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+ PROSPECTUS SUMMARY AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, "WE," "US," "OUR," AND "VETRO, INC." REFERS TO VETRO, 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. VETRO, INC. Vetro, Inc. was founded in the State of Nevada on August 15, 2012. We are a development stage company and intend to sell crepes in Czech Republic. We intend to use the net proceeds from this offering to develop our business operations (See "Description of Business" and "Use of Proceeds"). To implement our plan of operations we require a minimum of $40,000 for the next twelve months as described in our Plan of Operations. We expect our operations to begin to generate revenues during months10-12 after completion of this offering. However, there is no assurance that we will generate any revenue in the first 12 months after completion our offering or ever generate any revenue. Being a development stage company, we have very limited operating history. If we do not generate any revenue we may need a minimum of $10,000 of additional funding to pay for ongoing SEC filing requirements. We do not currently have any arrangements for additional financing. Our principal executive offices are located at Jicinska, 2285/4, Prague, Czech Republic 13000. Our phone number is +420228880935. From inception until the date of this filing, we have had limited operating activities. Our financial statements from inception (August 15, 2012) through May 31, 2013, reports no revenues and a net loss of $4,241. Our independent registered public accounting firm has issued an audit opinion for Vetro, Inc. 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 Lease Agreement with David Novak on April 17, 2013. As of the date of this prospectus, Tatiana Fumioka, our sole officer and director, owns 100% of the company's stocks. She will continue to own after completion of the offering sufficient shares to control the operations of the company. As of the date of this prospectus, there is no public trading market for our common stock and no assurance that a trading market for our securities will ever develop. We do not anticipate earning revenues until we enter into commercial operation. Since we are presently in the development stage of our business, we can provide no assurance that we will successfully assemble, construct and sell any products or services related to our planned activities. THE OFFERING The Issuer: VETRO, INC. Securities Being Offered: 8,000,000 shares of common stock. Price Per Share: $0.01 Nature of the Offering: The offering is a self-underwritten, best-efforts offering with no minimum subscription requirement. Duration of the Offering: The shares will be offered for a period of two hundred and forty (240) days from the effective date of this prospectus. The offering shall terminate on the earlier of (i) when the offering period ends (240 days from the effective date of this prospectus), (ii) the date when the sale of all 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. We do not reserve the right to extend the offering beyond the 240-day period. Gross Proceeds: $80,000 Securities Issued and Outstanding: There are 8,000,000 shares of common stock issued and outstanding as of the date of this prospectus, held by our sole officer and director, Tatiana Fumioka. If we are successful at selling all the shares in this offering, we will have 16,000,000 shares issued and outstanding. Subscriptions: All subscriptions once accepted by us are irrevocable. Registration Costs; We estimate our total offering registration costs to be approximately $8,000. Risk Factors: See "Risk Factors" and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in shares of our common stock. SUMMARY FINANCIAL INFORMATION The tables and information below are derived from our audited financial statements for the period from August 15, 2012 (Inception) to February 28, 2013 and our unaudited financial statements for the period from August 15, 2012 (Inception) to May 31, 2013. FINANCIAL SUMMARY February 28, 2013 ($) --------------------- (Audited) Cash and Deposits 8,136 Total Assets 8,136 Total Liabilities 317 Total Stockholder's Equity 7,819 STATEMENT OF OPERATIONS Accumulated From August 15, 2012 (Inception) to February 28, 2013 ($) --------------------- (Audited) Total Expenses 181 Net Loss for the Period (181) Net Loss per Share -- FINANCIAL SUMMARY May 31, 2013 ($) ---------------- (Unaudited) Cash and Deposits 4,076 Total Assets 4,076 Total Liabilities 317 Total Stockholder's Equity 3,759 STATEMENT OF OPERATIONS Accumulated From August 15, 2012 (Inception) to May 31, 2013 ($) ---------------- (Unaudited) Total Expenses 4,241 Net Loss for the Period (4,241) Net Loss per Share --
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+ contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information that you should consider before deciding whether to purchase shares in the stock offering. You should carefully read this entire prospectus, including the information contained in the sections entitled "Risk Factors" and "The Rights Offering," our audited consolidated financial statements and the accompanying notes for the year ended June 30, 2012, and our unaudited consolidated financial statements for the quarter ended December 31, 2012, both of which are incorporated into this prospectus by reference, in their entirety before you decide to exercise your subscription rights. The Company Known at the time as Minerva National Bank, Consumers National Bank was originally chartered on August 30, 1965. Consumers is a full service financial institution engaged in commercial and retail banking through twelve full service locations and 13 ATM s throughout Stark, Carroll and Columbiana counties in northeast Ohio. Consumers Bancorp, Inc. is a bank holding company that was formed in 1995 to acquire all the issued and outstanding capital stock of Consumers National Bank. Consumers is a bank holding company under the Bank Holding Company Act of 1956, as amended, and is a registered bank holding company, incorporated under the laws of the State of Ohio. Its activities have been limited primarily to holding the common shares of the Bank. Our common shares are traded on the over-the-counter market under the trading symbol "CBKM." As of December 31, 2012, we had total assets of $344.6 million, total gross loans of $205.7 million, total deposits of $292.2 million and total shareholders' equity of $29.1 million. At December 31, 2012, our tier 1 leverage capital ratio was 7.30%, tier 1 risk-based capital ratio was 11.41% and total risk-based capital ratio was 13.39%. For the sixth months ended December 31, 2012, our return on average assets was 0.79% and our return on average equity was 9.45%. The Company is focused on growing business relationships and building core deposits, profitable loans and non-interest income. We believe that we have built a solid franchise that meets the financial needs of our clients and communities by providing an array of personalized products and services delivered by seasoned banking professionals with decisions made at the local level. We strive to be the leading community bank in each of our markets. We believe that our core lending and deposit business segments have performed well in a very challenging economic environment that began in 2008. For the five fiscal years ending June 30, 2012, our net charge-offs averaged only 0.16% of average loans. For the six months ended December 31, 2012, our annualized net charge-offs were only 0.05% of average loans. As of December 31, 2012, we had non-performing assets of $1.73 million which represented 0.50% of total assets. At that date, we had no other real estate owned. Management believes that the Company is well positioned to build on its core performance to continue to grow profitably. Additional employees and infrastructure are needed to manage the increased customer relationships that come with growth. Plans have begun to replace the Minerva Corporate Headquarters and branch with a new facility by spring of 2015. The new facility will provide a much improved customer experience in the branch, upgraded staff work spaces and basic amenities, operating efficiencies and increased capacity that will allow us to meet future staffing needs. We are a community-oriented financial institution that offers a wide-range of commercial and consumer loan and deposit products, as well as mortgage, financial planning and investment services to individuals, farmers and small and medium sized businesses in our markets. We seek to be the provider of choice for financial solutions to customers who value exceptional personalized service, local decision making, and modern banking technology. Our business involves attracting deposits from local businesses and individual customers and using such deposits to originate commercial, agricultural, mortgage, and consumer loans in Stark, Columbiana, Carroll and contiguous counties in Ohio. We also invest in securities consisting primarily of obligations of U.S. government sponsored entities, municipal obligations and mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae. Consumers is supervised by the Board of Governors of the Federal Reserve System and Consumers National Bank is subject to supervision, regulation and periodic examination by the Office of the Comptroller of the Currency. Our executive offices are located at 614 East Lincoln Way, Minerva, Ohio and our telephone number is (330) 868-7701. Our internet address is www.consumersbank.com. The information contained on our website should not be considered part of this prospectus, and the reference to our website does not constitute incorporation by reference of the information contained on the website. Additional information about us and our subsidiaries is included in documents incorporated by reference in this prospectus. See "Where You Can Find More Information" beginning on page 26 of this prospectus. Our Management Team Our executive management team consists of seven seasoned banking professionals with an average of 25 years of experience each in the financial services industry. All seven members of our executive management team have worked in northeast Ohio for the majority of their respective careers. Our executive officers experience and local market knowledge have been instrumental in managing through challenging economic times and in positioning the Company to take advantage of future opportunities. To ensure management continuity well into the future, we have developed a leadership program for current executives and future leaders. The executive management team of Consumers consists of: Executive Title Years in Financial Services Ralph J. Lober, II President & CEO 22 Phillip M. Suarez Executive Vice President, Senior Loan Officer 41 Renee K. Wood Executive Vice President, Chief Financial Officer 20 Randy L. Gilroy Senior Vice President, Chief Credit Officer 32 Bryan D. Walters Senior Vice President, Chief Risk Officer 21 Derek G. Williams Senior Vice President, Retail Operations and Sales 34 Kimberly K. Chuckalovchak Vice President, Information Technology Manager 7 CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Amount to be Registered(3); Proposed Maximum Aggregate Offering Price(2) Amount of Registration Fee Subscription Rights, each to purchase one share of our Common Stock, without par value (1) (1) Shares of Common Stock, without par value, underlying the Subscription Rights Total $10,000,000 $1,364.00 (1)Pursuant to Rule 457(o) under the Securities Act of 1933, as amended, the registration fee is calculated based upon the maximum aggregate offering price of all securities listed (determined as provided below). Pursuant to Rule 457(o), the table omits certain information. (2)Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) of the Securities Act. (3)The registrant is registering hereunder an indeterminate number or amount of subscription units and common stock. In no event will the aggregate maximum offering price of all securities issued pursuant to this registration statement exceed $10,000,000. 