty lenders is substantially larger than the credit union market and that the specialty finance company market is potentially more attractive to CPI providers due to higher incidences of borrowers failing to obtain or maintain the required insurance. We believe that the banking and specialty financing sector represents a significant growth opportunity for us. We recently have begun devoting additional sales and marketing efforts towards this market and are seeking to hire additional dedicated sales staff to address the bank and specialty lender markets. We expect these efforts to further increase the overall amount of CPI business we write. Our History The Ledbetter family founded a small general agency in 1973 selling CPI exclusively in Texas. By the late 1970s, the Company began to expand the CPI business beyond Texas. We acquired the management contract for a Texas county mutual company (the County Mutual ) in 1979 to accommodate the growth of its CPI business and to reduce operating costs. The management contract enabled us to retain the profits generated from business we originated. After acquiring the management contract for the County Mutual, we received inquiries from other carriers and GAs seeking to access the Texas non-standard automobile market, and recognized the opportunity to act as an issuing carrier. The volume of business that the County Mutual wrote as an issuing carrier grew significantly. Most of this business was non-standard automobile insurance in the state of Texas, and all of this business was 100% reinsured. No A.M. Best rating was required and the County Mutual was able to write at very high leverage ratios. At one time, the County Mutual wrote approximately $400 million of premium on approximately $2 million of capital and surplus. This high degree of leverage, the related reinsurer credit underwriting undertaken to support that leverage, and the significant collateral held against potential losses, were the foundation of our Program Services business model. After legislative changes reduced the advantages of the county mutual model, we sold the management contract controlling the County Mutual in 2009. In 1984, we formed SNIC to write our CPI business directly. SNIC received an A (Excellent) rating from A.M. Best in 1993, and has maintained the rating for over 20 years. To utilize excess capital in SNIC, we expanded our issuing carrier operations outside of Texas. In 1999, we acquired NSIC, an inactive insurance company licensed to write business in 21 states, and later expanded its licensing to all 50 states in order to write program business on an unrated basis. NSIC later became a subsidiary of SNIC in order to enjoy SNIC s A (Excellent) A.M. Best rating. We formed USIC in 2006 to write coverage on an excess and surplus basis. In July of 2009, we formed an exclusive relationship with CUNA Mutual, a leading provider of insurance products to credit unions. This alliance provides us with access to their sales force of approximately 200 people and over 95% of the credit union market and has significantly increased our CPI business. Additionally, over the last 15 years, we have expanded our CPI business through opportunistic acquisitions of multiple CPI agencies and books of business. Our co-founders, Lonnie Ledbetter and Terry Ledbetter, have been instrumental in developing and growing our business. Prior to the completion of the private placement, management responsibilities were shared equally 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: 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 the 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 x Smaller reporting company o Table of Contents between the co-founders, with Lonnie serving as Chairman and Chief Executive Officer and Terry serving as President. On a day-to-day basis, Lonnie led the Lender Services segment while Terry led the Program Services segment. In early 2013, Lonnie was diagnosed with cancer and has undergone treatment. Since then, Terry has assumed most of the day to day responsibilities for both segments of the Company. Upon completion of the private placement, Lonnie (age 71) retired and began a one-year consultancy with the Company, and Terry assumed the role of Chief Executive Officer and Chairman, in addition to his title of President. Our Challenges and Risks Our company and our business are subject to numerous risks. As part of your evaluation of our business, you should consider the challenges and risks we face in implementing our business strategies, as described in the section of this prospectus entitled Risk Factors. Some of the principal risks related to our business include the following: Reinsurer credit risk. In our Program Services segment, we write insurance on behalf of our capacity providers and reinsure substantially all of the risk under these policies in exchange for ceding fees. However, as the issuer of the policies, we remain directly liable to these policyholders. In 2013, we wrote insurance policies with approximately $691 million in gross written premiums through our issuing carrier business. If any of our reinsurers becomes insolvent, or otherwise refuses to pay policyholder claims in a timely manner, our liability for these claims could materially and adversely affect our financial condition and results of operations. A.M. Best rating. We rely on our A rating from A.M. Best to operate our issuing carrier business and our Lender Services business. There can be no assurances that our insurance subsidiaries will be able to maintain this rating. Any downgrade in ratings would likely adversely affect our business through the loss of certain existing and potential policyholders and the loss of relationships with clients that might move to other companies with higher ratings. If we lost our A rating, our capacity providers likely would seek a higher rated issuing carrier to write their business. Our Lender Services segment also would be adversely affected if a large number of our accounts were to require an insurer with an A rating. Regulatory risk. In our Program Services segment, we enter into issuing carrier arrangements with capacity providers that wish to access insurance markets in states in which they are not licensed. The capacity provider administers the business and reinsures substantially all of the risks, and we receive a ceding fee. Some state insurance regulators may object to issuing carrier arrangements. If regulators were to object to an issuing carrier arrangement, our Program Services business could be adversely affected. In our Lender Services segment, we provide lender-placed automobile insurance to financial institutions. A similar product, lender-placed residential hazard insurance, has come under increased regulatory scrutiny and has been subject to recent regulatory changes at both the federal and state levels. If lender-placed automobile insurance becomes subject to similar regulatory scrutiny and is affected by regulatory changes, our CPI business could be adversely affected. Either of these regulatory outcomes could have a material adverse effect on our business, financial condition and results of operations. Subchapter S Corporation Status Prior to the completion of the private placement, we elected for our parent company to be taxed for federal income tax purposes as a Subchapter S corporation under the Internal Revenue Code and our subsidiaries (other than our insurance subsidiaries and their intermediate holding company) to be pass-through entities for federal income tax purposes. As a result, prior to the completion of the private placement, the income for our parent company and pass-through subsidiaries was not subject to, and we did not pay, U.S. federal income taxes, and no provision or liability for federal or state income tax for our parent company has been included in our consolidated financial statements. Unless specifically noted otherwise, any amounts of our consolidated net income or our basic or diluted earnings per share presented in this prospectus, including in our consolidated financial statements and the accompanying notes appearing in this prospectus, do not reflect any provision for or accrual of any expense for federal income tax liability for our Company for any period presented. The tax provision, assets and liabilities that are reflected in our consolidated financial statements represent those for our insurance subsidiaries, SNIC, NSIC and USIC, and SNIH, as those entities are C corporations. Upon the completion of the private placement, our status as a Subchapter S corporation terminated and our income became subject to U.S. federal income taxes. Calculation of Registration Fee Common Stock, par value $0.001 per share 30,728,500 $ 10.75(1) $ 322,686,750 $ 41,541.74(1) (1) The amount of the registration fee consists of (i) $41,354.36, previously paid on July 15, 2014, in respect of 30,578,500 shares based on a proposed maximum offering price of $10.50 per share, which was the price per share of the most recent trade known to us on July 15, 2014, and (ii) $187.37, in respect of an additional 150,000 shares registered hereunder based on a proposed maximum offering price of $10.75 per share, which is the most recent trade known to us as of the date of this filing, which amount was also previously paid on July 15, 2014. 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, as amended, 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. Table of Contents Corporate Structure Our corporate structure is as follows: Private Placement On June 25, 2014, we completed the sale of an aggregate of 31,050,000 shares of our common stock in a private placement exempt from registration under the Securities Act, which we refer to in this prospectus as the private placement, and received net proceeds of approximately $280.6 million. In the private placement, FBR Capital Markets & Co., or FBR, acted as the initial purchaser for the shares sold to investors pursuant to Rule 144A and Regulation S under the Securities Act, and as placement agent for the shares sold to investors pursuant to Regulation D under the Securities Act. The shares of common stock were sold to investors at an offering price of $10.00 per share, except for 575,000 shares that were sold to FBR and an affiliate of FBR at a price of $9.30 per share, representing the offering price per share sold to other investors less the amount of the initial purchaser discount or placement agent fee per share in the private placement. We determined the offering price per share in the private placement in consultation with FBR. In making such determination we considered many factors, including our business strategy and the amount of capital we needed to raise in the private placement to implement our business strategy, the market demand for our stock and our capital structure. Of the net proceeds from the private placement, we used approximately (i) $190.6 million to purchase 21,030,294 shares of our common stock from certain of our shareholders pursuant to a stock redemption agreement we entered into with them prior to the private placement at a per share price equal to the net proceeds, after allocable expenses, per share that we received from the private placement, (ii) $17.8 million to make pre-tax payments to CUNA Mutual pursuant to the recent amendment to our Collateral Protection Alliance Agreement with CUNA Mutual, which we refer to as the alliance agreement, to increase our retention of the business subject to the alliance and (iii) $50 million to contribute to the capital of our insurance subsidiaries. We intend to use the remainder of the net proceeds for general corporate purposes. In connection with the private placement, we entered into a registration rights agreement for the benefit of the holders of the shares sold in the private placement, which are being registered pursuant to the registration statement of which this prospectus is a part. See Description of Capital Stock Registration Rights Purchasers in the Private Placement. Table of Contents The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. Neither we nor the selling shareholders are using this prospectus to offer to sell these securities or to solicit offers to buy these securities in any jurisdiction where the offer or sale of the securities is not permitted. Subject to Completion, Dated October 22, 2014 30,728,500 Shares of Common Stock, $0.001 Par Value Per Share This prospectus relates solely to the resale of up to an aggregate of 30,728,500 shares of our common stock by the selling shareholders identified in this prospectus. The selling shareholders acquired the shares of common stock offered by this prospectus in a private placement in June 2014 in reliance on exemptions from registration under the Securities Act of 1933, as amended, and pursuant to our 2014 Stock Incentive Plan. We are registering the offer and sale of the shares of common stock to satisfy registration rights we have granted. See Security Ownership of Certain Beneficial Owners, Management and Selling Shareholders beginning on page 114 in this prospectus for a description of the selling shareholders. The selling shareholders will receive all proceeds from their sale of shares of our common stock, and therefore we will not receive any of the proceeds from their sale of shares of our common stock. The shares which may be resold by the selling shareholders constituted approximately 69% of our issued and outstanding common stock on October 22, 2014. Prior to the offering pursuant to this prospectus, there has been no public market for our common stock. Our common stock has been approved for listing on the NASDAQ Global Select Market under the symbol SNC. Because all of the shares being offered under this prospectus are being offered by the selling shareholders, we cannot currently determine the price or prices at which our shares of common stock may be sold under this prospectus. We are aware that, prior to the date of this prospectus, certain qualified institutional buyers who purchased shares of our common stock in a private offering that closed in June 2014 have traded shares of our common stock through the FBR PlusTM System, which is operated by FBR Capital Markets & Co. ( FBR ), at prices per share ranging from $10.00 to $10.75 during the period from the closing of the private placement to October 1, 2014 (the date of the most recent trade known to us). Until shares of our common stock are regularly traded or listed on a national securities exchange, we expect that the selling shareholders initially will sell their shares at prices per share between $10.00 and $10.75, if any shares are sold, and thereafter at prevailing market prices or privately negotiated prices. See Plan of Distribution. We are an emerging growth company under applicable Securities and Exchange Commission rules and will be eligible for reduced public company reporting requirements. See Summary We are an Emerging Growth Company. Table of Contents Determination of Offering Price for This Offering Because all of the shares being offered under this prospectus are being offered by the selling shareholders, we cannot currently determine the price or prices at which our shares of common stock may be sold under this prospectus. We are aware that, prior to the date of this prospectus, certain qualified institutional buyers who purchased shares of our common stock in a private offering that closed in June 2014, have traded shares of our common stock through the FBR PlusTM System, which is operated by FBR Capital Markets & Co. ( FBR ), at prices per share ranging from $10.00 to $10.75 during the period from the closing of the private placement to October 1, 2014 (the date of the most recent trade known to us). Until shares of our common stock are regularly traded or listed on a national securities exchange, we expect that the selling shareholders initially will sell their shares at prices per share between $10.00 and $10.75, if any shares are sold, and thereafter at prevailing market prices or privately negotiated prices. See Plan of Distribution. We are an Emerging Growth Company As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an emerging growth company as defined in the Jumpstart our Business Startups Act of 2012, commonly known as the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure obligations and reductions in other requirements that are otherwise applicable generally to public companies for up to five years following the effectiveness of the registration statement of which this prospectus is a part. We intend to take advantage of certain of the reduced disclosure requirements applicable to emerging growth companies, including the reduced executive compensation disclosure requirements and the exemption from the requirements under Section 404(b) of the Sarbanes-Oxley Act for auditor attestation relating to internal control over financial reporting. We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenues, have more than $700 million in market value of our capital stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. For the year ended December 31, 2013, we reported approximately $128.5 million in total revenue. As a result, for at least some period of years, our shareholders likely will not have the benefit of certain protective provisions and additional disclosures that would otherwise apply to most public companies. 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. However, we are choosing to opt out of any extended transition period, and as a result we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for publicly reporting companies which are not emerging growth companies. Section 107 provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. Company Information Our executive offices are located at 1900 L. Don Dodson Drive, Bedford, Texas 76021 and our telephone number is (817) 265-2000. Our website address is www.statenational.com. Information contained on our website is not incorporated by reference into this prospectus, and such information should not be considered to be part of this prospectus. Investing in our common stock involves risks. You should read the section entitled Risk Factors beginning on page 14 for a discussion of certain risk factors that you should consider before investing in our common stock. (1) Throughout this prospectus, unless the context expressly states otherwise, the number of shares of common stock outstanding excludes: (i) 2,783,873 shares of common stock issuable upon the exercise of stock options outstanding as of the date of this prospectus with a weighted average exercise price of $10.00 per share; and (ii) 1,585,627 additional shares of common stock available for future issuance under our 2014 Stock Incentive Plan. Table of Contents Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense. Table of Contents In addition, throughout this prospectus, unless the context states otherwise, all share amounts give effect to a 736 for 1 stock split in the form of a stock dividend that was effected prior to the completion of the private placement. The date of this prospectus is , 2014 Table of Contents Summary Historical Financial Data The following tables set forth our summary historical consolidated financial information for the periods ended and as of the dates indicated. These selected historical consolidated results are not necessarily indicative of results to be expected in any future period. You should read the following selected consolidated financial information together with the other information contained in this prospectus, including the section captioned Management s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and related notes included elsewhere in this prospectus. The income statement data for the years ended December 31, 2013, 2012 and 2011 are derived from our audited financial statements included elsewhere in this prospectus. The income statement data for the years ended December 31, 2010 and 2009 and the balance sheet data as of December 31, 2011, 2010 and 2009 are derived from our audited financial statements that are not included in this prospectus. The income statement data for the six months ended June 30, 2014 and 2013 and the balance sheet data as of June 30, 2014 are each derived from our unaudited condensed financial statements included elsewhere in this prospectus. Our unaudited consolidated condensed financial statements have been prepared on the same basis as our audited consolidated financial statements and, in our opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of such financial statements in all material respects. The results of any interim period are not necessarily indicative of results that may be expected for a full year or any future period. (1) The CPI premiums written presented in this document reflect the effects of the allowance for policy cancellations, including any adjustments related to re-estimation of the allowance. As such, the CPI premiums written are those that we expect to earn, which we refer to as stick premiums, while those that are expected to cancel are included in the allowance for policy cancellations. (2) Ceding fees are fees we receive in the Program Services segment in exchange for providing access to the U.S. property and casualty insurance market and are based on the gross premiums we write on behalf of our GA and capacity provider clients. We earn ceding fees in a manner consistent with the recognition of the gross earned premium on the underlying insurance policies, generally on a pro-rata basis over the terms of the policies reinsured. Typically, the reinsured policies have a term of one year. Ceding commissions earned on Lender Services business are not included as ceding fees. CUNA Mutual s ceding commission is included as a partial offset to commission expense. Table of Contents (3) Upon the completion of the private placement, our parent company s status as a Subchapter S corporation terminated and our consolidated income became fully subject to U.S. federal income taxes. This adjustment represents estimated income taxes as if the Company had been treated as a C Corporation for each period presented. The estimated tax was calculated assuming the Company s blended statutory federal and state income tax rates of 37.7% and 38.1% for the periods ended June 30, 2014 and 2013, respectively, and 38.1%, 37.2%, 35.7%, 35.5% and 34.1% for the years ended December 31, 2013, 2012, 2011, 2010 and 2009, respectively. (4) As a result of the Company s conversion to a C Corporation, the deferred tax asset increased by approximately $14.5 million primarily due to the effects of eliminating deferred tax balances on the insurance subsidiaries related to intercompany transactions. This excludes the tax effect related to contract modification expense as discussed in note (8) below. (5) During the periods presented, we made special compensation payments to our co-founders and principal executive officers, Lonnie Ledbetter and Terry Ledbetter in recognition of their service to our Company. We refer to these payments as Founder special compensation. Following the completion of the private placement, we no longer pay Founder special compensation, as Lonnie Ledbetter has retired, and the bonus compensation for the remainder of 2014 for Terry Ledbetter, who now serves as our Chairman, President and Chief Executive Officer, will be determined based on 2014 performance goals. See Executive Compensation Executive Incentive Plans. (6) Founder special compensation, offering-related expenses, and contract modification expense are shown net of the estimated tax benefit for each period presented. The estimated tax was calculated assuming the Company s blended statutory federal and state income tax rates of 37.7% and 38.1% for the periods ended June 30, 2014 and 2013, respectively, and 38.1%, 37.2%, 35.7%, 35.5% and 34.1% for the years ended December 31, 2013, 2012, 2011, 2010 and 2009, respectively. (7) Adjusted net income is considered a non-GAAP financial measure because it reflects the following adjustments to net income, which is the most directly comparable measure calculated in accordance with GAAP: the pro forma provision for income taxes as if the Company had been treated as a C Corporation for each period presented, and the exclusion (net of tax benefit) of the increase in the Company s deferred tax asset as a result of the conversion to C Corporation status, the amount of founder special compensation and the non-recurring offering-related expenses and contract modification expense related to the amendment to our alliance agreement with CUNA Mutual. Management believes this measure is helpful to investors because it provides comparability in evaluating core financial performance between periods. Management uses adjusted net income to evaluate core financial performance against historical results without the effect of these items. (8) In connection with the recent amendment to the alliance agreement with CUNA Mutual, we agreed to pay CUNA Mutual $17.8 million. As a result, we recorded contract modification expense of $17.8 million, or $11.1 million net of tax benefit. Table of Contents
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+This summary highlights information contained elsewhere in this prospectus. This summary does not contain all the information you should consider before making your investment decision. You should carefully read this entire prospectus, including "Risk Factors," "Management's Discussion and Analysis of Financial Conditions and Results of Operations" and our consolidated financial statements and related notes, before making your investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results stated in or suggested by such forward-looking statements due to a variety of factors, including those set forth in "Risk Factors" and "Forward-Looking Statements." Our Company Established 40 years ago, we provide highly specialized well flow management services to the global oil and gas industry with market leading positions internationally, offshore and in deepwater and other technically challenging environments. For the fiscal year ended March 31, 2014, we estimate that we derived approximately three quarters of our revenue from offshore services. For the same period, we estimate that we derived approximately one third of our revenue from the complex, high-growth and high-value deepwater sector. As a provider of well flow management services, we enhance the economic value of our customers' high-value oil and gas assets by optimizing development cost and enhancing production, through: improved understanding of their reservoirs and associated hydrocarbons to improve field development; deployment of technologies that enhance the installation efficiency and safety of their well completion operations and the productivity of their wells; accelerated early production, enhanced production and improved recovery rates from their fields; and cost-effective well maintenance and well integrity management services that reduce cost and improve production through the lifecycle of the well. Our well flow management capabilities include a range of services that are designed to measure, improve, control and process flow from high-value oil and gas wells, including: well test and appraisal services; subsea, completion and intervention services; and production services. We provide our well flow management services in many of the world's major offshore and onshore oil and gas basins. In the deepwater market, we face less competition as a result of demanding technology and the safety, operational capability and track record requirements that create higher barriers to entry. Our estimate of the global market for our well flow management services is approximately $9 billion in calendar year 2013 and we estimate that this market will increase by approximately 10% in calendar year 2014 compared to calendar year 2013. Our well flow management capabilities span the full lifecycle of oil and gas fields from exploration through abandonment. For the fiscal year ended March 31, 2014, we estimate that approximately three quarters of our revenue was derived from the more stable, predictable and long-cycle development and production phases of the field. 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 any offer to buy these securities in any jurisdiction where the offer or sale is not permitted. Subject to completion, dated September 23, 2014 Preliminary Prospectus Expro Oilfield Services PLC American Depositary Shares Representing Ordinary Shares Table of Contents We have established our market-leading positions through: continued innovation and development of specialized and proprietary technologies that are engineered to service highly complex wells and reservoirs; securing and maintaining a reputation as a trusted and reliable service provider that seeks to maintain high standards of safety, quality and customer service; a collaborative style of customer service that allows us to understand and be responsive to our customers' requirements and that fosters long-term, stable relationships; and investment in specially trained employees who, guided by safety and operational excellence, operate our equipment at customer well sites in demanding environments. We have an extensive footprint and operate in over 100 locations in more than 50 countries. We have a diverse and stable customer base, comprising national oil companies ("NOC"), international oil companies ("IOC") and independent exploration and production companies ("Independents"). We have strong relationships with a number of the world's largest NOCs and IOCs, some of which have been our customers on a continuous basis for over 20 years. For the fiscal year ended March 31, 2014, we had revenue of $1,384.6 million, Adjusted EBITDA of $365.3 million, an Adjusted EBITDA margin of 26.4% and operating income of $183.8 million. This represented an increase of 15.3% in revenue, 29.2% in Adjusted EBITDA and 2.9 percentage points with respect to our Adjusted EBITDA margin and an increase of 52.3% in our operating income compared to the fiscal year ended March 31, 2013. For the three months ended June 30, 2014, we had revenue of $326.4 million, Adjusted EBITDA of $82.6 million, an Adjusted EBITDA margin of 25.3% and operating income of $31.0 million. Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures. See " Summary Consolidated Financial and Operating Data." Competitive Strengths Provider of well flow management services well positioned to capture growth in demand for our products and services. We have established and maintained leading positions in our core markets, particularly in offshore, deepwater and other technically challenging environments, where there are higher barriers to entry. For the fiscal year ended March 31 2014, we estimate that we derived approximately three quarters of our revenue from offshore services. For the same period, we estimate that we derived approximately one third of our revenue from the high-growth and high-value deepwater sector. We believe we are the global leader in the provision of subsea safety systems, and we estimate that we had a 57% share of the large bore subsea completion landing string market in calendar year 2013. In addition, we believe we are a leader in the supply of fast track early production systems and in offshore exploration and appraisal well testing. As a result of our market positions, we believe we are well positioned to capture growth and increased demand for our products and services, particularly in the deepwater sector. Douglas-Westwood estimates that, based on the current pipeline of projects in water depths greater than 500 meters, deepwater capital expenditure on drilling, hardware and installation services could potentially increase from $27.8 billion in calendar year 2013 to $71.6 billion in calendar year 2018. According to Douglas-Westwood, deepwater drilling and completion spend on subsea wells could potentially increase from $9.2 billion in calendar year 2013 to $20.6 billion in calendar year 2018, representing a compound annual growth rate ("CAGR") of 20.8% and 17.5% per year, respectively. During the same period, Douglas-Westwood forecasts the number of subsea tree installations to potentially increase by up to 80%, or a CAGR of 12.5%, so we expect demand for our large bore subsea completion landing strings to increase during the same period. In addition, we expect to benefit from strong customer demand for our early production This is our initial public offering. We are offering American depositary shares, or ADSs. Each ADS represents our ordinary shares, par value 1.00 per share. We expect that the initial public offering price of the ADSs will be between $ and $ per ADS. Prior to this offering, there has been no public market for our ordinary shares. We intend to apply to have the ADSs listed on the under the symbol " ." Investing in the ADSs involves a high degree of risk. For a description of the risks that you should consider before buying the ADSs see
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+PROSPECTUS SUMMARY This summary highlights certain information about us and this offering contained elsewhere in this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in our securities and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. Before you decide to invest in our securities, you should read the entire prospectus carefully, including "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and the related notes included elsewhere in this prospectus. Unless the context indicates otherwise, as used in this prospectus, the terms "S1 Biopharma," "we," "us," "our," "our company" and "our business" refer to S1 Biopharma, Inc., and "this offering" refers to the offering contemplated in this prospectus. The Company We are a clinical-stage biopharmaceutical company focused on the development and commercialization of novel, first-in-class therapies for sexual dysfunction. We have a portfolio of four clinical and pre-clinical stage drug candidates. We intend to seek Food and Drug Administration, or FDA, approval of our two lead products via the 505(b)(2) new drug application, or NDA, pathway. Our lead product candidate is Lorexys , a first-in-class, proprietary fixed-dose combination therapy entering Phase 2b clinical trials for the treatment of female hypoactive sexual desire disorder, or HSDD. HSDD is characterized by a lack or absence of sexual fantasies and desire for sexual activity, causing marked distress or interpersonal difficulties. HSDD affects over 12 million women in the United States and has no FDA-approved therapies. Data from our Phase 2a clinical trial indicate that Lorexys is a generally well-tolerated therapy that may provide improvement in sexual desire and arousal in women suffering from HSDD. We expect to initiate the Phase 2b clinical trials for Lorexys during the first half of 2015 and to receive interim data from the first study by the end of 2015. Our second product candidate, Orexa , is in development for the treatment of male HSDD, a condition that affects approximately eight million men in the United States. There are no therapies for male HSDD that have been approved by the FDA, and no known competing drugs currently in development for male HSDD. We plan to initiate Phase 2a clinical trials in the first half of 2016 for Orexa , and to initiate Phase 2b clinical trials in 2017. Our pipeline also includes two other pre-clinical candidates. S1B-307, our next most advanced pre-clinical product candidate, is a peptide for the treatment of female sexual arousal disorder, or FSAD, and female orgasmic disorder, or FOD. We expect to file an investigational new drug application, or IND, in the first half of 2015 for S1B-307 and commence Phase 2a clinical trials as early as the end of 2015. S1B-3006, our other pre-clinical product candidate, is a proprietary second-generation agent combining active compounds present in Lorexys and S1B-307 for treatment-resistant sexual dysfunction conditions. We plan to file an IND in late 2016 for S1B-3006 and commence clinical trials shortly thereafter. We plan to have four proprietary programs targeting multiple sexual dysfunction indications in clinical trials in 2017. Lorexys for Female HSDD Our lead product candidate, Lorexys , is an oral, proprietary fixed-dose combination tablet of two antidepressants, bupropion and trazodone, for the treatment of female HSDD in pre-menopausal women. The scientific basis for the development of Lorexys is the Kinsey dual control model, which maintains that sexual desire, arousal and orgasm are modulated by mechanisms in the brain that involve the balance of excitatory and inhibitory systems through chemicals in the brain called Amendment No. 3 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 We are not, and the underwriters are not, making an offer to sell these securities in any state or other jurisdiction where the offer or sale is not permitted. For investors outside the United States: neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the units and the distribution of this prospectus outside the United States. Table of Contents neurotransmitters, hormones and psychosocial inputs. Lorexys is designed to modulate dopamine/norepinephrine excitation and serotonin inhibition to regulate sexual inhibition and sexual excitation. Based on Phase 2a clinical trial data, we believe Lorexys has the following advantages as a first-in-class therapy for HSDD: Novel mechanism of action: Lorexys 's dual mechanism of action may contribute to its potential efficacy in desire and arousal. The results of our Phase 2a clinical trial suggest a possible synergistic effect of our novel fixed-dose combination of bupropion and trazodone designed to restore the balance of key neurotransmitters in the brain which impact sexual desire. Promising efficacy: Lorexys demonstrated statistically significant (p-value <0.05) superiority compared to the active control, bupropion, in a Phase 2a clinical trial of 30 premenopausal women with HSDD based on our primary endpoint, the Female Sexual Function Index's Desire subscale, or FSFI-D, an endpoint used as the primary measure of sexual desire in other HSDD programs, and which has been accepted by the FDA as the primary desire endpoint for at least one other company's clinical trials relating to HSDD. The FDA requires statistically significant superiority over placebo to establish a drug as having a clinically meaningful benefit. Based upon our review of published scientific literature, we believe that the benchmark for FDA approval of a central nervous system, or CNS, drug is yielding a response rate at least 20 percentage points higher than placebo on the primary endpoint tested, a standard that, to our knowledge, was not previously met in an HSDD drug candidate clinical trial. Lorexys exceeded this threshold in the Phase 2a clinical trial against an active control, as opposed to placebo. We believe Lorexys is the first HSDD drug candidate to show a majority of patients reaching remission in a clinical trial. Encouraging safety and tolerability profile: Our Phase 2a clinical trial met our safety/tolerability goals, with only one tolerability-related dropout. In addition, while sedative effects were reported among patients, the events reported were not severe and did not cause any patients to drop out of the trial, supporting our hypothesis that the unique, dual mechanism of action would moderate side effects associated with bupropion and trazodone when used as monotherapies. Before obtaining regulatory approval for the commercial sale of Lorexys , we must demonstrate with substantial evidence gathered in pre-clinical studies and well controlled clinical trials, including the planned Phase 2b and Phase 3 clinical trials, to the satisfaction of the FDA, that Lorexys is safe and effective for the treatment of female HSDD in pre-menopausal women. We plan to conduct up to three randomized, double-blind, placebo-controlled, parallel Phase 2b clinical trials, and expect interim data from the first of these clinical trials by the end of 2015. We plan to hold an end-of-Phase 2 meeting with the FDA and to initiate Phase 3 clinical trials in 2016. We also intend to initiate additional pharmacokinetic studies with the final Phase 3 dose as recommended or required by the FDA prior to the end of 2016. HSDD is the most prevalent form of female sexual dysfunction, or FSD. According to the 2008 PRESIDE study of over 30,000 women in the United States, HSDD is estimated to impact 9.0% of women ages 18 to 44, 12.3% of women ages 45 to 64, and 7.4% of women ages 65 and over or approximately 12 million women in the United States. The population suffering from HSDD in Europe is estimated to be similar to the number affected in the United States. Although HSDD is a reimbursable indication, there are currently no FDA-approved pharmaceutical treatment options for female HSDD in the United States. Off-label options include bupropion, which has demonstrated marginal efficacy, and testosterone, which can be accompanied by excess hair growth and acne, has been linked to increased rates of cancer and is now required by the FDA to include a label warning on the risk of venous blood clots. Other treatment options for female HSDD include lifestyle changes, treatment of coexisting psychiatric disorders, switching or discontinuing S1 Biopharma, 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) 27-3629427 (I.R.S. Employer Identification Number) 7 World Trade Center 250 Greenwich St. 46th Floor New York City, NY 10007 (201) 839-0941 (Address, including zip code and telephone number, including area code, of registrant's principal executive offices) Table of Contents medications that could impact sexual desire, hormone therapies and herbal remedies. We are also aware that flibanserin, a non-hormonal oral drug, is under investigation for treatment of premenopausal women with HSDD. Flibanserin received a Complete Response Letter, which is a letter the FDA issues when it determines that a drug candidate will not be approved in its present form, in October 2013 on the basis of safety concerns and a modest risk-benefit evaluation. The FDA has since mandated that Sprout Pharmaceuticals, Inc., the manufacturer of flibanserin, conduct two Phase 1 clinical trials in addition to a driving study prior to resubmitting its NDA. Based upon publicly available information, Sprout Pharmaceuticals, Inc. has indicated that it plans to resubmit the NDA for flibanserin in December 2014. Orexa for Male HSDD Our second product candidate, Orexa , is an oral, proprietary fixed-dose combination of bupropion and trazodone specifically formulated to treat HSDD in men. We believe Orexa improves sexual desire and arousal through the same novel, dual-control mechanism as Lorexys . We plan to enroll patients in a Phase 2a clinical trial for Orexa to evaluate safety, tolerability and pro-sexual efficacy compared to placebo. Other objectives include exploring the onset and duration of action of Orexa , which will be dosed using two different fixed ratios to inform the optimal fixed dose in future trials in men. We plan to commence Phase 2b clinical trials in 2017, with interim readout in late 2017, followed by commencement of Phase 3 clinical trials in early 2018. According to the 1999 National Health and Social Life Survey of over 1,200 men in the United States, the incidence of a "problem," defined as a lack of sexual desire, was approximately 15%. Based on this study, we estimate HSDD to affect eight million men in the United States alone. Although there are FDA-approved products for erectile dysfunction, or ED, they often fail to effectively treat HSDD, as the medications approved to treat ED are not designed to treat low desire stemming from neurotransmitter imbalances. No pharmaceutical treatment has been approved in the United States for HSDD in men. Other treatment options for male HSDD include lifestyle changes, treatment of coexisting psychiatric disorders, switching or discontinuing medications that could impact sexual desire, hormone therapies and herbal remedies. Other Preclinical Programs We are also developing two additional pre-clinical product candidates targeting other sexual dysfunction indications. S1B-307 is in preclinical development for the treatment of FSAD and FOD. The active component of S1B-307 has potential as a therapeutic application for these disorders in public literature, and we expect our innovative formulation and mechanism of delivery to improve efficacy, onset and duration of action. We expect to submit an IND for S1B-307 in the first half of 2015 and plan to develop a formulation of S1B-307 for treatment-resistant ED conditions, as well as male delayed ejaculation. We plan to submit an IND in late 2016 for a second-generation drug candidate, S1B-3006, consisting of a proprietary combination of S1B-307 and Lorexys , for female treatment-resistant sexual dysfunction conditions. We also expect to formulate a separate product candidate that will combine S1B-307 and Orexa to treat men with treatment-resistant sexual dysfunction conditions. Nicolas G. Sitchon President and Chief Executive Officer S1 Biopharma, Inc. 7 World Trade Center 250 Greenwich St. 46th Floor New York City, NY 10007 (201) 839-0941 (Name, address, including zip code and telephone number, including area code, of agent for service) *Pre-IND meeting conducted in November 2012, and FDA comments on Phase 1b/2a protocol have been adopted by sponsor. Our Strategy Our objective is to be a leading provider of first-in-class products for the treatment of sexual dysfunction in both women and men. Key elements of our strategy include: Complete development of non-hormonal CNS drugs using 505(b)(2) pathway. We expect to continue development of proprietary formulations of first-in-class non-hormonal CNS treatments for sexual dysfunction using previously approved active ingredients with proven safety to take advantage of the 505(b)(2) regulatory approval pathway. We expect this pathway to result in approval with fewer clinical and nonclinical studies than under a full NDA. Innovative clinical trial design specific to sexual dysfunction. We believe that the experience of our management team in the field of sexual dysfunction and our sole focus on developing drugs for sexual dysfunction have assisted us in developing clinical trial designs which are informed by prior clinical experience with recent competitive product candidates. Develop a diverse portfolio of products to treat sexual dysfunction. We have four product candidates that address multiple sexual dysfunction conditions. We believe that developing complementary products addressing desire, arousal and orgasm, three of the major causes of sexual dysfunction in females and males, will efficiently drive prescriptions from gynecologists, psychiatrists, other high prescribing specialists and primary care physicians. In addition, we believe the breadth of our pipeline will be uniquely attractive to strategic partners active in or looking to enter the field of sexual dysfunction. Pursue multiple label expansion opportunities. As a result of the dual mechanisms of action of our non-hormonal CNS drugs, we believe that each of our product candidates may have use in Leslie J. Croland, Esq. Richard L. Cohen, Esq. Duane Morris LLP 200 South Biscayne Boulevard, Suite 3400 Miami, FL 33131 (305) 960-2200 Michael A. Hedge, Esq. Shoshannah D. Katz, Esq. K&L Gates LLP 1 Park Plaza, Twelfth Floor Irvine, CA 92614 (949) 253-0900 Table of Contents multiple indications. We believe that the design of our clinical trials will efficiently take advantage of potential label expansion opportunities that we have identified by incorporating secondary measures that will test the potential of each product candidate to treat other indications within the broad category of sexual dysfunction. Intellectual Property The proprietary nature of, and protection for, our product candidates, discovery programs and know-how are important to our business. Our strategy is to develop first-in-class products for sexual dysfunction in both women and men and to obtain patent protection for pharmacokinetic profiles, timing of administration, dose strengths and drug combinations. Secondarily, we will seek to protect specific formulations and administration regimens relating to our product candidates. We have one patent application directed to the composition of matter, including fixed-dose ranges, and use of bupropion and trazodone to treat sexual dysfunction pending in the United States, one patent application pending in Europe and 13 applications pending in other jurisdictions. We also have one Patent Cooperation Treaty international patent application directed toward the composition of matter and use of particular drug receptor agonist combinations to treat sexual dysfunction pending. We do not license any third-party intellectual property and have not granted any licenses to third parties to use our intellectual property.
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+PROSPECTUS SUMMARY This summary provides an overview of selected information contained elsewhere in this prospectus. It does not contain all the information you should consider before making a decision to purchase the shares we are offering. You should very carefully and thoroughly read the following summary together with the more detailed information in this prospectus and review our financial statements and related notes that appear elsewhere in this prospectus. In this prospectus, unless the context otherwise denotes, references to "we," "us," "our" and "Company" refer to Connect Interactive, Inc. As of the date of our most recent audit, June 30, 2014, we had $1,072 in total assets. CONNECT INTERACTIVE, INC. Organization We were incorporated in the State of Nevada as a for-profit company on February 28, 2014, under the name Connect Interactive, Inc. and our incorporator adopted our bylaws and appointed our two directors. To date, we have limited operations and are implementing our business plan to develop and offer an online and mobile application dating service, which we will initially target to military and public service persons in the United States. To date, our business activities have been limited to organizational matters and the development of our business model and plan. We have established a fiscal year end of December 31. On February 28, 2014, we issued 20,000,000 shares of our $0.0001 par value common stock, valued at $0.0001 per share, to our 2 founders, which includes 10,000,000 common shares to our chief executive officer, Jeremy Draper and 10,000,000 to our vice president and director, Don L. Rose, in exchange for organizational services incurred in our formation, which our board of directors valued at $0.0001 per share, or $1,000 and $1,000, respectively for preformation services rendered to develop our organization, business model and concept for our website. From February 28, 2014 to June 30, 2014, we incurred $23,314 in operational expenses. We anticipate our burn rate will be approximately $200 per month. Our present capital is not sufficient to cover our monthly burn rate for the next 12 months; however, our officers and directors have orally agreed to advance any funds necessary to cover our working capital and offering expenses. We believe that we will require approximately $50,000 in cash to accomplish the goals set out in our plan of operation, which are primarily focused on marketing our website and developing our mobile application. To the extent we are unable to accomplish our goals with the proceeds from the issuance of our common stock, then we intend to raise additional capital from investors through the sale of our common stock or from loans or advances from our 2 founding shareholders. Our principal business, executive and registered statutory office is located at 3565 Las Vegas Blvd. South, Suite 378, Las Vegas, NV 89109 and our telephone number is (631) 932-1226, fax is (888) 909-1033 and email contact is info@marryahero.com. Our corporate URL address is www.connectinteractiveinc.com and our marketing website is www.marryahero.com. Business We are a development stage enterprise that commenced operations in March 2014, which has been limited to organizational and business development activities. We intend to develop a website and mobile application, which can be downloaded for iOS and Android phones that will allow users to browse singles to meet and date. Our initial focus will be to target individuals in the military or who have served in the military as well as other public servants that work for the government. Our mission is to assist and develop a user friendly website and mobile application that will allow users to upload photos of themselves and information on their military or government service as well as general information on themselves, and additional information such as what they do for fun, their hobbies, favorite things, hot spots, books read, religion, ethnicity, places deployed or agencies that they have worked for as well as sports and other information to give users the opportunity to inform other users of their likes and dislikes. We intend to focus our initial marketing efforts through online advertising by using websites such as Google, Facebook, LinkedIn, Twitter, Pinterest, Instagram and others to market our website and mobile applications. We also intend to advertise in print publications such as local newspapers and through flyers. We may also contract with independent marketing representatives to market our website and mobile applications. We have had limited operations and have limited financial resources. Our auditors indicated in their report on our financial statements (the "Report") that "the Company s lack of business operations and early losses raise substantial doubt about our ability to continue as a going concern." Our operations to date have been devoted primarily to start-up, development and operational activities, which include: 1.Formation of the Company; 2.Development of our business plan; 3.Evaluating various target websites to affiliate and market our dating service; 4.Research on marketing channels/strategies for our dating service; 5.Secured our website domains www.connectinteractiveinc.com and www.marryahero.com; 6.Development of our site map for our websites; and 7.Research on the pricing for users of our website and app. We intend to offer users a variety of pricing options such as monthly, quarterly and annual subscriptions along with additional features that subscribers may add as paid options such as invitation to events, notification of read emails and other services. Market Opportunity The entertainment, web and mobile technology industries are rapidly growing sectors of the U.S. economy, and companies building entertainment and social media applications have grown their user bases and revenues at unprecedented rates in recent years. We believe that an attractive opportunity exists for a public company focused on assisting these businesses in the early-stage of their existence and technological development will provide our opportunity, which can include: Global adoption of Internet infrastructure and the proliferation of mobile technology. The cost of Internet access continues to decline, facilitating an increasing number of Internet users and driving up time spent online. This trend is magnified by the proliferation of smartphones and mobile technology, resulting in users with perpetual access to the Internet. As the Internet becomes more accessible, more data is being transmitted online, requiring evolving applications and businesses to manage this flow of information. Dramatic shifts in the way people share and consume information. The growing usage and availability of the Internet results in an increasing number of human connections. As more people are connected, an increasing volume of information is being shared. The benefits of this information flow manifest themselves in more ways than simply interacting with friends, and the Internet is becoming an increasingly important tool in businesses marketing programs. Connectivity among humans, when harnessed by businesses, can drive marketing costs down to virtually zero. We believe that as more consumption occurs on the Internet, more mediums of efficiently disseminating information are required. This secular shift creates vast opportunities for companies creating and investing in these technologies. Declining costs to build web- and mobile-based technology. The cost of starting and operating an Internet-based business has dramatically declined over the last decade as a result of dropping hardware costs and maturing open-source software. This decline has resulted in a shift in the capabilities web technology founders look for in a partner. Increasingly, entrepreneurs are valuing business support, brand connections, marketing and product support over the level of funding available from a partner. This adaptation creates a large and growing opportunity for web-technology incubators providing comprehensive support services to entrepreneurs. Increasing focus on web-based technology and entertainment companies by the capital market. The explosive growth of social media and entertainment content companies has attracted significant capital from investors. By consulting with these businesses, we believe we will benefit from this heightened desire for social media and entertainment investments through greater subsequent financing and sale opportunities for our client companies. Our Business Strategy Our goal is to consult with digital media, entertainment, music, consumer, Internet, and social networking companies, as well as other companies, by providing administrative support, which will allow management to focus on their core business. We believe this will generate capital appreciation of the client companies and realized gains for their founders. We believe that by consulting with entrepreneurs at inception, we will generate client loyalty while we add value for our potential clients. The following are key elements of our strategy: Guide our clients through the challenges of early development. We intend to help provide our client companies with the human capital to cultivate their products and services and grow into profitability. We believe that our services will reduce time, costs and accelerate the time to bring the clients products and services to market through managerial assistance, marketing resources, and technological collaboration. As the client companies mature, we can advise them by providing strategic guidance, access to legal and accounting resources. Apply a structured consulting process to our deployment of personnel and consultants. Web-based technology is becoming increasingly capital-efficient, and our model is optimized to leverage this trend. By advising clients in the earliest stages of their lifecycles we believe that we will achieve returns with minimal expenditures. We intend to use web-based applications, such as QuickBooks Online, to enable us to assist our clients. Consult to diverse, innovative and dynamic clients. We believe that the low capital requirements to consult with our target clients, coupled with the short development timeline of technology and start-up companies, enable us to spread our resources across a wide spectrum of clients. Some companies will achieve positive cash flow, some will require further capital, and some will fail. By diversifying our target clients and industries, we believe we will mitigate risk and enhance the value of our clients. We intend to provide managerial assistance available to our clients and, to the extent available, offer our services for cash or contingent compensation. We will negotiate our fees on a case-by-case basis and intend to offer hourly rates, flat fees and contingent fees for our services. The managerial assistance means, among other things, we, through our directors, officers or employees, offer to provide, and, if accepted do provide, significant guidance and counsel concerning the management, operations or business objectives and policies of our a portfolio company. We will provide a variety of services to client companies, including the following: corporate formation and structure; product development and design; administrative functions and support; office space and related office services; marketing, branding and public relations formulating operating strategies and corporate goals; formulating intellectual property and other strategies; introductions to potential joint venture partners, suppliers and customers; and assisting in financial planning. We intend to derive income from our clients for the performance of these services. As of the date of this Prospectus, we have 20,000,000 shares of $0.0001 par value common stock issued and outstanding, which is owned by 2 shareholders. We have 10,000,000 authorized shares of preferred stock of which none are issued. The aggregate market value of our common stock based on the offering price of $0.05 per share is $1,000,000. Our stockholders deficit as of our most recent audit is ($21,314). THE OFFERING We are offering for sale a total of 1,000,000 shares of common stock at a fixed price of $0.05 per share. There is no minimum number of shares that must be sold by us for the offering to proceed, and we will retain the proceeds from the sale of any of the offered shares. The proceeds from the sale of the offered shares will not be placed in escrow or a trust account and will be immediately available to us. The offering is being conducted on a self-underwritten, best efforts, basis, which means our chief executive officer and director, Mr. Jeremy Draper and our vice president and director, Mr. Don L. Rose, will attempt to sell the shares. This prospectus will permit them to sell the shares directly to the public, with no commission or other remuneration payable to them for any shares they may sell. Mr. Draper and Mr. Rose will sell the shares and intend to offer them to friends, family members and business acquaintances. In offering the securities on our behalf, they will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities and Exchange Act of 1934 (the "Exchange Act"). The intended methods of communication include, without limitations, telephone and personal contact. The following is a brief summary of this offering. Please see the "Plan of Distribution" section for a more detailed
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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 you should consider before deciding to invest in our ordinary shares. You should read this entire prospectus carefully, including the Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations of the Company sections and our consolidated financial statements and the related notes, before investing. Unless we tell you otherwise, the information in this prospectus assumes that the ordinary shares offered hereunder are sold at the midpoint of the estimated price range set forth on the cover page of this prospectus and that the underwriters will not exercise their option to purchase additional ordinary shares. In this prospectus, the terms Arysta, we, us, our and the Company refer to Arysta LifeScience plc and its subsidiaries. Arysta LifeScience plc Our Company Arysta is a leading global provider of crop solutions, with expertise in agrochemical and biological products. We have a solutions-oriented business model that focuses on product innovation to address grower needs. Our solutions are delivered on a local basis, utilizing globally managed patented and proprietary off-patent agrochemical active ingredients and biological solutions, or biosolutions, complemented by a broad portfolio of regionally managed off-patent agrochemical offerings. Biosolutions includes biological stimulants, or biostimulants, innovative nutrition and biological control, or biocontrol, products. Our agrochemical and biocontrol products improve agricultural productivity by protecting crops from weeds, insects and diseases. Biocontrol products offer a broad range of crop protection solutions with, in many cases, the added benefit of reduced synthetic residues. Our biostimulants and innovative nutrition portfolios focus on enhancing plant vigor and nutritional uptake, thus optimizing crop yield and quality. In 2013, we were the world s 12th largest agrochemical company by revenue according to Phillips McDougall, and we believe we have leadership positions in a number of key markets, including a strong position in Africa. In addition, we believe we have the number two global position by revenue in the high-growth biostimulants market following our March 2014 acquisition of Laboratoires Go mar, or Go mar. We employ a selective, highly targeted market strategy aimed at specific regions and crops where we believe our market position, product portfolio and capabilities enable us to achieve sustainable high growth and profitability and a strong leadership position. Our product portfolio consists of a distinctive suite of both agrochemical and biosolutions products. This breadth of product offerings led us to develop our ProNutiva concept that combines agrochemicals with biosolutions. ProNutiva solutions address the full spectrum of protection, nutrition and yield enhancement needs of growers, often with lower residue levels. Our worldwide network of customer-centric local sales teams possesses strong technical expertise, local market knowledge and direct customer contacts. Our sales teams are supported by our core competencies in global portfolio management, marketing, licensing, product development, regulatory and supply chain management. As a result, we are able to offer extensive solutions from our established portfolio and to rapidly develop innovative solutions that align with the evolving needs of our customers. We use information obtained from our customers to fine tune our product offering to ensure that it remains current with the changing needs of our target markets, while maintaining the breadth to provide our customers with comprehensive solutions. Our products serve a broad and diverse geographic mix, focusing on high-growth regions such as Latin America, Africa, the Middle East, Central and Eastern Europe, China and South Asia, which collectively accounted for over 65% of our sales in 2013. Within each region, we focus on the crops and product categories where we can offer the most value for our customers. Our management team executes our strategy across our six segments: Latin America; Africa and Western Europe; North America; Japan and Central/Eastern Europe; China, South Asia, Life Sciences and, following our acquisition in March 2014, Go mar; and Corporate. Our customer-centric sales model, highly targeted market strategy and robust portfolio of crop solutions are supported by our capabilities in product development and registration and our asset- Other than the IFRS consolidated financial statements included in this prospectus, for periods up to and including the year ended December 31, 2012, we have only prepared unconsolidated financial statements in accordance with Irish generally accepted accounting principles, or Irish GAAP, and Arysta Corporation has only prepared consolidated financial statements in accordance with Japanese generally accepted accounting principles, or JGAAP. We prepared consolidated financial statements under JGAAP for the year ended December 31, 2013. The previous GAAP for the purpose of preparing our consolidated financial statements is JGAAP because Arysta Corporation represented substantially all of our activity and its consolidated financial statements in JGAAP were regularly provided to our shareholder, lenders and similar stakeholders. A reconciliation from JGAAP to IFRS is presented in Note 25 to our audited consolidated financial statements elsewhere in this prospectus. Also, presented herein is the JGAAP selected unaudited financial data of Arysta Corporation for the four-year period from 2009 to 2012, the JGAAP unaudited financial statements of Arysta Corporation for the years ended December 31, 2011 and 2012, and management s discussion and analysis comparing 2012 to 2011. We have supplementally included this previous JGAAP information because we believe it enhances investor understanding of the Company s financial position and results of operations. We translate all assets and liabilities of our subsidiaries into their presentation currency, the U.S. dollar, using the spot exchange rate at the end of each reporting period. Income and expense items are translated into U.S. dollars at the average exchange rates for the period. light business model. Arysta is a leader in developing innovative agrochemical solutions by creating new applications from, and synergistic combinations including, proven agrochemical active ingredients, or AIs. As of June 30, 2014, our extensive product portfolio included over 200 AIs and over 3,600 registrations worldwide. We obtained 155 new product registrations in 2013. We endeavor to generate at least 15% of our annual gross profit from newly registered products and applications that we have introduced during the preceding three years (including products introduced globally for the first time and introductions of existing products to new markets or new applications), which we classify as New New . This is an important focus for our long-term business development strategy. We do not conduct any basic research for the discovery of new agrochemical AIs (which involves significant cost and risk); rather, we selectively acquire or license the rights to AIs that we believe will enhance our product portfolio and allow us to capitalize on market opportunities. Within biosolutions, where primary research activity is less costly and can result in a quicker time to market than for agrochemicals, we perform an increasing amount of research and development to further enhance our new product pipeline, with a strong external network of more than 15 research partners. We also conduct research activities at our 72-hectare Agricultural Research and Development Center in Brazil, at our biosolutions research facility in France, which we acquired in our acquisition of Go mar and at our research laboratory in Valdosta, Georgia. We have a nimble, asset-light business model that sources AIs from over 800 suppliers and utilizes a balanced mix of toll production and in-house formulation capabilities. We believe this model optimizes our flexibility, reduces production costs, and minimizes our capital expenditures. We operate in over 100 countries and have 13 formulation facilities strategically located in Latin America, Europe, Asia and Africa. With one minor exception, we engage in no direct agrochemical AI manufacturing. Our model helps us to optimize our cost structure by reducing fixed costs which, in turn, provides us with flexibility required to adapt quickly to market changes. Our Industry Global crop production is supported by a broad range of industries, including agrochemicals and biosolutions, that seek to deliver solutions to help growers protect and enhance crop yields. The agrochemical industry produces a range of agrochemical products which protect crops from weeds, insects and diseases. Biosolutions encompass a variety of technologies, including technologies designed to increase yield, improve crop quality and manage abiotic stress by enhancing natural plant systems and processes, as well as technologies providing naturally derived and/or lower residue alternatives for insect (and, to a lesser extent, other pest) control. We believe that the current market size for the two industries combined is approximately $60 billion globally. According to Phillips McDougall, the market for agrochemicals grew at a compound annual growth rate, or CAGR, of 6.8% between 2003 and 2013, and we estimate that the biosolutions market has grown at rates in excess of 15% per annum over the past two years. The agrochemicals and biosolutions industries are supported by strong global macroeconomic trends that we expect will drive demand for increasing crop production and yields. World population growth is expected to continue, particularly in emerging markets, where urbanization is expected to be accompanied by the expansion of the middle class and rising income levels. Increasing demand for meat and crops such as fruits and vegetables is expected to drive demand for agricultural products and, accordingly, crop protection. At the same time, increasing supply constraints from limited available arable land and scarce natural resources such as fresh water drive growing reliance on yield as a source of increased production. Recent sustained high farmer income levels create strong incentives to invest in innovative products such as agrochemicals and biosolutions to maximize yields, increase productivity and protect harvests. In emerging markets, agrochemical adoption rates continue to grow as farmer sophistication increases, providing an important driver for growth. In certain markets, increasing adoption of genetically modified seeds provides the opportunity for increased use of selective agrochemicals as well as biosolutions as part of a resistance management strategy. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 The agrochemical market was estimated at $54 billion in 2013, growing at a CAGR of 6.8% between 2003 and 2013. Key market categories include herbicides (44% of the 2013 agrochemical market), insecticides (28% of the 2013 agrochemical market) and fungicides (26% of the 2013 agrochemical market), according to Phillips McDougall. Off-patent products comprise approximately 77% of the agrochemicals market (inclusive of non-crop applications), and the category has been growing at a faster rate than the overall market due to the decreasing pace of AI discovery as well as an increasing number of products becoming off-patent. Proprietary off-patent products, a sub-category that companies such as Arysta and FMC Corporation focus on, are associated with a substantial degree of product differentiation through proprietary formulation or packaging, differentiated market access, or an advantaged supply position. These characteristics enable producers to maintain a stronger market position and higher profitability. Agrochemicals are highly regulated, requiring approval from relevant authorities in every country before an AI or formulated product can be sold locally. Major participants in agrochemicals and biosolutions have strong teams of regulatory experts focusing on obtaining and maintaining registrations for their products swiftly and effectively, which provide a significant advantage in the time and cost to bring a new product to market. As the pace of AI discovery in agrochemicals has slowed, novel formulations of existing AIs and new technologies such as biosolutions are expected to be increasingly important drivers of innovation in yield enhancement. We estimate that the biosolutions market had approximately $5 billion in sales in 2013 and has grown at a CAGR of over 15% over the past two years. Biosolutions encompass a range of innovative products and novel chemistries that promote physiological responses enhancing crop vigor, yield and/or quality through physiological stimuli often originating from natural sources, sustainable products that utilize novel technologies to optimize plant nutrition and a range of biocontrol products which operate as conventional crop protection products without residues of a synthetic origin. We believe that biosolutions have the potential to provide market changing solutions to issues such as abiotic stress, nutrient uptake efficiency and crop vigor, which are currently among the most significant causes of yield loss. These issues are not fully addressed by agrochemicals or by genetic modification. Biosolutions represent a relatively small but highly innovative and fast growing market, which we expect to continue to grow substantially faster than agrochemicals. Our Products We categorize our products in three core categories: Global Value Added Portfolio, or GVAP, Biosolutions and Regional products. We sell our products to growers, government entities, co-ops, retailers and leading national and regional distributors. Our distribution channels are tailored to the individual markets that we serve as grower purchasing practices vary significantly by country. Our highly technical salesforce works directly with growers to drive sales of products that address growers crop protection, yield and quality needs and also works closely with retailers and distributors in key markets. Our products are marketed strategically across our six segments of Latin America; Africa and Western Europe; North America; Japan and Central/Eastern Europe; China, South Asia, our Life Sciences business and, following our acquisition in March 2014, Go mar; and Corporate. We also offer non-crop products (turf and ornamental plants) including plant protection, as well as products through our Life Sciences business, including controlled release fertilizers and animal health products, which include honey bee protective miticides and veterinary products such as vaccines. Global Value-Added Portfolio Our GVAP portfolio includes approximately 800 products globally in the herbicides, insecticides and fungicides categories, primarily based on nine patented or proprietary off-patent AIs. Our GVAP portfolio includes products derived from AIs for which we have a strong market position due to differentiated product offerings or supply relationships. We consider the GVAP portfolio to be a key pillar for our sustainable growth. This portfolio has enjoyed strong growth from 2011 through 2013. FORM F-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Product Line Products/AIs(1) Highlights Herbicides Select Clethodim #1 global post-emergent grass herbicidal AI for use in oilseed crops, including soybeans, in 2012 Sold in over 60 countries in 2013 Everest Flucarbazone #3 grass herbicide used for spring wheat in North America by treated acres in 2013 Doubled Canadian market share by treated acres from 2011 to 2013 Dinamic Amicarbazone #1 herbicide used for sugarcane (ratoon) in Brazil for dry season application in 2012 Treated acres nearly tripled between 2008 and 2013 Proponit Large global market opportunity Propisochlor Strong technical profile Fungicides Evito Fluoxastrobin #5 strobilurin in the United States by treated acres, with 56% growth of treated area in 2013 compared to 2012 Eminent Tetraconazole #1 triazole AI in terms of area treated and #3 triazole brand in 2013 in terms of sales for Brazilian cotton SIGMA*DG 40% captan market share globally in 2012 Captan Global broad-spectrum contact phthalimide fungicide, used mostly on fruit crops Insecticides Orthene #1 insecticide AI in Japan in 2012 Acephate #1 acephate brand in Brazil in 2013 Honey Bee Health Apivar Amitraz Leading global miticide to protect honey bee health, targeting the Varroa mite (1) Our products are offered under different brand names throughout the world. Arysta LifeScience plc (Exact Name of Registrant as Specified in its Charter) Biosolutions Biosolutions includes over 700 biostimulants, innovative nutrition and biocontrol products. This portfolio is highly differentiated, primarily protected by trade secrets, and we expect this category to be a significant growth engine in the future. Our ability to offer both biosolutions and agrochemicals as part of one integrated crop solutions package is the foundation of our ProNutiva concept, and we believe this integrated approach is a significant part of our long-term strategy that differentiates us from our competitors. Product Line Products Highlights Biostimulants Biozyme #1 biostimulant in Mexican fruits and vegetables export market Approximately 20% biostimulant market share in Brazil in 2013 Atonik Strong growth in terms of gross profit, mainly driven by Central and Eastern Europe, with strong growth in Poland BM 86 10% market share in biostimulants in France by sales in 2013 and growing global presence BM Headset 10% market share in biostimulants used for rice in the United States in 2013 Innovative Nutrition Poliquel Range of products to provide tailored nutritional solutions for various crops Foltron Significant visible effect on plant growth and fruit quality after application Biocontrol Kasumin #1 bactericide in Brazil in 2012, produced from fermentation Vacciplant Derived from laminarin; stimulates the natural defense of plants with no residue Registered in 13 geographies, for 10 crops and for 12 diseases of various origins Carpovirusine Virus-based insecticide targeting codling moth and oriental fruit moth with 24 registrations globally Regional Our Regional portfolio includes a comprehensive range of over 4,000 products based on off-patent AIs that complement our GVAP and Biosolutions portfolios. By design, our Regional portfolio includes a wide range of off-patent agrochemicals because they enable us to accomplish several key strategic objectives: Create customized and comprehensive solutions that more effectively or completely address our customer needs; Achieve critical mass in important new markets; and Establish new grower relationships to promote our GVAP and Biosolutions portfolios. Complementary to our GVAP and Biosolutions portfolios, our Regional portfolio is an important component of our solutions-oriented strategy. In the markets in which we choose to compete, the breadth of our Regional portfolio allows us to tackle our customers challenges throughout the complete crop cycle. Ireland (State or Other Jurisdiction of Incorporation or Organization) (Company Number: 410477) Not Applicable (I.R.S. Employer Identification No.) Arysta LifeScience plc 5 George s Dock International Financial Services Centre Dublin 1, Ireland +353 (0)1 907 2731 (Address, including zip code, and telephone number, including area code, of Registrant s principal executive offices) Arysta LifeScience Management Company, LLC 383 Main Avenue Suite 603 Norwalk, Connecticut 06851 USA (Name, address, including zip code, and telephone number, including area code, of agent for service) Primary Market Products/AIs Category Highlights Latin America 2,4-D Herbicide Centerpiece of a strong and broad portfolio targeting the pasture market Tebuthiuron Herbicide Differentiated formulation for sugarcane Complementary product for amicarbazone Africa and the Pirimiphos Methyl Insecticide Product for public health and grain storage Middle East Terbuthylazine Herbicide Key product in maize combo pack offer, together with amicarbazone and mesotrine North America Fenhexamid Fungicide Specialty fungicide in high value horticulture sector Nutricote Fertilizer Controlled-release fertilizer primarily sold into the home and garden market Europe Cypermethrin Insecticide Broad-spectrum insecticide for use on many crops (e.g., cotton, fruits and vegetables) Chlorothalonil Fungicide Key product in the protection of fruits and vegetables, potatoes and peanuts Asia Prothiofos Insecticide Strong complementary offering to the acephate offering for fruits and vegetables in Japan Penoxsulam Herbicide Narrow-spectrum herbicide targeting weed control catering to the important rice market Our Strengths We believe that our competitive strengths, as outlined below, position us for strong and differentiated long-term growth relative to other companies in our industry. Serve an Attractive End Market with Strong Industry Fundamentals We focus on delivering crop solutions to growers. The crop protection market is supported by an ever-increasing need for higher crop yields and quality. We source and/or formulate and sell innovative agrochemical and biosolutions products to address the needs of growers around the world. According to Phillips McDougall, the agrochemical market has experienced a CAGR of 6.8% between 2003 and 2013. During the same time period, the off-patent agrochemical category (including non-crop applications), which includes proprietary off-patent products, has grown at a CAGR of 7.0% while the patented category (including non-crop applications) grew at 5.0% per annum. We believe the emerging biosolutions market has grown at an even higher rate, which we estimate to be approximately 15% per year over the past two years. In addition, our geographic exposure is heavily-weighted toward regions we believe are high-growth markets, with more than 65% of our sales in 2013 coming from Latin America, Africa and Middle East, Central and Eastern Europe, China and South Asia. We have significant leadership positions in certain key strategic markets, including a top five position in each of the Brazil pasture and soybean insecticides markets, and a number one position in the agrochemical market in several African countries, including South Africa. Copies to: Gregg A. Noel, Esq. Laura A. Kaufmann Belkhayat, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 Tel: (212) 735-3000 Arthur D. Robinson, Esq. John C. Ericson, Esq. Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, New York 10017 Tel: (212) 455-2000 *The registrant is currently an Irish private limited company named Arysta LifeScience Limited and will be converted into an Irish public limited company, or plc, prior to the completion of the offering. Approximate date of commencement of proposed sale to the public: As soon as practicable after effectiveness 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, 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. CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Proposed Maximum Aggregate Offering Price(1)(2) Amount of Registration Fee Ordinary shares, par value $0.01 per share $100,000,000 $12,880 (1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act. (2) Includes shares granted pursuant to the underwriters option to purchase additional shares. 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. Robust Portfolio of Value-Added Customer Solutions Our GVAP and Biosolutions portfolios support our global customer base across all regions. The products within these portfolios are generally protected by patents (which we primarily acquire or license from others), trade secrets, proprietary formulations and/or strong brands or registration positions that discourage new entrants. These products, along with their corresponding AIs, form the foundation of our ability to deliver innovative customer solutions. We have acquired or licensed the rights to over 900 patents to support our GVAP and Biosolutions products. We also actively pursue new product development, acquisitions and licensing opportunities for both portfolios. Our GVAP portfolio includes patented and proprietary off-patent herbicides, insecticides and fungicides, in addition to life sciences products. These products typically have leading market positions in target segments and differentiated profitability when compared to Regional products. An example is Select, based on clethodim, which was the number one global post-emergent grass herbicidal AI for use in oilseed crops, including soybeans, in 2012. Further, we have implemented our ProNutiva marketing concept, which combines agrochemical crop protection (utilizing products from our GVAP and Regional portfolios) with biosolutions to deliver integrated solutions that address a wider range of grower challenges, such as increasing crop yield and quality while minimizing chemical inputs which helps the grower meet growing public demand for food with lower chemical residues. For example, in Brazil we assembled a complete set of branded products to offer a through-the-season weed control solution for sugar cane centered on two GVAP products, Dinamic and Centurion, two complementary Regional products, Lava and Dizone, and a Biosolutions product, Biozyme. Our Biosolutions portfolio includes biostimulants, innovative nutrition and biocontrol products. Biosolutions have become a major focus of agronomic research and have the potential to drive greater improvements in crop yield and quality, including reduced residues, than those achieved by agrochemicals alone. While a number of large agrochemical participants have begun to develop capabilities in biosolutions, we believe that we are at the forefront of this sector with a leading presence in biostimulants and rapidly expanding offerings in innovative nutrition and biocontrol. We believe that our focus on biosolutions offers excellent long-term growth prospects. We have strengthened our position further in the biosolutions sector with our recent acquisition of Go mar, which provides us with over 40 years of scientific experience and reinforces our strong position in biostimulants. Through the combination of Go mar and our existing biostimulants platform, we believe we have the number two global position in biostimulants. We believe our leadership in biosolutions, combined with the strength of our GVAP and Regional portfolios, meaningfully enhances our ability to provide tailored solutions that anticipate and meet grower needs. Our ability to offer both agrochemicals and biosolutions as part of one integrated crop solutions package is the foundation of our ProNutiva concept, and we believe this integrated approach is highly differentiated relative to our competitors. Highly-Localized, Customer-Centric Agronomic Sales and Marketing Teams with Close-to-Grower Focus We employ a customer-centric sales and marketing force of over 1,300 professionals worldwide as of December 31, 2013 (approximately 46% of our employees). These professionals have strong technical expertise, local market knowledge and deep customer relationships. Our close-to-grower focus is a core component of our operating philosophy and generates robust knowledge of local grower needs. We use continuous feedback from our sales team in the field to anticipate grower needs, respond rapidly to changing market conditions and deliver customized, value-added solutions for our customers. We have the ability to identify and investigate specific unmet needs and draw on the full breadth of our GVAP, Biosolutions and Regional product portfolios to develop custom crop solutions. For example, based on grower feedback collected by our sales team, we launched Kasai-S, an innovative mixture of kasugamycin (a GVAP product) and tricyclazole (a Regional product) which is the first mixture of its kind introduced in Vietnam to control the growing panicle blast and leaf disease, which is becoming an increasing threat and challenge to rice growers in the region. This short and efficient feedback loop is an important source of new product ideas and helps guide our development focus and capital allocation decisions. We also take advantage of opportunities to provide growers with a tailored suite of solutions for their particular crops, applications and regions. We believe our extensive Regional product portfolio enables our local teams to be even more nimble, flexible and responsive to local and niche customer needs by supplying them with a broader range of AIs in a way that maximizes value to the grower. In addition, we place a heavy emphasis on providing valuable customer education and industry stewardship as an integral part of our sales and marketing efforts, further enhancing our grower relationships. Effective Centralized Marketing, Product Development and Registration Capabilities Our global marketing group works closely with our regional businesses, through globally managed category teams, to prioritize ideas for product development and to identify AI targets for licensing and acquisition. Global category teams include representation from all regions and operational functions, and define and implement the growth strategy associated with our GVAP and Biosolutions portfolios. Three global category teams are currently in place: Herbicides; Fungicides and Insecticides; and Biostimulants and Innovative Nutrition. Our global marketing team focuses on identifying opportunities to address unmet needs in attractive markets through the identification of AIs that can be effectively brought to market utilizing our development, regulatory, formulation and distribution capabilities. We do not engage in AI discovery in agrochemicals and our robust pipeline of agrochemical growth projects focuses on opportunities for development of new products based on acquired, licensed, or off-patent AIs. Our global marketing team is engaged in each step of bringing a product to market. Upon identifying (and if necessary, acquiring or licensing) a key target AI and generating ideas for innovative new products, the team works closely with all of our operational functions such as our registration, legal and supply chain teams to efficiently develop and commercialize the new products. Our product development capabilities are supported by our specialized and experienced regulatory team, which has a strong and successful track record of obtaining registrations expeditiously to support our product strategy. We hold over 3,600 registrations in over 100 countries and obtained 155 new registrations in 2013. Highly Flexible, Asset-Light Supply Chain Model We have established a nimble and integrated supply chain with the capability to source materials from over 800 suppliers in different markets to create a cost-effective and reliable supply chain and utilize a balanced mix of toll and in-house formulation capacities. We engage in virtually no direct agrochemical AI manufacturing. Instead, we purchase agrochemical AIs from third-party manufacturing partners and, when feasible, complete differentiated formulations close to the point of delivery. Our team carefully selects third-party supplier partners and our technical personnel work closely on the ground with our partners to further monitor their processes and ensure that our quality requirements are met and that controls are in place. We believe this approach provides us with a competitive advantage in terms of cost, product quality and reliability. We carefully manage our supplier base, aiming to avoid single-source supply for any individual raw material, which allows us to maintain favorable supplier terms and conditions while helping insulate us against supply disruptions caused by raw material unavailability, weather, natural disasters, work stoppages and other factors. We have increased our percentage of materials sourced from countries with generally low manufacturing costs, principally China and India, from 25% in 2010 to 57% in 2013, while maintaining our high standards of product quality. We also continue to work on supply chain efficiencies in sourcing and procurement, manufacturing and logistics. Our outsourcing model allows us to optimize our cost structure by reducing fixed costs which provides us with flexibility to adapt quickly to market changes. Additionally, we believe our model allows us to reduce capital expenditure requirements and lower our exposure to utilization drop-offs, facility closures, and certain manufacturing-related environmental risks. Diversified, Well Balanced Business Mix; Highly Resilient Throughout Cycles We have a highly diversified business mix that is well balanced across regions, crops, products and customers. No single customer accounted for more than 2% of our total sales in 2013. With the exception of soybeans, which we believe represented 15% to 20% of our total sales, no single crop accounted for more than 10% of our total sales in 2013. Our diversified geographic mix limits our exposure to any single region or country and reduces exposure to weather risk while providing a balance to the natural seasonality in our business. For example, in 2012, the adverse impact of the North American drought was partially offset by better-than-expected growth in Brazil. In 2013, 39% of our segment sales were in Latin America; 19% in Africa and Western Europe; 12% in North America; 15% in Japan and Central/Eastern Europe; and 14% in China, South Asia and our Life Sciences business. Our significant business diversification also creates a resilient business profile with considerable stability throughout economic cycles. During the last industry downturn from 2008 through 2010, coinciding with the global financial crisis, we were able to grow our consolidated segment income and expand margins by 175 basis points, or bps (based on the JGAAP financial results of our Japanese subsidiary, Arysta Corporation). For a definition of Arysta Corporation s consolidated segment income, please see Selected Consolidated Financial Data Selected Unaudited Consolidated Financial Data of Arysta Corporation (in accordance with JGAAP). This was primarily driven by our highly targeted market strategy which reduced our reliance on broad-based commodity products (notably, glyphosate). Despite the broader downturn, we were able to continue growing in the selected regions, crops and products in which we chose to compete. For example, the ten most common AIs industry-wide (including glyphosate) contributed less than 10% of our revenues in 2013 versus an industry average of 23%. We believe our resilience throughout economic cycles is further supported by our lower fixed cost structure due to our asset-light production model and a flexible supply chain strategy that enables us to reduce procurement costs. Experienced Management Team Our current senior management team has overseen a strong track record of growth and profitability. Our Chief Executive Officer, Wayne Hewett, joined Arysta in 2009 with a mandate to further our efforts to drive global operational excellence and to execute our growth plan and Company-wide initiatives. Since 2009: we increased segment sales in Latin America and Africa, our key target regions, excluding currency impacts, by 20% and 8%, respectively, from 2012 through 2013 on an IFRS basis (see Management s Discussion and Analysis of Financial Condition and Results of Operations of the Company Results of Operations Segment Results Segment sales ); we increased segment sales in Latin America and Africa, excluding currency impacts, by 54% and 45%, respectively, from 2009 through 2012 on a JGAAP basis (see Supplemental Management s Discussion and Analysis of Financial Condition and Results of Operations of Arysta Corporation Segment Results Trends Segment sales ); we grew consolidated segment income, excluding currency impacts, by 10% from 2012 through 2013 on an IFRS basis (see Management s Discussion and Analysis of Financial Condition and Results of Operations of the Company Segment Results Segment income ); we grew consolidated segment income, excluding currency impacts, by 35% from 2009 through 2012 on a JGAAP basis (see Supplemental Management s Discussion and Analysis of Financial Condition and Results of Operations of Arysta Corporation Segment Results Trends Segment income ); we expanded our GVAP portfolio organically, through multiple growth initiatives, and through strategic global licensing transactions such as fluoxastrobin in 2012 and tetraconazole in 2013; we expanded our Biosolutions platform both organically and through multiple licensing deals and the acquisition of Go mar in 2014; and 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 Preliminary Prospectus dated September 9, 2014 PROSPECTUS Shares Arysta LifeScience plc Ordinary Shares This is Arysta LifeScience plc s initial public offering. We are selling of our ordinary shares. We expect the public offering price to be between $ and $ per share. No public market currently exists for the ordinary shares. We intend to apply to list the ordinary shares on the New York Stock Exchange under the symbol ARYS. Investing in the ordinary shares involves risks that are described in the Risk Factors section beginning on page 18 of this prospectus. Per Share Total Public offering price $ $ Underwriting discount(1) $ $ Proceeds, before expenses, to us $ $ we centralized our global core competencies, such as supply chain and marketing and drove best practices through the global organization. The heads of our business units are comprised of industry veterans with significant industry experience, as well as experience in successfully completing and integrating acquisitions, and those skills are complemented by strong functional expertise from varied management roles prior to Arysta. Our management team has both deep knowledge of country-specific regulatory processes and requirements and a higher level of global coordination across regions that we believe differentiates us in our industry. Our Strategy Continue to Develop Leadership in Innovative, Customer-Centric Solutions We seek to enhance growth and profitability through a differentiated solutions-oriented approach supported by our GVAP, Biosolutions and Regional portfolios. We intend to leverage our strong relationships with growers and distributors, as well as our centralized capabilities in portfolio development, marketing, licensing, formulation and registration, to develop products that anticipate and satisfy growers needs. We believe we are at the forefront of innovation in the biosolutions business where we can use our expertise to develop solutions for new and emerging issues in the agricultural industry. We will continue to apply our expertise in both conventional crop chemistry and biosolutions through our ProNutiva concept which we recently introduced. ProNutiva combines agrochemical crop protection (utilizing products from our GVAP and Regional portfolios) with biosolutions to deliver integrated solutions that address a wide range of grower challenges. Our ability to leverage a broad agrochemical product portfolio in combination with market-leading biosolutions products (in twin packs or premix formulations) enables us to provide differentiated solutions to optimize yield and crop quality, often with lower chemical residues. Selective, Highly Targeted Market Participation We intend to continue employing a selective, highly targeted market participation strategy that we believe is fundamental to our historic and future success. We are highly focused on targeting crops, regions, products and combinations thereof that we believe offer the best opportunities for sustained growth and profitability. Our key criteria for evaluating market opportunities include the potential to enhance our long-term growth and margin profile, as well as the potential for near-term earnings and our ability to leverage our competitive strengths to obtain a profitable leadership position. Our process aims to balance crop market outlook with a selection of geographies and markets that complement our existing strengths and offer attractive financial returns. We expect to continue to make new investments in products and end markets that we believe will result in strong future performance. We constantly monitor and evaluate our portfolio to ensure that it remains differentiated and focused on selected opportunities, while managing exposure to high-volume, low-margin products. As a result of our selective market participation strategy, we are significantly less reliant than many of our competitors on broad-based commodity agrochemicals where purchasing decisions are primarily driven by price and where we would have limited opportunities to differentiate our offerings. Continued Focus on High-Growth Markets We focus on maintaining a strong presence in markets we believe are poised for rapid growth. As we continue to build our business platform in those regions, we expect continued growth and enhanced profitability over time. We believe our sales force has the ability to generate increasing demand through customer education as we leverage our customer relationships to offer growers a wide range of value-added products and solutions. In addition, we expect to experience benefits of scale from additional sales volume. Our high-growth market strategy focuses on countries and crops where we see attractive market fundamentals and where our strengths in marketing, portfolio development, registration and customer education can add value for growers. (1) See Underwriting for a description of the compensation payable to the underwriters. The underwriters may also exercise their option to purchase up to an additional ordinary shares from us, at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus, solely to cover over-allotments. 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 ordinary shares will be ready for delivery on or about , 2014. Morgan Stanley J.P. Morgan Citigroup Deutsche Bank Securities HSBC Nomura Jefferies Piper Jaffray Macquarie Capital Rabo Securities The date of this prospectus is , 2014. We substantially increased the proportion of our sales derived from high-growth markets (Latin America, Africa, the Middle East, Central and Eastern Europe, China and South Asia) to over 65% in 2013, driven by sales growth during the period. In Africa, we believe we have one of the largest local presences among global agrochemical companies, with over 90 retail locations owned or operated through partnerships. We have leading positions in several key countries, including South Africa, Ivory Coast, Burkina Faso and Mozambique, which creates a significant competitive advantage for growing our business on the continent. Additionally, we have strong market positions in selected countries in Central and Eastern Europe (Poland, Hungary) and South Asia (Vietnam, Myanmar) as well as select key categories in Brazil, Mexico, Colombia and Chile. Maintain Open-Innovation Model and Continue Selective Acquisition Strategy We are focused on constant innovation and development of new products to enhance our portfolio and presence in key markets. Within the agrochemicals space, we focus on developing our portfolio of AIs through selective acquisitions and licensing of proprietary and proven AIs that are complementary to our portfolio and that can enhance our market access. This approach allows us to leverage our core strengths and optimize research and development expenditures, as well as to reduce the economic risks of failed AI discovery. We are also able to accelerate product development by gaining access to already established AIs (preferably at an early stage), technologies and know-how through acquisitions and licenses. Our focus on product acquisitions and licensing has intensified in recent years and we have acquired or licensed more than six important agrochemical AIs since 2012. For example, our license of fluoxastrobin has meaningfully added to our gross profit in 2013 through cost savings and the global expansion of our sale of the molecule, and has led to over 30 registration submissions since 2012. Within the biosolutions space, we believe there is significant untapped potential for discovery of new AIs and technologies addressing currently unmet needs, while the research and development costs and time to market are significantly lower than in agrochemicals. We believe we are an innovation leader in biosolutions, having been active in the industry, directly or through acquisitions, for over 40 years. Our biosolutions AI research and development capabilities were further enhanced by our recent acquisition of Go mar in 2014. We intend to continue to leverage this expertise to develop new biosolutions products and will continue to evaluate and pursue additional acquisition opportunities that will further enhance our position. Additionally, we intend to continue to pursue selective market-access acquisitions intended to serve as gateways to enter new markets where we can leverage our GVAP, Biosolutions and Regional portfolios across market relationships.