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. QUESTIONS AND ANSWERS RELATING TO THE STOCK OFFERING The following are examples of what we anticipate will be common questions about the stock offering. The answers are based on selected information included elsewhere in this prospectus. The following questions and answers do not contain all of the information that may be important to you and may not address all of the questions that you may have about the stock offering. This prospectus contains more detailed descriptions of the terms and conditions of the stock offering and provides additional information about us and our business, including potential risks related to the stock offering, Consumers common shares and our business. What is the rights offering? We are distributing to holders of shares of our common stock as of 5:00 p.m., Eastern Time, on March 26, 2013, which is the record date for the rights offering, at no charge, non–transferable subscription rights to purchase shares of our common stock. You will receive one subscription right for each share of common stock you owned as of 5:00 p.m., Eastern Time, on March 26, 2013. Each subscription right entitles the holder to a basic subscription privilege and an over–subscription privilege, which are described below. The common shares to be issued in the rights offering, like our existing shares of common stock, will be traded on the OTC Markets under the symbol "CBKM." Why are we conducting the stock offering? We are engaging in the stock offering to raise equity capital to further strengthen Consumers National Bank s capital position, provide additional capital to Consumers for general operating purposes and to enable us to be well-positioned for future growth. Our capital management function is a regular process that consists of providing capital both for our current financial position and our anticipated future capital needs. Over the past few years we have experienced steady deposit growth and we believe that increased economic activity in our region, particularly in the energy sector, will lead to additional growth opportunities. The equity capital we raise in this stock offering will be used to enhance Consumers National Bank s overall capital position and for general corporate purposes, which may include, among others, pursuing strategic opportunities that may be presented to us from time to time. Our board of directors considered several alternative capital raising methods and has chosen to raise capital through a rights offering, in part to give our shareholders the opportunity to limit ownership dilution by buying additional shares of common stock. We believe that the stock offering will strengthen our financial condition by generating additional cash and increasing our capital position; however, our board of directors is making no recommendation regarding your exercise of the subscription rights. We cannot assure you that we will not need to seek additional financing or engage in additional capital offerings in the future. What is the basic subscription privilege? The basic subscription privilege of each subscription right gives our shareholders the opportunity to purchase 0.3173 shares of our common stock at a subscription price of $15.25 per share; however, fractional common shares resulting from the exercise of the subscription right will be eliminated by rounding down to the nearest whole share. We have granted to you, as a shareholder of record as of 5:00 p.m., Eastern Time, on the record date, one subscription right for each share of our common stock you owned at that time. For example, if you owned 100 shares of our common stock as of 5:00 p.m., Eastern Time, on the record date, you would have received 100 subscription rights and would have the right to purchase 31 shares of common stock for $15.25 per share subject to certain limitations and subject to allotment. You may exercise all or a portion of your basic subscription privilege or you may choose not to exercise any subscription rights at all. However, if you exercise less than your full basic subscription privilege, you will not be entitled to purchase any additional shares by using your over–subscription privilege. If you hold a Consumers stock certificate, the number of rights you may exercise pursuant to your basic subscription privilege is indicated on the enclosed rights certificate. If you hold your shares in the name of a custodian bank, broker, dealer or other nominee, you will not receive a rights certificate. Instead, the Depository Trust Company (DTC) will issue one subscription right to the nominee record holder for each share of our common stock that you own at the record date. If you are not contacted by your custodian bank, broker, dealer or other nominee, you should contact your nominee as soon as possible. What is the over–subscription privilege? In the event that you purchase all of the shares of our common stock available to you pursuant to your basic subscription privilege, you may also choose to purchase a portion of any shares of our common stock that are not purchased by our other shareholders through the exercise of their basic subscription privileges. You should indicate on your rights certificate how many additional shares you would like to purchase pursuant to your over–subscription privilege. If sufficient shares of common stock are available, we will seek to honor your over–subscription request in full. If, however, over–subscription requests exceed the number of shares of common stock available to be purchased pursuant to the over–subscription privilege, we will allocate the available shares of common stock among shareholders who over–subscribed by multiplying the number of shares requested by each shareholder through the exercise of their over–subscription privileges by a fraction that equals (i) the number of shares available to be issued through over–subscription privileges divided by (ii) the total number of shares requested by all subscribers through the exercise of their over–subscription privileges. We will not issue fractional shares through the exercise of over–subscription privileges. In order to properly exercise your over–subscription privilege, you must deliver the subscription payment related to your over–subscription privilege at the time you deliver payment related to your basic subscription privilege. Because we will not know the actual number of unsubscribed shares prior to the expiration of the rights offering, if you wish to maximize the number of shares you purchase pursuant to your over–subscription privilege, you will need to deliver payment in an amount equal to the aggregate subscription price for the maximum number of shares of our common stock that may be available to you. For that calculation, you must assume that no other shareholder, other than you, will subscribe for any shares of our common stock pursuant to their basic subscription privilege. See "The Rights Offering–The Subscription Rights–Over–Subscription Privilege." Am I required to exercise all of the subscription rights I receive in the rights offering? No. You may exercise any number of your subscription rights, or you may choose not to exercise any subscription rights. If you do not exercise any subscription rights, the number of shares of our common stock you own will not change. However, if you choose not to exercise your subscription rights or you exercise less than all of your subscription rights and other shareholders fully exercise their subscription rights or exercise a greater proportion of their subscription rights than you exercise, the percentage of our common shares owned by these other shareholders will increase relative to your ownership percentage, and your voting and other rights in the Company will likewise be diluted. In addition, if you do not exercise your basic subscription privilege in full, you will not be entitled to participate in the over–subscription privilege. Our Markets Headquartered in Minerva, we operate in the northeastern Ohio counties of Stark, Carroll and Columbiana. These counties are located in and around the region known as the Utica Shale Formation. According to the Ohio Oil & Gas Association (OOGA), from 2011 to 2015, oil and gas producers are projected to spend over $34 billion in exploration and development, midstream, royalty and lease expenditures in the Utica. Over that same timeframe, OOGA estimates the creation of over 200,000 jobs with more than $12 billion of annual salary and personal income. Although OOGA s projections are based on drilling results to date, there have been a number of significant investments including: Chesapeake Energy - Over $2 billion for development of the Utica Shale in 2012; this is in addition to the more than $1 billion it paid to Ohio landowners in the form of leasing and royalty payments, according to the Cleveland Plain Dealer; Vallourec – Announced the successful production of its first pipes at its new US state-of-the-art mill in Youngstown, Ohio after investing $350 million, according to Reuters; and M3 Midstream LLC – Over $1 billion for the first of several large natural gas processing plants in eastern Ohio scheduled to open in May 2013, according to the Cleveland Plain Dealer. Although we do not specifically lend to energy exploration concerns, the development and production of natural resources in our markets has caused a significant increase in economic development which, both directly and indirectly, is contributing to our increased growth and profitability. At the same time we are enjoying the positive effect of the Utica shale, we have been strategically expanding our access to more populous areas through the opening of offices in Hartville and Canton, Ohio. We believe that the demographic profiles of these areas are complementary to our existing markets and provide our business with geographic diversification. Through these new offices we are able to capitalize on our staff s market knowledge and have gained access to additional small business and agricultural customers. Situated in close proximity to Canton, Akron, Cleveland, Youngstown, and Pittsburgh, we believe that the markets we serve will provide meaningful growth opportunities for us. According to the Department of Labor, compared to data from the previous year, as of February 2013, all of our markets experienced meaningful job growth. The unemployment rates in each of our counties had a double-digit percentage decline year-over-year, compared to a 7.2% decline in the national unemployment rate. In 2012, the State of Ohio added more jobs than all other states except Texas, California, and New York. Competitive Strengths We believe that the following business strengths have been instrumental to the success of our core operations and will enable us to continue profitable growth and to maximize value to our shareholders, while remaining fundamentally sound. Community Banking Philosophy. As the leading community bank in our region, we believe the key to our franchise value is our dedication to making a difference in the markets we serve. We provide our clients with local decision making and individualized service coupled with the products and services offered by our larger institutional competitors. As our business lenders, officers, and company directors are based in or reside in the communities we serve, we are able to maintain a high-level of involvement in local organizations and establish a strong understanding of the banking needs of the respective communities. We believe that our customer-centric business philosophy and sales approach enables us to build long-term relationships with desirable customers, which enhances the quality and stability of our funding and lending operations. Our mission and philosophy has positioned us well in the communities across our market area and has enabled us to attract and maintain a very talented and experienced management team. Disciplined Credit Culture. We achieve our strong credit quality by adherence to sound underwriting and credit administration standards and by maintaining long-term customer relationships. The results of our focus on credit quality are evidenced by a ratio of non-performing assets to total assets of only 0.50% at December 31, 2012 and 0.65% at December 31, 2011, and a net charge-offs to average total loans ratio of 0.05% annualized for the six months ended December 31, 2012. Our ratio of allowance for loan losses to total loans was 1.15% at December 31, 2012 and 1.18% at December 31, 2011. While the challenging operating environment in 2008 and 2009 was disastrous for many banks across the country, our management team maintained excellent asset quality throughout. In part, this credit culture is the result of the level of stock ownership by our directors and executive officers. Strong Capital Position. We exceed the regulatory guidelines to be classified "well capitalized." Our capital position is strong and has consistently grown. At December 31, 2012, our tier 1 leverage capital ratio was 7.30%, our tier 1 risk-based capital ratio was 11.41% and our total risk-based capital ratio was 13.39%. We believe that our capital position enhances our ability to grow organically because it enables the Company to continue lending and to remain focused on our customers needs. We believe that completion of this stock offering will further enhance our capital strength and ability to grow. Technology. Throughout our history, we have been a leader in investing in the technology necessary to meet the developing demands of our commercial and retail customers. We utilize a strong core operating system that enables us to efficiently offer high-end deposit and loan products and have partnered with industry-leading internet banking, cash management, mobile banking, application-based banking, and telephone banking providers to offer a complete banking experience to all customers, regardless of their preference. We participate in a nationwide automated teller machine network and recently invested in fiber optics throughout our branch network. Profitable Growth Opportunities. We believe that we can attract new customers and expand our total loans and deposits within our existing market areas and through strategic branching and possible acquisition opportunities. The economic crisis and subsequent regulatory response will continue to create opportunities to attract new clients and in some cases, may become the catalyst for mergers and acquisitions. We will grow the loan portfolio, open new branches and consider new acquisitions only after rigorous due diligence and substantial quantitative analysis regarding the financial and capital impacts of such transactions. We believe that maintaining our financial discipline will generate long-term shareholder value. Financial Results for Nine Months Ending March 31, 2013, Six Months Ending December 31, 2012 and Fiscal Years 2012, 2011 and 2010 The following tables set forth certain information concerning the consolidated financial position and results of operations of Consumers for the periods indicated. This selected consolidated financial data should be read in conjunction with the consolidated financial statements incorporated into this prospectus by reference. 