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+S-1/A 1 d781983ds1a.htm PRE-EFFECTIVE AMENDMENT NO. 2 TO FORM S-1 Pre-Effective Amendment No. 2 to Form S-1 Table of Contents As filed with the Securities and Exchange Commission on November 6, 2014 Registration No. 333-198702 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 PRE-EFFECTIVE AMENDMENT NO. 2 TO THE FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Ben Franklin Financial, Inc. (Exact Name of Registrant as Specified in Its Charter) Maryland 6712 61-1746204 (State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Incorporation or Organization) Classification Code Number) Identification Number) 830 East Kensington Road Arlington Heights, Illinois 60004 (847) 398-0990 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant s Principal Executive Offices) Mr. C. Steven Sjogren Chairman, President and Chief Executive Officer 830 East Kensington Road Arlington Heights, Illinois 60004 (847) 398-0990 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Copies to: Kip Weissman, Esq. Michael Brown, Esq. Luse Gorman Pomerenk & Schick, P.C. 5335 Wisconsin Avenue, N.W., Suite 780 Washington, D.C. 20015 (202) 274-2000 Daniel C. McKay, II Jennifer Durham King Vedder Price 222 North LaSalle Street Chicago, Illinois 60601 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 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 shares 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. 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 Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company CALCULATION OF REGISTRATION FEE Title of each class of securities to be registered Amount to be registered Proposed maximum offering price per share Proposed maximum aggregate offering price Amount of registration fee Common Stock, $0.01 par value per share 998,488 shares $10.00 $ 9,984,880 (1) $ 1,287 (2) (1) Estimated solely for the purpose of calculating the registration fee. (2) 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 Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Table of Contents TABLE OF CONTENTS Page SUMMARY 1
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+S-1/A Table of Contents INTRODUCTION On September 8, 2014, Old Remy and FNF, the beneficial owner of approximately 51.1% of the common stock of Old Remy, announced a transaction involving the distribution of Old Remy shares owned by FNF and the outstanding units of Imaging to the holders of its FNFV Group common stock (a separate class of FNF stock that tracks selected assets of FNF) and the acquisition by a new holding company of Old Remy and Imaging. This transaction involves the following steps: FNF will contribute all of its shares in Old Remy, together with all of the outstanding units of Imaging, to New Remy (the contribution ); shares of New Remy will be distributed as a dividend to holders of the FNFV Group common stock (the spin-off and, together with the contribution, the restructuring ); and Old Remy and New Remy will merge with, and continue their existence as, wholly-owned subsidiaries of New Holdco, a newly-formed holding company established in connection with the transactions (collectively, the mergers ). We refer to the restructuring and the mergers collectively as the transactions. The terms of the restructuring and mergers are set forth in the merger agreement and reorganization agreement, respectively, which are each described in this prospectus. In the spin-off, each share of FNFV Group common stock as of the record date for the spin-off will entitle its holder to one share of New Remy common stock. Each share of New Remy common stock outstanding will immediately thereafter be converted into the right to receive in the mergers a number of shares of New Holdco common stock determined by a formula based on the number of shares of New Remy common stock outstanding at the effective time of the New Remy merger. Based on the number of shares of FNFV Group common stock outstanding as of November 24, 2014, we expect the exchange ratio to be approximately 0.17879 shares of New Holdco common stock for each share of New Remy common stock. As a result, holders of FNFV Group common stock will hold approximately 51.5% of the common stock of New Holdco outstanding immediately following the mergers. Because the shares of New Remy will immediately be converted into shares of New Holdco, this prospectus describes the business, management, compensation and capital stock of New Holdco. If you have any questions regarding the spin-off, you can contact FNF prior to the spin-off and New Holdco following the spin-off, each at the contact information listed below. Fidelity National Financial, Inc. 601 Riverside Drive Jacksonville, Florida 32204 Telephone: (904) 854-8100 Attention: Corporate Secretary Remy International, Inc. 600 Corporation Drive Pendleton, Indiana 46064 Telephone: (765) 778-6602 Attention: Corporate Secretary Table of Contents SUMMARY This summary highlights selected information from this document and may not contain all of the information that is important to you. To understand the restructuring, the mergers and other transactions more fully and for a more complete description of the legal terms of the transactions, you should read carefully this entire document. Except as otherwise indicated or the context otherwise requires, the information included in this prospectus assumes the completion of the spin-off and the mergers. The Companies Remy International, Inc. Remy International, Inc. 600 Corporation Drive Pendleton, Indiana 46064 Telephone: (765) 778-6499 Remy International, Inc., which we refer to as Old Remy, is a leading global vehicular parts designer, manufacturer, remanufacturer, marketer and distributor of aftermarket and original equipment electrical components for automobiles, light trucks, heavy-duty trucks and other vehicles. It conducts substantially all of its operations through subsidiaries. Old Remy sells its products worldwide primarily under the Delco Remy , Remy , World Wide Automotive , and USA Industries brand names and its customers' widely recognized private label brand names. Old Remy's products include new and remanufactured, light-duty and heavy-duty starters and alternators for both original equipment and aftermarket applications, hybrid power technology, and multi-line products, such as constant velocity ( CV ) axles, disc brake calipers, and steering gears. These products are principally sold or distributed to original equipment manufacturers ( OEMs ) for both original equipment manufacture and aftermarket operations, as well as to warehouse distributors and retail automotive parts chains. Old Remy sells its products principally in North America, Europe, Latin America and Asia-Pacific. Old Remy is one of the largest producers in the world of remanufactured starters and alternators for the aftermarket. Old Remy was incorporated in the State of Delaware in 1993 and on December 13, 2012 it completed its initial public offering and became a publicly traded company under the ticker symbol REMY . Fidelity National Financial, Inc. Fidelity National Financial, Inc. 601 Riverside Avenue Jacksonville, Florida 32204 Telephone: (904) 854-8100 Fidelity National Financial, Inc., which we refer to as FNF, is a leading provider of title insurance, technology and transaction services to the real estate and mortgage industries. FNF is organized into two groups, FNF Core Operations and Fidelity National Financial Ventures ( FNFV ). FNF is the nation s largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title and Alamo Title - that collectively issue more title insurance policies than any other title company in the United States. FNF also provides industry-leading mortgage technology solutions and transaction services, including MSP , the leading residential mortgage servicing technology platform in the U.S., through its majority-owned subsidiaries, Black Knight Financial Services, LLC and ServiceLink Holdings, LLC. In addition, it owns majority and minority equity investment stakes in a number of entities, including Old Remy, Imaging, American Blue Ribbon Holdings, LLC, J. Alexander s, LLC, Ceridian HCM, Inc., Comdata Inc. and Digital Insurance, Inc. On June 30, 2014, following a restructuring, FNF issued a tracking stock to FNF stockholders on a pro rata basis (the FNFV Group common stock ) to track and reflect the performance of the portfolio company investments. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________ AMENDMENT No. 2 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ___________________________ New Remy Corp. (Exact name of registrant as specified in its charter) Delaware (State or Other Jurisdiction of Incorporation or Organization) 3714 (Primary Standard Industrial Classification Code Number) 47-2022310 (I.R.S. Employer Identification No.) 601 Riverside Avenue Jacksonville, Florida 32204 (904) 854-8100 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) ____________________________ Michael L. Gravelle Executive Vice President, General Counsel and Corporate Secretary New Remy Corp. 601 Riverside Avenue Jacksonville, Florida 32204 Tel. (904) 854-8100 (Name, address, including zip code, and telephone number, including area code, of agent for service) ____________________________ Copies to: Michael J. Aiello Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10154 (212) 310-8000 John J. Pittas Remy International, Inc. 600 Corporation Drive Pendleton, IN 46064 (765) 778-6499 Robert S. Rachofsky Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, NY 10019 (212) 728-8000 Approximate date of commencement of proposed sale to public: As soon as practicable after this Registration Statement becomes effective and the satisfaction of all other conditions to the completion of the transactions described in the enclosed document have been satisfied or waived. 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, 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 Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer x (Do not check if a smaller reporting company) Smaller reporting company Table of Contents QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS Set forth below are commonly asked questions about the spin-off, the mergers and the transactions contemplated thereby. You should read the sections entitled The Transactions and The Transaction Agreements of this prospectus for a more detailed description of the matters described below. Q. What are the transactions described in this document? A. Old Remy and FNF, the beneficial owner of approximately 51.1% of the outstanding common stock of Old Remy, have entered into a transaction involving the distribution of Old Remy shares held by FNF to the holders of its FNFV Group common stock (a separate class of FNF stock that tracks selected assets of FNF), together with a small company, Fidelity National Technology Imaging, LLC, which we refer to as Imaging. This transaction involves the following steps: FNF will contribute all of its shares in Old Remy, together with all of the outstanding units of Imaging, to a newly formed corporation, New Remy Corp., which we refer to as New Remy (the contribution ); shares of New Remy will be distributed as a dividend to holders of the FNFV Group common stock (the spin-off and, together with the contribution, the restructuring ); and Old Remy and New Remy will merge with, and continue their existence as, wholly-owned subsidiaries of New Remy Holdco Corp., which we refer to as New Holdco, a newly-formed holding company established in connection with the transactions (collectively, the mergers ). We refer to the restructuring and mergers collectively as the transactions. The terms of the restructuring and mergers are set forth in the merger agreement and reorganization agreement, respectively, which are each described in this prospectus. Q: What is New Remy? A: New Remy is a wholly-owned subsidiary of FNF, newly formed for the purpose of effecting the transactions. Prior to the contribution, New Remy will have no assets. Following the contribution, New Remy will own all of the Old Remy common stock beneficially owned by FNF and all of the outstanding units of Imaging. Q: What will I receive in the transactions? A: Each share of FNFV Group common stock as of the record date for the spin-off will entitle its holder to receive one share of New Remy common stock. As of November 24, 2014, there were 92,934,470 shares of FNFV Group common stock outstanding. Each share of New Remy common stock outstanding will immediately thereafter be converted into the right to receive a number of shares of New Holdco based on the New Remy exchange ratio. Therefore, based on the number of outstanding shares of FNFV Group common stock as of November 24, 2014, it is currently estimated that New Remy stockholders will be entitled to receive approximately 0.17879 shares of New Holdco common stock for each share of New Remy common stock that they own. If there are fewer shares of FNFV Group common stock outstanding on the record date for the Spin-off, the New Remy exchange ratio will be higher. The New Remy exchange ratio is obtained by dividing the sum of (i) 16,342,508 (which is equal to the number of outstanding shares of Old Remy beneficially owned by FNF) and (ii) 272,851 (the number of shares of New Holdco to be issued in respect of the contribution of the Imaging business), by the number of shares of New Remy common stock outstanding as of the effective time of the New Remy merger, rounded to the nearest five decimal places and subject to adjustment for payment of cash in lieu of fractional shares. See The Transaction Agreements - The Merger Agreement-New Remy Exchange Ratio for details on the calculation. As a result of the mergers, Old Remy stockholders (other than New Remy) will be entitled to receive one share of New Holdco common stock for each share of Old Remy common stock that they own. See The Transaction Agreements - The Merger Agreement-Old Remy Exchange Ratio . Table of Contents Fidelity National Technology Imaging, LLC Fidelity National Technology Imaging, LLC 601 Riverside Avenue Jacksonville, Florida 32204 Telephone: (904) 854-8100 Fidelity National Technology Imaging, LLC, which we refer to as Imaging, is an indirect wholly-owned subsidiary of FNF, and is a provider of document conversion, indexing and redaction services supporting government and private industries. Imaging is headquartered in San Jose, CA. New Remy Holdco Corp. New Remy Holdco Corp. 601 Riverside Avenue Jacksonville, Florida 32204 Telephone: (904) 854-8100 New Remy Holdco Corp., which we refer to as New Holdco, is a newly-formed corporation that was organized in the State of Delaware on August 27, 2014 for the purpose of holding shares of Old Remy and New Remy following the mergers and serving as the new public company parent of Old Remy. Following the transactions, New Holdco will be renamed Remy International, Inc. and its common stock will be listed on NASDAQ under the ticker symbol REMY . New Remy Corp. New Remy Corp. 601 Riverside Avenue Jacksonville, Florida 32204 Telephone: (904) 854-8100 New Remy Corp., which we refer to as New Remy, is a wholly-owned subsidiary of FNF. New Remy was organized in the State of Delaware on August 27, 2014 for the purpose of holding shares of Old Remy and Imaging and effecting the transactions. New Remy Merger Sub, Inc. and Old Remy Merger Sub, Inc. New Remy Merger Sub, Inc. and Old Remy Merger Sub, Inc., which we refer to as Merger Sub One and Merger Sub Two respectively, are newly-formed corporations that were organized in the State of Delaware on August 27, 2014 for the purpose of effecting the transactions. The Transactions (see page 29) The Restructuring (see page 29) Pursuant to the reorganization agreement, FNF will engage in a series of corporate transactions (the restructuring ), including the following: FNF will cause its subsidiaries to effect a series of distributions such that, following such distributions, FNF will directly own all of the outstanding Imaging units and the Old Remy shares currently owned by it; FNF will contribute to New Remy (i) all of the Old Remy shares owned by FNF and (ii) all of the Imaging units, in exchange for 100% of the shares of New Remy common stock (the contribution ); and immediately prior to the consummation of the mergers, FNF will cause all of the shares of New Remy to be distributed pro rata to the holders of the FNFV Group common stock (the spin-off ). The Contribution. FNF currently indirectly owns Old Remy common stock representing approximately 51.1% of the outstanding shares of Old Remy, as well as all of the outstanding units in Imaging. In order to effect the spin-off of these interests to FNFV Group stockholders, FNF will cause these interests to be contributed to New Remy prior to 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 Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Table of Contents Q: What are the reasons for the transactions? A: FNF s principal purposes and reasons for the transactions are: the transactions should enable holders of FNFV Group common stock to receive shares of New Holdco in a manner that is generally tax-free to them; the transactions will significantly increase the float and trading liquidity in Old Remy s common stock; the FNF board believes that a completely independent Old Remy with a fully-distributed common stock will better enable Old Remy to pursue its strategic plans and create additional long-term value for Old Remy stockholders; the transactions should eliminate the overhang and potential price disruptions in Old Remy s common stock which could arise as a result of a controlling stockholder selling stock over a period of time; the transactions will eliminate potential limitations arising from a controlling stockholder s right to veto proposals by Old Remy to issue common stock for purposes of funding strategic acquisitions or management compensation plans, if stockholder approval thereof would be required under NASDAQ rules; and the transactions should attract new stockholders and research analysts to Old Remy. Q: Who will control New Holdco after the transactions? A: Although FNF holds a controlling interest in the shares of Old Remy today, immediately following the transactions FNF will no longer hold a controlling interest in the shares of Old Remy, and it is not expected that any person or group will hold a controlling interest in New Holdco. Q: What stockholder approvals are needed? A: No vote of FNF or FNFV stockholders of any class is required, or is being sought, in connection with the transactions. New Remy stockholders are not being requested to vote on the transactions, which will have already been approved by FNF as the sole stockholder of New Remy prior to the spin-off. However, the mergers cannot be completed unless the merger agreement is adopted by the affirmative vote of holders of a majority of the outstanding shares of Old Remy common stock. Pursuant to the merger agreement, FNF has agreed to cause all shares of Old Remy common stock beneficially owned by it, currently representing approximately 51.1% of the outstanding shares of Old Remy common stock, to be voted in favor of the adoption of the merger agreement. As a result, approval of the adoption of the merger agreement and the transactions contemplated thereby is assured. Q: What should FNFV Group stockholders do now? A: FNFV Group stockholders should carefully read this prospectus, which contains important information on the spin-off, the merger, New Remy and New Holdco. FNFV Group stockholders are not required to take any action to approve the spin-off, the mergers or any of the transactions contemplated thereby. No action will be required of you to receive shares of common stock of New Remy in the spin-off or the shares of New Holdco common stock issued in exchange therefor in the mergers. You will not be required to pay for the New Remy common stock that you receive in the spin-off, or the New Holdco common stock issued on the conversion thereof in the mergers, and you do not need to surrender or exchange any shares of your FNF or FNFV Group common stock in order to receive the New Remy common stock or New Holdco common stock, or take any other action in connection with the spin-off or mergers. Q: Has FNF set a record date for the distribution of New Remy shares in the spin-off? A: No. FNF will publicly announce the record date when it has been determined. This announcement will be made prior to completion of the spin-off and the mergers. Table of Contents the spin-off in exchange for all of the shares of New Remy common stock. As a result, following the contribution, New Remy will own all of the shares of Old Remy common stock beneficially owned by FNF and the Imaging business. The Spin-Off. Immediately prior to the mergers, FNF will distribute all of the shares of New Remy common stock held by FNF on a pro rata basis to all of the holders of FNFV Group common stock. Each share of FNFV Group common stock outstanding on the record date for the spin-off will entitle its holder to receive one share of New Remy common stock. FNF has not yet set the record date for the spin-off. FNF will publicly announce the record date when it has been determined, which will be prior to completion of the spin-off and the mergers. The distribution of shares will be made to a third party exchange agent in book-entry form for the benefit of the holders of the FNFV Group common stock. After giving effect to the restructuring, New Remy, which will be 100% owned by holders of the FNFV Group common stock, will own all of the Old Remy common stock beneficially owned by FNF prior to the restructuring and all of the outstanding units in Imaging. Immediately thereafter, each share of New Remy common stock will be converted into a right to receive a number of shares of New Holdco common stock. See -The Mergers below. The Mergers (see page 30) Upon satisfaction or waiver of each of the conditions to the merger agreement and immediately after the spin-off, Merger Sub One will merge with and into New Remy (the New Remy merger ). In the New Remy merger, each outstanding share of New Remy common stock (other than shares owned by New Remy) will be exchanged for a number of shares of New Holdco common stock equal to the quotient of (i) the sum of (A) 16,342,508 (the number of shares of Old Remy common stock currently beneficially owned by FNF) and (B) 272,851 (the number of shares of New Holdco to be issued in respect of the contribution of Imaging), divided by (ii) the number of outstanding New Remy shares as of the effective time of the New Remy merger, rounded to the nearest five decimal places and subject to adjustment for the payment of cash in lieu of fractional shares. Upon satisfaction or waiver of each of the conditions to the merger agreement and immediately following the New Remy merger, Merger Sub Two will merge with and into Old Remy (the Old Remy merger , and together with the New Remy merger, the mergers ). In the Old Remy merger, each outstanding share of Old Remy common stock (other than shares owned by Old Remy and New Remy) will be exchanged for one share of New Holdco common stock. Conditions to Completion of the Transactions (see page 42) Consummation of the mergers is subject to the satisfaction of certain conditions, including, among others: consummation of the restructuring, including the spin-off, in accordance with the reorganization agreement; the obtaining of the requisite approval by the Old Remy stockholders; the receipt of required regulatory approvals and third party consents; the SEC declaring effective the registration statement of New Remy on Form S-1, of which this prospectus forms a part, in connection with the spin-off and the registration statement of New Holdco on Form S-4; the shares of New Holdco common stock deliverable to certain stockholders of New Remy and Old Remy having been approved for listing on NASDAQ; each party s compliance in all material respects with its obligations under the merger agreement; no event or circumstance shall have occurred that has or would reasonably have a material adverse effect on New Remy or Old Remy; and receipt of a tax opinion from Willkie Farr & Gallagher LLP to the effect that the mergers will be treated for federal income tax purpose as a tax-free exchange described in section 351 of the Code and a tax opinion from Deloitte Tax LLP to the effect that the New Remy Merger will qualify as a tax-free reorganization under Section 368 of the Code. The information in this prospectus is not complete and may be changed. We may not issue 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 November 25, 2014 PRELIMINARY PROSPECTUS 92,934,470 shares New Remy Corp. Common Stock (par value $0.0001 per share) This prospectus is being furnished in connection with the planned distribution by Fidelity National Financial, Inc. ( FNF ) on a pro rata basis to the holders of its Fidelity National Financial Ventures ( FNFV ) Group common stock of all of the outstanding shares of its wholly-owned subsidiary New Remy Corp. ( New Remy ), which will hold all of the shares in Remy International, Inc. ( Old Remy ) beneficially owned by FNF and all of the outstanding units in Fidelity National Technology Imaging, LLC ( Imaging ). We refer to such distribution as the spin-off . We expect that, immediately following the spin-off, New Remy and Old Remy will each merge with wholly-owned subsidiaries of New Remy Holdco Corp. ( New Holdco ), with New Remy and Old Remy surviving such mergers as wholly-owned subsidiaries of New Holdco. We refer to such mergers as the New Remy merger and the Old Remy merger respectively and together as the mergers . Promptly following the mergers, New Holdco will change its name to Remy International, Inc. Each share of FNFV Group common stock outstanding as of 5:00 p.m., New York City time, on the record date for the spin-off (the record date ), which has not yet been determined and FNF will publicly announce prior to the completion of the spin-off and the mergers, entitle its holder to receive one share of New Remy common stock. The distribution of shares will be made to a third party exchange agent in book-entry form for the benefit of the holders of FNFV Group common stock. Immediately following the spin-off, as consideration for the New Remy merger, each share of New Remy common stock will be converted into the right to receive a number of shares of New Holdco common stock determined by a formula based on the number of shares of New Remy common stock outstanding at the effective time of the New Remy merger. Based on the number of shares of FNFV Group common stock outstanding as of November 24, 2014, we expect the exchange ratio to be approximately 0.17879 shares of New Holdco common stock for each share of New Remy common stock. As a result, holders of FNFV Group common stock will hold approximately 51.5% of the common stock of New Holdco outstanding immediately following the mergers. New Holdco has applied to have its common stock listed on the NASDAQ Global Select Market ( NASDAQ ) under the symbol REMY , which is Old Remy s current trading symbol. We expect that the spin-off should be tax-free to holders of FNFV Group common stock for U.S. federal income tax purposes. FNF does not require, and is not seeking, the approval of the holders of FNF or the FNFV Group common stock in connection with the spin-off or the mergers. Old Remy is seeking the approval of its stockholders for the Old Remy merger and approval by Old Remy stockholders is required for the mergers to take place. No action will be required of you to receive shares of common stock of New Remy in the spin-off or the shares of New Holdco common stock issued in exchange therefor immediately following the spin-off, which means that: you will not be required to pay for the New Remy common stock that you receive in the spin-off or the New Holdco common stock that you receive in the mergers; and you do not need to surrender or exchange any of your FNF or FNFV Group shares in order to receive the New Remy common shares, or take any other action in connection with the spin-off. In reviewing this prospectus, you should carefully consider the matters described under Risk Factors beginning on page 10 of this prospectus for a discussion of certain factors that should be considered by recipients of the New Remy common stock. Table of Contents Q: When will the transactions occur? A: The transactions are expected to close in December 2014 or in the first quarter of 2015. Q: What will happen to the listing of shares of FNFV Group common stock? A: Nothing. FNFV Group common stock will continue to be traded on the New York Stock Exchange under the symbol FNFV . Q: Will the spin-off affect the trading price of my shares of FNFV Group common stock? A: Yes. We expect the trading price of FNFV Group common stock immediately following the spin-off to be lower than immediately prior to the spin-off because the trading price will no longer reflect the value of Old Remy or Imaging, which are being spun-off through the distribution of New Remy shares. Furthermore, until the market has fully analyzed the value of the FNFV Group common stock without Old Remy or Imaging, the price of FNFV Group common stock may fluctuate. Q: What if I want to sell my shares of FNFV Group common stock or my shares of New Holdco common stock? A: You should consult with your financial advisors, such as your stockbroker, bank or tax advisor. None of FNF, New Holdco or New Remy makes any recommendations on the purchase, retention or sale of FNFV Group common stock or the New Holdco common stock to be distributed immediately following the transactions. If you decide to sell any shares before the spin-off, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your FNFV Group common stock or the New Holdco common stock you will receive immediately following the transactions. If you own FNFV Group common stock as of 5:00 p.m., New York City time, on the record date, which has not yet been determined, and sell those shares up to and including the distribution date, you will still receive the New Remy common stock, and the New Holdco common stock issued upon conversion thereof in the mergers, that you would be entitled to receive in respect of the FNFV Group common stock you owned as of 5:00 p.m., New York City time on the record date. Q: How will FNF distribute our shares of New Remy common stock? A: The distribution of New Remy common stock will be made to a third party exchange agent in book-entry form for the benefit of the holders of FNFV Group common stock. Immediately following the spin-off, as consideration for the New Remy merger, each share of New Remy common stock will be converted into the right to receive a number of shares of New Holdco common stock determined by a formula based on the number of shares of New Remy common stock outstanding at the effective time of the New Remy merger. At the effective time of the New Remy merger, New Remy will instruct the exchange agent to make book-entry credits for the shares of New Holdco common stock that you are entitled to receive. Since shares of New Holdco common stock will be in uncertificated book-entry form, you will receive share ownership statements in place of physical share certificates. See The Transactions-Exchange of Old Remy and New Remy Shares . Q: What are the U.S. federal income tax consequences to me of the spin-off? A: The spin-off is conditioned upon the receipt by FNF of the opinion of Deloitte Tax LLP ( Deloitte ), tax advisor to FNF, to the effect that the contribution and the spin-off should qualify as a tax-free reorganization under Sections 368(a) and 355 of the Code and a distribution to which Sections 355 and 361 of the Code applies. Accordingly, FNF and holders of FNFV Group common stock generally should recognize no gain or loss with respect to the spin-off. The opinion will be based upon various factual representations and assumptions, as well as certain undertakings made by FNF, New Remy, and Old Remy. Any inaccuracy in the representations or assumptions upon which such tax opinion is based, or failure by FNF, New Remy, or Old Remy to comply with any undertakings made in connection with such tax opinion, could alter the conclusions reached in such opinion. Opinions with respect to these matters are not binding on the IRS or the courts. As a result, the conclusions expressed in these opinions could be challenged by the IRS and a court could sustain such a challenge. You should note that FNF does not intend to seek a ruling from the IRS as to the U.S. federal income tax treatment of the spin-off. Table of Contents Termination (see page 44) The merger agreement may be terminated: by mutual consent of the parties; by any of the parties if the merger has not been completed by March 7, 2015, subject to certain extension rights; by any of the parties if the merger is enjoined; by any of the parties if the Old Remy stockholder approval is not obtained; by Old Remy, on the one hand, and New Remy, on the other hand, upon an incurable material breach of the merger agreement by the other party or parties; or by New Remy if the Old Remy board withdraws or modifies its recommendation of the mergers to the Old Remy stockholders. FNF s Reasons for the Transactions (see page 30) In the course of reaching its decision to approve and declare advisable the merger agreement, the reorganization agreement and the transactions contemplated thereby, the FNF board of directors considered a number of factors in its deliberations. Those factors are described in The Transactions--FNF s Reasons for the Transactions . Accounting Treatment (see page 33) FNF originally acquired approximately 47% of the common stock of Old Remy upon Old Remy s emergence from bankruptcy in 2007. In the third quarter of 2012, FNF acquired additional shares of Old Remy, bringing its total ownership to approximately 51.1%, and began to consolidate Old Remy in its financial statements. At the time FNF began to consolidate Old Remy, FNF applied purchase accounting to record the then-fair value of the assets and liabilities of Old Remy, and recorded the amount that the fair value of Old Remy exceeded the fair value of the identified assets and liabilities at that date as goodwill. As FNF owned less than 80% of Old Remy, however, Old Remy did not apply push-down accounting in accordance with U.S. generally accepted accounting principles ( US GAAP ) for business combinations. Therefore, FNF reports different income statement and balance sheet amounts for Old Remy than Old Remy itself does in its stand-alone financial statements for periods after August 14, 2012. Among other things, FNF s reported earnings from continuing operations for Old Remy for such periods are lower than Old Remy s reported amounts, primarily because of increased amortization expense for intangibles recorded at fair value in FNF s purchase accounting. Under US GAAP accounting rules on the treatment of transactions occurring within controlled groups, FNF s basis of accounting for Old Remy is the basis on which New Holdco will present Old Remy in its financial statements following the transactions. This basis of accounting is reflected in the audited annual and unaudited interim combined financial statements of Remy International, Inc. and Fidelity National Technology Imaging, LLC included in this prospectus commencing on page F-1. After the transactions, these financial statements (which are referred to herein as the Annual Audited Financial Statements and the Interim Unaudited Financial Statements, respectively) will be the historical financial statements of the predecessor of New Holdco for periods prior to the mergers. For periods after the closing of the transactions, items relating to stockholders equity will be adjusted for shares issued in the mergers. Accordingly, readers of this prospectus should not place undue weight on the audited and unaudited financial statements and other financial information of Old Remy as prepared on its historical basis of accounting which are included or incorporated by reference in this prospectus for periods following August 14, 2012. It should be noted, however, that this change in the basis of accounting for Old Remy does not change the amount of cash generated by its operations, and the US GAAP cash flow from operations reported by New Holdco for Old Remy following the mergers will be the same as Old Remy would have reported. Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined that this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities. The date of this prospectus is [____________], 2014. Table of Contents If, notwithstanding the receipt of an opinion of Deloitte, if the spin-off were determined to be a taxable transaction, each holder of FNFV Group common stock who receives shares of New Remy common stock in the spin-off would generally be treated as receiving a taxable distribution in an amount equal to the total fair market value of such shares of New Remy common stock. In general, the distribution would be taxable as a dividend to the extent of FNF s current and accumulated earnings and profits. Any amount of the distribution in excess of FNF's earnings and profits would be treated first as a non-taxable return of capital to the extent of the holder's tax basis in its shares of FNFV Group common stock, with any remaining amount taxed as gain from the sale or exchange of the FNFV Group common stock. FNF would generally recognize taxable gain equal to the excess of the fair market value of the shares of New Remy common stock distributed by FNF in the spin-off over FNF s tax basis in such stock. For further information concerning the U.S. federal income tax consequences of the spin-off, see Material U.S. Federal Income Tax Consequences of the Transactions--the Spin-Off. Q: How will New Holdco s common stock trade? A: There is currently no public market for New Holdco common stock. We have applied to list New Holdco common stock on the NASDAQ Global Select Market under the symbol REMY . Q: Who is the exchange agent for the New Remy shares? A: American Stock Transfer & Trust Company, Old Remy s transfer agent, will be the exchange agent for the New Remy shares. Q: Whom should I call with other questions? A: If you have any questions regarding the transactions, you can contact FNF prior to the spin-off and New Holdco following the spin-off, each at the contact information listed below. Fidelity National Financial, Inc. 601 Riverside Drive Jacksonville, Florida 32204 Telephone: (904) 854-8100 Attention: Corporate Secretary Remy International, Inc. 600 Corporation Drive Pendleton, Indiana 46064 Telephone: (765) 778-6602 Attention: Corporate Secretary Table of Contents Certain Material U.S. Federal Income Tax Consequences of the Transactions (see page 135) The Spin-off The spin-off is conditioned upon the receipt by FNF of the opinion of Deloitte, tax advisor to FNF, to the effect that the contribution and the spin-off should qualify as a tax-free reorganization under Sections 368(a) and 355 of the Code and a distribution to which Sections 355 and 361 of the Code applies. Accordingly, FNF and holders of FNFV Group common stock generally should recognize no gain or loss with respect to the spin-off. The opinion will be based upon various factual representations and assumptions, as well as certain undertakings made by FNF, New Remy, and Old Remy. Any inaccuracy in the representations or assumptions upon which such tax opinion is based, or failure by FNF, New Remy, or Old Remy to comply with any undertakings made in connection with such tax opinion, could alter the conclusions reached in such opinion. Opinions with respect to these matters are not binding on the IRS or the courts. As a result, the conclusions expressed in these opinions could be challenged by the IRS and a court could sustain such a challenge. You should note that FNF does not intend to seek a ruling from the IRS as to the U.S. federal income tax treatment of the spin-off. If, notwithstanding the receipt of an opinion of Deloitte, the spin-off was determined to be a taxable transaction, each holder of FNFV Group common stock who receives shares of New Remy common stock in the spin-off would generally be treated as receiving a taxable distribution in an amount equal to the total fair market value of such shares of New Remy common stock. In general, the distribution would be taxable as a dividend to the extent of FNF s current and accumulated earnings and profits. Any amount of the distribution in excess of FNF's earnings and profits would be treated first as a non-taxable return of capital to the extent of the holder's tax basis in its shares of FNFV Group common stock, with any remaining amount taxed as gain from the sale or exchange of the FNFV Group common stock. FNF would generally recognize taxable gain equal to the excess of the fair market value of the shares of New Remy common stock distributed by FNF in the spin-off over FNF s tax basis in such stock. For further information concerning the U.S. federal income tax consequences of the spin-off, see Material U.S. Federal Income Tax Consequences of the Transactions--The Spin-Off. The Mergers A U.S. holder who exchanges Old Remy common stock or New Remy common stock for New Holdco common stock will not recognize any gain or loss, for United States federal income tax purposes, upon the exchange, except for gain or loss with respect to cash received in lieu of New Holdco fractional shares. Such holder will have a tax basis in the New Holdco common stock received equal to the tax basis of the Old Remy common stock or New Remy common stock surrendered therefor, reduced by any tax basis allocable to the fractional share interests in New Holdco stock for which cash is received, provided either that the Old Remy common stock or New Remy common stock exchanged does not have a tax basis that exceeds its fair market value or, if it does, that a certain election to reduce the tax basis of the New Holdco common stock received to its fair market value is not made. The holding period for the New Holdco common stock received will include the holding period for the Old Remy common stock or New Remy common stock surrendered therefor. Board of Directors and Management of New Holdco (see page 99) The directors of New Holdco following the mergers will consist of the following six members: John H. Weber and George P. Scanlon, each of whom shall have a term expiring in 2015, Lawrence F. Hagenbuch and J. Norman Stout, each of whom shall have a term expiring in 2016, and Douglas K. Ammerman and John J. Pittas, each of whom shall have a term expiring in 2017. With the exception of Mr. Pittas, who is the Chief Executive Officer of Old Remy, all of the directors of New Holdco were directors of Old Remy immediately prior to the mergers. See Management of New Holdco Following the Transactions--Board of Directors . The executive officers of Old Remy immediately prior to the effective time of the Old Remy merger will be the initial executive officers of New Holdco, with the exception of Michael L. Gravelle, who prior to the Old Remy merger served as Senior Vice President, General Counsel and Corporate Secretary to Old Remy. Mr. Gravelle will cease to act in his capacity as Senior Vice President and General Counsel of Old Remy following the mergers but will continue as Corporate Secretary on a transitional basis. See Management of New Holdco Following the Transactions--Management . TABLE OF CONTENTS Page Introduction i Questions and Answers About the Transactions ii Summary 1
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+PROSPECTUS SUMMARY AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, "WE," "US," "OUR," AND "TERAFOX CORP." REFERS TO TERAFOX 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. TERAFOX CORP. We are a development stage company and our business is manufacture and distribution of printed products. Our initial business operations will be conducted in Sofia, Bulgaria. Terafox Corp was incorporated in Nevada on February 26, 2014. 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 $30,000 for the next twelve months as described in our Plan of Operations. Being a development stage company, we have very limited operating history. After twelve months period we may need additional financing. If we do not generate any revenue we may need a minimum of $15,000 of additional funding to pay for ongoing advertising expenses and SEC filing requirements. We do not currently have any arrangements for additional financing. Our principal executive offices are located at str. Lege, 6, Sofia, Bulgaria, 1000. Our phone number is + 17027932224. From inception until the date of this filing, we have had very limited operating activities. Our financial statements from inception (February 26, 2014) through September 30, 2014, reports no revenues and a net loss of $(676). Our independent registered public accounting firm has issued an audit opinion for Terafox Corp which includes a statement expressing substantial doubt as to our ability to continue as a going concern. We have spent $676 from inception (February 26, 2014) through September 30, 2014. Our monthly burn was very minimal during this time. Our expenses in this offering are estimated at $8,000, and we will need a minimum of $30,000 for the next twelve months. As such, our monthly burn rate for the next twelve months is estimated at $3,100. We will have to utilize funds from Aleksey Gagauz, our officer and director, who has verbally agreed to loan the company funds to complete the registration process. If we receive no funds from Mr. Gagauz following the registration process, we will run out of money shortly after effectiveness of this registration statement. To the date, we have developed our business plan, purchased one unit of equipment from "Eagle Key Holdings Limited", which agreed to supply us with industrial flatbed printing machines. 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 a "shell company" within the meaning of Rule 405, promulgated pursuant to Securities Act, because we have nominal assets and nominal operations. 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 are an "emerging growth company" as defined in the Jumpstart our Business Startups Act of 2012. 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. We have no plans or intentions to be acquired by an operating company nor do we have plans to enter into a change of control or similar transaction or to change our management. THE OFFERING The Issuer: TERAFOX CORP. Securities Being Offered: 9,000,000 shares of common stock. Price Per Share: $0.01 Duration of the Offering: The shares will be offered for a period of 240 days from the effective date of this prospectus. Gross Proceeds: $90,000 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, Aleksey Gagauz. Registration Costs: We estimate our total offering registration costs to be approximately $8,000. Risk Factors: See "Risk Factors" and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in shares of our common stock. SUMMARY FINANCIAL INFORMATION The tables and information below are derived from our unaudited financial statements for the period from February 26, 2014 (Inception) to September 30, 2014. FINANCIAL SUMMARY September 30, 2014 ($) ---------------------- Cash and Deposits $ 7,649 Total Assets $17,649 Total Liabilities $14,325 Total Stockholder's Equity $ 3,324 STATEMENT OF OPERATIONS Accumulated From February 26, 2014 (Inception) to September 30, 2014 ($) ---------------------- Total Expenses $ 676 Net Loss for the Period $ (676) Net Loss per Share $ (0.00)
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+Prospectus 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. About Us Cell Source, Inc. (the "Company") is a Nevada corporation formed on June 6, 2012 under the name Ticket to See, Inc. ("TTSI"). Prior to the Share Exchange (as defined below), we did not have any significant assets or operations. Cell Source, Inc. is the parent company of Cell Source Ltd. ("Cell Source Israel"). Cell Source Israel was founded in Israel in 2011 in order to commercialize a suite of inventions relating to certain cancer treatments. Our target indications include treatment of lymphoma, multiple myeloma and BCLL (which is a common form of leukemia), facilitating transplantation acceptance (initially bone marrow transplantation and subsequently organ transplantation) and ultimately treating a variety of non-malignant diseases. Our lead prospective product is our patented Veto-Cell immune system management technology, which is an immune tolerance biotechnology that enables the selective blocking of immune responses. Our Veto-Cell immune system management technology is based on technologies patented, owned, and licensed to us by Research and Development Company Limited, Yeda Research and Development Limited, the commercial arm of Weizmann Institute of Science in Rehovot Israel ("Yeda"). We do not currently own any patents or other intellectual property and our total portfolio of intellectual property is limited to our rights to Yeda s intellectual property pursuant to our license agreement with Yeda. We are an early stage biomedical technology development company and we do not have any revenues and no immediate source of revenue is planned in the near term. We do not produce nor do we sell any products or services. In order to commence commercial activity, we will have to complete human treatment protocols and then have them approved for human clinical trials for each of our product candidates. The development of these protocols can take between 1 to 4 years per product. The various stages of approval in the United States with respect to the FDA can take between five and eight years if not longer. This means that it is quite likely that we not begin selling products in the United States for another eight years or longer. The Company currently has only one product which is in a slightly more advanced stage of development. This product, the megadose drug combination, already has a final human treatment protocol which has been developed. A hospital in Italy, on its own initiative, plans to conduct human clinical trials for this product on a self-directed basis in the near future. The hospital, which applied for approval on May 14th, 2014, recently received final written approval from the Italian Medicine Association (AIFA), which is the Italian equivalent of the United States FDA, to begin a trial with a small number of patients. While this trial is not being conducted by the Company itself, because it involves the same treatment protocol the Company plans to use in the future, successful results in this trial can act as a springboard to a company sponsored study of the same protocol in Italy and potentially elsewhere. There is no assurance that any trials will be successful, and there is no assurance that any products will be safe and/or effective in treating patients. Furthermore, there can be no assurances that we will be granted any regulatory approval or that we will be able to sell any products anywhere in the world. The Company's corporate headquarters is located at 65 Yigal Alon Street, 23rd Floor, Tel Aviv 67433, Israel, and the telephone number at such address is (972) 3 562-1755. The Company s U.S. contact information is: 57 W. 57th St., Suite 400 New York, NY 10019 and the telephone number at such address is (646) 416-7896. References to "we," "us," "our" and similar words refer to the Company and its subsidiaries after giving effect to the Share Exchange. References to "TTSI" refer to the Company and its business prior to the Share Exchange. As of June 30, 2014 we had $889,332 in cash. Our historical burn rate was approximately $150,000 per month. However, we estimate that our current burn rate is approximately $100,000 per month and, as a result, we expect that the cash we currently have available will fund our operations through November 2014. Recent Developments Share Increase On May 7, 2014, the Board of Directors and the majority stockholder of TTSI adopted resolutions approving an amendment (the "Amendment") of the Company's Articles of Incorporation to increase the number of authorized shares. Prior to the Amendment, the authorized shares of the Company consisted of 75,000,000 shares of common stock, $0.001 par value. The Amendment was filed with the Secretary of State of the State of Nevada on May 20, 2014 and increased the number of shares of common stock that the Company is authorized to issue from 75,000,000 shares to 200,000,000 shares. The Company also authorized 10,000,000 shares of preferred stock, par value $0.001, for designation in one or more series, with such designations, preferences and relative, participating, optional, or other special rights and qualifications, limitations, or restrictions thereof, as may, from time to time, be adopted by the Company's Board of Directors. Name Change On June 23, 2014, the majority stockholder of TTSI adopted resolutions approving an amendment of the Company's Articles of Incorporation to change the name of the corporation from Ticket to See, Inc. to Cell Source, Inc. The Amendment was filed with the Secretary of State of the State of Nevada on June 23, 2014 and changed the name of the Corporation from Ticket to See, Inc. to Cell Source, Inc., effective June 26, 2014. In connection with the name change, the trading symbol of the Company s common stock was changed from TTSE to CLCS. Share Exchange On June 30, 2014 (the "Closing Date"), TTSI entered into and closed a Share Exchange Agreement (the "Share Exchange Agreement") with Cell Source Israel and 100% of the shareholders of Cell Source Israel (the "CSL Shareholders") whereby Cell Source Israel became the wholly-owned subsidiary of TTSI and TTSI changed its name to Cell Source, Inc. (the "Share Exchange"), and whereby certain CSL Shareholders, holding 18,245,923 of the outstanding shares of Cell Source Israel, transferred to the Company an aggregate of 18,245,923 shares of Cell Source Israel s ordinary shares, each of nominal value of NIS 0.01 ("CSL Ordinary Shares") in exchange for an aggregate of 18,245,923 newly issued shares of the Company's Common Stock, par value $0.001 per share (the "Company Common Stock" or the "Common Stock"). The aggregate of 18,245,923 shares of newly issued Company Common Stock represents 78.5% of the outstanding shares of Company Common Stock following the Closing Date. In addition, outstanding five (5) year warrants to acquire 4,859,324 CSL Ordinary Shares at an exercise price of $0.75 per share (the "CSL Warrants") were exchanged for newly issued warrants to purchase shares of Company Common Stock (the "Company Warrants"), which Company Warrants contain substantially similar terms as the CSL Warrants. In addition, outstanding warrants to acquire 2,043,835 CSL Ordinary Shares held by Dr. Reisner and Yeda were exchanged for warrants to purchase shares of Company Common Stock (the "Researcher Company Warrants"), which Researcher Company Warrants contain substantially similar terms as their warrants to acquire CSL Ordinary Shares. The aggregate of 6,903,159 Company Warrants and Researcher Company Warrants represents 77.5% of the outstanding warrants to purchase Common Stock of the Company following the Closing Date. Cell Source Israel's Private Placement Beginning in November 2013, Cell Source Israel collected and entered into a series of subscription agreements (the "Subscription Agreement") with certain accredited investors (the "Investors") in a private placement offering (the "Private Placement"). Cell Source Israel held closings of the Private Placement between December 9, 2013 through April 7, 2014, pursuant to which Cell Source Israel sold an aggregate of 4,759,324 Units (the "Units"), at a purchase price of $0.75 per Unit, for gross proceeds of $3,569,475. Each Unit consists of one (1) share of CSL Ordinary Shares and one (1) CSL Warrant. Each CSL Warrant entitled the holder to purchase one (1) share of CSL Ordinary Shares for a five (5) year period at an exercise price of $0.75 per share. In connection with the Private Placement, Cell Source Israel relied upon the exemption from securities registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act") and Rule 506 as promulgated under the Securities Act for transactions not involving a public offering. Under the Subscription Agreement, the Investors were granted the following rights for a period of five (5) years commencing on the closing of the Private Offering: (i) in the event any shares of CSL Ordinary Shares or securities convertible, exchangeable or exercisable for CSL Ordinary Shares are issued at a price less than $0.75 per share ("Adjustment Event"), subject to certain adjustments, then additional CSL Ordinary Shares, or equivalents, will be issued to the Investors such that the aggregate holdings of the Investors is equal to the aggregate holding had such Investors initially purchased at the applicable lower price by which securities were issued in the Adjustment Event (except that certain issuances set forth in the Subscription Agreement would not be an Adjustment Event); and (ii) upon any financing by Cell Source whereby CSL Ordinary Shares or securities convertible into CSL Ordinary Shares are issued or sold (a "Subsequent Financing"), Investors have the right to participate in such Subsequent Financing (subject to customary exemptions). The Investors were also granted the right to elect up to two (2) independent board members. On May 29, 2014, the majority of the Investors granted certain groups of shareholders the right to elect, subject to the closing of the Share Exchange Agreement, Yoram Drucker, Itamar Shimrat, David Zolty, Ben Friedman and Dennis Brown to the Board of Directors of the Company. Furthermore, pursuant to the Subscription Agreement, in the event that the Registration Statement is declared effective, the Company is obligated to issue to certain founders of Cell Source Israel (Isaac Braun, Saar Dickman, Itamar Shimrat and Yoram Drucker) warrants to purchase an aggregate of 3,000,000 shares of Company Common Stock at an exercise price of $0.75 per share, subject to the same adjustments and terms as the Company Warrants. In connection with the Private Placement, Cell Source Israel also entered into a Registration Rights Agreement (the "Registration Rights Agreement") with the Investors, pursuant to which Cell Source Israel agreed to file a registration statement (the "Registration Statement"), registering for resale (i) all CSL Ordinary Shares, or securities into which they were exchanged, that were included in the Units; and (ii) all CSL Ordinary Shares, or equivalent securities, issuable upon exercise of the Investor Warrants or upon exercise of warrants into which the Investor Warrants were exchanged. As a result of the Share Exchange, the Company assumed the obligations of Cell Source Israel under the Subscription Agreement and Registration Rights Agreement. In July and August 2014, the Company, Cell Source Israel and the majority of the Investors entered into Amendment No. 1 (the "RRA Amendment") to the Registration Rights Agreement in order to amend a definition in the Registration Rights Agreement to more accurately reflect the understanding of the parties. Pursuant to the RRA Amendment, the definition relating to the deadline to file the Registration Statement was corrected such that the Company became obligated to file the Registration Statement on or prior to the 60th day after the closing of the Share Exchange Agreement (the "Registration Filing Date"). The RRA Amendment did not change any other term of the Registration Rights Agreement, including the obligation of the Company to get the Registration Statement declared effective within 120 days of the Registration Filing Date. The foregoing descriptions of the Private Placement and related agreements and transactions do not purport to be complete and are qualified in their entirety by reference to the complete text of such agreements. Implications of being an Emerging Growth Company As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act, or JOBS Act, enacted in April 2012. An "emerging growth company" may take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to: being permitted to present only two years of audited financial statements and only two years of related Management s Discussion & Analysis of Financial Condition and Results of Operations in this prospectus; not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act; reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration 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. We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended, or the Securities Act, which such fifth anniversary will occur in 2018. However, if certain events occur prior to the end of such five-year period, including if we become a "large accelerated filer," our annual gross revenues exceed $1.0 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period. We have elected to take advantage of certain of the reduced disclosure obligations and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests. 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. However, we are choosing to "opt out" of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that its decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. Notwithstanding the above, we are also currently a "smaller reporting company", meaning that we are not an investment company, an asset-backed issuer, nor a majority-owned subsidiary of a parent company that is not a smaller reporting company, and has a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. Some of the reduced disclosure and other requirements available to us as a result of the JOBS Act may continue to be available to us after we are no longer considered an "emerging growth 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; and have certain other decreased disclosure obligations in their 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 our results of operations and financial prospects. About this Offering This prospectus includes 9,618,648 shares of Company Common Stock offered by the Selling Stockholders consisting of (i) 4,759,324 shares of Common Stock issued pursuant to the Private Placement; (ii) 4,759,324 shares of Common Stock issuable upon exercise of Company Warrants issued pursuant to the Private Placement; and (iii) 100,000 shares of Common Stock issued for legal services provided to the Company. Estimated Use of Proceeds This prospectus relates to shares of our Common Stock that may be offered and sold from time to time by the Selling Stockholders. We will not receive any of the proceeds resulting from the sale of Common Stock by the Selling Stockholders. However, we may generate proceeds from the cash exercise of the Company Warrants. We intend to use those proceeds for general corporate purposes. Financial Results Our planned principal operations are the development and commercialization of new cell therapy products focused on treatment of blood cancers, certain non-malignant disorders and organ transplantations and regeneration. We are currently conducting research and development activities in order to facilitate the transition of the patent technology we license from the laboratory to clinical trials. We have a limited operating history. Therefore, there is limited historical financial information upon which to base an evaluation of our performance. Our prospects must be considered in light of the uncertainties, risks, expenses, and difficulties frequently encountered by companies in their early stages of operations. We have not generated any revenues to date and Cell Source Israel has generated net losses since it began its operations in 2011, including $1,783,650 for the year ended December 31, 2013 and $1,806,320 for the six months ended June 30, 2014. We expect to incur substantial additional net expenses over the next several years as our research, development, and commercial activities increase. As of June 30, 2014 we had cumulative losses of approximately $5,747,000. The amount of future losses and when, if ever, we will achieve profitability are uncertain. Our ability to generate revenue and achieve profitability will depend on, among other things, successful completion of the preclinical and clinical development of our product candidates; obtaining necessary regulatory approvals from the U.S. Food and Drug Administration (the "FDA") and international regulatory agencies; successful manufacturing, sales, and marketing arrangements; and raising sufficient funds to finance our activities. If we are unsuccessful at some or all of these undertakings, our business, prospects, and results of operations may be materially adversely affected. Summary of the Shares Issued Pursuant to this Prospectus The following is a summary of the shares being offered by the Company: Common Stock offered by the Selling Stockholders 9,618,648 shares of Common Stock of which 4,759,324 shares are issuable upon exercise of outstanding warrants. Common Stock outstanding prior to the offering 23,579,256 (1) Common Stock to be outstanding after the offering 28,338,580, assuming the full exercise of the warrants to purchase 4,759,324 share of Common Stock that are included in this prospectus. Use of proceeds We will not receive any proceeds from the sale of shares in this offering by the Selling Stockholders. However, we may generate proceeds from the cash exercise of the Company Warrants. We intend to use those proceeds for general corporate purposes. (1) Based upon the total number of issued and outstanding shares as of October 23, 2014.
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+PROSPECTUS SUMMARY This summary highlights selected information contained in this prospectus . This summary does not contain all of the information you should consider before investing in the Shares . You should carefully read this entire prospectus carefully, including the section titled Risk Factors, along with our, CAS and Arysta s financial statements, and the respective notes to those financial statements, before making an investment decision . This prospectus contains forward-looking statements, which involve risks and uncertainties . Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under Risk Factors and elsewhere in this prospectus . Our Company We are a global producer of high technology specialty chemical products and provider of technical services. Our business involves the manufacture of a broad range of specialty chemicals, created by blending raw materials, and the incorporation of these chemicals into multi-step technological processes. These specialty chemicals and processes are sold into multiple industries including agricultural, electronics, graphic arts, metal and plastic plating, and offshore oil production and drilling. As our name Platform Specialty Products Corporation implies, we continually seek opportunities to act as an acquirer and consolidator of specialty chemical businesses on a global basis, particularly those meeting Platform s asset-lite, high-touch philosophy, which involves prioritizing extensive resources to research and development and highly technical, post-sale customer service, while managing conservatively our investments in fixed assets and capital expenditures. To date, Platform has completed three acquisitions, the MacDermid Acquisition, on October 31, 2013, the Agriphar Acquisition, on October 1, 2014, and the CAS Acquisition, on November 3, 2014. On October 20, 2014, Platform announced the proposed Arysta Acquisition, which is expected to close in the first quarter of 2015, subject to closing conditions customary for a transaction of this type. See Recent Developments and Risk Factors Risks Related to the Acquisitions There can be no assurance that the Arysta Acquisition will be completed. Our History We were initially incorporated with limited liability under the laws of the British Virgin Islands on April 23, 2013 under the name Platform Acquisition Holdings Limited. We were created for the purpose of acquiring a target company or business with an anticipated enterprise value of between $750 million and $2.50 billion. We completed our initial public offering in the United Kingdom on May 22, 2013, raising net proceeds of approximately $881 million, and were listed on the London Stock Exchange. On October 31, 2013, we indirectly acquired substantially all of the equity of MacDermid Holdings, LLC ( MacDermid Holdings ), which, at the time, owned approximately 97% of MacDermid. As a result, we became a holding company for the MacDermid business. We acquired the remaining 3% of MacDermid (the MacDermid Plan Shares ) on March 4, 2014, pursuant to the terms of an Exchange Agreement, dated October 25, 2013, between us and the fiduciaries of the MacDermid, Incorporated Profit Sharing and Employee Savings Plan (the MacDermid Savings Plan ). Concurrently with the closing of the MacDermid Acquisition, we changed our name to Platform Specialty Products Corporation. On January 22, 2014, we changed our jurisdiction of incorporation from the British Virgin Islands to Delaware (the Domestication ), and on January 23, 2014, our shares of common stock began trading on the NYSE under the ticker symbol PAH. Our Business Until consummation of the CAS Acquisition, we managed our business in two operating segments: Performance Materials and Graphic Solutions. Upon consummation of the CAS Acquisition, we created a new operating segment, AgroSolutions, which includes Agriphar s and CAS complementary businesses. Upon consummation of the proposed Arysta Acquisition, AgroSolutions will also include Arysta s business. See Our Business AgroSolutions. 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 jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION DATED NOVEMBER 10, 2014 PROSPECTUS 25,465,024 Shares Platform Specialty Products Corporation Common Stock This prospectus relates to the resale of up to 25,465,024 shares of our common stock, which may be offered for sale from time to time by the selling stockholders named in this prospectus. The shares of our common stock covered by this prospectus (the Shares ) were issued by us to the selling stockholders in a private placement (the October/November Private Placement ) which we completed on October 8, 2014 and November 6, 2014, respectively, as more fully described in this prospectus. The selling stockholders may from time to time sell, transfer or otherwise dispose of any or all of their Shares in a number of different ways and at varying prices. See Plan of Distribution beginning on page 170 of this prospectus for more information. Our shares of common stock are listed on the New York Stock Exchange (the NYSE ) under the ticker symbol PAH. The closing sale price on the NYSE for our shares of common stock on November 7, 2014 was $25.79 per share. We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus and any amendments or supplements carefully before you make your investment decision. We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ) and have elected to take advantage of certain reduced public company reporting requirements. Investing in our common stock involves risks. You should carefully consider the risks that we have described in Risk Factors beginning on page 19 of this prospectus, and under similar headings in any amendments or supplements to this prospectus, before investing in the Shares. 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. You should rely only on the information contained in this prospectus or any prospectus supplement or amendment. Neither we nor the selling stockholders have authorized anyone to provide you with different information. The selling stockholders are not making an offer of their Shares in any state where such offer is not permitted. The date of this prospectus is November , 2014. Table of Contents Trademarks and Trade Names This prospectus contains some of our trademarks and trade names. All other trademarks or trade names of any other company appearing in this prospectus belong to their respective owners. Solely for convenience, the trademarks and trade names in this prospectus may be 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. Industry and Market Data We obtained the industry, market and competitive position data described or referred to throughout this prospectus from our own internal estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. While we believe our internal estimates and research are reliable and the market definitions are appropriate, such estimates, research and definitions have not been verified by any independent source. We caution you not to place undue reliance on this data. Non-GAAP Financial Measures The United States Securities and Exchange Commission (the SEC ) has adopted rules to regulate the use of non-GAAP financial measures that are derived on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles ( GAAP ). In this prospectus we present Adjusted EBITDA, which is a non-GAAP financial measure. Our management believes this non-GAAP financial measure provides useful information about our operating performance by excluding certain items and including other items that we believe are not representative of our core business. We also believe that this financial measure will provide investors with a useful tool for assessing the comparability between periods of our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures. We use certain of these financial measures for business planning purposes and in measuring our performance relative to that of our competitors. However, these measures should not be considered as alternatives to net sales or cash flows from operating activities as indicators of operating performance or liquidity. For additional information on why we present non-GAAP financial measures, the limitations associated with using non-GAAP financial measures and reconciliations of our non-GAAP financial measures to the most comparable applicable GAAP measure, see Summary Financial Data. Other than the International Financial Reporting Standards ( IFRS ) consolidated financial statements of Arysta included in this prospectus, for periods up to and including the year ended December 31, 2012, Arysta only prepared unconsolidated financial statements in accordance with Irish generally accepted accounting principles ( Irish GAAP ), and Arysta Corporation only prepared consolidated financial statements in accordance with Japanese generally accepted accounting principles ( JGAAP ). Arysta prepared consolidated financial statements under JGAAP for the year ended December 31, 2013. A reconciliation from JGAAP to IFRS is presented in Note 25 to Arysta s audited consolidated financial statements included in this prospectus. Unaudited Pro Forma Financial Information The proposed Arysta Acquisition is a probable significant acquisition to us (at a significance level of greater than fifty percent) under Rule 3-05 and 1-02(w) of Regulation S-X under the Securities Act of 1933, as amended (the Securities Act ). The CAS Acquisition, which was consummated on November 3, 2014, was also a significant acquisition (at a significance level of forty percent). As a result, we have included in this prospectus unaudited pro forma financial information based on the historical financial statements of Platform, CAS and Arysta, combined and adjusted to give effect to the CAS Acquisition and the proposed Arysta Acquisition as if each had occurred as of January 1, 2013 for purposes of the statements of operations and as of June 30, 2014 for purposes of the balance sheet data. For the year ended December 31, 2013, such pro forma financial information is also giving effect to the MacDermid Acquisition and the related financings as if they had occurred as of January 1, 2013 for purposes of the statement of operations. The unaudited pro forma combined consolidated financial information has been prepared in accordance with the basis of preparation described in Unaudited Pro Forma Financial Information Notes to the Unaudited Pro Forma Financial Information. Table of Contents Our Performance Materials segment manufactures and markets dynamic chemistry solutions that are used in the electronics, automotive and oil and gas production and drilling industries. We operate in the Americas, Asia and Europe. Our products include surface and coating materials and water-based hydraulic control fluids. In conjunction with the sale of these products, we provide extensive technical service and support to ensure superior performance in their application. Our Graphic Solutions segment primarily produces and markets photopolymers through an extensive line of flexographic plates that are used in the commercial packaging and printing industries. Our operations in the Graphic Solutions segment are predominantly in the Americas and Europe. Our AgroSolutions segment focuses on a wide variety of proven plant health and pest control products to growers, which are comprised of specific target applications in the following major product lines: seed treatment, insecticides, miticides, herbicides, fungicides, honey bee health, plant growth regulators, adjuvants and home applications (home and garden and ectoparasiticides). We offer innovative seed treatment and crop protection applications and value-added customer solutions, drawing upon our registration expertise and capabilities in numerous geographies and our large established distribution network. We sell our products into three main geographic regions: the Americas, Asia and Europe. Because our segments utilize shared facilities and administrative resources but offer products that are distinct from one another, we make decisions about how to manage our operations by reference to each segment and not with respect to the underlying products or geographic regions that comprise each segment. Recent Developments Amendments to Credit Agreement On August 6, 2014, we, Barclays Bank PLC, the several lenders from time to time party thereto and the other parties thereto further amended our senior secured credit facility by entering into a second amended and restated credit agreement (the Second Amended and Restated Credit Agreement ), which generally provides for, among other things, (i) Platform as a borrower under the term loan facility, (ii) increased flexibility with respect to permitted acquisitions, (iii) the ability to request incremental facilities in currencies other than U.S. Dollars, and (iv) securing foreign assets in support of future term loans. The Amended and Restated Credit Agreement also allows us, subject to certain limitations, to extend the maturity of our term loans and/or revolving credit commitments. In addition, on August 6, 2014 we, Barclays Bank PLC, the several lenders from time to time party thereto and the other parties thereto, agreed to further amendments to the Amended and Restated Credit Agreement (the Further Amendments, and together with the Second Amended and Restated Credit Agreement, the Amended and Restated Credit Agreement ). Pursuant to the Further Amendments, which became effective upon the consummation of the CAS Acquisition on November 3, 2014, (i) we borrowed new term loans in an aggregate principal amount of $130 million through an increase in our existing tranche B term loan facility (the New Tranche B Term Loans ), (ii) our existing U.S. Dollar revolving credit facility was increased by $62.5 million to $87.5 million, and (iii) our existing multicurrency revolving credit facility was increased by $62.5 million to $87.5 million. On the date of the CAS Acquisition, we borrowed $60 million under the U.S. Dollar revolving credit facility and 55 million ($69 million assuming an exchange rate of $1.26 per 1.00) under the multicurrency revolving credit facility. In addition, new term loans denominated in Euros in an aggregate amount of 205 million, or approximately $259 million assuming an exchange rate of $1.26 per 1.00 (the Euro Tranche Term Loans ) were borrowed by a newly formed indirect subsidiary of Platform, MacDermid Agricultural Solutions Holdings B.V., a company organized under the laws of the Netherlands ( MAS Holdings ), and Netherlands Agricultural Investment Partners, LLC ( NAIP ), a Delaware limited liability company and subsidiary of Platform, serving as a United States co-borrower. Pursuant to the Further Amendments, MAS Holdings and NAIP were added as borrowers under the Amended and Restated Credit Agreement in respect of the Euro Tranche Term Loans and certain domestic and foreign subsidiaries of Platform Table of Contents The unaudited pro forma combined consolidated financial information presented herein is for informational purposes only and is not intended to represent or to be indicative of the consolidated results of operations or financial position that we would have reported had the MacDermid Acquisition, the CAS Acquisition and the Arysta Acquisition been completed as of the dates set forth in the unaudited pro forma combined consolidated financial information, and should not be taken as indicative of our future consolidated results of operations or financial position. The unaudited pro forma financial data has been prepared in accordance with the requirements of Regulation S-X of the Securities Act. However, neither the assumptions underlying the pro forma adjustments nor the resulting pro forma financial information have been audited or reviewed in accordance with any generally accepted auditing standards. The unaudited pro forma combined consolidated financial information should be read in conjunction with our historical financial statements and with both CAS and Arysta s historical financial statements, all included in this prospectus. Table of Contents and MacDermid, including MAS Holdings and NAIP, became guarantors under our Amended and Restated Credit Agreement, and in connection therewith, pledged certain additional collateral to secure the obligations incurred under the Euro Tranche Term Loans and/or other loans incurred under the facility. With the exception of the collateral package as noted above and the interest rate, the terms of the Euro Tranche Term Loans are substantially similar to Platform s New Tranche B Term Loans and bear interest at a rate per annum equal to an applicable margin plus an adjusted Eurocurrency Rate, calculated as set forth in the Amended and Restated Credit Agreement, and mature on June 7, 2020. As amended by the Further Amendments, the Amended and Restated Credit Agreement now also provides for, among other things, additional flexibility with respect to certain limiting covenants, including by increasing certain dollar baskets. On October 1, 2014, we and MacDermid, as borrowers, MacDermid Holdings, certain subsidiaries of MacDermid Holdings and Platform, Barclays Bank PLC, as collateral agent and administrative agent, and the incremental lender entered into an incremental amendment No. 1 (the Incremental Amendment ) to the Amended and Restated Credit Agreement through an increase in our existing Tranche B Term Loans under the Amended and Restated Credit Agreement (the New USD Term Loans ) in an aggregate principal amount of $300 million. Except as set forth in the Incremental Amendment, the New USD Term Loans have identical terms as the existing Tranche B Term Loans (as defined in the Amended and Restated Credit Agreement) and are otherwise subject to the provisions of the Amended and Restated Credit Agreement. The proceeds from the Incremental Amendment were used to finance the Agriphar Acquisition. As a result of the Incremental Amendment and the Further Amendments, on November 7, 2014, we have (i) approximately $1,437 million outstanding under our first lien credit facility (including new term loans denominated in Euros in an aggregate of 205 million) and (ii) approximately $129 million outstanding under our revolving credit facilities (including revolving credit facility borrowings denominated in Euros in an aggregate of 55 million). Private Placements On May 20, 2014, we completed a private placement to certain qualified institutional buyers and a limited number of institutional accredited investors (the May Private Placement ). In the May Private Placement, we sold an aggregate of 15,800,000 shares of our common stock at a purchase price of $19.00 per share, raising net proceeds of approximately $287 million, after deducting placement agents commissions and fees and offering and transaction expenses of the placement agents and us. Pursuant to a registration rights agreement we entered into in connection with the May Private Placement, on June 13, 2014, we filed a resale registration statement on Form S-1, resulting in the registration of 14,825,000 of the shares sold in the May Private Placement. Such registration statement was declared effective on June 19, 2014. On October 8, 2014 and November 6, 2014, we completed a private placement to certain qualified institutional buyers and a limited number of institutional accredited investors of an aggregate of 16,060,960 shares and 9,404,064 shares, respectively, of our common stock at a price of $25.59 per share (the October/November Private Placement ). In the October/November Private Placement, we received net proceeds of approximately $651.5 million, after deducting fees and offering expenses. Pursuant to registration rights agreements we entered into in connection with the October/November Private Placement, on November 3, 2014, we initially filed this resale registration statement on Form S-1 to register the resale of all of the shares sold in the October/November Private Placement, which resale registration statement was amended on November 10, 2014. We expect this registration statement to be declared effective on November 10, 2014. Agriphar Acquisition On October 1, 2014, we completed the acquisition of Agriphar, whose product portfolio includes a wide range of herbicide, fungicides and insecticides, pursuant to the agreement, dated August 4, 2014 (the Agriphar Table of Contents Acquisition Agreement ), by and among MAS Holdings, as the purchaser, Platform, as the guarantor, and a representative of Percival, as the seller. Pursuant to the terms of the Agriphar Acquisition Agreement, MAS Holdings acquired 100% of the equity interests of Percival for a purchase price of 300 million (approximately $379 million assuming an exchange rate of $1.26 per 1.00), consisting of 285 million in cash (approximately $360 million assuming an exchange rate of $1.26 per 1.00) and 711,551 restricted shares of our common stock, which will become unrestricted beginning January 2, 2018 unless agreed otherwise in accordance with the terms of the Agriphar Acquisition Agreement. These shares can also be transferred back to us within six-months after the closing of the Agriphar Acquisition for 15 million (approximately $19 million assuming an exchange rate of $1.26 per 1.00). Agriphar is a European crop protection group supported by a team of researchers and regulatory experts which provides a wide range of herbicides, fungicides and insecticides with end markets primarily across Europe. We believe Agriphar s wide variety of product applications and expertise will increase the anticipated benefits from the recently consummated CAS Acquisition and the proposed Arysta Acquisition, if and when completed. For the year ended December 31, 2013, Agriphar had $164.3 million of revenue and $20.4 million of net income. For more information about Agriphar s business and a general presentation of our new operating segment, AgroSolutions, which was recently created upon the consummation of the CAS Acquisition, see Our Business AgroSolutions. CAS Acquisition On November 3, 2014, we completed the acquisition of CAS for approximately $1.00 billion, consisting of $950 million in cash, subject to certain post-closing working capital and other adjustments, 2,000,000 shares of our common stock and the assumption of certain liabilities by Platform. Established over 50 years ago, CAS is a leading niche provider of seed treatment and agrochemical products for a wide variety of crop protection applications in numerous geographies. CAS focuses on specific target applications in seven major product lines: seed treatments; insecticides; miticides; herbicides; fungicides; plant growth regulators; and adjuvants. CAS develops, sells and registers its own products, as well as products manufactured by others on a license or resale basis. For more information about CAS financial performance, see Unaudited Pro Forma Financial Information, other related pro forma information included in Summary Financial Data and in this prospectus, and CAS financial statements for the fiscal years ended December 31, 2013 and 2012 and the six-month periods ended June 30, 2014 and 2013, included in this prospectus. For a general presentation of our new operating segment, AgroSolutions, which was created upon the consummation of the CAS Acquisition, see Our Business AgroSolutions, included in this prospectus. Proposed Arysta Acquisition On October 20, 2014, we entered into a share purchase agreement (the Arysta Acquisition Agreement ) pursuant to which Platform agreed to acquire Arysta, a leading global provider of crop solutions, with expertise in agrochemical and biological products, for approximately $3.51 billion, consisting of $2.91 billion in cash, subject to working capital and other adjustments, and $600 million of new Series B convertible preferred stock of the Company (the Series B Convertible Preferred Stock ). The closing of the proposed Arysta Acquisition is subject to the satisfaction or waiver of certain closing conditions customary for a transaction of this type, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and approvals of government authorities and antitrust authorities from certain non-U.S. jurisdictions. Arysta has a solutions-oriented business model that focuses on product innovation to address grower needs. Arysta s solutions are delivered on a local basis, utilizing globally managed patented and proprietary off-patent Table of Contents agrochemical active ingredients ( AIs ) and biological solutions, or biosolutions, complemented by a broad portfolio of regionally managed off-patent agrochemical offerings. Biosolutions includes biological stimulants, or biostimulants, innovative nutrition and biological control, or biocontrol, products. Arysta employs a targeted market strategy aimed at specific regions and crops where it is believed that its market position, product portfolio and capabilities enable Arysta to achieve sustainable high growth and a strong leadership position. The Arysta Acquisition Agreement contains representations and warranties customary for a transaction of this type. However, no representations or warranties will survive the closing of the Arysta Acquisition, except for (i) the seller s representations with respect to its ownership of Arysta s equity and its authority to enter into the Arysta Acquisition Agreement and to consummate the Arysta Acquisition, and (ii) Platform s representations with respect to its due organization, its authority to enter into the Arysta Acquisition Agreement and to consummate the Arysta Acquisition, and its solvency immediately following the closing of the Arysta Acquisition. The seller has also agreed to various customary covenants and agreements regarding Arysta, including the seller s covenants to cause Arysta and its subsidiaries, during the period between the execution of the Arysta Acquisition Agreement and the closing of the Arysta Acquisition, (A) to conduct their business in the ordinary course of business consistent with past practices and procedures, and (B) without the prior written consent of Platform (which consent will not be unreasonably withheld, conditioned or delayed), among other things, (i) not to make any amendments to the organizational documents of any of Arysta s subsidiaries in a manner adverse to Platform in any material respect, (ii) not to purchase any securities or make any material investment in any person, or otherwise acquire direct or indirect control over any Person, (iii) not to incur, assume or guarantee any indebtedness as defined in the Agreement, except for borrowings under Arysta s existing credit facilities in the ordinary course of business, (iv) not to sell, transfer, lease, sublease or otherwise dispose of any properties or assets other than immaterial assets or properties in the ordinary course of business, (v) not to amend or otherwise modify or terminate (other than allowing expiration according to its scheduled term) any of its material contracts other than in the ordinary course of business and (vi) not to engage in or take certain other kinds of transactions or actions during such period, as more fully described in the Agreement. Platform covenants, among other things, (A) during the period between the execution of the Agreement and the closing of the Arysta Acquisition, not to (i) acquire or agree to acquire, including by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, any business of any person or business organization if such acquisition or proposed acquisition could reasonably be expected to (a) delay any authorization from any governmental antitrust authority necessary to complete the Arysta Acquisition, (b) delay or adversely affect Platform s ability to obtain debt financing in connection with the Arysta Acquisition or (c) delay or prevent the consummation of the Arysta Acquisition, (ii) amend, alter or repeal any of its organizational documents if such amendment, alteration or repeal would be adverse to the seller in any material respect, (iii) declare, set aside or pay any dividend or other distribution payable in cash, capital stock, property or otherwise with respect to any of its equity interests, except in respect of our Series A preferred stock (the Series A Preferred Stock ) and (iv) authorize or create any shares of any class or series of stock of Platform ranking senior to or on parity with the Series B Convertible Preferred Stock with respect to the payment of dividends, redemption or the distribution of assets upon any liquidation, dissolution or winding up of Platform, and (B) to reserve for issuance a sufficient number of shares of common stock of Platform for issuance upon conversion of the Series B Convertible Preferred Stock. When issued, each share of Series B Convertible Preferred Stock may be converted into such number of shares of common stock of Platform as is determined by dividing a $1,000 liquidation preference by a conversion price of $27.14. Platform has also agreed to enter into a registration rights agreement with the seller pursuant to which Platform would be obligated to file with the SEC a registration statement to register the resale of the shares of common stock of Platform issuable upon conversion of the Series B Convertible Preferred Stock. The form of the certificate of designation for the Series B Preferred Stock and the registration rights agreement are attached as Exhibits A and B, respectively, to the Arysta Acquisition Agreement, which is filed as an exhibit to the registration statement of which this prospectus forms a part. Table of Contents Each share of Series B Convertible Preferred Stock that is not previously converted to common stock will be subject to automatic redemption on either (a) the earlier of (i) October 20, 2016 and (ii) four months prior to the maturity of the mandatory preferred stock contemplated by the Debt Commitment Letter (as defined under Acquisition Financing Arysta below) if such security is issued; provided that such maturity date shall not be prior to the earlier of (x) the first anniversary of the original issue date of the Series B Convertible Preferred Stock and (y) 90 days prior to the maturity of the mandatory preferred stock contemplated by the Debt Commitment Letter (the Maturity Date ) or (b) the occurrence of (i) a merger of Platform or a subsidiary of Platform where more than 50% of the voting power of the surviving corporation is held by persons other than the stockholders of Platform, (ii) the sale of all or substantially all of the assets or subsidiaries of Platform in a single transaction or series of related transactions or (iii) a bankruptcy or liquidation of Platform (each of clauses (i), (ii) and (iii), a Triggering Event ). The redemption price for each share of Series B Convertible Preferred Stock will be $1,000, which must be paid in cash in the event of redemption upon a Triggering Event. The redemption price may be paid in cash or shares of common stock (valued at $27.14 per share), at the option of Platform, in the event of redemption at the Maturity Date. However, Platform may not issue more than 22,107,590 shares of common stock in connection with a redemption at the Maturity Date. To the extent that the aggregate value of such 22,107,590 shares of common stock is less than $600 million (based on a 10-day volume weighted average price), then, pursuant to the Arysta Acquisition Agreement, such shortfall would be payable in cash by Platform as additional purchase price. Assuming that the proposed underwritten public offering of our common stock described below under Proposed Underwritten Public Offering of Common Stock (the Proposed Public Offering ) is consummated, we do not intend to issue any mandatory preferred stock contemplated by the Debt Commitment Letter in connection with the Arysta Acquisition. The Arysta Acquisition Agreement also contains customary provisions governing circumstances under which the parties may terminate the Agreement, including the right of Platform or the seller, as the case may be, to terminate the Agreement if the transactions contemplated therein have not been consummated on or before June 1, 2015, subject to certain conditions, and subject to extension to August 3, 2015 if certain regulatory approvals have not been obtained. Neither Platform nor the seller is responsible for a termination fee in any event. There can be no assurance that the Arysta Acquisition will close, or be completed in the time frame, on the terms or in the manner currently anticipated, as a result of a number of factors, including, among other things, the failure of one or more of the conditions to closing. See Risk Factors Risks Related to the Acquisitions There can be no assurance that the Arysta Acquisition will be completed. The closing of the Proposed Public Offering is not conditioned on, and is expected to be consummated before, the closing of the proposed Arysta Acquisition. As Arysta is being acquired by a U.S. company, the Arysta Acquisition Agreement provides that prior to the closing of the Arysta Acquisition, the seller will cause Arysta to terminate all the business and operations of Arysta and its subsidiaries in or directed to certain countries subject to sanctions by the United States. We can make no assurance that Arysta will fully wind down these operations, and to the extent that it does not, the closing of the Arysta Acquisition could be delayed or may not occur at all. In addition, to the extent that any action by Arysta prior to the consummation of the Arysta Acquisition is deemed to have violated applicable laws, Platform could face the risk of potential investigations or enforcement actions (including potential successor liability) related to those acts. For more information about Arysta s financial performance, see Unaudited Pro Forma Financial Information, other related pro forma information included in Summary Financial Data in this prospectus, and Arysta s financial statements for the fiscal years ended December 31, 2013 and 2012 and the six-month periods ended June 30, 2014 and 2013, included in this prospectus. For a general presentation of our new operating segment, AgroSolutions, which was created upon consummation of the CAS Acquisition and which, upon consummation of the proposed Arysta Acquisition, will also include Arysta s business, see Our Business AgroSolutions, included in this prospectus. Table of Contents Acquisition Financing Agriphar. We funded the Agriphar Acquisition with the proceeds from the aforementioned Incremental Amendment and cash on hand. CAS. We funded the cash portion of the purchase price and related transaction expenses of the CAS Acquisition through a combination of available cash on hand, and borrowings under an increase in term loans of approximately $389 million (approximately $259 million of which is denominated in Euros), $60 million under the U.S. Dollar revolving credit facility and 55 million ($69 million assuming an exchange rate of $1.26 per 1.00) under the multicurrency revolving credit facility under the Amended and Restated Credit Agreement, as amended upon the effectiveness of the Further Amendments. Arysta. We plan to fund the cash portion of the proposed Arysta Acquisition through a combination of the net proceeds of equity (including the shares to be issued in connection with the Proposed Public Offering) or debt offerings, available cash on hand, the financial arrangements described below and/or possible other financings. Pursuant to the Arysta Acquisition Agreement, we deposited $400 million into an escrow account and agreed to deposit an additional $200 million into such escrow account no later than November 28, 2014. The release of any amounts from such escrow account is subject to the prior written consent of the seller. The funds in the escrow account are intended to be released to the Seller in connection with the consummation of the Arysta Acquisition. The seller in the Arysta Acquisition will also receive $600 million of our Series B Convertible Preferred Stock (the Arysta Seller Financing ). The closing of the Proposed Public Offering is not conditioned on, and is expected to be consummated before, the closing of the Arysta Acquisition. On October 20, 2014, we entered into a commitment letter (the Debt Commitment Letter ) with Barclays Bank PLC, Credit Suisse AG, Cayman Islands Branch, Credit Suisse Securities (USA) LLC, Nomura Corporate Funding Americas, LLC, Nomura Securities International, Inc., UBS AG, Stamford Branch and UBS Securities LLC (collectively, the Commitment Parties ) for (i) $1.6 billion of first lien incremental term loans (the Term Facility ) to be incurred under the Amended and Restated Credit Agreement and (ii) senior unsecured bridge loans (the Senior Bridge Facility and together with the Term Facility, the Facilities ) in an aggregate principal amount of $750 million, for the purposes of financing the proposed Arysta Acquisition and the fees and expenses in connection therewith, on the terms and subject to the conditions set forth in the Debt Commitment Letter. The Commitment Parties obligation to provide the Facilities is subject to a number of customary conditions precedent. Furthermore, we are under no obligation to borrow under the Facilities and we anticipate seeking a number of alternative financings for the proposed Arysta Acquisition in lieu of the Facilities, including, but not limited to, equity (including the shares offered in connection with the Proposed Public Offering) or debt offerings and other borrowings under our Amended and Restated Credit Agreement. Third Quarter Results Set out below are certain unaudited financial results for each of Platform, CAS and Arysta in respect of the three and nine months ended September 30, 2014. Platform On November 5, 2014, we issued a press release and filed a Form 8-K announcing our financial results for the three and nine months ended September 30, 2014. The following unaudited financial results were included in that announcement. We expect to file our quarterly report on Form 10-Q for the quarterly period ended September 30, 2014 on November 14, 2014. The 2013 as reported quarterly and year-to-date information is based on Predecessor information and does not reflect the purchase accounting effect of the MacDermid Acquisition on October 31, 2013. In order to perform a proper comparison between the 2013 and 2014 periods, we have made certain adjustments to our reported numbers, as detailed in the financial tables below, to assist in this comparison of the profit and loss data provided below. We believe that this as adjusted format better reflects a comparable analysis of the numbers being presented. Table of Contents In addition, because the Agriphar Acquisition and the CAS Acquisition were consummated subsequent to September 30, 2014, and the proposed Arysta Acquisition has not been consummated, the financial results of Agriphar, CAS and Arysta are not reflected in our financial results for the three months and nine months ended September 30, 2014 presented below. For the three months ended September 30, 2014 (unaudited): Net sales increased $8.3 million, or 4.4%, to $196.8 million, compared to $188.4 million for the same period in 2013. Reported gross profit increased $4.3 million, or 4.3%, to $103.2 million, compared to $99.0 million for the same period in 2013. Reported net income declined to $11.9 million, compared to $14.5 million for the same period in 2013. Adjusted EBITDA increased $4.9 million to $52.5 million, compared to $47.6 million for the same period in 2013 representing a record level. For the nine months ended September 30, 2014 (unaudited): Net sales increased $9.1 million, or 1.6%, to $569.6 million, compared to $560.6 million for the same period in 2013. Reported gross profit decreased $4.7 million, or 1.6%, to $284.1 million, compared to $288.8 million for the same period in 2013. Reported net income declined to $4.1 million, compared to $23.9 million for the same period in 2013. Adjusted EBITDA increased $11.0 million to $146.6 million, compared to $135.6 million for the same period in 2013 representing a record level. Adjusted EBITDA is a non-GAAP financial measure. For a definition of Adjusted EBITDA and additional information on why we present non-GAAP financial measures as well as the limitations associated with using non-GAAP financial measures, see Summary Financial Data. Platform Specialty Products Corporation Statement of Operations Data (Unaudited) ($ In thousands) Successor Successor Predecessor Successor Successor Predecessor Three Months Ended September 30, 2014 Three Months Ended September 30, 2013 Three Months Ended September 30, 2013 Nine Months Ended September 30, 2014 Period from Inception (April 23, 2013) to September 30, 2013 Nine Months Ended September 30, 2013 Net sales $ 196,782 $ $ 188,433 $ 569,640 $ $ 560,557 Gross profit $ 103,224 $ $ 98,972 $ 284,133 $ $ 288,827 Total operating expenses $ 79,861 $ 4,773 $ 60,352 $ 251,172 $ 4,870 $ 183,799 Operating profit (loss) $ 23,363 $ (4,773 ) $ 38,620 $ 32,961 $ (4,870 ) $ 105,028 Income (loss) before income taxes, non-controlling interests and accrued payment-in-kind dividends on cumulative preferred shares $ 12,322 $ (4,710 ) $ 21,500 $ 5,915 $ (4,790 ) $ 45,141 Income tax benefit (provision) $ 1,595 $ $ (6,864 ) $ 3,542 $ $ (20,932 ) Net income (loss) $ 13,917 $ (4,710 ) $ 14,636 $ 9,457 $ (4,790 ) $ 24,209 Net income attributable to the non-controlling interests $ (2,046 ) $ $ (139 ) $ (5,380 ) $ $ (319 ) Net income (loss) attributable to common shareholders $ 11,871 $ (4,710 ) $ 14,497 $ 4,077 $ (4,790 ) $ 23,890 Accrued payment-in-kind dividend on cumulative preferred shares $ $ $ (1,028 ) $ $ $ (22,100 ) Net income (loss) attributable to common shares $ 11,871 $ (4,710 ) $ 13,469 $ 4,077 $ (4,790 ) $ 1,790 Table of Contents Platform Specialty Products Corporation Balance Sheet Data (Unaudited) ($ In thousands) September 30, 2014 December 31, 2013 Cash $ 281,676 $ 123,040 Restricted cash $ 315,000 $ Total current assets $ 911,704 $ 383,452 Total assets $ 2,729,620 $ 2,260,154 Total current liabilities $ 141,310 $ 119,673 Total liabilities $ 1,150,038 $ 1,124,080 Total stockholders equity $ 1,481,195 $ 1,019,081 Total liabilities, redeemable 401(k) interest and stockholders equity $ 2,729,620 $ 2,260,154 Reconciliation of Non-GAAP Measures Includes Predecessor and Successor data Predecessor Successor Predecessor Successor (in millions) Three Months Ended September 30, 2013 Three Months Ended September 30, 2014 Nine Months Ended September 30, 2013 Nine Months Ended September 30, 2014 Net income $ 14.5 $ 11.9 $ 23.9 $ 4.1 Adjustments to reconcile to net income (loss): Income tax expense (benefit) 6.9 (1.6 ) 20.9 (3.5 ) Interest expense 16.2 8.1 41.0 23.8 Depreciation and amortization expense 9.7 19.0 (1) 29.5 57.3 (1) Unrealized (gain) loss on foreign currency denominated debt (1.1 ) (2) Unrealized loss on foreign exchange forward contracts 2.6 (3) 2.6 (3) Restructuring and related expenses 0.2 0.6 1.9 1.0 (4) Manufacturer s profit in inventory (purchase accounting) 12.0 (5) Non-cash fair value adjustment to contingent consideration 2.3 26.1 (6) Acquisition costs 8.2 18.8 (7) Debt Extinguishment 18.8 (8) Other expense (income) 0.1 1.4 (9) 0.7 4.4 (9) Adjusted EBITDA $ 47.6 $ 52.5 $ 135.6 $ 146.6 Footnotes: (1) Includes $14.3 million in the three months ended September 30, 2014 and $6.7 million in the three months ended September 30, 2013 and $43.6 million in the nine months ended September 30, 2014 and $20.2 million in the nine months ended September 30, 2013 for amortization expense that is added back in the as adjusted income statement. (2) Predecessor adjustment to other income for non-cash gain on foreign denominated debt. (3) Adjustment to reverse net unrealized loss on foreign exchange forward contracts in connection with the Chemtura and Agriphar Acquisitions. (4) Includes restructuring expenses of $1.9 million of reorganization costs adjusted out of operating expenses for the nine months ended September 30, 2013. (5) Adjustment to reverse manufacturer s profit in inventory purchase accounting adjustment associated with the MacDermid Acquisition. (6) Adjustment to fair value of contingent consideration in connection with the MacDermid Acquisition primarily associated with achieving the share price targets. (7) Adjustment to reverse deal costs primarily in connection with the Chemtura and Agriphar Acquisitions. (8) Adjustment to reverse debt extinguishment charge in connection with debt from Predecessor recapitalization. (9) Adjustment for 2014 primarily for reversal of the income attributable to the non-controlling interest resulting from the MacDermid Acquisition. For 2013, adjustment to reverse miscellaneous non-recurring charges. Table of Contents CAS The unaudited third quarter financial data provided below in respect of the Chemtura AgroSolutions segment has been prepared in accordance with GAAP. The Chemtura AgroSolutions segment data reported in Chemtura s quarterly report on Form 10-Q is prepared on a different basis than CAS carve-out financial information and may not include (i) all adjustments to certain costs necessary to present CAS on a carve-out basis, and (ii) certain adjustments related to portions of entities we did not acquire in the CAS Acquisition. Accordingly, CAS independent auditors do not express any form of assurance that the unaudited financial data of the Chemtura Agrosolutions segment presented below is representative in any way of what CAS financial results would be on a carve-out entity basis. Based upon information contained in the quarterly report on Form 10-Q filed by Chemtura on October 28, 2014, the unaudited Chemtura AgroSolutions segment s financial data for the three months ended September 30, 2014 is as follows: sales of approximately $113 million as compared to approximately $119 million for the same period in 2013; and operating profit of approximately $20 million as compared to approximately $24 million for the same period in 2013. Based upon information contained in the earnings press release issued by Chemtura on October 28, 2014, unaudited adjusted EBITDA for the Chemtura AgroSolutions segment for the three months ended September 30, 2014 was $23 million as compared to $28 million for the same period in 2013. CAS is in the process of finalizing its unaudited carve-out financial information for the three and nine months ended September 30, 2014. CAS carve-out financial information for the three and nine months ended September 30, 2014 has not been audited, reviewed or subject to any other procedures by CAS independent auditors. The Chemtura AgroSolutions financial data presented above is for informational purposes only and is not intended to represent or be indicative of CAS carve-out financial information for the three months ended September 30, 2014, which once finalized, may be lower than the Chemtura AgroSolutions segments financial data indicated above. Accordingly, investors should not place undue reliance on these preliminary estimates of CAS carve-out financial information for the three months ended September 30, 2014. Arysta The unaudited third quarter information provided below in respect of Arysta has been prepared in accordance with IFRS as issued by the IASB but has not been reviewed or subject to any other procedures by Arysta s independent auditors. Accordingly, Arysta s independent auditors do not express any form of assurance with respect to the unaudited third quarter financial data provided below. Pursuant to the Arysta Acquisition Agreement, we have limited access to Arysta s financial information, and do not yet have full information for the three and nine months ended September 30, 2014. The below limited information is based on data provided to us by Arysta s management. Arysta is in the process of finalizing its financial results for the three and nine months ended September 30, 2014. However, based upon their preliminary unaudited results for the three months ended September 30, 2014, certain selected financial results are expected to be as follows: Arysta had approximately $362 million of sales, compared to $356 million for the same period in 2013; Arysta had a net loss of approximately $26.9 million compared to income of approximately $1.8 million for the same period in 2013; and Table of Contents Incorporated by Reference Included in this Registration Statement Exhibit No. Exhibit Description Form File No. Exhibit No. Filing Date 10.24 Form of support agreement (filed as Annex A to Platform s preliminary proxy statement, as filed on October 6, 2014, and incorporated herein by reference) 8-K 001-36272 10.2 10/08/14 10.25 Placing Agreement, dated May 17, 2013, by and between Platform Acquisition Holdings Limited, certain of its Directors, Berggruen Acquisition Holdings IV Ltd., Mariposa Acquisition, LLC, and Barclays Bank and Citigroup Global Markets Limited as placing banks S-4 333-192778 10.18 01/02/14 10.26 Form of Option Deeds S-4 333-192778 10.19 01/02/14 10.27 Third Amendment to Amended and Restated MacDermid, Incorporated Employees Pension Plan S-4 333-192778 10.21 01/02/14 10.28 Form of Non-Qualified Stock Option Agreement Platform Specialty Products Corporation Equity Incentive Plan S-4 333-192778 10.22 01/02/14 10.29 Form of Incentive Stock Option Agreement Platform Specialty Products Corporation Equity Incentive Plan S-4 333-192778 10.23 01/02/14 10.30 Amended and Restated Pledge and Security Agreement, amended and restated as of October 31, 2013 10-K 001-36272 10.25 03/31/14 10.31 Commitment Letter dated April 16, 2014, between Barclays Bank PLC and Platform Specialty Products Corporation 8-K 001-36272 10.1 04/17/14 10.32 Amended and Restated Commitment Letter dated July 15, 2014, between Barclays Bank PLC and Platform Specialty Products Corporation 8-K 001-36272 10.13 07/21/14 10.33 Registration Rights Agreement, dated May 20, 2014, between Platform Specialty Products Corporation, the placement agents and the purchasers stated therein 8-K 001-36272 10.1 05/21/14 10.34 Registration rights agreement, dated October 8, 2014, between Platform and the purchasers of the Shares 8-K 001-36272 10.3 10/08/14 10.35 Form of Supply Agreement between Platform and Chemtura Corporation 8-K 001-36272 10.1 10/06/14 21.1 List of subsidiaries 10-K 001-36272 21.1 03/31/14 23.1 Consent of PricewaterhouseCoopers LLP (Platform) X 23.2 Consent of KPMG LLP (MacDermid) X 23.3 Consent of KPMG LLP (Chemtura AgroSolutions) X 23.4 Consent of Ernst & Young ShinNihon LLC (Arysta) Table of Contents Arysta had approximately $61.9 million of adjusted EBITDA, compared to $59.1 million for the same period in 2013. Arysta s adjusted EBITDA is defined as consolidated net income (loss) before depreciation and amortization; other operating income (expense), net; financial income (expense), net; income tax benefit (expense); income (loss) after tax from discontinued operations; and other adjustments permitted by its existing credit agreement. The following table reconciles Arysta s net income to adjusted EBITDA for the three months ended September 30, 2014: (in thousands) Net income (loss) $ (26,911 ) Depreciation and amortization 17,912 Other operating (income) expense, net (a) 14,242 Financial (income) expense, net(b) 25,502 Income tax (benefit) expense 30,097 Other credit agreement adjustments(c) 1,056 Arysta s adjusted EBITDA. . . . . . . . . . . . . . . . . . . $ 61,898 (a) Represents the net of other operating income and operating expense. (b) Represents the net of financial income and financial expense. (c) Reflects adjustments consistent with Arysta s existing credit agreement that are permitted to be made when computing EBITDA for any given period under such agreement. Adjustments permitted under Arysta s existing credit agreement include items such as restructuring costs, costs related to a debt refinancing, consulting fees paid to affiliates of the Seller, expenses related to mergers and acquisitions, business optimization expenses and, unusual or non-recurring charges. Arysta s financial information presented herein is for informational purposes only and is not intended to represent or be indicative of Arysta s final results for the three months ended September 30, 2014, once finalized. Accordingly, investors should not place undue reliance on these preliminary estimates. Proposed Underwritten Public Offering of Common Stock On November 10, 2014, we filed an amended registration statement on Form S-1 in connection with the Proposed Public Offering. The Proposed Public Offering is subject to market conditions and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.
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+This summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in shares of our common stock. You should read carefully this entire prospectus, including the information incorporated by reference in this prospectus and any free writing prospectus prepared by us or on our behalf, including the section entitled Risk Factors in this prospectus and the documents incorporated by reference in this prospectus and the financial statements and the related notes incorporated by reference in this prospectus, before you decide to invest in shares of our common stock. Hilton Worldwide Hilton Worldwide is one of the largest and fastest growing hospitality companies in the world, with 4,265 hotels, resorts and timeshare properties comprising 705,196 rooms in 93 countries and territories. In the nearly 100 years since our founding, we have defined the hospitality industry and established a portfolio of 12 world-class brands. Our flagship full-service Hilton Hotels & Resorts brand is the most recognized hotel brand in the world. Our premier brand portfolio also includes our luxury and lifestyle hotel brands, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts and Canopy by Hilton, our full-service hotel brands, Curio A Collection by Hilton, DoubleTree by Hilton and Embassy Suites Hotels, our focused-service hotel brands, Hilton Garden Inn, Hampton Hotels, Homewood Suites by Hilton and Home2 Suites by Hilton and our timeshare brand, Hilton Grand Vacations. We own or lease interests in 145 hotels, many of which are located in global gateway cities, including iconic properties such as the Waldorf Astoria New York, the Hilton Hawaiian Village and the London Hilton on Park Lane. More than 155,000 employees proudly serve in our properties and corporate offices around the world, and we have approximately 43 million members in our award-winning customer loyalty program, Hilton HHonors. We operate our business through three segments: (1) management and franchise; (2) ownership; and (3) timeshare. These complementary business segments enable us to capitalize on our strong brands, global market presence and significant operational scale. Through our management and franchise segment, which consists of 4,120 properties with 645,866 rooms, we manage hotels, resorts and timeshare properties owned by third parties and we license our brands to franchisees. Our ownership segment consists of 145 hotels with 59,330 rooms that we own or lease. Through our timeshare segment, which consists of 44 properties comprising 6,794 units, we market and sell timeshare intervals, operate timeshare resorts and a timeshare membership club and provide consumer financing. Our competitive strengths, together with execution of our strategies and strong fundamentals in the global lodging industry, have contributed to our strong top- and bottom-line operating performance in recent periods and continued industry-leading unit growth. Our system-wide comparable RevPAR increased 5.2 percent on a currency neutral basis for the year ended December 31, 2013 compared to the year ended December 31, 2012 and increased 7.3 percent on a currency neutral basis for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. Adjusted EBITDA increased 13 percent for the year ended December 31, 2013 compared to the year ended December 31, 2012 and increased 14 percent for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. Net income attributable to Hilton stockholders and earnings per share each increased 18 percent for the year ended December 31, 2013 compared to the year ended December 31, 2012 and increased 32 percent and 24 percent, respectively, for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. Table of Contents The information in this preliminary 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 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. Subject to Completion. Dated November 3, 2014 90,000,000 Shares Hilton Worldwide Holdings Inc. Common Stock The selling stockholders named in this prospectus are offering 90,000,000 shares of common stock of Hilton Worldwide Holdings Inc. We will not receive any proceeds from the sale of our common stock by the selling stockholders. Our common stock is listed on the New York Stock Exchange, or NYSE, under the symbol HLT. On October 31, 2014, the closing sales price of our common stock as reported on the NYSE was $25.24 per share. See Risk Factors beginning on page 14 to read about factors you should consider before buying shares of our common stock. Neither the Securities and Exchange Commission nor any other regulatory body 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. Per Share Total Public offering price $ $ Underwriting discounts and commissions (1) $ $ Proceeds, before expenses, to the selling stockholders $ $ (1) We have agreed to reimburse the underwriters for certain FINRA-related expenses. See Underwriting. To the extent that the underwriters sell more than 90,000,000 shares of common stock, the underwriters have the option to purchase up to an additional 13,500,000 shares from the selling stockholders at the public offering price less the underwriting discount. The underwriters expect to deliver the shares against payment in New York, New York on or about , 2014. Deutsche Bank Securities Goldman, Sachs & Co. BofA Merrill Lynch Morgan Stanley J.P. Morgan Citigroup Credit Suisse Wells Fargo Securities HSBC UBS Investment Bank Barclays Credit Agricole CIB Macquarie Capital Nomura MUFG RBS Baird Raymond James RBC Capital Markets CastleOak Securities, L.P. Drexel Hamilton Ramirez & Co., Inc. Telsey Advisory Group Prospectus dated , 2014. Table of Contents the average RevPAR index premium of our comparable hotels (as defined in Management s Discussion and Analysis of Financial Condition and Results of Operations Key Business and Financial Metrics Used by Management Comparable Hotels on page 27 of our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014, or Q3 2014 Form 10-Q, which is incorporated by reference in this prospectus, but excluding hotels that do not receive competitive set information from Smith Travel Research, or STR, or do not participate with STR). The owner or manager of each Hilton comparable hotel exercises its discretion in identifying the competitive set of properties for such hotel, considering factors such as physical proximity, competition for similar customers, product features, services and amenities, quality and average daily rate, as well as STR rules regarding competitive set makeup. Accordingly, while the hotel brands included in the competitive set for any given Hilton comparable hotel depend heavily on market-specific conditions, the competitive sets for Hilton comparable hotels frequently include properties branded with the competing brands identified for the relevant Hilton comparable hotel listed under Business Our Brand Portfolio on page 4 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, or 2013 Form 10-K. STR provides us with the relevant data for competitive sets that we submit for each of our comparable hotels, which we utilize to compute the RevPAR index for our comparable hotels. Table of Contents Our capital light management and franchise segment experienced increases in Adjusted EBITDA of eight percent and 16 percent, respectively, for the year ended December 31, 2013 and the nine months ended September 30, 2014 compared to the prior periods; and our capital light timeshare segment experienced increases in Adjusted EBITDA of 18 percent and 13 percent, respectively, for the year ended December 31, 2013 and the nine months ended September 30, 2014 compared to the prior periods. We have reduced our long-term debt by $2.3 billion through voluntary prepayments from December 12, 2013, the date of our IPO, through October 31, 2014. We opened 34,000 new rooms during the year ended December 31, 2013, and increased the number of rooms in our system by over 25,000 rooms on a net basis, growing the number of rooms in our management and franchise segment in excess of four percent. During the nine months ended September 30, 2014, we opened nearly 30,000 rooms and achieved net unit growth of over 26,000 rooms. We approved 72,000 new rooms for development during the year ended December 31, 2013 and another 55,000 new rooms during the nine months ended September 30, 2014. Our industry-leading pipeline has grown at an average of 12 percent for each of the last three years, and as of September 30, 2014, included 1,269 hotels, consisting of approximately 215,000 rooms, of which more than half, or 119,000 rooms, were located outside of the United States. All of the rooms in our pipeline are within our capital light management and franchise segment. As of September 30, 2014, we had approximately 109,000 rooms under construction, representing the largest number of rooms under construction in the industry based on STR data. We expect that our number one share of worldwide rooms under construction will allow us to continue to expand our share of worldwide rooms supply and build on our leading market position. See Summary Historical Financial Data for the definition of Adjusted EBITDA and a reconciliation of net income attributable to Hilton stockholders to Adjusted EBITDA. Recent Developments Launch of New Brand On October 15, 2014, we launched our newest brand: Canopy by Hilton. This brand represents a new hotel concept that redefines the lifestyle category, offering simple, guest-directed service, thoughtful local choices and comfortable spaces for a positive stay, as well as delivering the many benefits of our system, including the Hilton HHonors guest loyalty program. Letters of intent have been signed for 11 properties and we expect to open the first Canopy hotel in 2015. Sale of Waldorf Astoria New York On October 6, 2014, we announced that we have agreed to sell the Waldorf Astoria New York to an affiliate of Anbang Insurance Group Co. Ltd. (the Buyer ) for a purchase price of $1.95 billion, which is payable in cash at closing and is subject to customary pro rations and adjustments. At closing, we will enter into a management agreement with a 100-year term with the Buyer, pursuant to which we will continue to operate the hotel under our Waldorf Astoria Hotels & Resorts brand. The Buyer has provided a $100 million cash deposit, which is being held in escrow as earnest money and the completion of the transaction is subject to customary closing conditions. Subject to specified terms and conditions, the closing is scheduled for December 31, 2014, but the parties have the right to adjourn closing to March 31, 2015 or later. We can provide no assurance that the closing will occur on either date or at all. At closing, we expect that our existing mortgage loan of approximately $525 million secured by the Waldorf Astoria New York will be repaid in full. Table of Contents Our Competitive Strengths We believe the following competitive strengths provide the foundation for our position as a leading global hospitality company. World-Class Hospitality Brands. Our globally recognized, world-class brands have defined the hospitality industry. Our flagship Hilton Hotels & Resorts brand often serves as an introduction to our wider range of brands, including those in the luxury segment, upper midscale segment and everything in between, that are designed to accommodate any customer s needs anywhere in the world. Our brands have achieved an average global RevPAR index premium of 15 percent for the twelve months ended September 30, 2014, based on STR data. This means that our brands achieve on average 15 percent more revenue per room than competitive properties in similar markets. The demonstrated strength of our brands makes us a preferred partner for hotel owners. Leading Global Presence and Scale. We are one of the largest hospitality companies in the world with 4,265 properties and 705,196 rooms in 93 countries and territories. We have hotels in key gateway cities such as New York City, London, Dubai, Johannesburg, Tokyo, Shanghai and Sydney and 364 hotels located at or near airports around the world. Our global presence allows us to serve our loyal customers throughout the world and to introduce our award-winning brands to customers in new markets. These world-class brands facilitate system growth by providing hotel owners with a variety of options to address each market s specific needs. In addition, the diversity of our operations reduces our exposure to business cycles, individual market disruptions and other risks. Our robust commercial services platform allows us to take advantage of our scale to more effectively deliver products and services that drive customer preference and enhance commercial performance on a global basis. Large and Growing Loyal Customer Base. Serving our customers is our first priority. By continually adapting to customer preferences and providing our customers with superior experiences, we have improved our overall customer satisfaction ratings since 2007. We earned 34 first place awards in the J.D. Power North America Guest Satisfaction rankings since 1999, more than any multi-brand lodging company. Our hotels accommodated more than 136 million customer visits during the twelve months ended September 30, 2014, with members of our Hilton HHonors loyalty program contributing 51 percent of the 179 million resulting room nights. Hilton HHonors unites all our brands, encourages customer loyalty and allows us to provide tailored promotions, messaging and customer experiences. Membership in our Hilton HHonors program continues to increase, and as of September 30, 2014, there were approximately 43 million Hilton HHonors members, an 11 percent increase from September 30, 2013. Significant Embedded Growth. All of our segments are expected to grow through improvement in same-store performance driven by strong anticipated industry fundamentals. PKF Hospitality Research LLC, or PKF-HR, predicts that lodging industry RevPAR in the U.S., where 76 percent of our system rooms are located, will grow 8.2 percent in 2014 and 6.7 percent in 2015. Our management and franchise segment also is expected to grow through new room additions, as upon completion, our industry-leading development pipeline would result in a 31 percent increase in our room count with minimal capital investment from us. In addition, our franchise revenues should grow over time as franchise agreements renew at our published license rates, which are higher than our current effective rates. For the nine months ended September 30, 2014, our weighted average effective license rate across our brands was 4.6 percent of room revenue and our weighted average published license rate was 5.4 percent as of September 30, 2014. We also expect our incentive management fees, which are linked to hotel profitability measures, to increase as a result of the expected improvements in industry fundamentals and new unit growth. In our ownership segment, we believe we will benefit from strong growth in bottom-line earnings as industry fundamentals continue to improve as a result of this segment s operating leverage, and our large hotels with significant meeting space should benefit from Table of Contents recent improvements in group demand, which we expect will exhibit strong growth as the current stage of the lodging cycle advances. Finally, our timeshare business has over six years of projected interval supply at our current sales pace in the form of existing owned inventory and executed capital light projects, which should enable us to continue to grow our earnings from the segment with lower levels of capital investment from us. Strong Cash Flow Generation. We generate significant cash flow from operating activities with an increasing percentage from our growing capital light management and franchise and timeshare segments. During the three-year period ended December 31, 2013, we generated an aggregate of $4.4 billion in cash flow from operating activities. Over this same period, we reduced our total indebtedness by $4.8 billion and during the nine months ended September 30, 2014, we further reduced our long-term debt by $700 million through voluntary prepayments. Additionally, in October 2014, we made a $100 million voluntary prepayment to further reduce our long-term debt. We believe that our focus on cash flow generation, the relatively low investment required to grow our management and franchise and timeshare segments, and our disciplined approach to capital allocation position us to maximize opportunities for profitability and growth while continuing to reduce our indebtedness over time. Iconic Hotels with Significant Underlying Real Estate Value. Our diverse global portfolio of owned and leased hotels includes a number of renowned properties in key gateway cities such as New York City, London, San Francisco, Chicago, S o Paolo, Sydney and Tokyo. The portfolio also includes iconic hotels with significant embedded asset value, including: the Waldorf Astoria New York, a landmark luxury hotel with 1,413 rooms encompassing an entire city block in the heart of midtown Manhattan near Grand Central Terminal; the Hilton Hawaiian Village, a full-service beach resort with 2,860 rooms that sits on approximately 22 oceanfront acres along Waikiki Beach on the island of Oahu; and the London Hilton on Park Lane, a 453-room hotel overlooking Hyde Park in the exclusive Mayfair district of London. Our ten owned hotels with the highest Adjusted EBITDA contributed 56 percent of our ownership segment s Adjusted EBITDA during the year ended December 31, 2013, which highlights the quality of our key flagship properties. In addition, we believe the iconic nature of many of these properties creates significant value for our entire system of properties by reinforcing the world-class nature of our brands. We continually focus on increasing the value and enhancing the market position of our owned and leased hotels and, over time, we believe we can unlock significant incremental value through opportunistically exiting assets or executing on adaptive reuse plans for all or a portion of certain hotels as retail, residential or timeshare uses. An example of this is the recent sale of a previously non-income producing parcel of land at the Hilton Hawaiian Village that had previously been used as a loading dock, along with corresponding entitlements, to a third party in connection with a planned timeshare development project that will not require any capital investment by us. Further, we have plans at the Hilton New York to redevelop the hotel s retail platform to include over 10,000 square feet of street-level retail space, as well as to convert certain floors to timeshare units, which we expect will increase the value of the property. Additionally, in October 2014, we announced that we have entered into an agreement to sell the Waldorf Astoria New York for $1.95 billion and that we will enter into a management agreement with the buyer for a 100-year term. Market-Leading and Innovative Timeshare Platform. Our timeshare business complements our other segments and provides an alternative hospitality product that serves an attractive customer base. Our timeshare customers are among our most loyal hotel customers, with estimated spend in our hotel system increasing approximately 40 percent after the purchase of their timeshare interests. Historically, we have concentrated our timeshare efforts in four key markets: Florida, Hawaii, New York City and Las Vegas, which has helped us to increase annual sales of timeshare intervals while yielding strong profit margins during a time when our competitors generally experienced declines in both sales and profit margins. As a result of this strong operating performance and the returns we were able to drive on our own timeshare developments, we began a transformation of our timeshare business to a capital light model in which third-party timeshare owners and developers provide capital for development Table of Contents while we act as sales and marketing agent and property manager. Through these transactions, we receive a sales and marketing commission and branding fees on sales of timeshare intervals, recurring fees to operate the homeowners associations and revenues from resort operations. We also earn recurring fees in connection with the points-based membership programs we operate that provide for exclusive exchange, leisure travel and reservation services, and through fees related to the servicing of consumer loans. We have increased the sales of intervals developed by third parties from zero in 2009 to 58 percent for the twelve months ended September 30, 2014, which has dramatically reduced the capital requirements of our timeshare segment while continuing to drive strong earnings and cash flows. Performance-Driven Culture. We are an organization of people serving people, thus it is imperative that we attract and retain best-in-class talent to serve our various stakeholders. We have a performance-driven culture that begins with an intense alignment around our mission, vision, values and key strategic priorities. Our President and Chief Executive Officer, Christopher J. Nassetta, has nearly 30 years of experience in the hotel industry, previously serving as President and Chief Executive Officer of Host Hotels & Resorts, Inc., where he was named Institutional Investor s 2007 REIT CEO of the Year. He and the balance of our executive management team have been instrumental in transforming our organization and installing a culture that develops leaders at all levels of the organization that are focused on delivering exceptional service to our customers every day. We rely on our over 155,000 employees to execute our strategy and continue to enhance our products and services to ensure that we remain at the forefront of performance and innovation in the lodging industry. Our Business and Growth Strategy The following are key elements of our strategy to become the preeminent global hospitality company the first choice of guests, employees and owners alike: Expand our Global Footprint. We intend to build on our leading position in the U.S. and expand our global footprint. In February 2006, we reacquired Hilton International Co., which had operated as a separate company since 1964, and in so doing, reacquired the international Hilton branding rights. Reuniting Hilton s U.S. and international operations has provided us with the platform to grow our business and brands globally. As a result of the reacquisition and focus on global expansion, we currently rank number one in every major region of the world by rooms under construction, based on STR data. We aim to increase the relative contribution of our international operations by increasing the number of rooms in our system that are located outside of the U.S. As of September 30, 2014, 70 percent of our new rooms under construction are located outside of the U.S. We plan to continue to expand our global footprint by introducing the right brands with the right product positioning in targeted markets and allocating business development resources effectively to drive new unit growth in every region of the world. Grow our Fee-Based Businesses. We intend to grow our higher margin, fee-based businesses. We expect to increase the contribution of our management and franchise segment, which already accounts for more than half of our aggregate segment Adjusted EBITDA, through new third-party hotel development and the conversion of existing hotels to our brands. Our industry-leading pipeline consisted of approximately 215,000 rooms as of September 30, 2014, all within our capital light management and franchise segment. Upon completion, this pipeline of new, third-party owned hotels would result in a 33 percent increase in our management and franchise segment s room count with minimal capital investment from us. In addition, we aim to increase the average effective franchise fees we receive over time by renewing and entering into new franchise agreements at our current published franchise fee rates. Table of Contents Continue to Increase the Capital Efficiency of our Timeshare Business. Traditionally, timeshare operators have funded 100 percent of the investment necessary to acquire land and construct timeshare properties. In 2010, we began sourcing timeshare intervals through sales and marketing agreements with third-party developers. These agreements enable us to generate fees from the sales and marketing of the timeshare intervals and club memberships and from the management of the timeshare properties without requiring us to fund acquisition and construction costs. Our supply of third-party developed timeshare intervals has increased to 106,000, or 81 percent of our total supply, as of September 30, 2014 and the percentage of sales of timeshare intervals developed by third parties has increased to 58 percent for the twelve months ended September 30, 2014. We continue to expand our capital light timeshare business through fee-for-service arrangements with third-party timeshare developers, including the sales and marketing and other timeshare related services agreement we announced in June 2014 for the development of a 37-story, 418-unit timeshare tower adjacent to the Hilton Hawaiian Village. We also recently signed a sales and marketing agreement with a third party for our first timeshare project in Maui, which will consist of over 20,000 intervals and is expected to begin sales in 2016. We will continue to seek opportunities to grow our timeshare business through this capital light model. Optimize the Performance of our Owned and Leased Hotels. In addition to utilizing our commercial services platform to enhance the revenue performance of our owned and leased assets, we have focused on maximizing the cost efficiency of the portfolio by implementing labor management practices and systems and reducing fixed costs to drive profitability. Through our disciplined approach to asset management, we have developed and executed on strategic plans for each of our hotels to enhance the market position of each property. We expect to continue to enhance the performance of our hotels by improving operating efficiencies, and believe there is an opportunity to drive further improvements in operating margins and Adjusted EBITDA. Further, at certain of our hotels, we are developing plans for the adaptive reuse of all or a portion of the property to residential, retail or timeshare uses similar to our plans for the Hilton New York. Finally, we believe we can create value over time by opportunistically exiting assets and restructuring or exiting leases. Strengthen and Enhance our Brands and Commercial Services Platform. We intend to enhance our world-class brands through superior brand management by continuing to develop products and services that drive increased RevPAR premiums. We will continue to refine our luxury brands to deliver modern products and service standards that are relevant to today s luxury traveler. We will continue to position our full-service operating model and product standards to meet evolving customer needs and drive financial results that support incremental owner investment in our hotels. In our focused-service brands, we will continue to position for growth in the U.S., and tailor our products as appropriate to meet the needs of customers and developers outside the U.S. We will continue to innovate and enhance our commercial services platform to ensure we have the most formidable sales, pricing, marketing and distribution platform in the industry to drive premium commercial performance to our entire system of hotels. We also will continue to invest in our Hilton HHonors customer loyalty program to ensure it remains relevant to our customers and drives customer loyalty and value to our hotel owners. Our Industry We believe that the fundamentals of the global hotel industry, as projected by analysts, particularly in the U.S., where 76 percent of our system-wide rooms are located, will yield strong industry performance and support the growth of our business in coming years. According to STR data, U.S. lodging demand, as measured by number of hotel rooms sold, has improved with the economic recovery in recent years, experiencing a compound annual growth rate, or CAGR, of 3.2 percent over the last three years, significantly exceeding the 25-year CAGR of 1.7 percent. In contrast, over the last three years, U.S. lodging industry supply has grown at a CAGR of Table of Contents 0.5 percent, well below the 25-year CAGR of 1.8 percent. We believe this positive imbalance between demand growth and supply growth has contributed to a RevPAR CAGR of 6.7 percent over the last three years, well above the 25-year CAGR of 2.8 percent. According to PKF-HR, total U.S. lodging industry RevPAR is expected to increase 8.2 percent in 2014 and 6.7 percent in 2015. According to STR data, global lodging demand, as measured by number of hotel rooms sold, has grown at a CAGR of 3.9 percent over the last three years and hotel supply growth increased at a CAGR of 1.6 percent. We believe these attractive supply/demand fundamentals provide the potential for continued global RevPAR growth in the coming years. In addition, we believe that broader positive global macroeconomic and travel and tourism trends will continue to drive longer-term growth in the lodging sector. In particular, we believe that a growing middle class (which the Organization for Economic Co-operation and Development expects will grow from approximately two to five billion people by 2030) with the desire and resources to travel both within their home regions and elsewhere will support growth in global tourism (which the United Nations World Tourism Organization projects will grow on average between 3 percent and 4 percent annually through 2030) and will be an important factor in driving the growth of the global lodging industry. We believe that these trends will provide a strong basis for our growth over the long term. Investment Risks An investment in shares of our common stock involves substantial risks and uncertainties that may adversely affect our business, financial condition and results of operations and cash flows. Some of the more significant challenges and risks relating to an investment in our company include those associated with the following: We are subject to the business, financial and operating risks inherent to the hospitality industry, any of which could reduce our revenues and limit opportunities for growth. Macroeconomic and other factors beyond our control can adversely affect and reduce demand for our products and services. Contraction in the global economy or low levels of economic growth could adversely affect our revenues and profitability, as well as limit or slow our future growth. The hospitality industry is subject to seasonal and cyclical volatility, which may contribute to fluctuations in our results of operations and financial condition. Because we operate in a highly competitive industry, our revenues or profits could be harmed if we are unable to compete effectively. Any deterioration in the quality or reputation of our brands could have an adverse effect on our reputation, business, financial condition or results of operations. If we are unable to maintain good relationships with third-party hotel owners and renew or enter into new management and franchise agreements, we may be unable to expand our presence and our business, financial condition and results of operations may suffer. We are exposed to the risks resulting from significant investments in owned and leased real estate, which could increase our costs, reduce our profits and limit our ability to respond to market conditions. Our efforts to develop, redevelop or renovate our owned and leased properties could be delayed or become more expensive, which could reduce revenues or impair our ability to compete effectively. We share control in joint venture projects, which limits our ability to manage third-party risks associated with these projects. Table of Contents The timeshare business is subject to extensive regulation and failure to comply with such regulation may have an adverse effect on our business. A decline in timeshare interval inventory or our failure to enter into and maintain timeshare management agreements may have an adverse effect on our business or results of operations. Some of our existing development pipeline may not be developed into new hotels, which could materially adversely affect our growth prospects. Failures in, material damage to, or interruptions in our information technology systems, software or websites and difficulties in updating our existing software or developing or implementing new software could have a material adverse effect on our business or results of operations. We may be exposed to risks and costs associated with protecting the integrity and security of our guests personal information. Failure to comply with marketing and advertising laws, including with regard to direct marketing, could result in fines or place restrictions on our business. Because we derive a portion of our revenues from operations outside the United States, the risks of doing business internationally could lower our revenues, increase our costs, reduce our profits or disrupt our business. The loss of senior executives or key field personnel, such as general managers, could significantly harm our business. Any failure to protect our trademarks and other intellectual property could reduce the value of the Hilton brands and harm our business. Our substantial indebtedness and other contractual obligations could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and pay our debts and could divert our cash flow from operations for debt payments. Our Sponsor controls us and its interests may conflict with ours or yours in the future. Please see Risk Factors in our 2013 Form 10-K which is incorporated by reference in this prospectus for a discussion of these and other factors you should consider before making an investment in shares of our common stock. Hilton Worldwide Holdings Inc. was incorporated in Delaware in March 2010. In 1919, our founder Conrad Hilton purchased his first hotel in Cisco, Texas. Through our predecessors, we commenced operations in 1946 when our subsidiary Hilton Hotels Corporation, later renamed Hilton Worldwide, Inc., was incorporated in Delaware. Our principal executive offices are located at 7930 Jones Branch Drive, Suite 1100, McLean, Virginia 22102 and our telephone number is (703) 883-1000. Table of Contents The Offering Common stock offered by the selling stockholders 90,000,000 shares Underwriters option to purchase additional shares of common stock The selling stockholders have granted the underwriters a 30-day option to purchase up to an additional 13,500,000 shares. Common stock outstanding after this offering 984,617,365 shares Use of proceeds We will not receive any of the proceeds from the sale of shares of common stock by the selling stockholders. Dividend policy We have no current plans to pay dividends on our common stock. Any decision to declare and pay dividends in the future will be made at the sole discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our board of directors may deem relevant.