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 14, 2013 PROSPECTUS Consumers Bancorp, Inc. 655,668 shares of Common Stock, including up to 655,668 shares of Common Stock issuable upon the exercise of Subscription Rights at $15.25 per share We are distributing, at no charge to our shareholders, non-transferable subscription rights to purchase up to 655,668 shares of our common stock, without par value. In the rights offering, you will receive one subscription right for each share of common stock you held as of 5:00 p.m. Eastern Time, on March 26, 2013, the record date of the rights offering. Each subscription right will entitle you to purchase 0.3173 shares of our common stock at a subscription price of $15.25 per share, which we refer to as the basic subscription privilege, subject to certain limitations and subject to allotment. If you fully exercise your basic subscription privilege and other shareholders do not fully exercise their basic subscription privileges, you will be entitled to exercise an over-subscription privilege, subject to certain limitations and subject to allotment, to purchase a portion of the unsubscribed shares of our common stock at the same subscription price of $15.25 per share. To the extent you properly exercise your over-subscription privilege for an amount of shares that exceeds the number of the unsubscribed shares available to you, any excess subscription payments received by the subscription/escrow agent will be returned to you promptly, without interest, following the expiration of the stock offering. The subscription rights will expire if they are not exercised by 5:00 pm., Eastern Time, on [ ], 2013. We reserve the right to extend the expiration date one or more times, but in no event will we extend the rights offering beyond [ ], 2013. You should carefully consider whether to exercise your subscription rights before the expiration of the rights offering. All exercises of subscription rights are irrevocable. The subscription rights may not be sold, transferred or assigned. Our board of directors is not making a recommendation regarding your exercise of the subscription rights. You should carefully consider whether to exercise your subscription rights prior to the expiration of the rights offering. Investing in our common shares involves risks. See "Risk Factors" beginning on page 7 to read about factors you should consider before exercising your subscription rights. We may offer any of the shares of common stock that remain unsubscribed (after taking into account all over-subscription privileges exercised) at the expiration of the rights offering to the public at $15.25 per share on a best efforts basis by Boenning & Scattergood, Inc. (Boenning). Because the public offering is a best efforts offering, our selling agent is not required to purchase any common shares, but will use its best efforts to sell all the shares offered. The public offering will close as soon as practicable after the expiration date of the rights offering, but in no event later than [_____], 2013. The rights offering and the public offering may be referred to collectively as the stock offering. We may in our sole discretion cancel the rights offering and return the subscriber funds, in certain circumstances, no later than the earlier to occur of the public offering expiration date or the date on which we have accepted subscriptions for all shares available for purchase. Such circumstances are duscussed under the heading "Conditions, Withdrawal and Termination". If we cancel this offering, the subscription/escrow agent will return all subscription payments it has received for the cancelled rights offering without interest or penalty. We have engaged Registrar and Transfer Company to serve as the subscription/escrow agent. The subscription/escrow agent will hold in escrow the funds we receive from subscribers until we complete or cancel the rights offering. Our common shares are traded on the OTC Markets under the trading symbol "CBKM." The last reported sales price of our shares of common stock on [ ], 2013 was $[ ] per share. The shares of common stock issued in the rights offering will also be traded on the OTC Markets. The subscription rights will not be listed for trading on any stock exchange or market. As of the close of business on April 10, 2013 there were 2,066,399 shares of common stock issued and outstanding. 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. These shares of common stock are not savings accounts, deposits, or other obligations of our bank subsidiary or any of our non-bank subsidiaries and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
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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, including without limitation the Risk Factors section of this prospectus, and the documents incorporated by reference herein, including our consolidated financial statements and related notes, before making an investment decision. Some of the statements in this prospectus and the documents incorporated by reference herein constitute forward-looking statements. See Cautionary Notice Regarding Forward-Looking Statements for more information. Our Company Dune Energy, Inc., a Delaware corporation, is an independent energy company based in Houston, Texas. We were formed in 1998 and since May of 2004, we have been engaged in the exploration, development, acquisition and exploitation of crude oil and natural gas properties, with interests along the Louisiana/Texas Gulf Coast. Our properties cover over 82,000 gross acres across 19 producing oil and natural gas fields. Our total proved reserves as of December 31, 2012 were 90.1 Bcfe, consisting of 50.6 Bcf of natural gas and 6.6 Mmbbls of oil. The PV-10 of our proved reserves at year end was $260.6 million based on the average of the oil and natural gas sales prices on the first day of each of the twelve months during 2012, which was $91.33 per bbl of oil and $2.76 per mcf of natural gas. During 2012, we added 18.1 Bcfe through extensions and discoveries and produced 5.3 Bcfe. In addition, we experienced a net downward revision of 2.1 Bcfe. Our Business Strategy We intend to use our competitive strengths to increase reserves, production and cash flow in order to maximize value for our stockholders. The following are key elements of this strategy: Grow Through Exploitation, Development and Exploration of Our Properties. Our primary focus will continue to be the development and exploration efforts in our Gulf Coast properties. We believe that our properties and acreage position will allow us to grow organically through low-risk drilling in the near term, as this property set continues to present attractive opportunities to expand our reserve base through workovers and recompletions, field extensions, delineating deeper formations within existing fields and higher risk/higher reward exploratory drilling. In addition, we will constantly review, rationalize and high-grade our properties in order to optimize our existing asset base. Actively Manage the Risks and Rewards of Our Drilling Program. Our strategy is to increase our oil and natural gas reserves and production while keeping our finding and development costs and operating costs (on a per Mcfe basis) competitive with our industry peers. We expect to implement this strategy through drilling exploratory and development wells from our inventory of available prospects that we have evaluated for geologic and mechanical risk and future reserve or resource potential. Our drilling program will contain some higher risk/higher reserve potential opportunities as well as some lower risk/lower reserve potential opportunities in order to achieve a balanced program of reserve and production growth. Maintain and Utilize State of the Art Technological Expertise. We expect to maintain and utilize our technical and operations teams knowledge of salt-dome structures and multiple stacked producing zones common in the Gulf Coast to enhance our growth prospects and reserve potential. We employ technical advancements, including 3-D seismic data, pre-stack depth and reverse-time migration, to identify and exploit new opportunities in our asset base. We also employ the latest directional drilling, completion and stimulation technology in our wells to enhance recoverability and accelerate cash flows. Table of Contents Pursue Opportunistic Acquisitions of Underdeveloped Properties. We continually review opportunities to acquire producing properties, leasehold acreage and drilling prospects that are in core operating areas and require a minimum of initial upfront capital. We are also seeking to acquire operational control of properties that we believe have a solid proved reserve base coupled with significant exploitation and exploration potential. We will evaluate acquisition opportunities that we believe will further enhance our operations and reserves in a cost-effective manner. Summary Risk Factors We are subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects. You should carefully consider these risks, including all of the risks discussed in the section entitled Risk Factors, beginning on page 7 of this prospectus and discussed in the documents incorporated by reference herein, before investing in our common stock. Risks relating to our business include, among others: We have had operating losses and limited revenues to date. We have substantial capital requirements that, if not met, may hinder our operations. Recent economic conditions in the credit markets may adversely affect our financial condition. Natural gas and oil prices are highly volatile, and lower prices will negatively affect our financial results. Drilling for natural gas and oil is a speculative activity and involves numerous risks and substantial and uncertain costs that could adversely affect us. We depend on successful exploration, development and acquisitions to maintain reserves and revenue in the future. Our estimated reserves are based on many assumptions that may prove inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves. A substantial percentage of our proved reserves consist of undeveloped reserves. Seismic studies do not guarantee that hydrocarbons are present or, if present, will produce in economic quantities. We may experience difficulty in achieving and managing future growth. Our business may suffer if we lose key personnel. We face strong competition from other natural gas and oil companies. We may not be able to keep pace with technological developments in our industry. Governmental regulation and liability for environmental matters may adversely affect our business, financial condition and results of operations. General Corporate Information Our principal offices are located at Two Shell Plaza, 777 Walker Street, Suite 2300, Houston, Texas 77022. We can be reached by phone at 713-229-6300 and our website address is www.duneenergy.com. Information on our website is not part of this prospectus. Table of Contents
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+ PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important to you. 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
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+ This summary highlights information contained elsewhere, or incorporated by reference, in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding to invest in our common stock. You should read this entire prospectus, including the section entitled Risk Factors and the risk factors incorporated by reference in this prospectus as described in that section, and our financial statements and the notes thereto and other information incorporated by reference in this prospectus from our other filings with the Securities and Exchange Commission (the SEC ). In this prospectus, unless the context indicates otherwise, the terms company, we, us, and our refer to Community Financial Shares, Inc., a Maryland corporation, and its subsidiaries. Company Information Overview Community Financial Shares, Inc. ( Community Financial Shares or the Company ) is a registered bank holding company. The operations of Community Financial Shares and its banking subsidiary, Community Bank Wheaton/Glen Ellyn (the Bank ), consist primarily of those financial activities common to the commercial banking industry, including but not limited to, demand, savings and time deposits, loans, mortgage loan origination for investors, cash management, electronic banking services, Internet banking services including bill payment, Community Investment Center services, and debit cards. Community Bank Wheaton/Glen Ellyn serves a diverse customer base including individuals, businesses, governmental units, and institutional customers located primarily in Wheaton and Glen Ellyn and surrounding communities in DuPage County, Illinois. Community Bank Wheaton/Glen Ellyn has banking offices in Glen Ellyn, and Wheaton, Illinois. All of the operating income of Community Financial Shares is attributable Community Bank-Wheaton/Glen Ellyn. Community Financial Shares was incorporated in the State of Delaware in July 2000 as part of an internal reorganization whereby the stockholders of Community Bank - Wheaton/Glen Ellyn exchanged all of their Community Bank - Wheaton/Glen Ellyn Bank stock for all of the issued and outstanding stock of Community Financial Shares (the Reorganization ). The Reorganization was completed in December 2000. As a result of the Reorganization the former stockholders of Community Bank - Wheaton/Glen Ellyn acquired 100% of Community Financial Shares stock and Community Financial Shares acquired (and still holds) 100% of Community Bank - Wheaton/Glen Ellyn s stock. The former Community Bank - Wheaton/Glen Ellyn stockholders received two shares of Community Financial Shares common stock for each share of Community Bank - Wheaton/Glen Ellyn common stock exchanged in the Reorganization. Community Financial Shares was formed for the purpose of providing financial flexibility as a holding company for Community Bank - Wheaton/Glen Ellyn. On June 25, 2013, Community Financial Shares completed its reincorporation into the State of Maryland (the Reincorporation ). The Reincorporation was approved by the stockholders of the Company at the annual meeting of stockholders held on June 13, 2013. The Reincorporation was completed by means of a merger of the Company with and into a new Maryland corporation that was organized as a wholly owned subsidiary of the Company for the purpose of effecting the Reincorporation, with the new Maryland corporation being the surviving corporation. As a result, the rights of the holders of the Company s capital securities are now governed by the Maryland General Corporation Law and the Maryland Articles of Incorporation and Bylaws of the Company. The Reincorporation did not result in any change in the business or principal facilities of the Company. Regulatory Matters As previously disclosed, the Bank entered into a Stipulation and Consent to the Issuance of a Consent Order with the Federal Deposit Insurance Corporation (the FDIC ) and the Illinois Department of Financial and Professional Regulation (the IDFPR ) on January 21, 2011, whereby the Bank consented to the issuance of a Consent Order (the Order ) by the FDIC and IDFPR, without admitting or denying that grounds exist for the FDIC and IDFPR to initiate an administrative proceeding against the Bank. Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Community Financial Shares from time to time includes forward-looking statements in its oral and written communications. Community Financial Shares may include forward-looking statements in filings with the Securities and Exchange Commission, such as this prospectus, in other written materials and in oral statements made by senior management to analysts, investors, representatives of the media and others. Community Financial Shares intends these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and Community Financial Shares is including this statement for purposes of these safe harbor provisions. Forward-looking statements can often be identified by the use of words like estimate, project, intend, anticipate, expect and similar expressions. These forward-looking statements include: Statements of Community Financial Shares goals, intentions and expectations; Statements regarding Community Financial Shares business plan and growth strategies; Statements regarding the asset quality of Community Financial Shares loan and investment portfolios; and Estimates of Community Financial Shares risks and future costs and benefits. Community Financial Shares ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of Community Financial Shares and its subsidiaries include, but are not limited to, the following: The strength of the United States economy in general and the strength of the local economies in which Community Financial Shares conducts its operations which may be less favorable than expected and may result in, among other things, an escalation in problem assets and foreclosures, a deterioration in the credit quality and value of Community Financial Shares assets, especially real estate, which, in turn would likely reduce our customers borrowing power and the value of assets and collateral associated with our existing loans; The effects of, and changes in, federal, state and local laws, regulations and policies affecting banking, securities, insurance and monetary and financial matters; The failure of assumptions underlying the establishment of our allowance for loan losses, that may prove to be materially incorrect or may not be borne out by subsequent events; The success and timing of our business strategies and our ability to effectively carry out our business plan; An inability to meet our liquidity needs; The effect of changes in accounting policies and practices, as may be adopted from time-to-time by bank regulatory agencies, the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; The effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, inflation, interest rate, market and monetary fluctuations; The risks of changes in interest rates on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; Table of Contents The Order requires the Bank to achieve Tier 1 capital at least equal to 8% of total assets and total capital at least equal to 12% of risk-weighted assets within 120 days. At September 30, 2013, our Tier 1 and total capital ratios were 6.8% and 11.4%, compared to 6.7% and 11.4% at June 30, 2013, 6.8% and 11.8% at March 31, 2013 and 7.7% and 12.6% at December 31, 2012, respectively. We are actively working to comply with the Order s capital ratio requirements. The additional capital we have raised since June 30, 2013 in connection with the completion of the second closing of our December 2012 private placement offering and our September 2013 private placement offering, which are discussed in greater detail below, has brought the Bank closer to meeting the capital requirements set forth in the Order. However, our continued inability to meet the capital requirements of the Order may result in monetary penalties and/or additional regulatory actions and may require us to raise additional capital in the future. Our ability to raise additional capital is contingent on the current capital markets and on our financial performance. The Order also required the Bank to take the following actions: ensure that the Bank has competent management in place in all executive officer positions; increase the participation of the Bank s Board of Directors in the affairs of the Bank and in the approval of sound policies and objectives for the supervision of the Bank s activities; establish a compliance program to monitor the Bank s compliance with the Order; increase its allowance for loan losses to $4,728,000 after application of the funds necessary to effect the charge-off of certain adversely classified loans identified in the related Report of Examination of the FDIC and IDFPR (the ROE ); implement a program for the maintenance of an adequate allowance for loan and lease losses; adopt a written profit plan and a realistic, comprehensive budget for all categories of income and expense for calendar year 2011; charge off from its books and records any loan classified as loss in the ROE; adopt a written plan to reduce the Bank s risk position in each asset in excess of $500,000 which has been classified as substandard or doubtful in the ROE; cease extending additional credit to any borrower who is already obligated in any manner to the Bank on any extension of credit that has been charged off the books of the Bank or classified as loss in the ROE without the prior non-objection of the FDIC; not pay any dividends to the Company without prior regulatory approval; implement procedures for managing the Bank s sensitivity to interest rate risk; provide the Company with a copy of the Order; and submit quarterly progress reports to the FDIC and IDFPR regarding the Bank s compliance with the Order. We have been actively working to comply with the requirements of the Order, which will remain in effect until modified or terminated by the FDIC and IDFPR. In addition to raising capital as described above, our Board of Directors has continuously reviewed the qualifications of, and has restructured, our management team and has determined that our current management team has the authority and ability to: (i) comply with the requirements of the Order; (ii) operate the Bank in a safe and sound manner; (iii) comply with applicable laws, rules, and regulations; and (iv) restore all aspects of the Bank to a safe and sound condition, including capital adequacy, asset quality, management effectiveness, earnings, liquidity, and sensitivity to interest rate risk. The Board has also continued its participation in the affairs of the Bank, assuming full responsibility for the approval of sound policies and objectives and for the supervision of all the Bank s activities. In connection with its continued oversight, the Board meets no less than monthly to, at a minimum, review and approve: (i) reports of income and expenses; (ii) new, overdue, renewal, insider, charged off, and recovered loans; (iii) investment activity; (iv) the adoption or modification of operating policies; (v) individual committee reports; (vi) audit reports; (vii) internal control reviews including management responses; (viii) reconciliation of general ledger accounts; and (ix) compliance with the Order. We have also submitted a recapitalization plan to FDIC in accordance with the terms of the Order. Any material failure to comply with the provisions of the Order could result in enforcement actions by the FDIC and IDFPR. While the Company intends to take such actions as may be necessary to enable the Bank to comply with the requirements of the Order, there can be no assurance that the Bank will be able to comply fully with the provisions of the Order, or to do so within the timeframes required, that compliance with the Order will not be more time consuming or more expensive than anticipated, or that compliance with the Order will enable the Company and the Bank to resume profitable operations, or that efforts to comply with the Order will not have adverse effects on the operations and financial condition of the Company and the Bank. In addition to the Order, on January 14, 2011, the Company was notified by the Federal Reserve Bank of Chicago (the FRB ) that the overall condition of the Company and the Bank is less than satisfactory. As a result, the Company must now obtain prior written approval from the FRB prior to, among other things, the payment of any Table of Contents capital distribution, including stockholder dividends, or making any payments related to any outstanding trust preferred securities. The Company was also required, within thirty days of January 14, 2011, to downstream all remaining funds to the Bank with the exception of the Company s non-discretionary payments required to be made over the next twelve months. Additionally, the Company is required to comply with (i) the provisions of Section 32 of the Federal Deposit Insurance Act and Section 225.71 of the Rules and Regulations of the Board of Governors of the Federal Reserve System with respect to the appointment of any new Company directors or the hiring or change in position of any Company senior executive officer and (ii) the restrictions on making golden parachute payments set forth in Section 18(k) of the Federal Deposit Insurance Act. Recent Developments Financial Condition Like many financial institutions across the United States, our operations have been impacted by recent economic conditions. During 2008 and 2009, the economic crisis that was initially confined to residential real estate and subprime lending evolved into a global economic crisis that negatively impacted not only liquidity and credit quality but also economic indicators such as the labor market, the capital markets and real estate values. As a result of this significant downturn, we have been adversely affected by declines in the residential and commercial real estate market in our market area. Declining home prices, slowing economic conditions and increasing levels of delinquencies and foreclosures have negatively affected the credit performance of our residential real estate and commercial real estate loans, resulting in an increase in our level of nonperforming assets and loans past due 90 days or more and still accruing interest and charge-offs of problem loans. At the same time, competition among depository institutions in our markets for deposits and quality loans has increased significantly. As a result of the deterioration in economic conditions and the local real estate market, the Company experienced net losses of $4.6 million, $11.0 million and $2.5 million for the fiscal years ended December 31, 2010, 2011 and 2012, respectively, and experienced a net loss of $3.2 million for the nine months ended September 30, 2013 compared to a net loss of $1.6 million for the nine months ended September 30, 2012. During this time, the book value of the Company s common stock, on a fully converted basis, decreased from $14.26 per share at December 31, 2010 to $0.73 per share at September 30, 2013. The Company also experienced loan loss provisions totaling $8.3 million, $6.2 million and $1.6 million for the fiscal years ended December 31, 2010, 2011 and 2012, respectively, and experienced a loan loss provision of $1.4 million for the nine months ended September 30, 2013 compared to $1.1 million for the nine months ended September 30, 2012. Total nonperforming assets have decreased from $23.3 million at December 31, 2010 to $16.8 million at December 31, 2012 and have been further reduced to $8.4 million as of September 30, 2013. December 2012 Private Placement Offering As previously disclosed, in an effort to satisfy the increased capital requirements set forth in the Order, Community Financial Shares entered into a securities purchase agreement (the Securities Purchase Agreement ), dated as of November 13, 2012, with certain accredited investors and members of the Company s Board of Directors and executive management team pursuant to which, on December 21, 2012, the Company issued an aggregate of 4,315,300 shares of common stock at $1.00 per share, 133,411 shares of Series C convertible noncumulative perpetual preferred stock (the Series C Preferred Stock ) at $100.00 per share, 56,708 shares of Series D convertible noncumulative perpetual preferred stock (the Series D Preferred Stock ) at $100.00 per share and 6,728 shares of Series E convertible noncumulative perpetual preferred stock (the Series E Preferred Stock ) at $100.00 per share in a private placement offering, for gross proceeds of $24.0 million. The 133,411 shares of Series C Preferred Stock, the 56,708 shares of Series D Preferred Stock and the 6,728 shares of Series E Preferred Stock are convertible into 13,341,100, 5,670,800 and 672,800 shares of Company common stock, respectively. The effective price per share paid by investors was $1.00 per common share after taking into account the anti-dilution provisions of the Securities Purchase Agreement. Table of Contents Closings. The Securities Purchase Agreement provided that the Company would conduct two closings in connection with the private placement offering. The first closing, which occurred on December 21, 2012, resulted in $24.0 million in gross proceeds, or $21.5 million in net proceeds after deducting offering expenses of $2.5 million. The Company used the net proceeds from the first closing to (i) redeem the Company s $6.9 million of preferred stock previously issued to the U.S. Department of Treasury pursuant to the TARP Capital Purchase Program, (ii) repay the Company s indebtedness to a third party lender, (iii) enhance the capital of the Bank, as required by the terms of the Order previously issued by FDIC and IDFPR, and (iv) support the future operational growth of the Company In accordance with the terms of the Securities Purchase Agreement, after the first closing, the Company commenced a rights offering pursuant to which existing holders of the Company s common stock (not the investors participating in the first closing) were able to purchase up to an aggregate of 3,000,000 shares of Company common stock at a price of $1.00 per share. For more