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus or incorporated by reference into this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in our common stock. 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 together with the documents that we incorporate by reference into this prospectus. Quintiles We are the world s largest provider of biopharmaceutical development services and commercial outsourcing services. We are positioned at the intersection of business services and healthcare and generated $3.8 billion of service revenues in 2013, conduct business in approximately 100 countries and have approximately 28,200 employees. We use the breadth and depth of our service offerings, our global footprint and our therapeutic, scientific and analytics expertise to help our biopharmaceutical customers, as well as other healthcare customers, to be more successful in an increasingly complex healthcare environment. Since our founding more than 30 years ago, we have grown to become a leader in the development and commercialization of new pharmaceutical therapies. Our Product Development segment is the world s largest contract research organization, or CRO, as ranked by 2013 reported service revenues by public CROs, and is focused primarily on Phase II-IV clinical trials and associated laboratory and analytical activities. Our Integrated Healthcare Services segment includes one of the leading global commercial pharmaceutical sales and service organizations. Integrated Healthcare Services provides a broad array of services, including commercial services, such as providing contract pharmaceutical sales forces in key geographic markets, as well as a growing number of healthcare business services for the broader healthcare sector, such as outcome-based, consulting and real-world research and other healthcare solutions. Product Development contributed approximately 77% and Integrated Healthcare Services contributed approximately 23% to our 2013 service revenues. Additional information regarding our segments is presented in Note 21 to our audited consolidated financial statements incorporated by reference from our Annual Report on Form 10-K for the year ended December 31, 2013, as amended (our 2013 Form 10-K ). In 2013, our service revenues were $3.8 billion and our net income attributable to our shareholders was $226.6 million. As of December 31, 2013, we had total assets of $3.1 billion, total liabilities of $3.7 billion and a shareholders deficit of $667.5 million. We had backlog of $9.9 billion as of December 31, 2013 and net new business of $4.9 billion during 2013. Backlog represents the value of future service revenues from work not yet completed or performed under awards as of a particular date, and net new business is the value of services awarded during the period from projects under signed contracts, letters of intent and, in some cases, pre-contract commitments, which are supported by written communications and adjusted for contracts that were modified or canceled during the period. Net new business under sole provider arrangements are recorded over the life of the arrangement as projects are awarded. We did not pay any dividends in 2013 and currently do not intend to pay dividends for the foreseeable future. From 2009 to 2013, our non-GAAP adjusted EBITDA grew at a 7.2% compound annual growth rate, or CAGR. During this period, our service revenues experienced year-over-year increases each year and our annual book-to-bill ratio was between 1.16x and 1.29x. For additional information regarding these financial measures, including a reconciliation of our non-GAAP measures to the most directly comparable measure presented in accordance with United States generally accepted accounting principles, or GAAP, see Selected Consolidated Financial Data included elsewhere in this prospectus. Our global scale and capabilities enable us to work with the leading companies in the biopharmaceutical sector that perform trials and market their products all around the world. During each of the last 11 years, we have worked with the 20 largest biopharmaceutical companies ranked by 2012 reported revenues. We have Table of Contents The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and neither we nor the selling shareholders are soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted. Subject to completion, dated March 10, 2014 PROSPECTUS 15,000,000 Shares COMMON STOCK The selling shareholders identified in this prospectus are offering 15,000,000 shares of common stock. We will not receive any proceeds from the sale of our common stock by the selling shareholders. The common stock of Quintiles Transnational Holdings Inc. is listed on the New York Stock Exchange (the NYSE ) under the symbol Q . The last reported sale price of Quintiles Transnational Holdings Inc. s common stock on the NYSE on March 7, 2014 was $54.11 per share. Investing in our common stock involves risks. See Risk Factors beginning on page 14 to read about factors you should consider before buying our common stock. Per Share Total Public offering price $ $ Underwriting discounts(1) $ $ Proceeds to selling shareholders, before expenses $ $ (1) See Underwriting for a description of the compensation payable to the underwriters. The underwriters have an option to purchase up to an additional 2,250,000 shares of common stock from the selling shareholders at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus. Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body 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. The underwriters expect to deliver the shares of common stock to purchasers on or about , 2014. MORGAN STANLEY BARCLAYS J.P. MORGAN CITIGROUP GOLDMAN, SACHS & CO. WELLS FARGO SECURITIES BofA MERRILL LYNCH DEUTSCHE BANK SECURITIES BAIRD WILLIAM BLAIR JEFFERIES GUGGENHEIM SECURITIES PIPER JAFFRAY RAYMOND JAMES RBC CAPITAL MARKETS UBS INVESTMENT BANK , 2014 Table of Contents provided services in connection with the development or commercialization of the top 50 best-selling biopharmaceutical products and the top 50 best-selling biologic products during 2012, as measured by reported sales. Of the new molecular entities, or NMEs, and new biologic applications approved from 2004 through 2012, we helped develop or commercialize 97% of the central nervous system drugs, 93% of the oncology drugs and 89% of the cardiovascular drugs. We have extensive scientific and therapeutic expertise which enables us to add sophisticated statistical, process development and advanced technology applications into our clinical development services to meet the needs of the broader healthcare industry for appropriate endpoints, adaptive trials, drug therapy analysis, outcomes and real-world research and evidence-based medicine. Moreover, our flexible business solutions and commitment to our customers objectives enable us to provide our customers with customized operational delivery models to meet their particular needs. Our Markets The market served by Product Development consists primarily of biopharmaceutical companies, including medical device and diagnostics companies, that are seeking to outsource clinical trials and other product development activities. We estimate that total biopharmaceutical spending on drug development was approximately $93 billion in 2013, of which we estimate that our addressable market (clinical development spending excluding preclinical spending) was approximately $51 billion. The portion of this $51 billion that was outsourced in 2013, based on our estimates, was approximately $19 billion. We estimate that the potential market for Product Development s services will experience a CAGR of 6%-8% from 2013 through 2016 as a result of increased research and development, or R&D, spending by biopharmaceutical companies and the increased outsourcing of this spending as compared to 2012. Integrated Healthcare Services primarily addresses markets related to the use of approved biopharmaceutical products. We estimate that total spending related to approved drugs, including biopharmaceutical spending on commercialization of these drugs and expenditures by participants in the broader healthcare market on real-world research and evidence-based medicine, exceeded $94 billion in 2013. Integrated Healthcare Services links product development to healthcare delivery. This segment s services include commercial services such as recruiting, training, deploying and managing a global sales force, channel management, patient engagement services, market access consulting, brand communication, consulting and medical education. In addition, Integrated Healthcare Services offers outcome-based services such as observational studies, comparative effectiveness studies and product and disease registry services which are intended to help increase the quality and cost-effectiveness of healthcare and provider payer solutions. We believe that a combination of cost pressure in healthcare systems around the world and the increasing focus on the value and efficacy of pharmaceutical therapy provides us many opportunities to grow our revenues and expand our service offerings by improving the cost-effectiveness of drug therapies. We believe that we are well-positioned to benefit from current trends in the biopharmaceutical and healthcare industries that affect our markets, including: Trends in R&D Spending. We estimate that R&D spending was approximately $137 billion in 2013 and will grow to approximately $145 billion in 2016, with development accounting for approximately 68% of total expenditures. R&D spending trends are impacted as a result of several factors, including major biopharmaceutical companies efforts to replenish revenues lost from the so-called patent cliff of recent years, increased access to capital by the small and midcap biotechnology industry, and recent increases in pharmaceutical approvals by regulatory authorities. In 2013, there were approximately 4,060 drugs in the Phase I-III pipeline, an increase of 19% since 2008, and there were 27 NME approvals by the United States Food and Drug Administration, or FDA, in 2013 which for the two year period of 2012 to 2013 showed the highest number of approvals since the late 1990s. We believe that further R&D spending, combined with the continued need for Table of Contents Table of Contents cost efficiency across the healthcare landscape, will create new opportunities for biopharmaceutical services companies, particularly those with a global reach and broad service offerings, to help biopharmaceutical companies with their pre- and post-launch product development and commercialization needs. Growth in Outsourcing. We estimate that clinical development spending outsourced to CROs in Phases I-IV in 2013 was approximately $19 billion and will grow to approximately $23 billion by 2016. We expect outsourced clinical development to CROs to grow 6%-8% annually during this period. Of this annual growth, we believe that up to 2% will be derived from increased R&D expenditures, with the remainder coming from increased outsourcing penetration. We estimate that overall outsourcing penetration in 2013 was 37%. The market served by Integrated Healthcare Services is diverse, which makes it difficult to estimate the current amount of outsourced integrated healthcare services and the expected growth in such services. However, based on our knowledge of these markets we believe that, while the rate of outsourcing penetration varies by market within Integrated Healthcare Services, the current outsourcing penetration of the estimated $94 billion addressable market is not more than 20%. As business models continue to evolve in the healthcare sector, we believe that the growth rate for outsourcing across the Integrated Healthcare Services markets will be similar to the growth in clinical development. In particular, we believe that the following trends will result in increased outsourcing to global biopharmaceutical services companies, of which we are the largest and most global: Maximizing Productivity and Lowering Costs. We believe that the need for biopharmaceutical companies to maximize productivity and lower costs in their product development and commercial operations will cause them to look to partners as they enter into outsourcing arrangements to improve efficiency, increase sales force utilization and effectiveness, improve clinical success rates and turn fixed costs into variable costs across their R&D and commercial operations. Managing Complexity. Improved standards of care in many therapeutic areas and the emergence of new types of therapies, such as biologics, genetically targeted therapies, gene and stem cell therapies, and other treatment modalities have led to more complex development and regulatory pathways. We believe that companion diagnostics, genomics and biomarker expertise will become a more critical part of the development process as biopharmaceutical companies require more customized clinical trials and seek to develop treatments that are more tailored to an individual s genetic profile or a disease s profile. We believe that our global clinical development capabilities position us well to help biopharmaceutical companies manage the complexities inherent in an environment where this type of expertise is important. Providing Enhanced Value for Patients. As healthcare costs rise globally, governments and third-party payers have looked for ways both to control healthcare expenditures and increase the quality, safety and effectiveness of drug therapies. Governments and regulatory bodies have adopted, and may continue to adopt, healthcare legislation and regulations that may significantly impact the healthcare industry by demanding more value for money spent and financial accountability for patient outcomes, which we believe will increase the demand for innovative and cost-effective commercialization strategies and outcome research and data analytics services. Increased Importance of Product Development in Local Markets. Increasingly, regulators require trials involving local populations as part of the process for approving new pharmaceutical products, especially in certain Asian and emerging markets. Understanding the epidemiological and physiological differences in different ethnic populations and being able to conduct trials locally in certain geographies will be important to pharmaceutical product growth strategies, both for multinational and local/regional biopharmaceutical companies. Table of Contents Table of Contents Prospectus Summary 1
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+Table of Contents Summary iWallet Corporation The Company We were incorporated as "Queensridge Mining Resources, Inc." on January 29, 2010, in the State of Nevada for the purpose of engaging in mineral exploration. On July 21, 2014, we entered into a Merger Agreement with iWallet Corporation, a private California corporation, whereby we acquired all of the issued and outstanding common stock of iWallet Corporation through a subsidiary. Following this merger, we merged the subsidiary with and into our corporation, and changed our name to "iWallet Corporation" as part of that process. As a result of entering into the Merger Agreement, we are in the business of designing and developing biometric locking wallets and related physical, personal security products. Our address is 7394 Trade Street, San Diego, California 92121. Our phone number is (858) 530-2958. Our fiscal year end is December 31. The Offering Securities Being Offered Up to 20,968,130 shares of our common stock, including 10,484,065 shares of common stock issued to the selling shareholders in private placements, as well as 10,484,065 shares of common stock underlying the warrants also issued to the selling shareholders in private placements Offering Price All shares being offered are being sold by existing shareholders without our involvement, so the actual price of the stock will be determined by prevailing market prices at the time of sale or by private transactions negotiated by the selling shareholders. The offering price will thus be determined by market factors and the independent decisions of the selling shareholders. Minimum Number of Shares To Be Sold in This Offering n/a Maximum Number of Shares To Be Sold in This Offering 20,968,130 Securities Issued and to be Issued 33,919,419 shares of our common stock are issued and outstanding as of October 9, 2014. All of the common stock to be sold under this prospectus will be sold by existing shareholders. There will be no increase in our issued and outstanding shares as a result of this offering. Use of Proceeds We will not receive any proceeds from the sale of the common stock by the selling shareholders. Table of Contents Summary Financial Information Balance Sheet Data Fiscal Year Ended December 31, 2013 (audited) Six Months Ended June 30, 2014 (unaudited) Cash $250,718 $17,168 Total Assets $496,993 $380,630 Liabilities $719,794 $1,007,824 Total Stockholder s Deficit $222,812 $627,205 Statement of Operations Revenue $85,769 $38,139 Net Profit (Loss) for Reporting Period $(226,921) $(404,393) Risk Factors You should consider each of the following risk factors and any other information set forth herein and in our reports filed with the SEC, including our financial statements and related notes, in evaluating our business and prospects. The risks and uncertainties described below are not the only ones that impact on our operations and business. Additional risks and uncertainties not presently known to us, or that we currently consider immaterial, may also impair our business or operations. If any of the following risks actually occur, our business and financial results or prospects could be harmed. In that case, the value of the Common Stock could decline. Risks Related to Our Business and Industry Our failure to raise additional capital or generate the cash flows necessary to expand our operations and invest in our product offerings could reduce our ability to compete successfully and adversely affect our results of operations. We will need to raise additional funds in order to execute on our business development plan over the long term. We may not be able obtain additional debt or equity financing on favorable terms, if at all. If we raise additional equity financing, our security holders may experience significant dilution of their ownership interests and the value of our common stock could decline. If we engage in debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness and force us to maintain specified liquidity or other ratios. If we cannot raise additional capital on acceptable terms, we may not be able to, among other things: develop and enhance our products develop our brand and acquire new customers continue to expand our technology development, sales and marketing organizations acquire complementary technologies, products or businesses expand operations internationally pay our debts as they come due hire, train and retain employees respond to competitive pressures or unanticipated working capital requirements Our inability to do any of the foregoing could reduce our ability to compete successfully and adversely affect our results of operations. Table of Contents Because we have experienced net losses to date, we may never be able to generate sufficient net revenue in the future to be profitable. We have had net operating losses since inception and expect to continue experiencing net losses for the immediate future. In addition, we expect to make significant future expenditures related to the continued development and expansion of our business. Furthermore, as a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. As a result of these factors, to achieve profitability we will need to, among other matters, increase our customer base and our distribution channels. We cannot assure you that we will be able to increase our revenue in this manner and achieve profitability. As we expect to continue to invest in the development of our business, this investment could outpace growth in our revenue, and thereby impair our ability to achieve and maintain profitability. Because we are dependent on outside manufacturers to produce our products, increases in manufacturing costs or component prices may negatively affect our operations We currently rely on one manufacturer to manufacture our iWallet products to order. We are constrained by its manufacturing capabilities and pricing, and may face production delays or escalating costs if it is unable to manufacture a sufficient quantity of product at an affordable cost. Further, we could face production delays if it becomes necessary to replace our existing supplier with one or more alternative suppliers. These factors could have a material adverse effect on our business, prospects, and results of operations or financial condition. In addition, our operation could be significantly affected by increases in the cost of high quality carbon fiber or other raw materials necessary to manufacture our products. Because there is an uncertain market for our products, we cannot be certain that they will gain wide acceptance or that we will be able to generate sustained sales growth. While we believe that our innovative security products would be attractive to business professionals, we have only a limited operating history to determine the market acceptance for our products. No assurance can be given that a significant market for our products and services will be developed or sustained. If our iWallet security products do not gain wider acceptance amongst our target market, we will be unable to achieve sustained sales growth and our business may not be viable over the longer term. Because the preservation of our intellectual property rights is essential to the success of our business, our failure to protect those rights could adversely affect our business. Our intellectual property rights, including existing and future trademarks, patents, trade secrets and copyrights, are and will continue to be valuable and important assets of our business. We believe that our proprietary technology, as well as our other technologies and business practices, are competitive advantages and that any duplication by competitors would harm our business. We have taken measures to protect our intellectual property, but these measures may not be sufficient or effective. Intellectual property laws and contractual restrictions may not prevent misappropriation of our intellectual property or deter others from developing similar technologies. In addition, others may develop technologies that are similar or superior to our technology. Our failure to protect, or any significant impairment to the value of, our intellectual property rights could harm our business. Our products may contain defects, which could adversely affect our reputation and cause us to incur significant costs. Defects may be found in our products. Any such defects could cause us to incur significant return and exchange costs, re-engineering costs, divert the attention of our personnel from product development efforts, and cause significant customer relations and business reputation problems. If we deliver products with defects, our credibility and the market acceptance and sales of our products could be harmed. If we are unable to hire and retain key personnel, we may not be able to implement our business plan. Having certain key personnel is essential to the development and marketing of the products we plan to sell and thus to the entire business itself. Consequently, the loss of any of those individuals may have a substantial effect on our future success or failure. We may have to recruit qualified personnel with competitive compensation packages, equity participation, and other benefits that may affect the working capital available for our operations. Management may have to seek to obtain outside independent professionals to assist them in assessing the merits and risks of any business proposals as well as assisting in the development and operation of many company projects. No assurance can be given that we will be able to obtain such needed assistance on terms acceptable to us. Our failure to attract additional qualified employees or to retain the services of key personnel could have a material adverse effect on our operating results and financial condition. Even though we are not manufacturing the products ourselves, if any of the products we sell infringe on the intellectual property rights of others, we may find ourselves involved in costly litigation, which will negatively affect the financial results of our business operations. Although we have not received notices of any alleged infringement, we cannot be certain that our products do not infringe on issued trademarks and/or copyright rights of others. We may be subject to legal proceedings and claims from time to time in our ordinary course of business arising out of intellectual property rights of others. These legal proceedings can be very costly, and thus can negatively affect the results of our operations. Table of Contents Because we conduct business outside of the United States, we are subject to certain additional risks related to doing business in foreign countries. We intend to conduct our business, in part, outside of the United States, and our products are manufactured under contract in China. Doing business in foreign countries carries with it certain risks that are not found in doing business in the United States. The risks of doing business in foreign countries that could result in losses against which we are not insured include: exposure to local economic conditions; potential adverse changes in the diplomatic relations of foreign countries with the United States; hostility from local populations; the adverse effect of currency exchange controls; restrictions on the withdrawal of foreign investment and earnings; government policies against businesses owned by foreigners; investment restrictions or requirements; expropriations of property; the potential instability of foreign governments; the risk of insurrections; risks of renegotiation or modification of existing agreements with governmental authorities; foreign exchange restrictions; withholding and other taxes on remittances and other payments by subsidiaries; and Changes in taxation structure. Table of Contents Risks Related to Legal Uncertainty Because our articles of incorporation and bylaws and Nevada law limit the liability of our officers, directors, and others, shareholders may have no recourse for acts performed in good faith. Under our articles of incorporation, bylaws and Nevada law, each of our officers, directors, employees, attorneys, accountants and agents are not liable to us or the shareholders for any acts they perform in good faith, or for any non-action or failure to act, except for acts of fraud, willful misconduct or gross negligence. Our articles and bylaws provide that we will indemnify each of our officers, directors, employees, attorneys, accountants and agents from any claim, loss, cost, damage liability and expense by reason of any act undertaken or omitted to be undertaken by them, unless the act performed or omitted to be performed constitutes fraud, willful misconduct or gross negligence. If certain legislation, including the Sarbanes-Oxley Act of 2002, makes it more difficult for us to retain or attract officers and directors, we may be unable to hire such personnel and our business operations may be materially negatively impacted. The Sarbanes-Oxley Act of 2002 was enacted in response to public concerns regarding corporate accountability in connection with recent accounting scandals. The stated goals of the Sarbanes-Oxley Act are to increase corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. The Sarbanes-Oxley Act generally applies to all companies that file or are required to file periodic reports with the SEC, under the Securities Exchange Act of 1934. As a public company, we are required to comply with the Sarbanes-Oxley Act. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may deter qualified individuals from accepting these roles. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. We continue to evaluate and monitor developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. Risks Relating to our Common Stock If we fail to remain current on our reporting requirements, we could be removed from quotation on the OTCQB, which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. Companies trading on the OTCQB, such as us, must be reporting issuers with the Securities and Exchange Commission and must be current in their reports in order to maintain price quotation privileges on the OTCQB tier of the electronic quotation system operated by OTC Markets, Inc. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. Because our common stock could be deemed a low-priced "Penny" stock, it would be cumbersome for brokers and dealers to trade in our common stock, making the market for our common stock less liquid and negatively affect the price of our stock. We may be subject to certain provisions of the Securities Exchange Act of 1934, commonly referred to as the "penny stock" as defined in Rule 3a51-1. A penny stock is generally defined to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. If our stock is deemed to be a penny stock, trading will be subject to additional sales practice requirements of broker-dealers. These require a broker-dealer to: Deliver to the customer, and obtain a written receipt for, a disclosure document; Disclose certain price information about the stock; Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer; Send monthly statements to customers with market and price information about the penny stock; and In some circumstances, approve the purchaser s account under certain standards and deliver written statements to the customer with information specified in the rules. Consequently, penny stock rules may restrict the ability or willingness of broker-dealers to trade and/or maintain a market in our common stock. Also, prospective investors may not want to get involved with the additional administrative requirements, which may have a material adverse effect on the trading of our shares. Because we became a public company through a reverse acquisition, we may not be able to attract the attention of major brokerage firms. There may be risks associated with our becoming public through a reverse acquisition. Securities analysts of major brokerage firms may not provide coverage of our Company since there is no incentive to brokerage firms to recommend the purchase of our common stock. No assurance can be given that brokerage firms will want to conduct any secondary offerings on behalf of our post-merger company in the future. Because we were formerly considered a "shell company" within the meaning of Rule 12b-2 under the Exchange Act, the ability of any holders of "restricted securities," as defined under Rule 144 promulgated under the Securities Act, to re-sell their shares may be limited by applicable regulations for a period of time and our ability to attract additional investment through private offerings in the near future may be limited. Formerly, we were classified as a "shell company" under Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act. As such, any "restricted securities," as defined under Rule 144 promulgated under the Securities Act, may not be resold in reliance on safe harbors provided under Rule 144 until: (1) we have filed Form 10 information with the SEC when we cease to be a "shell company"; (2) we have filed all reports as required by Section 13 and 15(d) of the Securities Act for twelve consecutive months; and (3) one year has elapsed from the time we file the current Form 10 type information with the SEC reflecting our status as an entity that is not a shell company. We ceased to be a shell company on July 21, 2014. In addition, we filed Form 10 type information reflecting our status as a non-shell company with SEC in our Current Report on Form 8-K filed July 25, 2014, as amended on July 31, 2014 and September 3, 2014. One year must elapse from the date of this filing, however, until the requirements of Rule 144(i) are met. In addition, we must remain current in our SEC filingd during this period. As a result, we may experience difficulty in raising additional capital through private offerings of common stock or other securities until such time as the one year period has elapsed. For so long as the safe harbors provided under Rule 144 are not available to holders of restricted securities, our ability to raise significant additional capital in any offering other than a registered public offering may be severely limited. To the extent that any capital from future private offerings is available to us prior to the conclusion of the required one year period, the investors may demand re-sale registration rights in connection with such offerings or otherwise insist on terms which make such financings unattractive or infeasible. Table of Contents 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. The actual results could differ materially from our forward-looking statements. Our actual results are most likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in this
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+PROSPECTUS SUMMARY This summary may not contain all of the information that may be important to you. You should read the entire prospectus, including the financial statements and related notes, and the risk factors under the section titled Risk Factors . Unless otherwise indicated or the context otherwise requires, all references in this prospectus to DanDrit, we, us, our or the Company are to DanDrit Biotech USA, Inc., a Delaware corporation ( DanDrit USA ), together with its wholly-owned subsidiary DanDrit Biotech A/S, a Danish limited company, organized under the Danish Act on Limited Companies of the Kingdom of Denmark ( DanDrit Denmark, or the Subsidiary ). Overview We are a biotechnology company seeking to develop what we believe could be the world s first vaccine approved for the treatment of colorectal cancer. For more than a decade we have developed and patented vaccines successfully used in initial clinical trials in Europe and Asia including: (i) MelCancerVac (MCV) for treatment of cancer (one phase I/II trial in Denmark and two phase II trials in Denmark and Singapore), (ii) Tolerogenic (producing immunologic tolerance) dendritic cell (TDC) (pre-clinical stage in Denmark) and (iii) Melvaccine (MV) a melanoma cell lysate used as stand-alone vaccine (pre-clinical state in Denmark). We plan to continue the clinical development program in the United States. Springing from academic roots in Denmark, DanDrit has built upon its scientific and medical skills to advance candidate therapies, targeted initially at non-small-cell-lung-cancer (NSCLC) and colorectal cancer (CRC). In 2001, MCV was developed as a result of the combined efforts and research of DanDrit researchers and employees. On September 22, 2008, the Singapore government granted to DanDrit Denmark a named-patient compassionate use program of MCV. DanDrit s dendritic cell vaccine, MCV, was evaluated in three single-arm Phase II clinical trials in cancer where MCV demonstrated potential efficacy. However, these three clinical trials generated data reported in published papers which indicated that the data needed to be confirmed in a larger, comparative randomized clinical trial. As a result, DanDrit, with the assistance of experienced practitioners in colorectal cancer treatment, designed a randomized trial with 174 stage IV colorectal cancer patients. Neither the US Federal Drug Administration (FDA) nor any other comparable governmental agency has reviewed MCV. Therefore, any assessment of its safety or efficacy only reflects the opinion of the Company. Furthermore, it does not indicate that MCV will achieve favorable results in any later stage trials or that the FDA or comparable agency will ultimately determine that MCV is safe and effective for purposes of granting marketing approval. Our Biotechnology We plan to use a dendritic cell vaccine technology relatively similar to the technology behind Dendreon s FDA approved Provenge cancer vaccine. However, we believe DanDrit s next generation of dendritic cell vaccine may benefit from technological competitive advantages over other cancer vaccines including: The vaccine will be generated within eight days from a patient s peripheral blood. We will be able to generate the vaccine quickly because only 200 ml of blood is required. Leukapheresis, a medical technology in which the blood of a patient is passed through an apparatus (similar to a dialysis machine) that separates out one particular constituent and returns the remainder to the circulation which is used in Dendreon s Provenge cancer vaccine, can be used but is not needed. The vaccine will use an allogenic (using cells, tissues, or organs, sourced from a genetically non-identical member of the same species as the recipient ( Allogenic ) tumor lysate (a fluid containing the contents of lysed cells (lysis referring to the breaking down of a cell and a fluid containing the contents of lysed cells referred to as a lysate ) as opposed to inconvenient autologous (from the patient) tumor lysate. A major limitation of autologous tumor cell vaccines is the low yield of autologous tumor cells that may compromise the number of immunizations given to patients (difficult to obtain enough cancer cells from the patient). A second inconvenience is the variability of GM-CSF (a protein that functions as a white blood cell growth factor) secretion among patients, which could be responsible for the different levels of responses observed. But above all, although autologous tumor cells may be a good source of tumor-associated antigens, present on some tumor cells and some normal cells (as opposed to tumor specific antigens only present on tumor cells) (TAA) for cancer vaccine development, limitations plus the significant time and expense required for the approval of each patient s vaccine by the appropriate regulatory agencies severely limit the development of this type of immunization approach. DanDrit does not need a patient s tumor cells to manufacture MCV. Therefore MCV is not classified as an autologous vaccine. The vaccine will be polytopic (targets several cancer specific antigens). As a result, the risk of the tumor escaping is more limited and more T-cells can be activated than if the vaccine is targeting one antigen only. However, MCV has a focus on melanoma-associated antigen ( MAGE )-A antigens that are only expressed by tumors (in many different types of cancer not only melanoma) and absent in normal tissues. Fast track production in two days is possible. Our Proposed Clinical Trial Parallel with the establishment of a cancer vaccine center in the European Union ( EU ), DanDrit intends to develop globally MCV in colorectal cancer, with opportunities to expand the scope of the treatment to other types of cancers after development in colorectal cancer. DanDrit proposes to focus its development program on a randomized multicenter Phase IIb/III clinical trial in stage IV colorectal cancer to be initiated in Italy. The proposed Proof of Concept (PoC) study with an adaptive seamless design plans to enroll 174 stage IV colorectal cancer patients after surgical resection of metastases and chemotherapy. The traditional drug clinical development is a sequence of independent trials or phases, where each phase has a different research objective, such as, determining the maximum toxicity point at which the drug can be administered (Phase I), assessing dosing requirements (Phase IIA) and determining efficacy at a prescribed dose (Phase IIB). Each phase of the drug development may also have a different group of randomized participants. A trial that is designed as an adaptive seamless clinical trial refers to a trial that combines the objectives of what are typically separate trials into a single uninterrupted trial with multiple objectives. Usually, the patient participants in this trial are constant and monitored through the course of the various phases and are not re-randomized except for new enrollments. Regulatory authorities in the United States and Europe have published guidance documents on the use and implementation of adaptive design trials. These documents include descriptions of adaptive trials and a requirement for prospectively written standard operating procedures and working processes for executing adaptive trials as well as a recommendation that sponsor companies engage with CROs that have the necessary experience in running such trials. Dealer Prospectus Delivery Obligation Until , 2014 (90 days after the date of this prospectus), 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 a placement agent and with respect to any unsold allotments or subscriptions. TABLE OF CONTENTS ABOUT THIS PROSPECTUS You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different or additional information. If anyone provides you with different or inconsistent information, you should not rely on it. 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 any sale of securities described in this prospectus. 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. You should assume that the information appearing in this prospectus or any prospectus supplement, as well as information we have previously filed with the Securities and Exchange Commission (the SEC or the Commission ) and incorporated by reference herein, is accurate as of the date on the front of those documents only. Our business, financial condition, results of operations and prospects may have changed since those dates. CURRENCY INFORMATION The functional and reporting currency of DanDrit Biotech USA, Inc. is the U.S. Dollar. The functional currency of DanDrit Biotech A/S is the Danish Krone ( DKK or Danish Krone ) and our reporting currency is U.S. dollars ($) for the purpose of the financial statements and other financial data contained elsewhere in this prospectus. DanDrit Biotech A/S consolidated balance sheet accounts are translated into U.S. dollars at the period-end exchange rates (DKK 5.422, DKK 5.4127 and DKK 5.66 to $1 at March 31, 2014, December 31, 2013 and 2012, respectively) and all revenue and expenses reported for three months ended March 31, 2014 and the years ended December, 2013 and 2012 are translated into U.S. dollars at the average exchange rates prevailing during 2014, 2013 and 2012 (DKK 5.41735, DKK 5.54 and DKK 5.79 to $1, respectively). FINANCIAL INFORMATION As a result of the reverse acquisition resulting from the Share Exchange (as defined below), DanDrit Denmark (as defined below) is considered the accounting acquirer in the Share Exchange and the assets and liabilities and the historical operations that are reflected in our financial statements are those of DanDrit Denmark. Therefore, the historical financial data of DanDrit Denmark is deemed to be our historical financial data; provided, however, that all amounts have been restated to reflect the recapitalization of the exchange ratio applied as a result of the Share Exchange. TABLE OF CONTENTS The proposed patients for the Phase IIb/III clinical trial have no evidence of disease but are not cured of cancer. Their Progression Free Survival (PFS), which refers to the length of time during and after treatment that a patient lives with the disease which does not get worse, is only 24 to 26 months. The objective of this multicenter Phase IIb/III clinical study is to lengthen the survival of these patients. Treatment will be double blinded (to the patients and physicians) against reference therapy. Patients will be included after surgical resection of their primary tumor and resectable metastases in liver and after appropriate peri-operative chemotherapy by stratification and random assignment to a non-vaccine control group or a vaccine group receiving five vaccinations with 14-day administration intervals followed by five vaccines with two-month intervals. Inclusion will take place one month after finishing the last round of peri-operative chemotherapy (FOLFOX or FOLFIRI) and after a negative tumor scan (head, thoracic and abdominal cavities) and normal carcinoembryonic antigen (CEA) prior to inclusion in the vaccine or the control groups. Patients will be screened for MAGE-A expression. The control group will receive five plus five injections with physiological saline. In the event of disease progression, as verified by tumor scan and biomarker levels during the vaccination schedule, vaccinations will be discontinued. The initial Phase IIb/III trials are currently contemplated to be initiated in Italy. Following the initial closing of the offering described in the Registration Statement, we intend to file an Investigational Medicinal Product Dossier (IMPD) in Italy which is required to obtain a clinical trial authorization (CTA) to begin trials in any Europe state. The IMPD and CTA review and approval process is anticipated to take approximately two-three months, and we anticipate that patients will begin to be enrolled for the Phase IIb/III trials in Italy in October or November of 2014. DanDrit has not filed an investigational new drug (IND) application with the FDA in relation to the proposed trial but anticipates filing an IND application with the FDA by the end of 2014 to initiate the process to permit manufacturing capability of MCV in the U.S. and to include U.S. patients in the PhaseIIb/III trials. Once an IND application has been filed in the U.S., we believe that we will be able to expand the PhaseIIb/III trials initiated in Italy to the U.S. but we cannot estimate at this time when we will be able to begin enrolling U.S. patients in the trial. Although we were a sponsor for only one of the three MCV clinical trials completed to date, we have obtained the case report forms (CRF) with respect to two of the three trials and have requested the CRFs with respect to the third trial and therefore we intend to present the results obtained from the MCV clinical trials for all trials in which we have been able to obtain the related CRFs to the FDA in connection with our IND application, when filed. While we were not the sponsor or principal investigator for all of the trials, certain employees and directors of DanDrit were significantly involved in the design of the study and the analysis and interpretation of the data in all three studies and therefore believe that any weight applied to such trial in connection with our IND application will be focused on the results and data of the trials derived from the studies and disclosed in published papers or otherwise reflected in the CRFs rather than the level of our participation. In addition, we believe that the data received in connection with the Phase IIB/III trials contemplated to be initiated in Italy, will have the greatest weight applied in connection with its IND application anticipated to be filed with the FDA (see Clinical Trials Data and Product Approvals). Our Competitive Strengths We believe the following strengths position us to increase our revenue and profitability: Cutting Edge Technology. We believe, based on the current state of research, that immunotherapy is one of the waves of the future in cancer management. Colorectal Therapy Potential. We believe the treatment of advanced colorectal cancer represents an opportunity to meet a well identified medical need for safe maintenance therapy. We believe the clinical data for MCV to date shows the potential for the vaccine to eventually become a standard of care for maintenance therapy. We believe, based on the available studies to date, that MCV has the potential to prolong periods of remission after response to chemotherapy. If MCV works as expected in advanced colorectal cancer, we believe it would likely prove beneficial in other tumors that over-express MAGE-A including lung, breast and esophageal cancers. Regulatory Precedent. With Provenge , its prostate cancer vaccine, Dendreon pioneered the regulatory pathway for MCV. Dendreon worked with the FDA to develop the protocols which could allow a cellular therapy such as MCV to be approved for clinical use. We believe that DanDrit is the next generation of dendritic cell vaccine with several improvements over its competition: stimulate a cellular immune response rather than just an antibody response, no need for leukapheresis to produce the vaccine, intradermal administration, convenience of an Allogenic vaccine (off-the-shelf cancer specific antigens), polytopic approach but with a focus on the MAGE-A antigen family and reliable cost-efficient manufacturing. Use in Singapore. For the last five years, DanDrit and the Singapore National Cancer Center have provided MCV to colorectal cancer patients within an on-going compassionate use program in Singapore. Strong IP Protection. The technology is patented with a long patent life. DanDrit owns 100% of the technology. Our Strategy Our strategy is focused on conducting a proof-of-concept clinical trial in advanced colorectal cancer. DanDrit intends to conduct a randomized multicenter Phase IIb/III clinical trial to determine the ability of MCV to prevent recidivism in stage IV colorectal patients with no evidence of disease after resection of metastasis and chemotherapy. This blinded comparative trial is planned to be completed within three years. We believe that positive clinical data will be the catalyst to unlock commercial revenues for DanDrit through either acquisition by pharmaceutical partner or licensing deals that would yield upfront and milestone payments as well as royalties or other strategic directions the Company may consider. Furthermore, parallel to the previously described clinical trial, DanDrit may pursue a registration trial to support potential approval of MCV in China. This trial would be conducted under China s State Food and Drug Administration (the SFDA ) regulations with a Chinese oncology pharmaceutical partner. China has recently put in place a drug approval system. DanDrit is headquartered in and runs operations from Denmark. However, DanDrit intends to establish a dendritic cell cancer vaccine good manufacturing practices (GMP) laboratory in the United States. Industry Overview We believe that major advances have been made the last three years in the field of immunotherapy. Molecular and cellular mechanisms controlling the immune system s battle against cancer cells are now better understood. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 TABLE OF CONTENTS However, cancer remains mostly treated by surgery, chemotherapy and radiotherapy. The current therapeutic approach is aggressive on the patient with significant side effects. Immunotherapy, however, can potentially solve these problems because the immune system, with its high level of specificity, can zero in on cancer cells that surgeons, drugs and radiations cannot reach. For example, according to Dr. Adam Snook, Our immune system is characterized by remarkable specificity, potency and memory the ability of a single vaccine treatment to provide life-long-protection. No pharmacologic treatment for any indication can provide the same level of safety, efficacy, and long lasting effect than a vaccine can. In 2010, Dendreon published positive Phase III survival data for its immunotherapy, called Provenge , in prostate cancer. During the last three years, we believe the field of cancer immunotherapy has been fast evolving. There has been recently positive clinical data (i.e. anti-programmed cell death protein-1) and approval of several immunotherapies for cancer. We believe that dendritic cell vaccines such as MCV are among the potential developments in the treatment of cancer. CRC is the second largest cancer market in terms of numbers of patients diagnosed. In 2010, a total of around 1.58 million individuals were affected by CRC in the seven major markets, including the US, Japan, France, Germany, Italy, Spain and the UK. CRC was the leading cause of cancer prevalence among men and second among women in Europe. It was also observed that higher survival rates correlated with higher prevalence. According to Decision Resources, the CRC market totaled $8.3 billion in 2011. The value of the CRC market is expected to decrease in the next ten years due to generic competition for a key cytotoxic agent, oxaliplatin (Sanofi s Eloxatin/Eloxatine, Yakult Honsha s Elplat), as well as the entry of biosimilar competitors for key targeted biological agents. In terms of number of patients, despite the risk being strongly associated with age, the effect of population aging may be limited by reduced risk of invasive disease due to screening at least in developed countries. DanDrit develops MCV for the management of metastatic CRC (stage IV). Currently, about 20% of CRC patients are diagnosed with metastatic disease. Forecast improvements in the observed survival in the metastatic setting will increase the number of people living with metastatic CRC over the next 20 years, despite the number developing metastatic disease per year remaining relatively stable due to the combined effects of screening and forecast improvements in the management of metastatic recurrence. Treatment of advanced CRC typically involves removal of sections of the colon (colectomy) or rerouting of the intestine by colostomy. Chemotherapy is also used to treat patients with stage IV colon cancer. Irinotecan, oxaliplatin, and 5-fluorouracil are the three most commonly used drugs. In addition, monoclonal antibodies, including cetuximab (Erbitux), panitumumab (Vectibix), and bevacizumab (Avastin) have been used alone or in combination with chemotherapy. CRC is considered cured in the absence of a recurrence within the first five years. Five year survival rates associated with CRC are as high as 90% in early stage disease, and 40 60% in late-stage disease. Stage I, II and III cancers are considered potentially curable. In most cases, stage IV cancer is not curable. Therefore, there is an unmet need for a safe maintenance therapy of stage IV CRC after surgery and chemotherapy. Corporate History and Information DanDrit was incorporated in Delaware on January 18, 2011 under the name Putnam Hills Corp. ( Putnam ) as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. We filed a Registration Statement on Form 10 with the SEC on August 12, 2011. On February 12, 2014, the Company signed and consummated the transactions contemplated by a Share Exchange Agreement (the "Share Exchange Agreement"), by and among DanDrit USA, DanDrit Denmark and N.E. Nielsen, as the representative of the shareholders of DanDrit Denmark, pursuant to which the Company will acquire 100% of the issued and outstanding equity securities in Dandrit Denmark in exchange for 6,000,000 of the issued and outstanding shares common stock par value $0.0001 per share of the Company. The initial share exchange was closed on February 12, 2014 pursuant to which holders of approximately 97% of the issued and outstanding capital stock of DanDrit Denmark (the DanDrit Consenting Holders ) exchanged an aggregate of 3,879,624 equity interests of DanDrit Denmark for 5,814,947 shares of DanDrit USA (the Share Exchange ) and as a result of which Putnam would become the parent of DanDrit Denmark. In accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark, DanDrit Denmark shareholders who have not consented to the Share Exchange (the Non-Consenting Shareholders ) and therefore have not exchanged such DanDrit Denmark shareholder s equity interests in DanDrit Denmark for shares of DanDrit USA, will be entitled to receive the 185,053 shares of common stock of DanDrit USA, reflected as issued and outstanding, that each such DanDrit Denmark shareholder would have been entitled to receive if such DanDrit Denmark shareholder had consented to the Share Exchange, up to an aggregate of 185,053 shares of common stock of DanDrit USA. As a result of the Share Exchange, the former shareholders of Dandrit Denmark became the controlling shareholders of the Company. The Share Exchange was accounted for as a reverse takeover/recapitalization effected by a share exchange, wherein Dandrit Denmark is considered the acquirer for accounting and financial reporting purposes. The capital, share price, and earnings per share amount in these consolidated financial statements for the period prior to the reverse merger were restated to reflect the recapitalization in accordance with the exchange ratio established in the merger. PRE-EFFECTIVE AMENDMENT NO. 6 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 TABLE OF CONTENTS Upon the closing of the Share Exchange, DanDrit USA and its majority shareholder immediately prior to the closing agreed to cancel up to 4,400,000 shares of our common stock. In addition, following the closing of the Share Exchange, DanDrit Biotech USA, Inc., a wholly owned subsidiary of the Company merged with and into the Company, thereby changing the Company s name to DanDrit Biotech USA, Inc. DanDrit USA owns approximately 97% of the outstanding equity interests of DanDrit Denmark. As a result of the Share Exchange, we changed our management and reconstituted our board of directors. As of the effective time of the Share Exchange, Samir Masri, the Chief Executive Officer, Chief Financial Officer, President, Secretary and sole director of Putnam resigned as the sole officer and director of Putnam and appointed NE Nielsen, Dr. Jacob Rosenberg, Dr. Eric Leire, Aldo Petersen and Robert E. Wolfe as directors of Putnam, and Dr. Eric Leire as Chief Executive Officer and President and Mr. Wolfe as Chief Financial Officer, Treasurer and Secretary. Our principal executive offices are located at Fruebjergvej 3 Box 62, 2100 Copenhagen, Denmark, and our telephone number is +45 39179840. We maintain an Internet website at www.dandrit.com. The information contained in, or accessible from, our website is not a part of this prospectus. Implications of being an Emerging Growth Company As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act, or JOBS Act, enacted in April 2012. An emerging growth company may take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to: Financial Disclosure. The financial disclosure in a registration statement filed by an emerging growth company pursuant to the Securities Act of 1933, as amended (the Securities Act ), will differ from registration statements filed by other companies as follows: audited financial statements are required for only two fiscal years; selected financial data is required for only the fiscal years that were audited; executive compensation only needs to be presented in the limited format now required for smaller reporting companies . Because we are a smaller reporting company, we are already provided with the above exemptions under Regulation S-K promulgated under the Securities Act. The JOBS Act also exempts us from any Public Company Accounting Oversight Board rules that, if adopted, would mandate auditor rotation or auditor discussion and analysis. Internal Control Attestation. The JOBS Act provides an exemption to emerging growth companies from the audit of internal controls over financial reporting. We are also exempt from this requirement as a smaller reporting company. Shareholder Advisory Votes. Section 102(a) of the JOBS Act exempts emerging growth companies from the requirements in Sections 14A(a) and (b) of the Securities Exchange Act of 1934, as amended (the Exchange Act ) to hold shareholder advisory votes approving executive compensation and golden parachute compensation paid in connection with an acquisition, merger, consolidation, or proposed sale or other disposition of all or substantially all the assets of an issuer. DanDrit Biotech USA, Inc. (Exact name of registrant as specified in its charter) Delaware 2834 45-2259340 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) TABLE OF CONTENTS Information about an Emerging Growth Company. Section 105(a) of the JOBS Act amended the Securities Act to provide an exception from the definition of the word offer for purposes of Sections 2(a)(10) and 5(c) of the Securities Act for research reports issued by a broker-dealer regarding an emerging growth company that is the subject of a proposed public equity offering. The JOBS Act also prohibits the SEC and FINRA from adopting or maintaining any rule or regulation in connection with an initial public offering of an emerging growth company that restricts, based on functional role , which employees of a broker-dealer may arrange for communications between research analysts and prospective investors; prohibits research analysts from participating in communication with company management in the presence of non-research personnel such as investment banking or sales force personnel; or which prohibits the publication or distribution of a research report or making of a public appearance within any prescribed period of time either following the pricing date of the emerging growth company s initial public offering or prior to the expiration of a company or shareholder lock-up agreement. Election to Opt Out of Transition Period. 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 standard. 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 election to opt out is irrevocable. We have not elected to opt out of the transition period. We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act, which such fifth anniversary will occur in 2018. However, if certain events occur prior to the end of such five-year period, including if we become a large accelerated filer, our annual gross revenues exceed $1.0 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period. Because we have elected to take advantage of certain of the reduced disclosure obligations and may elect to take advantage of other reduced reporting requirements in future filings, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests. DanDrit Biotech A/S Fruebjergvej 3 Box 62 2100 Copenhagen, Denmark +45 39179840 (Telephone Number) (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) TABLE OF CONTENTS THE OFFERING Common stock offered by us Up to 2,400,000 shares on a best efforts basis. Common stock outstanding prior to the offering 8,040,000 shares, including 185,053 shares of common stock reserved for issuance to the Non-Consenting Shareholders of DanDrit Denmark and deemed issued and outstanding for accounting purposes. Common stock to be outstanding after the offering Up to 10,440,000 shares. Use of proceeds Based on an assumed offering price of $5.00 per share, after deducting the placement agents commissions and estimated offering expenses payable by us, we estimate that we will receive up to $10,785,464 in net proceeds from the sale of the shares of common stock in this offering. However, this is a best efforts offering, and there can be no assurance that the offering contemplated hereby will ultimately be consummated. We intend to use the proceeds from this offering to invest approximately (i) $830,000 for the manufacturing of our products, (ii) $2,670,656 in SG&A/Administration, (iii) $526,689 in debt repayment to Sune Olsen Holding ApS, a shareholder, and (iv) $6,758,120 in our clinical trial. All remaining proceeds will be used for working capital and general corporate purposes. If we are unable to raise gross proceeds equal to at least $12,000,000, we intend to first apply the proceeds towards $526,689 in outstanding debt to Sune Olsen Holding ApS, a shareholder, and then towards the development and marketing of our products and the engineering, development and testing of vaccines. However, to the extent that we are unable to raise a sufficient amount of proceeds in this offering, we may not be able to achieve all our business objectives in a timely manner. In the event that we file a post-effective amendment to increase the offering amount pursuant to Rule 462(b) of the Securities Act, we plan to allocate the extra funds in strengthening our Phase II/III clinical trial with a larger sample size and in targeting patients with stage III colorectal cancer rather than metastatic (stage IV) colorectal cancer patients. See Use of Proceeds for more information. Potential purchases by affiliates Certain of our affiliates may purchase shares of our common stock in this offering on the same terms as they are offered and sold to the public. Risk factors The shares of common stock offered hereby involve a high degree of risk. See Risk Factors . Dividend policy We currently intend to retain any future earnings to fund the development and growth of our business. Therefore, we do not currently anticipate paying cash dividends on our common stock. Trading Symbol There is not currently, and there has never been, any market for our common stock. In connection with this offering, we intend to arrange for a registered broker-dealer to apply to have our common stock quoted on the OTC Bulletin Board and on the OTCQB. We cannot guarantee that our application will be approved. Lock-Up All of the DanDrit Consenting Shareholders that were issued shares of common stock in the Share Exchange are subject to a lock-up agreement for a 180 day period beginning as of the filing date of the last amendment to the registration statement filed in connection with this Offering that is declared effective (the Lock-Up Period ). The one selling shareholder (the Security Holder ) identified in the Resale Prospectus will also be subject to a lock-up agreement restricting any sales of the Company s common stock during the Lock-up Period. See Plan of Distribution . The Company will not receive any proceeds from the Resale of the shares of Common Stock by the Security Holder. Dr. Eric Leire Chief Executive Officer c/o DanDrit Biotech USA, Inc. P.O. Box 189 Randolph, VT 05060 212-727-7085 (Name, address, including zip code, and telephone number, including area code, of agent for service) TABLE OF CONTENTS
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+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information you should consider in making your investment decision. You should carefully read the entire prospectus, including the financial statements and related notes included in this prospectus and the section entitled "Risk Factors," before deciding whether to invest in our common stock. Unless otherwise indicated or the context otherwise requires, references in this prospectus to "Paylocity," "the Company," "our company," "we," "us," and "our" refer to Paylocity Holding Corporation, a Delaware corporation, and, where appropriate, its wholly-owned subsidiary. References to any year herein refer to the twelve months ended June 30 of the year indicated unless otherwise specified. Paylocity Holding Corporation Overview We are a cloud-based provider of payroll and human capital management, or HCM, software solutions for medium-sized organizations, which we define as those having between 20 and 1,000 employees. Our comprehensive and easy-to-use solutions enable our clients to manage their workforces more effectively. As of June 30, 2014, we served approximately 8,500 clients across the U.S., which on average had over 100 employees. Our solutions help drive strategic human capital decision-making and improve employee engagement by enhancing the human resource, payroll and finance capabilities of our clients. Our multi-tenant software platform is highly configurable and includes a unified suite of payroll and HCM applications, such as time and labor tracking, benefits and talent management. Our solutions have been organically developed from our core payroll solution, which we believe is the most critical system of record for medium-sized organizations and an essential gateway to other HCM functionality. Our payroll and HCM applications use a unified database and provide robust on-demand reporting and analytics. Our platform provides intuitive self-service functionality for employees and managers combined with seamless integration across all our solutions. We supplement our comprehensive software platform with an integrated implementation and client service organization, which is designed to meet the needs of medium-sized organizations. We market and sell our products primarily through our direct sales force. We generate sales leads through a variety of focused marketing initiatives and by referrals from our extensive referral network of 401(k) advisors, benefits administrators, insurance brokers, third-party administrators and HR consultants. We derive revenue from a client based on the solutions purchased by the client, the number of client employees and the amount, type and timing of services provided in respect of those client employees. We have experienced significant growth in recent years. Our total revenues increased from $55.1 million in fiscal 2012 to $77.3 million in fiscal 2013, representing a 40% year-over-year increase, and to $108.7 million in fiscal 2014, representing a 41% year-over-year increase. Our recurring revenues increased from $52.5 million in fiscal 2012 to $72.8 million in fiscal 2013, representing a 39% year-over-year increase, and to $101.9 million in fiscal 2014, representing a 40% year-over-year increase. Our annual revenue retention rate was greater than 92% in each of the fiscal years 2012, 2013 and 2014. Although we do not have long-term contracts with our clients and our agreements with clients are generally terminable on 60 days or less notice, our recurring revenue model and our high annual revenue retention rates provide significant visibility into our future operating results. As of June 30, 2014, we had approximately 8,500 clients. For more information about our key operating metrics, see "Management's Discussion and Analysis of Financial Condition and Results of Operations Key Metrics." AMENDMENT NO. 1 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents We have invested, and intend to continue to invest, in growing our business by expanding our sales and marketing activities, increasing research and development to expand and improve our product offerings, and scaling our technical infrastructure and operations. We incurred net losses of $7.1 million in fiscal 2014 and had net income of $1.7 million and $617,000 in fiscal 2012 and 2013, respectively. Industry Background Effective management of human capital is a core function in all organizations and requires a significant commitment of resources. Organizations are faced with complex and ever-changing requirements, including diverse federal, state and local regulations across multiple jurisdictions. In addition, the workplace operating environment is rapidly changing as employees become increasingly mobile, work remotely and expect a user experience similar to that of consumer-oriented Internet applications. Medium-sized organizations operating without the infrastructure, expertise or personnel of larger enterprises are uniquely pressured in this complex and dynamic environment. We believe that existing payroll and HCM solutions have limitations that cause them to underserve the unique needs of medium-sized organizations. Traditional payroll service providers are primarily focused on delivery of a variety of payroll processing services, insurance products and HR business process outsourcing solutions. Many of these solutions offer limited capabilities and lack a unified and configurable payroll and HCM suite. Enterprise-focused payroll and HCM software vendors offer solutions that are designed for the complex needs and structures of large enterprises. As a result, their solutions can be overly complex, expensive and time-consuming to implement, operate and maintain. The market opportunity is driven by the importance of payroll and HCM solutions to the successful management of organizations. According to market analyses published by International Data Corporation, or IDC, titled Worldwide and U.S. Human Capital Management Applications 2014-2018 Forecast (May 2014) and U.S. Payroll Outsourcing Services 2013-2017 Forecast and Analysis (October 2013), the U.S. market for HCM applications and payroll outsourcing services is estimated to be $22.6 billion in 2014. To estimate our addressable market, we focus our analysis on the number of U.S. medium-sized organizations and the number of their employees. According to the U.S. Census Bureau, there were over 565,000 firms with 20 to 999 employees in the U.S. in 2010, employing over 40 million persons. We estimate that if clients were to buy our entire suite of existing solutions at list prices, they would spend approximately $220 per employee annually. Based on this analysis, we believe our current target addressable market is approximately $8.8 billion. Although our existing clients do not typically buy our entire suite of solutions, we plan to sell a broader selection of solutions to our existing clients by expanding their use of our solutions. Our Solution Our solution provides the following key benefits to our clients: Comprehensive Platform Optimized for Medium-Sized Organizations. Our solutions empower finance and HR professionals in medium-sized organizations to drive strategic human capital decisions by providing enterprise-grade payroll and HCM applications, including robust reporting and analytics. Our unified platform fully automates payroll and HCM processes, enabling our clients to focus on core business activities. Modern, Intuitive User Experience. Our intuitive, easy-to-use interface is based on current technology and automatically adapts to users' devices, including mobile platforms. Our *Not Meaningful Other income (expense) for fiscal 2014 increased by $0.2 million as compared to fiscal 2013. Other income for the year ended June 30, 2014 primarily consists of interest income earned on our cash and cash equivalents, partially offset by interest expense incurred on our note payable and other debt, which was repaid in full in March 2014. Other income (expense) for fiscal 2013 increased by $0.2 million as compared to fiscal 2012. Other expense for the year ended June 30, 2013 primarily consists of interest expense incurred on our note payable and other debt, which was reduced as compared to fiscal 2012 due to increased principal payments in fiscal 2013. Income Tax (Benefit) Expense Year Ended June 30, Change from 2012 to 2013 Change from 2013 to 2014 2012 2013 2014 $ % $ % Effective tax rate 34 % * (4 )% Income tax (benefit) expense $ 884 $ (602 ) $ 255 $ (1,486 ) * $ (857 ) * Percentage of total revenues Paylocity Holding Corporation (Exact name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of Incorporation or Organization) 7372 (Primary Standard Industrial Classification Code Number) 46-4066644 (I.R.S. Employer Identification No.) 3850 N. Wilke Road Arlington Heights, Illinois 60004 (847) 463-3200 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) Table of Contents platform's self-service functionality and performance management applications provide employees with an engaging experience. Flexible and Configurable Platform. We design our solutions to be flexible and configurable, allowing our clients to match their use of our software with their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and user interface, providing a consistent user experience with powerful features that are easily adaptable to our clients' needs. Highly-Attractive SaaS Solution for Medium-Sized Organizations. Our solutions are cloud-based and offered on a subscription basis, making them easier and more affordable to implement, operate and update. Seamless Integration with Extensive Ecosystem of Partners. Our platform offers our clients automated data integration with over 200 related third-party partner systems, such as 401(k), benefits and insurance provider systems. This integration reduces the complexity and risk of error of manual data transfers and saves time for our clients and their employees. Our Strategy We intend to strengthen and extend our position as a cloud-based provider of payroll and HCM software solutions to medium-sized organizations. Key elements of our strategy include: Grow Our Client Base. We believe that our current client base represents only a small portion of the medium-sized organizations that could benefit from our solutions. In order to acquire new clients, we plan to continue to grow our sales organization aggressively across all U.S. geographies. Expand Our Product Offerings. We plan to increase investment in software development to continue to advance our platform and expand our product offerings. For example, we recently introduced new onboarding functionality that enables payroll and HR departments to deliver a highly intuitive, mobile-responsive onboarding experience to new hires. Increase Average Revenue Per Client. Our average revenue per client has consistently increased in each of the last three years as we have broadened our product offerings. We plan to further grow average revenue per client by selling a broader selection of products to new clients and deepening relationships with existing clients by expanding their use of our products. Extend Technological Leadership. We believe that our organically developed cloud-based multi-tenant software platform, combined with our unified database architecture, enhances the experience and usability of our products. We plan to continue our technology innovation, as we have done with our mobile applications, social features and analytics capabilities. Further Develop Our Referral Network. We have developed a strong network of referral participants, such as 401(k) advisors, benefits administrators, insurance brokers, third-party administrators and HR consultants that recommend our solutions and provide referrals. We plan to increase integration with third-party providers and expand our referral network to grow our client base and lower our client acquisition costs.
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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 this entire prospectus carefully, especially the "Risk factors" section and our financial statements and the related notes appearing elsewhere in this prospectus, before making an investment decision. Our company overview We are a biopharmaceutical company focused on the discovery and development of orally administered, proprietary small-molecule drugs that target post-transcriptional control processes. While our discovery programs are directed at targets in multiple therapeutic areas, we are focusing particularly on the development and commercialization of treatments for orphan and ultra-orphan disorders. Our lead product candidate is ataluren for the treatment of patients with genetic disorders that arise from a type of genetic mutation known as a nonsense mutation. We hold worldwide commercialization rights to ataluren for all indications in all territories. Ataluren is in late stage clinical development for the treatment of Duchenne muscular dystrophy caused by nonsense mutations, or nmDMD, and cystic fibrosis caused by nonsense mutations, or nmCF. There are currently no marketed therapies approved to treat the underlying cause of nmDMD or nmCF. The European Medicines Agency, or EMA, has designated ataluren as an orphan medicinal product, and the U.S. Food and Drug Administration, or FDA, has granted orphan drug designation to ataluren for the treatment of both nmDMD and nmCF. We have initiated a confirmatory Phase 3 clinical trial of ataluren for the treatment of nmDMD. We refer to this trial as the Ataluren Confirmatory Trial in DMD, or ACT DMD. We dosed the first patient in this trial in 2013 and expect to complete enrollment in mid-2014. In October 2012, we submitted a marketing authorization application, or MAA, to the EMA for conditional approval of ataluren for the treatment of nmDMD. In January 2014, EMA's Committee for Medicinal Products for Human Use, or CHMP, adopted a negative opinion recommending the refusal of the granting of the conditional marketing authorization for ataluren for the treatment of nmDMD. We have requested a re-examination of the CHMP opinion. We are also planning a Phase 3 clinical trial of ataluren for the treatment of nmCF. We plan to begin dosing patients in this trial in the first half of 2014. We have completed a Phase 2b clinical trial of ataluren for the treatment of nmDMD and a Phase 3 clinical trial of ataluren for the treatment of nmCF. We did not achieve the primary efficacy endpoint in either trial with the pre-specified level of statistical significance. However, we believe that the collective data from these trials, including retrospective and subgroup analyses that we have performed, provide strong support for concluding that ataluren was active and showed clinically meaningful improvements over placebo in these trials. In addition, we believe that our experience in these completed clinical trials has allowed us to enhance the designs of our confirmatory Phase 3 clinical trials and improve our likelihood of success in these trials. Accordingly, we initiated our confirmatory Phase 3 ACT DMD clinical trial and are planning a confirmatory Phase 3 clinical trial of ataluren for the treatment of nmCF. Ataluren has been generally well tolerated in all of our clinical trials to date. We also plan to pursue additional indications for ataluren beyond nmDMD and nmCF and expect to initiate a proof-of-concept study for a third indication in 2014. We continue to advance the development of our spinal muscular atrophy collaboration with F. Hoffman-La Roche Ltd and Hoffman-La Roche Inc., which we refer to collectively as Roche, and the Spinal Muscular Atrophy Foundation, or SMA Foundation. A development candidate for the program was selected in August 2013, and a Phase 1 clinical program was initiated in healthy volunteers in January 2014. Each of these events triggered a milestone payment to us from Roche. AMENDMENT NO. 2 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents The letters "PTC" in our corporate name are an acronym for post-transcriptional control processes, which are the regulatory events that occur in cells after a messenger RNA, or mRNA, molecule is copied, or transcribed, from DNA. Post-transcriptional control processes regulate the rate and timing of protein production and are essential to proper cellular function. Nonsense mutations create a premature stop signal in the translation of the genetic code contained in mRNA and prevent the production of full-length, functional proteins. The absence or overproduction of specific proteins can cause disease. We apply proprietary technologies and our extensive knowledge of post-transcriptional control processes in our drug discovery and development activities. We discovered ataluren by applying our technologies to identify molecules that promote or enhance the suppression of nonsense mutations. In addition, we have a pipeline of product candidates that are in preclinical development. Our preclinical and discovery programs are focused on the development of new treatments for multiple therapeutic areas, including neuromuscular disease, oncology and infectious disease. We have discovered all of our compounds currently under development using our proprietary technologies. We plan to develop these compounds both on our own and through selective collaboration arrangements with leading pharmaceutical and biotechnology companies. Ataluren Ataluren is a novel, orally administered small-molecule compound that targets nonsense mutations. We are developing ataluren for the treatment of genetic disorders in which a nonsense mutation is the cause of the disease. Genetic tests are available for many genetic disorders, including Duchenne muscular dystrophy and cystic fibrosis, to determine if the underlying cause is a nonsense mutation. We believe that ataluren interacts with the ribosome, which is the component of the cell that decodes the mRNA molecule and manufactures proteins, to enable the ribosome to read through premature nonsense stop signals on mRNA and allow the cell to produce a full-length, functional protein. We believe that a drug with a mechanism of action that allows the ribosome to read through premature stop signals without affecting the normal termination of protein synthesis may be able to overcome the effects of nonsense mutations. Ataluren is administered orally as granules mixed with permitted liquids or semi-solid foods, such as milk, water, applesauce or yogurt. We designed this formulation because children comprise a significant portion of the patient population for ataluren and often have difficulty swallowing pills or capsules. Ataluren is manufactured in reliable and reproducible synthetic processes from readily available starting materials. Ataluren for nmDMD Muscular dystrophies are genetic disorders involving progressive muscle wasting and weakness. Duchenne muscular dystrophy is the most common and one of the most severe types of muscular dystrophy. Duchenne muscular dystrophy occurs when a mutation in the dystrophin gene prevents the cell from making a functional dystrophin protein. Based on information from the American Journal of Medical Genetics, we estimate that a nonsense mutation is the cause of Duchenne muscular dystrophy in approximately 13% of patients, or approximately 2,000 patients in the United States and 2,500 patients in the European Union. There is currently no marketed therapy approved for the treatment of the underlying cause of Duchenne muscular dystrophy. Currently available treatments for Duchenne muscular dystrophy are only palliative. We have initiated our confirmatory Phase 3 ACT DMD clinical trial to evaluate the efficacy and safety of ataluren in patients with nmDMD. This is a multicenter, randomized, double-blind, placebo controlled PTC 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) 04-3416587 (I.R.S. Employer Identification No.) 100 Corporate Court South Plainfield, New Jersey 07080 (908) 222-7000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Table of Contents Phase 3 clinical trial. We dosed the first patient in this trial in April 2013, with enrollment expected to be completed in mid-2014. We plan to conduct this trial in approximately 220 patients at investigational sites worldwide. The primary objective of this trial is to evaluate the effect of ataluren on ambulation as measured by mean change in distance walked during a 6-minute walk test, which we refer to as 6-minute walk distance. Based on our estimates regarding patient enrollment, we expect to complete this trial and have initial, top-line data available in mid-2015. The trial protocol specifies the following key inclusion criteria for patients enrolling in this trial: the patient must be seven through 16 years of age; at baseline, the patient must walk no more than 80% of predicted 6-minute walk distance compared to healthy boys matched for age and height, but have the ability to walk at least 150 meters during the 6-minute walk test; and the patient must have used systemic corticosteroids for a minimum of six months prior to the start of treatment. The study population and outcome measures that we are using in our confirmatory Phase 3 ACT DMD clinical trial are based on, and reflect our analysis of the results of, our completed Phase 2b clinical trial of ataluren for the treatment of nmDMD, including data regarding disease progression, referred to as natural history data, and a post-hoc, retrospective subgroup analysis of patients who would meet the enrollment criteria for our confirmatory Phase 3 ACT DMD clinical trial. This retrospective subgroup analysis showed a much larger treatment effect in mean change in 6-minute walk distance between ataluren and placebo in this subgroup than in the overall population included in the Phase 2b clinical trial. In light of this natural history data and retrospective subgroup analysis, our confirmatory Phase 3 ACT DMD clinical trial is focusing on patients in the decline phase of the disease based on age and baseline 6-minute walk distance. The intent of focusing on patients in the decline phase of the disease is to enhance the demonstration of ataluren's effect to slow decline in walking ability. In addition, we believe that by only enrolling patients who are treated with systemic corticosteroids, the variability of 6-minute walk distance results will be reduced. In October 2012, we submitted an MAA to the EMA for conditional approval of ataluren for the treatment of nmDMD. During the review process, the EMA informed us of major objections that would preclude a recommendation for marketing authorization unless adequately addressed. These major objections related to, among other things, the EMA's views regarding insufficient evidence of efficacy based on our single Phase 2b clinical trial, resulting in a negative risk-benefit balance for purposes of conditional approval, and uncertainties about the effective dose. The EMA also questioned whether our confirmatory Phase 3 ACT DMD clinical trial could be completed if the EMA granted conditional approval. In December 2013, the EMA convened a scientific advisory group, or SAG, meeting as part of the regulatory review process followed by the oral explanation meeting with the CHMP. We believe that both the SAG and oral explanation meetings allowed us and independent experts in the DMD field to provide information to the SAG and CHMP members about important aspects of our clinical data and trial design. In January 2014, the CHMP adopted a negative opinion recommending the refusal of the granting of the conditional marketing authorization for ataluren for the treatment of nmDMD. The CHMP stated that a principal reason for the negative opinion was that the prior Phase 2b clinical trial had failed to demonstrate in the primary analysis that patients taking ataluren could walk a greater distance in six minutes than patients taking placebo, the primary endpoint. Additionally, the CHMP noted that other Stuart W. Peltz, Ph.D. Chief Executive Officer PTC Therapeutics, Inc. 100 Corporate Court South Plainfield, New Jersey 07080 (908) 222-7000 (Name, address, including zip code, and telephone number, including area code, of agent for service) Table of Contents measures of efficacy provided only limited supportive evidence of the beneficial effects of ataluren. The CHMP acknowledged in communication to us that the post hoc analyses that we presented to the CHMP were performed in line with the most current knowledge about the natural history of the disease and that our definition of the subgroups in the analyses were both clinically and scientifically justified. However, the CHMP concluded that we did not provide sufficiently compelling evidence of efficacy to justify conditional approval. In addition, the CHMP considered that we had not provided sufficient data to determine how ataluren works in the body and how its effects change with dose. Finally, the CHMP expressed concern that the conduct of the confirmatory Phase 3 ACT DMD trial might be affected by the availability of an authorized product and therefore potentially jeopardize the feasibility of completing the trial. Therefore, despite divergent minority positions, the CHMP concluded a favorable risk-benefit balance could not be established at the time of their meeting and adopted a negative opinion. We have requested a re-examination of the CHMP opinion. Based upon the timelines for a re-examination process, we believe that our confirmatory Phase 3 ACT DMD clinical trial will be substantially enrolled at the time the CHMP would consider a revision of their initial opinion as part of the re-examination process. We continue to believe that completion of our confirmatory Phase 3 ACT DMD clinical trial and submission of data to the regulatory authorities is the more likely path to obtain marketing approval of ataluren. There is substantial risk that the EMA will not grant us conditional approval upon re-examination of the original CHMP negative opinion. If granted, EMA conditional approval would permit us to market ataluren in the European Union for treatment of nmDMD prior to completion of our confirmatory Phase 3 ACT DMD clinical trial. We plan to complete our confirmatory Phase 3 ACT DMD clinical trial before applying for marketing approval from the FDA. In designing our confirmatory Phase 3 ACT DMD clinical trial for the treatment of nmDMD, we have sought to reflect the views expressed by both the EMA and the FDA in our discussions with these regulatory authorities. We expect that these trial results, if favorable, could serve as the basis for full approval by the EMA and the FDA of ataluren for the treatment of nmDMD. If the trial results are favorable, and based on our estimates of patient enrollment and data availability, we expect to be able to submit applications for full marketing approval of ataluren for the treatment of nmDMD in both the European Union and the United States in 2016. Ataluren for nmCF Cystic fibrosis is among the most common life-threatening genetic disorders worldwide. Cystic fibrosis is caused by defects in a single gene known as the cystic fibrosis transmembrane conductance regulator, or CFTR. Based on information from the Cystic Fibrosis Foundation, we estimate that nonsense mutations are the cause of cystic fibrosis in approximately 10% of patients, or approximately 3,000 patients in the United States and approximately 3,700 to 4,200 patients in the European Union. There is currently no marketed therapy approved to correct defective CFTR production and function in patients with nmCF. For nmCF patients, available treatments do not address the underlying cause of the disease and are designed only to alleviate the symptoms of the disease. We are planning a multicenter, randomized, double-blind, placebo controlled Phase 3 clinical trial to evaluate the efficacy and safety of ataluren in approximately 210 patients with cystic fibrosis caused by a nonsense mutation as confirmed by gene sequencing. We expect that the primary objective of this trial will be to evaluate the effect of ataluren on pulmonary function as measured by relative change in percent of predicted forced expiratory volume in one second, or FEV1. FEV1 is a measure of the volume of air that has been exhaled at the end of the first second of forced expiration. Percent of predicted FEV1, or %-predicted FEV1, is based on a comparison to healthy individuals matched for age, height and gender. Based on our Copies to: David E. Redlick Brian A. Johnson Rosemary G. Reilly Wilmer Cutler Pickering Hale and Dorr LLP 7 World Trade Center, 250 Greenwich Street New York, New York 10007 Telephone: (212) 230-8800 Fax: (212) 230-8888 Mark E. Boulding Executive Vice President and Chief Legal Officer PTC Therapeutics, Inc. 100 Corporate Court South Plainfield, New Jersey 07080-2449 Telephone: (908) 222-7000 Fax: (908) 222-1128 Richard Truesdell, Jr. Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 Telephone: (212) 450-4000 Fax: (212) 701-5800 Table of Contents estimates regarding initiation of the trial and patient enrollment, we expect to complete this trial and have initial, top-line data available in 2016. We expect to require that patients in this trial be at least six years of age and have %-predicted FEV1 within a specified range, sweat chloride in excess of a specified level as evidence of the severity of the disease and documentation of a nonsense mutation in at least one copy of the CFTR gene. We expect to exclude patients from the trial if, among other reasons, they are receiving chronic inhaled aminoglycoside antibiotics. We selected the enrollment criteria for our confirmatory Phase 3 clinical trial in part based on a subgroup analysis of patients not receiving inhaled aminoglycoside antibiotics in our completed Phase 3 clinical trial for the treatment of nmCF. We believe that the inhaled antibiotic tobramycin interfered with ataluren's mechanism of action. For the subgroup of patients not receiving chronic inhaled aminoglycoside antibiotics, there was a substantial difference in mean relative changes from baseline in %-predicted FEV1 at the end of the trial favoring ataluren in comparison with placebo. In contrast, patients that received chronic inhaled aminoglycoside antibiotics and ataluren did not exhibit a difference compared to patients that received chronic inhaled aminoglycoside antibiotics and placebo. We have received scientific advice from the EMA regarding the possibility of submitting an MAA for conditional approval of ataluren for the treatment of nmCF and the protocol design of a post-approval confirmatory trial. There is substantial risk that the EMA will not grant us conditional approval of ataluren for the treatment of nmCF. We had interactions with the FDA in 2013 regarding the clinical development design which would have the potential to support an NDA, but we did not achieve a consensus between the EMA and FDA views. While we have incorporated feedback from the FDA into our proposed trial design, we believe that certain key recommendations from the FDA are not appropriate. Two of the key recommendations that we are in disagreement with are the designation of FEV1, CF pulmonary exacerbations and body mass index as three co-primary endpoints for the trial and a suggested three-year trial duration. We plan to make FEV1 the primary endpoint with CF pulmonary exacerbations and body mass index key secondary endpoints, which is consistent with other clinical trials currently ongoing in cystic fibrosis and FDA's earlier recommendation. Additionally, we believe that extending the study duration to three years would result in a number of complications that would ultimately limit the robustness of the data and conclusions that could be drawn from the results. Based on these interactions, we nonetheless intend to proceed with our confirmatory Phase 3 clinical trial of ataluren in nmCF in the first half of 2014 consistent with feedback from the EMA on our trial design. Our strategy Our goal is to become a leading biopharmaceutical company focused on discovering, developing and commercializing small-molecule therapeutics that target post-transcriptional control processes and address disorders, particularly in the orphan and ultra-orphan areas, with high unmet medical needs. To achieve our goal, we are pursuing the following strategies: Complete clinical development and seek marketing approvals for ataluren for the treatment of nmDMD and nmCF. Commercialize ataluren through our own focused, specialized sales force initially in the European Union and the United States and, eventually, in other key territories. Explore additional, strategically attractive indications for ataluren based on the large number of genetic disorders caused by nonsense mutations. Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement is declared 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, 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 Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Table of Contents Advance the development of our preclinical product candidates and discover and develop additional small molecules that alter post-transcriptional control processes in a broad range of indications. Seek third party grants and support and selectively establish strategic alliances. Risks associated with our business 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 in the "Risk factors" section of this prospectus immediately following this prospectus summary. These risks include, among others, the following: We currently depend heavily on the success of ataluren. Our ability to generate product revenues, which may not occur for several years, if ever, will depend heavily on the successful development and commercialization of ataluren for either or both of nmDMD and nmCF. There is substantial risk that the EMA will not grant us conditional approval of ataluren for the treatment of either nmDMD or nmCF. Clinical trials of ataluren or any of our other product candidates may not be successful. For example, we did not achieve the primary efficacy endpoint with the pre-specified level of statistical significance in a Phase 2b clinical trial of ataluren for the treatment of nmDMD that we completed in 2009 or in a Phase 3 clinical trial of ataluren for the treatment of nmCF that we completed in 2011. If we are unable to obtain required marketing approvals for, commercialize, obtain and maintain patent protection for or gain market acceptance by physicians, patients and third-party payors of ataluren or any of our other product candidates, or experience significant delays in doing so, our business will be materially harmed and our ability to generate revenue will be materially impaired. Our scientific approach focusing on the discovery and development of product candidates that target post-transcriptional control processes is unproven and may not result in the development of commercially viable drugs that safely and effectively treat genetic disorders or other diseases. Our current and any future collaborations with third parties for the development and commercialization of our product candidates may not be successful. We have a limited operating history. We currently have no commercial products and we have not received marketing approval for any product candidate. We have incurred significant operating losses since inception and may need substantial additional funding. We expect to incur significant expenses and increasing operating losses for at least the next several years. As of September 30, 2013, we had an accumulated deficit of $310.9 million. Our corporate information Our executive offices are located at 100 Corporate Court, South Plainfield, New Jersey 07080, and our telephone number is (908) 222-7000. Our website address is www.ptcbio.