information on the rights offering, see Rights Offering below. Under the Securities Purchase Agreement, certain investors were permitted to purchase additional shares of Series C Preferred Stock and Series D Preferred Stock and Series E Preferred Stock, as applicable, in a subsequent second closing to the extent their ownership interests in the Company were diluted by the issuance of shares in the rights offering. On July 17, 2013, the Company consummated the second closing, pursuant to which it issued to the Selling Shareholders identified in this prospectus an aggregate of 1,192 shares of Series C Preferred Stock at $100.00 per share and 1,385 shares of Series D Preferred Stock at $100.00 per share for gross proceeds of $257,700. The 1,192 shares of Series C Preferred Stock and the 1,385 shares of Series D Preferred Stock that were issued in connection with the second closing are convertible into 119,200 and 138,500 shares of Company common stock, respectively. The second closing resulted in $257,700 in gross proceeds, or $226,850 in net proceeds after deducting offering expenses of $30,850. The Company used the net proceeds from the second closing to enhance the capital position of the Company. Rights Offering. As previously disclosed, and in accordance with the provisions of the Securities Purchase Agreement, on March 28, 2013, the Company sold 483,121 shares of common stock at a price of $1.00 per share in a nontransferable rights offering for gross proceeds of $483,121, or $424,800 in net proceeds after deducting offering expenses of $58,300. The Company used the net proceeds from the rights closing to enhance the capital position of the Company. Including the second closing and rights offering, gross proceeds of the private placement offering totaled $24.7 million, or $22.1 million in net proceeds after deducting aggregate offering expenses of $2.6 million. Board Representation. The Securities Purchase Agreement provided that the size of the Board of Directors of the Company must be fixed at nine members and that, subject to any required regulatory approvals, the Company would (i) appoint Donald H. Wilson as the Chairman of the Company s and the Bank s Board of Directors and (ii) appoint three individuals approved by three different nominating investors as members of the Company s and the Bank s Board of Directors and to certain committees thereof. Each of the nominating investors has the right to be represented on the Board of Directors of the Company and the Bank by one director of its choice for as long as it maintains at least a 2.5% ownership interest in the Company. Upon the receipt of all required regulatory approvals, Mr. Wilson was appointed as Chairman of the Board and Daniel Strauss, Christopher Hurst and Philip Timyan were appointed as directors of the Company and the Bank in accordance with the terms of the Securities Purchase Agreement. In anticipation of these appointments, and pursuant to the restriction in the Securities Purchase Agreement that the size of the Board of Directors may not exceed nine members, Donald H. Fischer retired as Chairman of the Board of Directors in January 2013 and William F. Behrmann, H. David Clayton, Joseph S. Morrissey and Robert F. Haeger resigned from the Board of Directors in February 2013. Use of Proceeds. The proceeds of the December 2012 private placement were used to (i) redeem the Company s $6.9 million of preferred stock previously issued to the U.S. Department of Treasury pursuant to the TARP Capital Purchase Program, (ii) repay the Company s indebtedness to a third party lender, (iii) enhance the capital of the Bank, as required by the terms of the Order previously issued by FDIC and IDFPR, and (iv) support the future operational growth of the Company. On November 13, 2012, the Company entered into a securities purchase agreement with the U.S. Department of Treasury (the TARP Securities Purchase Agreement ) pursuant to which, subject to the completion of the December 2012 private placement offering and the receipt of Federal Reserve Board approval, it agreed to repurchase the shares of preferred stock it previously issued pursuant to the TARP Capital Table of Contents Purchase Program for $3,293,550 plus an amount equal to 45% of the accrued and unpaid dividends on such preferred shares. The Company consummated the transactions contemplated by the TARP Securities Purchase Agreement on December 21, 2012. Stockholder Approval. In order to consummate the transactions contemplated by the Securities Purchase Agreement, the Company was required to obtain stockholder approval of (i) a proposal to amend the Company s Certificate of Incorporation to increase the authorized number of shares of the common stock of the Company to 75,000,000 shares from 5,000,000 shares and (ii) a proposal to amend the Company s Certificate of Incorporation to specify that each outstanding share of Company common stock is entitled to one vote on each matter submitted to a vote of the Company s stockholders so that each share of convertible voting preferred stock issued in the private placement could vote together with the shares of Company common stock on an as converted basis. Each of these proposals required the approval of the holders of a majority of the Company s outstanding shares of common stock. In order to save the expense associated with holding a special meeting of the Company s stockholders, the Board of Directors elected to obtain stockholder approval of the amendments described above by written consent pursuant to Section 228 of the Delaware General Corporation Law, rather than by calling a meeting of stockholders. Accordingly, on November 12, 2012, the Board of Directors voted to eliminate Article II, Section 13 of the Company s Bylaws, which provided that any action taken by stockholders of the Company without a meeting required the written consent of all of the stockholders entitled to vote with respect to the subject matter. The amendment of the Bylaws was effected without stockholder approval, which was not required under Delaware law. On December 12, 2012, the Company received the requisite number of stockholder consents needed to approve both amendments to the Company s Certificate of Incorporation. Non-Dilution Rights. The Securities Purchase Agreement provides that, until December 21, 2013, the Company may generally not issue any additional shares of common stock or other securities convertible into shares of common stock without the consent of the investors or the approval of two-thirds of the Company s Board of Directors. To the extent that the Company issues additional securities in accordance with this provision, investors have non-dilution rights under the Securities Purchase Agreement that will enable them, if they so choose, to purchase a number of shares of common stock (at the same price and on the same terms made available to purchasers of shares in the subsequent stock issuance) as would enable them to maintain the same economic ownership interest in the Company that they had immediately following the closing of the rights offering that was completed in March 2013. Registration Rights Agreement. In connection with the execution of the Securities Purchase Agreement, the Company and each of the investors also entered into a Registration Rights Agreement. The Registration Rights Agreement required the Company to file a registration statement with the Securities and Exchange Commission to register the resale of the shares of common stock issuable upon the conversion of the Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock by investors participating in the private placement offering and also provides investors with demand and piggyback registration rights under certain circumstances. Preferred Stock Conversion Blockers. Each share of Series C Preferred Stock is convertible immediately, at the sole discretion of the holder, initially into 100 shares of Company common stock, provided, however, that a holder may not convert shares of the Series C Preferred Stock to the extent that such conversion would result in the holder or its affiliates beneficially owning more than 9.9% or 4.9%, as applicable, of the Company s outstanding common stock. If, pursuant to the Securities Purchase Agreement, the holder acquired either (i) solely shares of Series C Preferred Stock, or a combination of Series C Preferred Stock and common stock, in each case, that, together with Company voting securities acquired by its affiliates, constituted more than 4.9% of the Company s voting securities, or (ii) shares of both Series C Preferred Stock and Series D Preferred Stock, then the 9.9% conversion blocker will be applicable to such investor and its transferees. If, pursuant to the Securities Purchase Agreement, the holder acquired either (i) solely Series C Preferred Stock, or a combination of Series C Preferred Stock and common stock, in each case, that, together with Company voting securities acquired by its affiliates, constituted 4.9% or less of the Company s voting securities, or (ii) both Series C Preferred Stock and Series E Preferred Stock, then the 4.9% conversion blocker will be applicable to such investor and its transferees. Accordingly, the number of shares of common stock and percentage common stock reflected in the following table includes those shares of common stock issuable upon the conversion of shares of Series C Preferred Stock. Shares of Series D Preferred Stock and Series E Preferred Stock are convertible into shares of Series C Preferred Stock on a one-for-one basis, provided, however, that no such conversion results in any person, together with its affiliates, holding more than a 9.9% or 4.9% voting ownership interest, respectively, in the Company. Table of Contents September 2013 Private Placement Offering On September 30, 2013, the Company consummated its previously announced private placement offering, pursuant to which the Company issued 2,836,900 shares of common stock to accredited investors at a purchase price of $1.00 per share. In connection with the closing of the September 2013 private placement offering, the Company also issued an additional 350,200 shares of common stock at a purchase price of $1.00 per share and 7,334 shares of Series D convertible noncumulative perpetual preferred stock at a purchase price of $100.00 per share to existing stockholders of the Company. The additional shares of common stock and preferred stock were issued to satisfy the exercise of non-dilution rights afforded to stockholders under the Securities Purchase Agreement. Including these anti-dilution shares, the Company raised aggregate proceeds of $3,920,500 in connection with the completion of the private placement offering, $3.4 million in net proceeds after deducting offering expenses of $472,000. The Company used the net proceeds from the September 2013 private placement offering to invest $500,000 in the Bank and to further enhance the capital position of the Company. The issuance of shares in the September 2013 private placement offering was approved by at least two-thirds of the Company s Board of Directors as required under the Securities Purchase Agreement. After giving effect to the first and second closings of the December 2012 private placement offering, the March 2013 rights offering and the September 2013 private placement offering, the number of shares of outstanding Company common stock has increased from 1,245,267 to 10,781,988 since the execution of the Securities Purchase Agreement on November 13, 2012. Corporate Governance Matters Change in State of Incorporation. On June 25, 2013 the Company changed its state of incorporation from Delaware to Maryland. The reincorporation, which was effected to eliminate the Company s significant annual Delaware franchise tax expense, was approved by the stockholders of the Company at the annual meeting of stockholders held on June 13, 2013. The reincorporation was completed by means of a merger of Community Financial Shares, Inc., a Delaware corporation ( CFIS-Delaware ), with and into Community Financial Shares, Inc., a Maryland corporation ( CFIS-Maryland ), a wholly owned subsidiary of CFIS-Delaware incorporated for the purpose of effecting the reincorporation, with CFIS-Maryland being the surviving corporation. As a result of the merger, holders of CFIS-Delaware s capital securities are now holders of CFIS-Maryland s capital securities, and their rights as holders thereof are governed by the Maryland General Corporation Law and the Articles of Incorporation and Bylaws of CFIS-Maryland. For a description of the differences between the rights of holders of CFIS-Delaware s and CFIS-Maryland s capital securities, see Comparison of Stockholder Rights in the Company s Definitive Proxy Statement on Schedule 14A, filed with the Securities and Exchange Commission on April 29, 2013 and incorporated herein by reference. The reincorporation did not result in any change in the business or principal facilities of CFIS-Delaware. Appointment of New President and Chief Executive Officer. On August 15, 2013, the Board of Directors of the Company and the Bank appointed Donald H. Wilson as the President and Chief Executive Officer of the Company and the Bank effective as of August 15, 2013. As a result of the management restructuring, effective as of August 15, 2013, Scott W. Hamer, the former President and Chief Executive Officer of the Company and the Bank, was terminated as President and Chief Executive Officer. Mr. Wilson has served as the Chairman of the Company s and the Bank s Board of Directors since April 2013 and continues to serve in this capacity following his appointment as the President and Chief Executive Officer of the Company and the Bank. Table of Contents Terms of the Offering Shares Offered Up to 1,622,100 shares of common stock Selling Shareholders See Selling Shareholders for information regarding the Selling Shareholders. Use of Proceeds We will not receive any proceeds from the resale of the Shares by the Selling Shareholders. Plan of Distribution See Plan of Distribution for a discussion of the methods that may be used by the Selling Shareholders in their offer and sale of the Shares.
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+ PROSPECTUS SUMMARY This summary may not contain all the information that you should consider before investing in our securities. You should carefully read the entire prospectus, including the information included in the Risk Factors section in this prospectus and in our Annual Report on Form 10-K for the year ended December 31, 2012, as well as our financial statements, notes to the financial statements and the other information incorporated by reference into this prospectus, as well as the exhibits to the registration statement of which this prospectus is a part, before making an investment decision. Tribute Pharmaceuticals Canada Inc. We are an emerging Canadian specialty pharmaceutical company with a primary focus on the acquisition, licensing, development and promotion of healthcare products in Canada. We target several therapeutic areas in Canada but have a particular interest in products for the treatment of pain, urology, dermatology and endocrinology/cardiology. We also sell Uracyst and NeoVisc internationally through a number of strategic partnerships. On December 1, 2011, we acquired 100% of the outstanding shares of Tribute Pharmaceuticals Canada Ltd. and Tribute Pharma Canada Inc., creating a North American specialty pharmaceutical company. As a result, we have gained access to a portfolio of existing products, as well as certain rights to the future development and distribution of therapeutic products within the Canadian marketplace. On October 1, 2012, Tribute amalgamated with its two wholly owned subsidiaries and became a single entity. Prior to this date, the financial statements of the Company were consolidated with its two wholly owned subsidiaries. Our current portfolio of assets includes nine products: NeoVisc , NeoVisc Single Dose, Uracyst , BladderChek , Bezalip SR, Soriatane , Cambia , Daraprim , and MycoVa . Each of these products has received regulatory approval in Canada, with the exception of MycoVa. We market our products in Canada through our own sales force and currently have licensing agreements for the distribution of select products in 27 countries, and continue to expand this footprint. Our focus on business development is twofold: utilizing in-licensing and out-licensing for immediate impact on our revenue stream, as well as product development for future growth and stability. Our management team has a strong track record in senior management positions at companies such as Wyeth, GSK, Syntex/Roche, Astra-Zeneca and Biovail. The team has extensive business development experience and has completed numerous prior product acquisitions, licensing and product re-formulation transactions. Our senior management has grown and managed companies with sales in excess of $300 million in the U.S. and over CDN$150 million in Canada. Our management team also has extensive experience in product launches in Canada. Corporate Information We were incorporated under the Business Corporations Act (Ontario) on November 14, 1994. We maintain two facilities including our head office located at 151 Steeles Ave. E., Milton, Ontario, Canada, L9T 1Y1 and our production facility at 544 Egerton Street, London, Ontario, Canada N5W 3Z8. Our telephone number is (519) 434-1540, facsimile number is (519) 434-4382 and e-mail address is support@tributepharma.com. We maintain a website at www.tributepharma.com. The information contained in, or that can be accessed through, the Company s website is not part of, and is not incorporated into 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 TRIBUTE PHARMACEUTICALS CANADA INC. (Exact name of registrant as specified in its charter) Ontario 2834 N/A (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 151 Steeles Ave. E. Milton, Ontario Canada L9T 1Y1 (519) 434-1540 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Scott Langille Chief Financial Officer Tribute Pharmaceuticals Canada Inc. 151 Steeles Ave. E. Milton, Ontario Canada L9T 1Y1 (519) 434-1540 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copy to: Daniel A. Etna, Esq. David A. Pentlow, Esq. Herrick, Feinstein LLP 2 Park Avenue New York, New York 10016 (212) 592-1400 Eric R. Roblin, Esq. Fogler, Rubinoff LLP 77 King Street West Suite 3000 Toronto-Dominion Centre Toronto, Ontario M5K 1G8 (416) 864-9700 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. 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 (Do not check if a smaller reporting company) The Offering Common shares offered for sale by the selling shareholders 22,725,000 common shares(1) Common shares to be outstanding assuming all of the shares covered hereby are sold 62,335,042 common shares(2) Use of proceeds We will not receive any of the proceeds from the sale of the common shares offered in this prospectus. However, if all of the warrants were exercised for cash, we would receive gross proceeds of approximately $12,498,750.
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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. Before you decide to invest in our common stock, you should read the entire prospectus carefully, including the Risk Factors section and the financial statements and related notes appearing at the end of this prospectus. In this prospectus, unless otherwise stated or the context otherwise indicates, references to Aerie, we, us, our and similar references refer to Aerie Pharmaceuticals, Inc. Overview We are a clinical-stage pharmaceutical company focused on the discovery, development and commercialization of first-in-class therapies for the treatment of patients with glaucoma and other diseases of the eye. Glaucoma is one of the largest segments in the global ophthalmic market. In 2012, branded and generic glaucoma product sales exceeded $4.5 billion in the United States, Europe and Japan in aggregate, according to IMS, and prescription volume is expected to grow, driven in large part by the aging population. Our strategy is to advance our product candidates, including dual-action AR-13324 and triple-action PG324, to regulatory approval and commercialize these products ourselves in the United States. We plan to build a commercial team of approximately 100 sales representatives to target approximately 10,000 high prescribing eye-care professionals throughout the United States. For certain key markets outside the United States, including Europe, Japan and emerging markets, we intend to explore partnership opportunities through collaboration and licensing arrangements. We plan to further maximize our commercial potential by identifying and advancing additional product candidates, both through our internal discovery efforts and through possible in-licensing or acquisitions of additional ophthalmic products or product candidates that would complement our current product portfolio. Our senior leadership team has extensive experience in the ophthalmology market and has overseen the development and commercialization at major pharmaceutical companies of several successful ophthalmic products, including Acular, Alphagan P, Bepreve, Besivance, Bromday, Istalol, Ocuflox, Retisert, Vitrase, Xibrom and Zylet. If our products are approved and we are commercially successful, we believe Aerie could become a market-leading ophthalmic company. Our product candidates are once-daily eye drops that, if approved, will provide eye-care professionals with the first novel intraocular pressure-lowering mechanisms of action, or MOA, to treat glaucoma in nearly 20 years. Our lead product candidate, dual-action AR-13324, recently completed a Phase 2b clinical trial. We are currently planning two Phase 3 registration trials for this product candidate, which we expect to commence in mid-2014. Additionally, we are planning to commence a Phase 2b clinical trial by early 2014 for our triple-action PG324, a fixed-dose combination of AR-13324 and the prostaglandin analogue, or PGA, latanoprost, the most commonly prescribed drug for the treatment of patients with glaucoma. Glaucoma is a progressive and highly individualized disease, in which elevated levels of intraocular pressure, or IOP, are associated with damage to the optic nerve, which results in irreversible vision loss and potentially blindness. Patients may suffer the adverse effects of glaucoma across a wide range of IOP levels. The level of IOP in healthy individuals is generally accepted to be 10 to 21 millimeters of mercury, or mmHg. The majority of glaucoma patients have IOP of 26 mmHg or below at the time of diagnosis, which we refer to as low to moderately elevated IOP. Glaucoma is treated by the reduction of IOP, which has been shown to slow the progression of vision loss. The U.S. Food and Drug Administration, or FDA, recognizes sustained lowering of IOP as the primary clinical endpoint for regulatory approval. Once glaucoma develops, it is a chronic condition that requires life-long treatment. The initial treatment for glaucoma patients is typically the use of a prescription eye drop. PGAs have become the most widely prescribed glaucoma drug class. The most frequently prescribed PGA is once-daily latanoprost. The most commonly prescribed non-PGA drugs belong to the beta blocker class. The most frequently prescribed beta blocker is twice-daily timolol. Other non-PGA drug classes include the alpha agonists and carbonic anhydrase inhibitors. When PGA monotherapy is insufficient to control IOP, non- Table of Contents The information contained in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED OCTOBER 21, 2013 PRELIMINARY PROSPECTUS 5,250,000 Shares Common Stock We are offering 5,250,000 shares of our common stock. This is our initial public offering and no public market currently exists for our common stock. We expect the initial 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 AERI. Investing in our common stock involves a high degree of risk. Please read Risk Factors beginning on page 13 of this prospectus. We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, and will be subject to reduced public company reporting requirements. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. PER SHARE TOTAL Public Offering Price $ $ Underwriting Discounts and Commissions $ $ Proceeds to Aerie Pharmaceuticals, Inc. before expenses (1) $ $ (1) See Underwriting for additional information regarding underwriter compensation. Our existing principal stockholders and their affiliated entities have indicated an interest in purchasing an aggregate of approximately $10 million of 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, any of these stockholders may determine to purchase more, less or no shares in this offering, or the underwriters may determine to sell more, less or no shares in this offering to any of these stockholders. Delivery of the shares of common stock is expected to be made on or about , 2013. We have granted the underwriters an option for a period of 30 days to purchase an additional 787,500 shares of our common stock. If the underwriters exercise the option in full, the total underwriting discounts and commissions payable by us will be $ , and the total proceeds to us, before expenses, will be $ . RBC Capital Markets Stifel Canaccord Genuity Needham & Company Prospectus dated , 2013 Table of Contents PGA products are used either as add-on therapy to the PGA or as an alternative monotherapy. Due to the multiple daily dosings, side effects and contraindications of non-PGA products, we believe there is a significant unmet need in the non-PGA market segment, which represents approximately half of the U.S. and European glaucoma market based on prescription volumes. Our primary product candidates, once-daily dual-action AR-13324 and once-daily triple-action PG324, lower IOP through novel MOAs. Our product candidates inhibit both Rho Kinase, or ROCK, and the norepinephrine transporter, or NET. Through ROCK inhibition, they reduce IOP by increasing fluid outflow through the trabecular meshwork, or the TM, the tissue responsible for elevated IOP in glaucoma and the eye s primary drain, which accounts for approximately 80% of fluid drainage. Through NET inhibition, AR-13324 also lowers IOP by reducing the production of eye fluid. PG324, a single-drop fixed-dose combination of AR-13324 with latanoprost, lowers IOP through the same MOAs as AR-13324, and also by increasing fluid outflow through the uveoscleral pathway, the eye s secondary drain. We believe that dual-action AR-13324 has several significant differentiating characteristics that would make it a strong competitor in the non-PGA market segment, if approved, including: Strong IOP-Lowering Effect In our Phase 2b clinical trial, once-daily