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference. In this prospectus, unless otherwise stated or the context otherwise requires, references to "PTC," "PTC Therapeutics," "we," "us," "our" and similar references refer to PTC Therapeutics, Inc. and, where appropriate, its subsidiaries. The trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners. CALCULATION OF REGISTRATION FEE Title of Each Class of Securities To Be Registered Proposed Maximum Aggregate Offering Price(1) Amount of Registration Fee(2)(3) Common Stock, $0.001 par value per share $115,000,000 $14,812 (1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. (2) Calculated pursuant to Rule 457(o) based on a bona fide estimate of the proposed maximum aggregate offering price. (3) A registration fee of $11,109 was previously paid in connection with the Registration Statement, and an additional amount of $3,703 is being paid herewith. 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 Implications of being an emerging growth company As a company with less than $1 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we may remain an emerging growth company until December 31, 2018, subject to satisfaction of certain conditions. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not emerging growth companies. In particular, in this prospectus, we have provided only two years of audited financial statements and have not included all of the executive compensation related information that would be required if we were not an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. 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 12, 2014 Prospectus $100,000,000 Common stock This is a public offering of common stock by PTC Therapeutics, Inc. We are selling $100,000,000 of shares of our common stock. Our common stock trades on The NASDAQ Global Select Market under the trading symbol "PTCT". On February 11, 2014, the last sale price of our common stock as reported on The NASDAQ Global Select Market was $23.48 per share. We are an "emerging growth company" and have elected to rely on certain reduced public company disclosure requirements. See "Prospectus summary Implications of being an emerging growth company." 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 to PTC Therapeutics, Inc., before expenses $ $ (1) The underwriters will receive compensation in addition to the underwriting discount. See "Underwriting" on page 180. Brookside Capital Partners Fund L.P., Section Six Partners, L.P. and Celgene European Investment Company LLC, which are existing stockholders of ours, have indicated an interest in purchasing an aggregate of up to approximately $14.7 million of shares of our common stock in this offering at the 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 have indicated 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 indicated an interest in purchasing or not to sell any shares to these stockholders. The underwriters will receive the same underwriting discount on any shares purchased by these stockholders as they will on any other shares sold to the public in this offering. We have granted the underwriters an option for a period of 30 days to purchase up to $15,000,000 of additional shares of our common stock to cover any over-allotments. The underwriters can exercise this right at any time within 30 days after the date of this prospectus. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The underwriters expect to deliver the shares of common stock to investors on or about , 2014. J.P. Morgan Credit Suisse The number of shares of our common stock to be outstanding after this offering is based on 24,913,508 shares of our common stock outstanding as of January 28, 2014 and assumes the issuance and sale of $100,000,000 of shares of our common stock at an assumed public offering price of $23.48 per share, which is the last sale price of our common stock, as reported on the NASDAQ Global Select Market on February 11, 2014. The number of shares of our common stock to be outstanding after the closing of this offering excludes: 3,025,394 shares of our common stock issuable upon the exercise of stock options outstanding as of January 28, 2014, at a weighted-average exercise price of $22.33 per share; 15,160 shares of our common stock issuable upon the exercise of warrants outstanding as of January 28, 2014, at a weighted-average exercise price of $199.32 per share; and 163,661 shares of our common stock available for future issuance, as of January 28, 2014, under our 2013 long term incentive plan. Unless otherwise indicated, all information in this prospectus assumes: no exercise of the outstanding stock options or warrants described above; and no exercise by the underwriters of their option to purchase up to $15,000,000 of additional shares of our common stock to cover over-allotments. Brookside Capital Partners Fund L.P., Section Six Partners, L.P. and Celgene European Investment Company LLC, which are existing stockholders of ours, have indicated an interest in purchasing an Deutsche Bank Securities Cowen and Company Table of Contents aggregate of up to approximately $14.7 million of shares of our common stock in this offering at the public offering price. Assuming a public offering price of $23.48 per share, which is the last sale price of our common stock, as reported on the NASDAQ Global Select Market on February 11, 2014, these stockholders would purchase an aggregate of 627,769 of the 4,258,943 shares offered in this offering based on these indications of interest. However, because indications of interest are not binding agreements or commitments to purchase, these stockholders may determine to purchase fewer shares than they have indicated 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 indicated an interest in purchasing or not to sell any shares to these stockholders. Wedbush PacGrow Life Sciences Emerging Growth Equities, Ltd. The date of this prospectus is , 2014 Table of Contents Summary financial data You should read the following summary financial data together with our financial statements and the related notes appearing elsewhere in this prospectus and the "Selected financial data" and "Management's discussion and analysis of financial condition and results of operations" sections of this prospectus. We have derived the statements of operations data for the years ended December 31, 2011 and 2012 from our audited financial statements included in this prospectus. We have derived the statements of operations data for the nine months ended September 30, 2012 and 2013 and the balance sheet data as of September 30, 2013 from our unaudited financial statements included in this prospectus. The unaudited financial data include, in the opinion of our management, all adjustments, consisting of normal recurring adjustments, that are necessary for a fair statement of our financial position and results of operations for these periods. Our historical results for any prior period are not necessarily indicative of results to be expected in any future period, and our results for any interim period are not necessarily indicative of results to be expected for a full fiscal year. Year ended December 31, Nine months ended September 30, Statement of operations data (in thousands, except share and per share data) 2011 2012 2012 2013 Revenues: Collaboration revenue $ 98,961 $ 28,779 $ 22,861 $ 27,395 Grant revenue 6,451 5,167 4,445 2,890 Total revenues 105,412 33,946 27,306 30,285 Operating expenses: Research and development 58,677 46,139 36,689 39,855 General and administrative 16,153 14,615 11,391 17,735 Total operating expenses 74,830 60,754 48,080 57,590 Income (loss) from operations 30,582 (26,808 ) (20,774 ) (27,305 ) Interest income (expense), net (2,444 ) (1,210 ) (1,007 ) (6,250 ) Loss on extinguishment of debt (130 ) Other income, net 461 1,783 1,818 (3 ) Income (loss) before tax benefit 28,599 (26,235 ) (19,963 ) (33,688 ) Income tax benefit 2,306 Net income (loss) 30,905 (26,235 ) (19,963 ) (33,688 ) Deemed dividend (18,249 ) Gain on exchange of convertible preferred stock in connection with recapitalization 159,954 159,954 3,391 Less beneficial conversion charge (378 ) (378 ) Net income (loss) attributable to common stockholders $ 30,905 $ 133,341 $ 139,613 $ (48,546 ) Net income (loss) per share(1) Basic $ 23.95 $ 219.76 $ 182.41 $ (5.40 ) Diluted $ 4.55 $ 42.50 $ 39.41 $ (5.40 ) Weighted-average shares outstanding: Basic 1,089 3,328 2,937 8,995,167 Diluted 5,729 17,205 13,593 8,995,167 (1) See Note 8 to our audited financial statements appearing at the end of this prospectus regarding the calculation of net income per share. Table of Contents September 30, 2013 Balance sheet data (in thousands) Actual As adjusted(1) Cash, cash equivalents and marketable securities $ 157,227 $ 250,677 Working capital 146,217 239,667 Total assets 167,244 260,694 Long-term debt, including current portion 84 84 Convertible preferred stock Accumulated deficit (310,912 ) (310,912 ) Total stockholders' equity (deficit) 151,033 244,483 (1) The as adjusted balance sheet gives effect to our issuance and sale of $100.0 million of shares of our common stock in this offering at an assumed public offering price of $23.48 per share, which is the last sale price of our common stock, as reported on the NASDAQ Global Select Market on February 11, 2014, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Table of Contents
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+PROSPECTUS SUMMARY This summary contains basic information about us and the resale of the securities being offered by the Selling Stockholders. You should read this entire prospectus carefully, including the section entitled Risk Factors and our financial statements and the notes to the financial statements, before making an investment decision. This summary is qualified in its entirety by the more detailed information and the financial statements and related notes. Unless the context otherwise requires, references in this prospectus to Ring, we, us, the Company, our or ours refer to Ring Energy, Inc. and its subsidiary. Ring Energy, Inc. Overview Ring is a Midland-based exploration and production company that is engaged in oil and natural gas acquisition, exploration, development and production activities. Our exploration and production interests are currently focused in Texas and Kansas. The Company takes a conventional approach to its drilling program and seeks to develop its traditional core areas, as well as look for new growth opportunities. The Company s primary drilling operations target the Central Basin Platform in Andrews County and Gaines County, Texas. As of December 31, 2013, Ring had 14,375 gross (8,949 net) acres in those counties. The Company also has 16,997 gross (14,232 net) acres in Kansas targeting the Mississippi Lime play. The acreage is located in Gray, Finney and Haskell counties. On October 16, 2013, Ring entered into a joint development agreement with Torchlight Energy Resources, Inc., to develop its Kansas leasehold. The Company will continue to operate the acreage and Torchlight Energy Resources, Inc., will earn an equal share in the leasehold after fulfilling the agreed upon drilling carry obligation of $6 million (the Development Agreement ). Ring plans to drill ten vertical wells pursuant to the Development Agreement. As of December 31, 2013, Ring s proved reserves were 7.3 million BOE (barrel of oil equivalent). Effectively 100% of its reserves (based on the estimates above) relate to properties located in Texas. The Company s proved reserves are oil-weighted with 94% of proved reserves consisting of oil and 6% consisting of natural gas. Of those reserves, 24% of the proved reserves are classified as proved developed producing, or PDP, 4% are classified as proved developed non-producing, or PDNP, and approximately 72% are classified as proved undeveloped, or PUD. Production for the quarter ended June 30, 2014, was approximately 119,723 BOE, as compared to production of 15,443 BOE for the quarter ended June 30, 2013, a 675% increase in BOE. The stated production amount reflects only the oil and gas that was produced and shipped prior to the end of the quarter. Any oil and gas produced in the second quarter but still held on site after June 30, 2014, will be credited in the third quarter. Ring believes that there is significant value to be created by drilling the identified undeveloped opportunities on its Texas properties. As of June 30, 2014, Ring owned interests in a total of 5,467 gross (3,537 net) developed acres and 15,280 gross (9,848 net) undeveloped acres in Texas. The Company has 192 identified proven vertical drilling locations based on the reserve report as of December 31, 2013, and an additional 1,171 identified potential vertical drilling locations based on 10-acre downspacing. Ring believes there is further downspacing opportunity based on results of neighboring operators which would add additional drilling locations to existing acreage. Ring intends to grow its 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 the Company s strategic and financial objectives, targeting oil-weighted reserves. Ring has identified 23 wells that are suitable candidates for re-stimulation, providing attractive returns with lower upfront costs. Ring will continue to develop its Kansas acreage through the Development Agreement with Torchlight Energy Resources, Inc. The drilling carry will cover the drilling expenses for approximately the first ten wells. Ring s Business Strategy Growing production and reserves by developing our oil-rich resource base. Ring intends to actively drill and develop its acreage base in an effort to maximize its value and resource potential. Ring s portfolio of proved oil and natural gas reserves consists of 94% oil and 6% natural gas. Of those reserves, 24% of the proved reserves are classified as proved developed producing, or PDP, 4% are classified as proved developed non-producing, or PDNP, and approximately 72% are classified as proved undeveloped, or PUD. Through the conversion of undeveloped reserves to developed reserves, Ring will seek to increase production, reserves and cash flow while gaining favorable returns on invested capital. Through December 31, 2013, we increased our proved reserves to approximately 7.3 million BOE (barrel of oil equivalent). As of December 31, 2013, our estimated proved reserves had a pre-tax PV10 (present value of future net revenues before income taxes discounted at 10%) of approximately $198.4 million and a Standardized Measure of Discounted Future Net Cash Flows of approximately $133.9 million. The difference between these two amounts is the effect of income taxes. The Company presents the pre-tax PV-10 value, which is a non-GAAP financial measure, because it is a widely used industry standard which we believe is useful to those who may review this Annual Report when comparing our asset base and performance to other comparable oil and gas exploration and production companies. We spent approximately $44.5 million on acquisitions and capital projects during 2012 and 2013, and we intend to continually actively drill and develop our acreage in an effort to maximize shareholder value. Employ industry leading drilling and completion techniques. Ring s executive team, which has over 100 years combined experience in the oil and gas industry, intends to utilize new and innovative technological advancements and careful geological evaluation in reservoir engineering to generate value for its stockholders and to build development opportunities for years to come. Improved efficiency through employing technological advancements can provide a significant benefit in a continuous drilling program such as the one Ring contemplates for its current inventory of drilling locations. Additionally, Ring believes that the experience of its executive team will help reduce the time and cost associated with drilling and completing both conventional and horizontal wells, while potentially increasing recovery. Pursue strategic acquisitions with exceptional upside potential. Ring has a history of acquiring leasehold positions that it believes to have substantial resource potential and to meet its targeted returns on invested capital. Ring has historically pursued acquisitions of properties that it believes to have exploitation and development potential comparable to its existing inventory of drilling locations. The Company has developed and refined an acquisition program designed to increase reserves and complement existing core properties. Ring s experienced team of management and engineering professionals identify and evaluate acquisition opportunities, negotiate and close purchases and manage acquired properties. Management intends to continue to pursue strategic acquisitions that meet the Company s operational and financial targets. The executive team, with its extensive experience in the Permian Basin, has many relationships with operators and service providers in the region. Ring believes that leveraging its contacts will be a competitive advantage in identifying acquisition targets. Management s proven ability to evaluate resource potential will allow Ring to successfully acquire acreage and bring out more value in the assets. Ring s Strengths High quality asset base in one of North America s leading resource plays. Ring s acreage in the Permian Basin is all located in Andrews and Gaines Counties, which is in the heart of the Central Basin Platform. The Central Basin Platform is a NW-trending uplifted basement block that separates the Midland Basin (to the east) from the Delaware Basin (to the west). As of June 30, 2014, Ring has drilled 100 wells on its acreage and re-stimulated 23existing wells. Production for the three months ended June 30, 2014, was 99% oil and 1% natural gas. As of December 31, 2013, estimated net proved reserves were comprised of approximately 94% oil and 6% natural gas, which allow the Company to benefit from the currently more favorable pricing of oil as compared to natural gas. De-risked Permian acreage position with multi-year vertical drilling inventory. As of June 30, 2014, Ring has drilled 100 gross operated wells across its leasehold position with a 100% success rate. The Company has also re-stimulated 23 existing wells with attractive well economics. Ring has identified a multi-year inventory of potential drilling locations that will drive reserves and production growth and provide attractive return opportunities. As of December 31, 2013, Ring has 192 identified proven vertical drilling locations in its proved undeveloped reserves. It believes it has an additional 1,171 potential locations based on 10-acre downspacing. The Company views this drilling inventory as de-risked because of the significant production history in the area and well-established industry activity surrounding the acreage. Experienced and proven management team focused on the Permian Basin. The executive team has an average of approximately 22 years of industry experience per person, most of which has been focused in the Permian Basin. The Company believes its management and technical team is one of the principal competitive strengths due to the team s proven ability to identify and integrate acquisitions, focus on cost efficiencies while managing a large-scale development program and disciplined allocation of capital to high-returning projects. Chief Executive Officer Kelly Hoffman has had a successful career in the Permian Basin since 1975 when he started with Amoco Production Company and found further success in West Texas when he co-founded AOCO. In addition, Chairman of the Board, Lloyd T. Rochford, and Director, Stanley M. McCabe, formed Arena Resources, Inc. ( Arena ) in 2001, which operated in the same proximate area as Ring s Andrews and Gaines County acreage. Arena eventually sold to SandRidge Energy, Inc., in July 2010 for $1.6 billion. Ring s management team aims to execute a similar growth strategy and development plan by leveraging its industry relationships and significant operational experience in these regions. Concentrated acreage position with high degree of operational control. Ring operates approximately 99% of its Permian Basin and Kansas acreage positions. The operating control allows Ring to implement and benefit from its strategy of enhancing returns through operational and cost efficiencies. Additionally, as the operator of substantially all of acreage, Ring retains the ability to adjust its capital expenditures based on well performance and commodity price forecasts. Recent Developments On February 27, 2014, Ring completed an acquisition of certain assets pursuant to its previously announced Purchase and Sale Agreement, for a purchase price of approximately $6.51 million in cash. The assets acquired by Ring pursuant to the Purchase Agreement consist of approximately 2,481 gross (1,576 net) acres, located in Andrews and Gaines Counties, in the Permian Basin of Texas. The acreage, comprised of 92 separate leases, includes both developed and undeveloped parcels and is in close proximity to Ring s existing Permian Basin assets. The developed area is comprised of approximately 907 net acres with current net production of 42 BOEs (Barrel of Oil Equivalent) per day from the San Andres and Glorieta formations and is over 92% oil. The undeveloped area is comprised of approximately 660 net acres. On June 18, 2014, we closed our offering of 2,000,001 shares of our Common Stock, for gross proceeds of $30,000,015 (the Private Placement ). Offering costs, including sales commissions, for the Private Placement totaled $1,334,884. The shares were placed by SunTrust Robinson Humphrey, Inc., acting as lead placement agent and Global Hunter Securities, LLC, acting as co-placement agent in the transaction. These shares were issued without registration under the Securities Act of 1933, as amended (the Securities Act ), by reason of the exemption from registration afforded by the provisions of Section 4(a)(5) and/or Section 4(a)(2) thereof, and Rule 506 promulgated thereunder, as a transaction by an issuer not involving any public offering (constituting a Private Placement ). Each of the investors in this offering was an accredited investor as defined in Regulation D. Each investor delivered appropriate investment representations with respect to their investment, including their status as accredited investors . The Resale Shares are being registered with the Securities and Exchange Commission (the SEC ) to fulfill Ring s commitment to register such shares in connection with the Private Placement. On July 1, 2014, the Company entered into a Credit Agreement with SunTrust Bank, as lender, issuing bank and administrative agent for several banks and other financial institutions and lenders (the Credit Facility ). The Credit Facility provides for a senior secured revolving credit facility with a maximum borrowing amount of $150 million and an initial borrowing base of $40 million, which is subject to periodic redeterminations, mandatory reductions and further adjustments from time to time. The Credit Facility matures on July 1, 2019, and is secured by substantially all of the Company s assets. As of August 13, 2014, no amount was outstanding on the Credit Facility. Upon entering into this Credit Facility, the Company terminated its prior credit facility with The F&M Bank and Trust Company and has paid off all amounts outstanding under such credit facility. Historical Background Ring was originally organized under the name of Blanca Corp. in the State of Nevada on July 30, 2004. The name of the corporation was changed of record to Transglobal Mining Corp. on April 8, 2007. The initial purpose of the corporation was to engage in mining development operations within the United States and Canada. On March 21, 2008, the corporation was acquired by a new majority group of stockholders. At the time of the closing of the majority share acquisition, the corporation divested itself of all mining-related assets and liabilities. On or about March 20, 2008, the corporation changed its name of record in Nevada to Ring Energy, Inc., and the purpose of the corporation changed to focus on the acquisition and development of oil and gas properties and the marketing of oil and gas products derived from those properties. In connection with the closing, the corporation approved, by majority stockholder consent resolution, a reverse split of eighteen-to-one (18:1) of its issued shares, decreasing the issued and outstanding shares. On June 28, 2012, Ring completed the acquisition of Stanford Energy, Inc. ( Stanford ) through the closing of a stock-for-stock exchange agreement dated May 3, 2012. As a result, Stanford s stockholders obtained control of Ring under current accounting guidance. Since the Stanford stockholders obtained a controlling interest in Ring s Common Stock and stock options, Stanford was determined to be the accounting acquirer and its historical financial statements have been adjusted to reflect its reorganization in a manner equivalent to a 2,500-for-1 stock split. On May 23, 2011, prior to Ring s acquisition of Stanford, Stanford acquired developed and undeveloped properties referred to as the Fisher I Property. The Fisher I Property represents Stanford s predecessor under Rule 405 of Regulation C of the Securities Act of 1933, as amended, as the Fisher I Property was Stanford s first significant interest in producing oil and natural gas properties and Stanford s own operations before the acquisition were insignificant relative to the operations acquired. In that regard, upon consummation of the acquisition, the historical financial statements of the Fisher I Property became the historical financial statements of Ring. Corporate Information Our principal executive offices are located at 200 N. Loraine Street, Suite 1245, Midland, Texas 79701, and our telephone number is (432) 682-7464. Our Internet website can be found at www.ringenergy.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934 will be available through our Internet website as soon as reasonably practical after we electronically file such material with, or furnish it to, the SEC. The information on, or that can be accessed through, our website is not incorporated by reference into this prospectus and should not be considered part of this prospectus.
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+S-1/A 1 d738487ds1a.htm S-1/A S-1/A Table of Contents As filed with the Securities and Exchange Commission on September 30, 2014 Registration No. 333-198500 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No. 2 to Form S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 USD Partners LP (Exact name of Registrant as Specified in Its Charter) Delaware 4610 30-0831007 (State or Other Jurisdiction of Incorporation or Organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 811 Main Street, Suite 2800 Houston, Texas 77002 (281) 291-0510 (Address, Including Zip Code, and Telephone Number, including Area Code, of Registrant s Principal Executive Offices) Daniel K. Borgen Chief Executive Officer and President USD Partners LP 811 Main Street, Suite 2800 Houston, Texas 77002 (281) 291-0510 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Copies to: Sean T. Wheeler Keith Benson Latham & Watkins LLP 811 Main Street, Suite 3700 Houston, Texas 77002 (713) 546-5400 Douglas E. McWilliams Sarah K. Morgan Vinson & Elkins L.L.P. 1001 Fannin Street, Suite 2500 Houston, Texas 77002 (713) 758-2222 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 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, 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 Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Proposed Maximum Aggregate Offering Price(1)(2) Amount of Registration Fee Common units representing limited partner interests $213,727,500 $27,528.11 (1) Includes common units issuable upon exercise of the underwriters over-allotment option to purchase additional common units. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o). (3) The total registration fee includes $19,320 that was previously paid for the registration of $150,000,000 of proposed maximum aggregate offering price in the filing of the Registration Statement on August 29, 2014 and $8,208.11 for the registration of an additional $63,727,500 of proposed maximum aggregate offering price registered hereby. 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 Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Table of Contents TABLE OF CONTENTS 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 investing, you should carefully read this entire prospectus, including our consolidated financial statements and the information set forth under the sections Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations and Special Note Regarding Forward-Looking Statements. Unless the context requires otherwise, the words we, us, our and Varonis refer to Varonis Systems, Inc. and its subsidiaries. VARONIS SYSTEMS, INC. Overview We provide an innovative software platform that allows enterprises to map, analyze, manage and migrate their unstructured data. We specialize in human-generated data, a type of unstructured data that includes an enterprise s spreadsheets, word processing documents, presentations, audio files, video files, emails, text messages and any other data created by employees. This data often contains an enterprise s financial information, product plans, strategic initiatives, intellectual property and numerous other forms of vital information. Our Metadata Framework is a proprietary technology platform that extracts critical metadata, or data about data, from an enterprise s IT infrastructure and uses this contextual information to map functional relationships among employees, data objects, content and usage. IT and business personnel deploy our software for a variety of use cases, including data governance, data security, archiving, file synchronization, enhanced mobile data accessibility and information collaboration. In today s information-based economy, enterprises must share, protect and manage their vital information assets; however, the rapid growth in data volume and complexity is making it significantly harder for enterprises to do so. The December 2012 International Data Corporation (IDC) Digital Universe Study, which we refer to as the IDC Study, estimates that the amount of digital information created and replicated will grow at a compound annual growth rate of 39% from 2012 through 2020, and more than 90% of the data created in the next decade will be unstructured data. We believe that unstructured data represents a critical business asset, and enterprises are increasingly seeking ways to maximize the value of this data, while simultaneously ensuring that the data is appropriately secured and managed. Despite the importance of their digital assets, most enterprises have difficulty tracking who has access to selected data, who is responsible for that data, and which employees are accessing, creating, manipulating or deleting it. The revolution in internet search occurred when search engines began to mine internet metadata, such as the links between pages, in addition to page content, thereby making the internet s content more usable and consequently more valuable. Similarly, our Metadata Framework creates advanced searchable data structures and provides real-time intelligence about an enterprise s massive volumes of human-generated content, to create more accessible, manageable and secure human-generated data. We believe that the technology underlying our Metadata Framework is our primary competitive advantage. The strength of our solution is driven by several proprietary technologies and methodologies that we have developed, coupled with how we have seamlessly integrated them into our highly versatile Metadata Framework. The broad applicability of our technology has resulted in our customers deploying our platform for numerous use cases. These use cases include: searchable logs of all human-generated data related activity; centralized visibility into the unstructured data of the enterprise; identification of sensitive data and monitoring its security, ownership and usage, thereby reducing potential exposures; identification of and tracking data Table of Contents ownership; business productivity enhancement through self-service data management; intelligent archiving and migration of data; creation of secure hybrid cloud functionalities; abnormal activity alerts and identification and security of high-risk data. We believe that the diverse functionalities offered by our platform positions us at the intersection of several powerful trends in the digital universe. The addressable markets for the functionalities delivered by our platform are many and include portions of the markets defined by IDC as storage software, collaborative applications, IT Security (including endpoint security, messaging security and securing and vulnerability management), identity and access management, and data integration and access software. IDC estimates that the aggregate total spend of these established markets in 2012 was approximately $47 billion. We believe that our comprehensive product offering will attract a meaningful portion of this overall spend, resulting in a multi-billion dollar total addressable market. As we continue to innovate and introduce new products, we expect that the use cases for our solutions will expand, leading to incremental growth in our addressable market opportunity. We sell the vast majority of our products and services to channel partners, including distributors and resellers, which sell to end-user customers, which we refer to in this prospectus as our customers. We believe that our sales model, which combines the leverage of a channel sales model with our highly trained and professional sales force, has played and will continue to play a major role in our ability to grow and to successfully deliver our unique value proposition for enterprise human-generated data. We target customers of all sizes, in all industries and in all geographies. As of December 31, 2013, we had approximately 2,400 customers, spanning leading firms in the financial services, public, healthcare, energy and utilities, industrial, technology, consumer and retail, education and media and entertainment sectors. Our business model is characterized by strong revenue growth, growing repeat business and high gross margins. We have achieved significant growth and scale in the relatively short period of time since we started operations in 2005. For 2011, 2012 and 2013, our revenues were $39.8 million, $53.4 million and $74.6 million, respectively, representing year-over-year growth of 34% and 40% in 2012 and 2013, respectively. In 2011, 2012 and 2013, we had operating losses of $3.4 million, $1.6 million and $5.8 million, respectively. In 2011, 2012 and 2013, we had net losses of $3.8 million, $4.8 million and $7.5 million, respectively. Industry Background According to IDC estimates, the amount of information created and replicated in 2012 alone exceeded 2.8 zettabytes, or trillions of gigabytes, and expects this amount of information to grow at a compound annual growth rate of 39% from 2012 through 2020, representing a greater than 50-fold increase between 2010 and 2020. Additionally, the IDC Study estimates that more than 90% of the data created in the next decade will be unstructured data. Unstructured data includes both human-generated data and machine-generated data, such as log files that servers generate. Often the most valuable and fastest growing asset a business owns is its human-generated data that its employees spend hours creating and refining every day. Table of Contents The chart below depicts the three forms of data that are generated in enterprises globally: Human-generated data is inherently difficult to manage, protect and analyze. This form of unstructured data can be easily created and shared by humans, but without additional structure or metadata context, it cannot be easily classified or tagged by existing solutions. As a result, enterprises miss opportunities to extract value from this strategic asset. This value loss contrasts with how enterprises have been able to extract value from structured data, which tends to reside in databases and can be easily reviewed and analyzed. The IDC Study estimated that while 23% of the digital universe contained information that might be valuable if analyzed, only 0.5% of the digital universe is in fact analyzed. Prior to relational databases and business intelligence tools, enterprises lacked the ability to analyze and extract strategic value from their vast stores of structured data. Once the core analysis platform was developed for structured data, numerous additional tools, use cases and technologies emanated from the widespread adoption of the relational database. We believe that the ubiquity and growth of unstructured human-generated data is analogous to that of structured data, but the growth of unstructured, human-generated data is outpacing the growth of structured data. We see a similar ecosystem developing from the analysis of human-generated data and believe that our platform will continue to play a major role in harnessing the value of data for our clients. Existing technologies are available to manage and extract value from machine-generated data; however, similar technologies for human-generated data are not widespread. Enterprises are slowly gaining a better understanding of the potential value of their human-generated data and are demanding solutions that allow them to manage, protect and extract value from it. There is a growing need for solutions that demonstrate the ability to function across many platforms, to scale effectively and to provide users with intelligent and actionable reporting. Table of Contents VARONIS WE DEAL WITH HUMAN-GENERATE UNSTRUCTURED HUMAN-GENERATED DATA EMAILS WORD FILES SPREADSHEETS PRESENTATIONS GENERATED BY EVERY EMPLOYEE IN EVERY ORGANIZATION MASSIVE VOLUMES FOCUS OF VARONIS SOLUTIONS Table of Contents Key Challenges in Managing Human-Generated Enterprise Data The key challenges in managing human-generated enterprise data are: lack of granular access control; inability to track user data access activity; challenges in aligning data ownership with business context; growth of mobility leading to multiple access platforms; limited capabilities of archiving and migration platforms; inability to identify and classify sensitive data; increasing regulatory compliance; ineffective existing solutions; and cyber-attacks and hacktivism. Illustrative Use Cases of Varonis Solution within Enterprises We have described below several functionalities and use cases that our customers have been able to deliver based on our technology platform. We intend to introduce new products and enhance the capabilities of our existing products to expand the use cases for our solutions. Create a Searchable Log of All Historical Activity for any Human-Generated Data. IT and business personnel can use our software to monitor and alert on unstructured data events, including when files were created, deleted, modified, moved or accessed or when an email was sent, modified or deleted. This technology enables a variety of uses, such as finding lost or missing files, sending real time alerts on undesirable actions, forensic investigations, usage profiling and compliance with industry regulations. Provide Centralized Visibility into Unstructured Data. In addition to having the ability to search for usage, IT and business personnel have a granular map of all directory structures and access privileges from the perspective of data, users or groups, or content. This map allows for rapid responses to queries about who has access to a data set, what data a user or group can access, who deleted or moved files and many other day-to-day concerns facing IT and business personnel. Multi-variable Search for Sensitive or Topic-Specific Data and Monitor its Security, Ownership and Usage and Reduce Potential Exposures. The Varonis Data Classification Framework allows enterprises to search their file systems for data that matches known sensitive data content patterns, such as credit card numbers, social security numbers, project names and client names and then cross-references that with metadata regarding which employees have accessed those files. This multi-variable search functionality allows enterprises to identify, tag and prioritize data based on specific user access patterns coupled with other relevant metadata. Identify and Track Data Ownership. With the significant growth of unstructured data and the increased complexity of the infrastructure storing it, many enterprises have large volumes of data for which no designated owner exists in the system. Our platform can identify data that does not have an owner and recommends likely ownership candidates. Once confirmed, ownership is tracked in our Metadata Framework. This capability helps enterprises assign the correct owners for their data and enables subsequent analysis and search based on the owner, including functionality such as appropriate internal charging for data usage and storage. Enhance Business Productivity Through Self-Service Data Management. We empower business personnel, who are the authors and ultimate owners of unstructured data, to grant and review data privileges and activity based on accessibility, context and usage, enabling more effective classification, migration, disposition and Table of Contents DATA FILES IMAGE, AUDIO & VIDEO FILES UNABATED GROWTH OF DATA... 10x Growth in number of servers (virtual & physical)* 14x Amount of information managed directly by enterprise data centers* 1.5x Growth of IT professionals* ...PRESENTS DISRUPTIVE OPPORTUNITIES *Source: The December 2012 IDC study which provides estimates for 2012 - 2020. Table of Contents control. Historically, enterprises have relied on IT personnel to perform these tasks based on a generic set of policies or rules. This frequently led to excessive access privileges, stale, unused data or lost ownership. Our platform also allows business personnel to request access to desired folders through a self-service web portal that filters and routes the request to system-identified managers of data. Our software also periodically proactively prompts business unit personnel to review access and provides intelligent recommendations on whether access should be revoked based on an analysis of historical usage and access patterns. Moreover, our software enables time-based authorizations, whereby access to selected data expires after a given time period. Our platform can also be used by IT personnel to simulate and evaluate the impact of permission changes before actually implementing the change. Intelligently Archive, Quarantine and Migrate Data. Enterprises store data in many places and must frequently move or delete it for various reasons, including compliance with retention policies, IT infrastructure upgrades, better accessibility, legal matters, security, disk space savings, corporate restructurings, divestitures or easier employee accessibility, such as moving all data pertaining to a given project into a Sharepoint folder for group collaboration. Many existing data migration and archiving solutions utilize time stamps to determine which data to move. Our Metadata Framework empowers businesses to search for data that meets specific criteria, such as its usage or lack thereof, its content, its file system attributes, and its accessibility, and then execute the automatic deletion, copy, move or migration of this data on a one time or recurring schedule. Our platform can migrate data across storage platforms and domains. Create Secure Hybrid Clouds for Content Collaboration. Employees are increasingly storing corporate data in public cloud services for remote working purposes, quick access from smartphones or tablets or sharing with external business partners, often without corporate approval or oversight. This can result in a significant amount of proprietary and regulated data leaking on to non-corporate devices outside of enterprise controls. Our DatAnywhere software helps enterprises overcome this problem by allowing them to offer the productivity gains, ease of use, and mobile device access typically associated with public cloud services, while ensuring their data stays on their existing IT infrastructure and adheres to existing policies and controls. Highlight Abnormal Usage Activity. Our software automatically generates alerts when an employee s data usage deviates from his or her historical patterns, such as accessing or deleting an abnormally large number of files. This functionality acts as a safeguard for enterprises to protect their data against misuse or theft and also provides other valuable insights, such as early detection of upcoming resignations. Identify and Secure High-Risk Data. Enterprises need the ability to restrict access to confidential or proprietary files and information. For example, data belonging to key business functions such as finance, human resources, legal, or research and development, as well as stored customer data, such as credit card numbers, or social security numbers, constitute critical business assets that should be accessible by only the appropriate employees. Our platform allows enterprises to identify and remediate data lacking the appropriate level of security thereby reducing potential data theft, loss or misuse. Our Growth Strategy Our objective is to be the primary vendor to which enterprises turn to analyze, protect and transform into actionable intelligence their human-generated data. The following are key elements of our growth strategy: extending our technological capabilities through innovation; growing our customer base; increasing sales to existing customers; growing our sales force; growing sales from our recently introduced products; Table of Contents TABLE OF CONTENTS Page Prospectus Summary 1
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+PROSPECTUS SUMMARY AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, "WE," "US," "OUR," AND "BETAFOX CORP." REFERS TO BETAFOX CORP. THE FOLLOWING SUMMARY PROVIDES A BRIEF OVERVIEW OF THE KEY ASPECTS OF THE OFFERING. YOU SHOULD READ THE ENTIRE PROSPECTUS BEFORE MAKING AN INVESTMENT DECISION TO PURCHASE OUR COMMON STOCK. BETAFOX CORP. We are a development stage company and our business is production of a colored flame candles. Taking advantage of low cost production we plan to deliver our candles directly to our clients and stores in different markets. At present moment we have developed business plan, purchased one candle machine and secured a location for our production shop. We currently have minimal operations. Being a development stage company, we have no revenues and have limited operating history. Betafox Corp. was incorporated in Nevada on Sep. 10, 2013. To date we have prepared a business plan and purchased one candle making machine. Our principal executive office is located at 8 Nicou Georgiou, block 1, app 201, Nicosia, Cyprus, 1095. Our phone number is + 1702 879-4762. We require a minimum funding of $25,000 to conduct our 12 months plan of operation, and if we are unable to obtain this level of financing, our business may fail. We are a company without revenues and have just recently started our operations; we have minimal assets and have incurred losses since inception. Our financial statements for the period from September 10, 2013 (date of inception) to May 31, 2014, report no revenues and a net loss of $136. As of May 31, 2014 we had $3,495 in cash on hand. As of the date of this prospectus we had $1,587.89 in cash on hand. Our independent registered public accountant has issued an audit opinion for Betafox Corp. which includes a statement expressing substantial doubt as to our ability to continue as a going concern. If we are unable to obtain additional working capital our business may fail. To date, the only operations we have engaged in are the development of a business plan and the purchase of a candle making machine. We intend to use the net proceeds from this offering to develop our business operations (See "Description of Business" and "Use of Proceeds"). Being a development stage company, we have very limited operating history. Proceeds from this offering are required for us to proceed with our business plan over the next twelve months. We require minimum funding of $25,000 to conduct our proposed operations and pay all expenses for a minimum period of one year including expenses associated with maintaining a reporting status with the SEC. If we are unable to obtain minimum funding of $25,000, our business may fail. Even if we raise $100,000 from this offering or more, we may need more funds to develop growth strategy and to continue maintaining a reporting status. 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. Our president devotes approximately twenty hours a week of his time to our operations. He has no prior experience managing a public company. If necessary, Giorgos Kallides, our president, has verbally agreed to lend funds to pay for the registration process and lend funds to implement our business plan and to help maintain a reporting status with the SEC in the form of a non-secured loan for the next twelve months. Verbal Agreement attached as Exhibit 10.1. 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. THE OFFERING The Issuer: BETAFOX CORP. Securities Being Offered: 10,000,000 shares of common stock Price Per Share: $0.01 Duration of the Offering: The offering shall terminate on the earlier of: (i) the date when the sale of all 75,000,000 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. Gross Proceeds if 100% of the shares are sold: $100,000 Gross Proceeds if 75% of the shares are sold: $75,000 Gross Proceeds if 50% of the shares are sold: $50,000 Gross Proceeds if 25% of the shares are sold: $25,000 Securities Issued and Outstanding: There are 6,000,000 shares of common stock issued and outstanding as of the date of this prospectus, held solely by our sole officer and director, Giorgos Kallides. Registration Costs: We estimate our total offering registration costs to be approximately $10,000. Risk Factors: See "Risk Factors" and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in shares of our common stock. SUMMARY FINANCIAL INFORMATION The summarized financial data presented below is derived from, and should be read in conjunction with, our audited financial statements and related notes from September 10, 2013 (date of inception) to May 31, 2014, included on Page F-1 in this prospectus. FINANCIAL SUMMARY May 31, 2014 ($) ---------------- Cash and Deposits 3,495 Total Assets 9,495 Total Liabilities 3,631 Total Stockholder's Equity 5,864 STATEMENT OF OPERATIONS Accumulated From September 10, 2013 to May 31, 2014 ($) ---------------- Total Expenses 136 Net Loss for the Period (136) Net Loss per Share (0.00)
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