AR-13324 demonstrated mean IOP reductions of 5.7 and 6.2 mmHg on days 28 and 14, respectively. Studies have shown that a sustained 5 mmHg reduction in IOP reduces risk of disease progression by approximately 50%. If confirmed in our planned Phase 3 registration trials, we believe this level of IOP reduction would equal or exceed that of all currently marketed non-PGA drugs. Once-Daily Dosing Advantage The most commonly prescribed non-PGA drugs are dosed two to three times daily. AR-13324 is being developed as a once-daily dosed glaucoma therapy. This more convenient dosing regimen is expected to result in higher patient compliance, which may lead to improved outcomes. Favorable Tolerability Profile Currently marketed non-PGA drugs have several tolerability issues indicated on their product labels, including blurred vision, unusual tastes, ocular allergic reaction and itching of the eye. In our Phase 2a and Phase 2b clinical trials for AR-13324, a total of 209 patients were exposed to AR-13324. The main tolerability finding for AR-13324 was transient, or temporary, hyperemia, which is a cosmetic asymptomatic redness of the eye. Most hyperemia was scored as mild. Hyperemia is a common tolerability finding associated with the most widely prescribed glaucoma drugs. Lack of Systemic Side Effects AR-13324 has demonstrated a lack of systemic side effects in clinical trials to date. The currently marketed non-PGA drugs have systemic side effect issues indicated on their product labels, including among others, lethargy, reduced heart rate, Stevens Johnson syndrome and blood dyscrasias. Further, the most widely prescribed non-PGA drug, timolol, has contraindications, including bronchospasm, arrhythmia and heart failure. Novel Dual-Action MOA If approved, we believe AR-13324 would be the only once-daily drug available that specifically targets the TM, the diseased tissue responsible for elevated IOP in glaucoma. We believe AR-13324 will also be the first glaucoma drug to inhibit NET, which reduces fluid production in the eye. In addition, we believe the AR-13324 dual-action MOA is highly complementary to the MOA of the market-leading PGAs, which increase fluid outflow through the uveoscleral pathway. Consistent IOP-Lowering Effect Across Various Baseline IOPs In our Phase 2b clinical trial, AR-13324 demonstrated a distinct ability to reduce IOP at consistent levels across all baseline IOPs tested in the trial. Published studies have indicated that currently marketed PGA and non-PGA drugs do not lower IOP as effectively in patients with low to moderately elevated baseline IOPs relative to patients with higher IOPs. Patients with low to moderately elevated IOPs represent the significant majority of glaucoma patients. Table of Contents TABLE OF CONTENTS PROSPECTUS SUMMARY 1
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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 financial statements and related notes included in this prospectus. Unless the context indicates otherwise, as used in this prospectus, the terms "TetraLogic," "we," "us," "our," "our company" and "our business" refer to TetraLogic Pharmaceuticals Corporation. Overview We are a clinical-stage biopharmaceutical company focused on discovering and developing novel small molecule therapeutics that mimic Second Mitochondrial Activator of Caspases, or SMAC-mimetics, and are designed to cause or enable abnormal cells that are resistant to the body's immune system to self-destruct. Birinapant, our clinical-stage product candidate, is currently being tested in Phase 1 and Phase 2 oncology clinical trials for hematological malignancies and multiple solid tumors. Our clinical trials of birinapant have enrolled over 275 subjects. Our clinical and pre-clinical programs are focused on: myelodysplastic syndromes, or MDS We have an ongoing Phase 1/2 clinical trial in various blood cancers. We have also started a Phase 1 clinical trial in MDS and, upon its completion, intend to start a randomized Phase 2 clinical trial in MDS in the first half of 2014. colorectal cancer, or CRC We have substantially completed a Phase 1/2 clinical trial in CRC, and we intend to start a randomized clinical trial in CRC, subject to our ability to obtain additional financing apart from this offering. ovarian cancer We have an open Investigational New Drug Application, or IND, and intend to start a Phase 1/2 clinical trial in ovarian cancer in the fourth quarter of 2013. hepatitis B virus, or HBV We intend to start a Phase 1 clinical trial in HBV in the fourth quarter of 2014. Background of SMAC-mimetics Fundamentally important to maintaining human health is the mechanism in both normal and abnormal cells for controlling programmed cell death. This process of self-destruction of cells is known as apoptosis. There are multiple checks and balances within a cell to ensure that healthy cells do not undergo apoptosis by mistake and that abnormal cells such as cancerous and virally infected cells undergo apoptosis and are cleared from the body. Key molecules that protect cells from apoptosis are called the Inhibitor of Apoptosis proteins, or IAPs. A key molecule that promotes apoptosis is Second Mitochondrial Activator of Caspases, or SMAC, a naturally occurring IAP inhibitor. In many diseases, such as certain cancers and infections, abnormal cells that should be naturally cleared from the body manage to escape apoptosis. As a result, cells that should self-destruct actually Amendment No. 6 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents survive and even proliferate or propagate infection, leading to multiple disease complications. In both cancer and viral infections, the abnormal cells typically use the same escape pathway: the overexpression of IAPs resulting in the avoidance of the signals to undergo cell self-destruction. Tumor Necrosis Factor, or TNF, is an extracellular signaling molecule that induces apoptosis. Cancer cells and certain virally infected cells can use IAPs to convert a TNF-induced self-destruction signal into a pro-survival signal through a protein complex called NF-kB. While a number of cancer therapies induce TNF, the TNF self-destruction signal may be blocked by the IAPs. Normally, IAPs can be disabled by their natural inhibitor SMAC, but this natural blocking mechanism is rendered ineffective in many cancers and certain viral infections due to the overexpression of IAPs. We believe SMAC-mimetics have the potential to inhibit the overexpressed IAPs and re-establish the TNF self-destruction signal. Our therapeutic focus is centered on the development of SMAC-mimetics that are designed to inhibit IAPs and re-establish the TNF self-destruction signal in order to overcome this "escape-from-apoptosis" in malignant or infected cells. A key element of our strategy is to administer a SMAC-mimetic with other therapies that induce TNF or related self-destruction signaling molecules. Examples of such other therapies are azacitidine, gemcitabine, granulocyte-macrophage colony-stimulating factor, or GM-CSF, interferon, or IFN, irinotecan and radiation therapy. There are no drugs currently on the market that specifically target the IAPs to re-establish apoptosis in abnormal cells. Birinapant Birinapant was selected from our chemical library of over 3,000 SMAC-mimetic compounds, has a strong intellectual property profile, and we believe has the potential to be broadly active across multiple tumor types and against virally-infected cells. Over 275 study participants with cancer have been treated with birinapant alone or administered with standard chemotherapies. In clinical trials, birinapant was generally well tolerated, meaning that treatment-related side effects were mild or moderate in severity in the majority of treated subjects, and showed signs of activity in subjects with cancer. In pre-clinical cancer studies, birinapant was synergistic (or super-additive) with agents that induce TNF, including established anti-cancer chemotherapies (such as azacitidine, gemcitabine and irinotecan), other anti-cancer therapies (such as radiotherapy), biological agents (such as GM-CSF and IFN) and with TNF and other members of the TNF superfamily including TNF-related apoptosis-inducing ligand, or TRAIL, and TRAIL-Receptor 2 (also known as Death Receptor 5, or DR5) agonists. In addition, birinapant reduced HBV levels in animal studies in a TNF-dependent manner. Our clinical strategy is to administer birinapant with therapies (for example, azacitidine or irinotecan) that induce the production of TNF or related molecules. TetraLogic Pharmaceuticals Corporation (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) 42-1604756 (I.R.S. Employer Identification Number) 343 Phoenixville Pike Malvern, PA 19355 (610) 889-9900 (Address, including zip code and telephone number, including area code, of registrant's principal executive offices) Table of Contents FIGURE 1. Birinapant is designed to mimic SMAC and enable TNF-activated apoptosis. As shown in FIGURE 1, above, the principal target of birinapant is the IAP called cIAP1. A secondary target is the IAP called cIAP2 (not shown in FIGURE 1 above). Both are critical components of the TNF receptor 1 complex. It is this TNF receptor 1 complex that receives the TNF signal and then transmits it inside the cell, triggering a cascade of events that includes activation of NF-kB which delivers the pro-survival signal to a cancer cell. Activity in Clinical Trials We believe that our pre-clinical and clinical data suggest that birinapant has potential for treating a wide spectrum of hematological malignancies, solid tumors and viral infections, and provide the rationale for further clinical development of birinapant. In clinical trials, birinapant has shown favorable pharmacokinetic, or PK, properties, meaning how the subject's body handles birinapant, including the length of time birinapant remains in a subject's blood or tumor, with similar and predictable behavior among treated subjects. In addition, our clinical trials show evidence that birinapant is interacting with its intended target and that the activation of NF-kB was inhibited in subject tumor cells. Birinapant has thus far shown clinical activity in both hematological malignancies and solid tumors, including acute myelogenous leukemia, or AML, and CRC. Phase 1 and Phase 2 clinical trials have been completed or are ongoing with birinapant. Initial response and safety data from the Phase 1/2 solid tumor trial were reported at the 2013 Annual Meeting of the American Society of Clinical Oncology. Our Phase 1 clinical trials are designed to define the maximum tolerated dose, or MTD, of birinapant both as a single agent and when administered with other chemotherapies, to gather PK and safety data, and to determine the recommended Phase 2 dose. Phase 2 clinical trials are designed to determine the tolerability and magnitude of clinical benefit of birinapant both as a single agent and when administered with other chemotherapies, initially in a small number of subjects. Our Phase 1/2 clinical trials are designed to include both a dose escalation component and a fixed dose component J. Kevin Buchi President and Chief Executive Officer TetraLogic Pharmaceuticals Corporation 343 Phoenixville Pike Malvern, PA 19355 (610) 889-9900 (Name, address, including zip code and telephone number, including area code, of agent for service) Table of Contents to gather safety data and measure any early signal of clinical benefit. Phase 3 clinical trials will be designed to confirm the tolerability and magnitude of clinical benefit in a larger number of subjects. The following table sets forth our highest priority clinical programs: Overview of Clinical and Pre-clinical Programs Our most advanced clinical programs are in MDS and CRC. Proceeds from this offering will advance the MDS program and our earlier-stage programs in ovarian cancer and HBV. Advancing the CRC program will require additional financing apart from this offering. Myelodysplastic Syndromes (MDS) MDS is a form of cancer of bone-marrow stem cells resulting in fewer than normal mature blood cells in the circulation. In MDS, bone marrow becomes dysplastic, or defective. The blood cells produced do not develop normally, such that too few healthy blood cells are released into the blood stream, which leads to low blood cell counts, or cytopenias. Thus, many patients with MDS require frequent blood transfusions. In most cases, the disease worsens and the patient develops progressive bone marrow failure. In advanced stages of the disease, immature blood cells, or blasts, leave the bone marrow and enter the blood stream, leading to AML, which occurs in approximately one-third of patients with MDS. We believe that there is a medical need for a treatment option that improves outcomes of standard of care regimens for patients with MDS. A Phase 1/2 investigator-initiated clinical trial in AML, MDS and acute lymphoblastic leukemia, or ALL, is ongoing at the University of Pennsylvania and 23 study subjects have been treated with birinapant as the sole agent or administered with hydroxyurea (if deemed necessary by the treating physician). The majority of subjects enrolled are elderly (over 70 years) with AML secondary to MDS and have received multiple prior treatments. In preliminary data, the treatment-related adverse events included Grade 3 and Grade 4 increases in serum levels of the digestive enzymes amylase and lipase, as determined by laboratory testing, with no subject-reported symptoms of abdominal pain. The preliminary data also shows reductions in leukemic blasts (tumor bulk) in some subjects. There were increases in the normal white blood cells, or neutrophils, with the first birinapant dose in some subjects. One subject continued on treatment with birinapant as sole agent for approximately Copies to: Jeffrey P. Libson, Esq. Steven J. Abrams, Esq. Brian Korn, Esq. Pepper Hamilton LLP 3000 Two Logan Square 18th and Arch Streets Philadelphia, PA 19103 (215) 981-4000 Brent B. Siler, Esq. Andrew S. Williamson, Esq. Brian F. Leaf, Esq. Cooley LLP 11951 Freedom Drive Reston, VA 20190 (703) 456-8000 Table of Contents 10 months. Based on the synergy we observed in pre-clinical studies between birinapant and azacitidine, the current standard of care for MDS, and the action of birinapant in subjects with AML secondary to MDS, in August 2013, we initiated a Phase 1 clinical trial of birinapant administered with azacitidine in higher-risk MDS subjects who have relapsed or do not respond to treatment with, or are refractory to, azacitidine. We expanded this clinical trial to include subjects who have not been previously treated with, or are na ve to, azacitidine. We plan to enroll 15 to 20 subjects in a dose escalation phase to determine the recommended dose of birinapant administered with azacitidine for further trials. Subject enrollment is expected to be completed in the first half of 2014. We intend to commence a randomized Phase 2 clinical trial in the first half of 2014 of birinapant administered with azacitidine versus azacitidine alone in first-line higher-risk MDS subjects. Colorectal Cancer (CRC) CRC is the most deadly cancer in the U.S. among non-smokers and the second most deadly cancer overall. The American Cancer Society estimates that in the U.S. there will be approximately 142,000 new cases and approximately 51,000 deaths from CRC in 2013, accounting for 9% of all cancer deaths. Almost 50% of the patients with a new diagnosis of CRC will die within five years. According to the National Cancer Institute, or NCI, the prevalence of CRC in the U.S. in 2010 was estimated to be 1.2 million cases. CRC is the third most common cancer in both men and women. The risk of CRC increases with age; 90% of cases are diagnosed in individuals 50 years of age or older. Despite effective screening, leading to a reduction in the mortality from CRC, the number of cases remains high and is expected to increase worldwide to 2.2 million by the year 2030. We believe that there is a medical need for a treatment option that improves outcomes of standard of care regimens for patients with CRC. We have results of a Phase 1/2 clinical trial of birinapant administered with irinotecan in 71 CRC subjects who had previously failed standard chemotherapies. The trial has not been formally closed because one subject continues on treatment without disease progression for over 21 months. The clinical trial showed activity, with six subjects (8%) showing partial responses, or PRs, defined as at least a 30% decrease in the sum of all measurable tumor lesions by Response Evaluation Criteria in Solid Tumors, or RECIST. RECIST is a set of published rules that define when cancer patients improve (or respond), stay the same (or stabilize), or worsen (or progress) during treatment. The median progression-free survival, or PFS, was 2.2 months. Thirty-four percent of study subjects were alive without progression of their tumor at four months and 21% were alive without progression of their tumor at six months. The combination of birinapant administered with irinotecan was generally well tolerated. Compared to treatment with irinotecan alone, birinapant administered with irinotecan led to a modest increase in anemia (or a decrease in red blood cells) and a modest increase in thrombocytopenia (or a decrease in platelets). As noted above, irinotecan is one of the chemotherapies that induces TNF. As the majority of subjects had disease progression on prior irinotecan treatment (65 of 71, or 92%), we believe that this data supports the view that the activity seen in this study is being driven by the synergistic effect of birinapant and irinotecan. Based on the clinical data that has emerged from the study of birinapant administered with irinotecan, a randomized clinical trial is planned in third-line CRC subjects, meaning those who have already failed two prior treatment regimens for advanced disease to commence enrollment, subject to our ability to obtain additional financing apart from this offering. Ovarian Cancer In pre-clinical studies, we observed synergy between birinapant and TRAIL receptor agonist antibodies. In collaboration with Amgen, we will explore the combination of birinapant administered with Amgen's TRAIL receptor agonist antibody, conatumumab. We have an open IND for a Phase 1/2 ovarian cancer trial and intend to begin enrolling subjects before the end of 2013. 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, 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 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 Commission acting pursuant to said Section 8(a), may determine. Table of Contents Hepatitis B Virus (HBV) Hepatitis B is a liver disease that results from infection with HBV. In pre-clinical studies, birinapant significantly reduced HBV. The clearance was additive when given in combination with entecavir, the standard of care therapy for HBV. We intend to continue pre-clinical studies and regulatory activities and intend to start a Phase 1 clinical trial in the fourth quarter of 2014. Biomarkers In connection with our clinical programs, we are conducting research to uncover biomarkers, or biological parameters that can be measured to characterize a disease state or the effect of therapy, that can be used to identify subjects most likely to respond to birinapant. These studies are focused on detecting IAP gene amplification in different tumor types, on examining the expression of genes important in the TNF/IAP/NF-kB pathway and on examining the activation status of NF-kB itself. Our Strategy Our goal is to maximize the potential value of birinapant as a first-in-class and best-in-class SMAC-mimetic. The key elements of our strategy to achieve this goal include: pursuing regulatory approval for birinapant administered with other therapies for the treatment of first-line higher-risk MDS. We intend to initiate a randomized Phase 2 clinical trial in the first half of 2014. The data from the randomized Phase 2 clinical trial will determine the size of the treatment effect of birinapant administered with azacitidine versus azacitidine alone and will form the basis of a Phase 3 clinical trial in first-line higher-risk MDS; pursuing regulatory approval for birinapant administered with irinotecan for treatment of third-line CRC. We plan to initiate a randomized clinical trial upon the availability of additional financing apart from this offering; commencing a Phase 1/2 clinical trial by the end of 2013 with birinapant administered with conatumumab in ovarian cancer; continuing our pre-clinical studies of birinapant as a potential antiviral therapeutic agent, with the intent of starting an antiviral clinical program in the fourth quarter of 2014; and considering collaborations to accelerate development of our clinical programs outside of the U.S. Other elements of our business strategy include exploiting our understanding of the role of SMAC-mimetics more broadly in infectious disease, leveraging our library of SMAC-mimetic compounds to develop novel molecules to expand the utility of this developing class and pursuing potential collaborations, in-licensing or acquisitions of assets and companies to expand our existing technologies and operations.
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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 beginning on page 11 and our consolidated financial statements and the related notes appearing at the end of this prospectus, before making an investment decision. As used in this prospectus, unless the context otherwise requires, references to we, us, our and BIND refer to the consolidated operations of BIND Therapeutics, Inc. and its consolidated subsidiaries. Overview We are a clinical-stage nanomedicine platform company developing Accurins, our novel targeted and programmable therapeutics. Accurins are designed with specified physical and chemical characteristics to target specific cells or tissues and concentrate a therapeutic payload at the site of disease to enhance efficacy while minimizing adverse effects on healthy tissues. Our strategy is to leverage our medicinal nanoengineering platform to develop our own pipeline of Accurins, initially in oncology, as well as Accurins in collaboration with biopharmaceutical companies. Our lead drug candidate, BIND-014, is in Phase 2 clinical trials for non-small cell lung cancer, or NSCLC, and metastatic castrate-resistant prostate cancer, or mCRPC. To date in 2013, we have announced collaborations with Amgen, Pfizer and AstraZeneca to develop Accurins based on therapeutic payloads from their product pipelines, with the potential to achieve a total of over $1 billion in upfront and future milestone payments, including over $450 million in pre-commercial milestones. Our management team has extensive experience in the development, regulatory approval and commercialization of nanotechnology drugs. Currently, the two leading nanotechnology cancer drugs are Doxil, a liposomal doxorubicin, and Abraxane, an albumin nanoparticle paclitaxel. Our chief executive officer was the president and chief operating officer of SEQUUS Pharmaceuticals, Inc., the company that developed and commercialized Doxil. Both our chief medical officer and our head of regulatory affairs served in those roles at Abraxis Bioscience, Inc., the company that developed Abraxane. Our platform originated from the pioneering nanotechnology research at the Massachusetts Institute of Technology and Brigham and Women s Hospital/Harvard Medical School of our scientific founders and directors Dr. Robert Langer and Dr. Omid Farokhzad. Our scientists and engineers continue to advance this technology to produce the next generation of targeted nanomedicines. The challenge for all drugs is to maximize the net clinical benefit by increasing the desired therapeutic effect and reducing adverse effects. This is especially difficult in cancer, where the goal is to destroy or inhibit growth of cancer cells without damaging similar healthy cells. The first generation of cancer drugs were cytotoxic chemotherapies, such as Taxotere, which achieved limited selectivity by targeting mechanisms responsible for cell proliferation, a key characteristic of cancer cells. The mechanisms responsible for cell proliferation are also a property of healthy cells, which can lead to significant adverse effects when healthy cells are destroyed. Biopharmaceutical companies have developed more selective drugs, which we refer to as targeted therapies, such as Herceptin and Gleevec by targeting proteins found at higher levels on the surface of cancer cells or by inhibiting dysregulated biochemical pathways inside cancer cells. More recently, drugs such as Kadcyla have increased efficacy by linking toxins and antibodies to deliver targeted cytotoxicity. While these newer drugs were an improvement in targeting cancer cells relative to normal tissue, there continues to be a need to develop drugs with increased net clinical benefit. We believe Accurins represent the next stage in the evolution of cancer therapy. Accurins are nanoparticles containing a therapeutic payload and are designed to target tumors at three levels: tissue, cellular and molecular. They combine this triple targeting with a prolonged circulation time to concentrate the therapeutic payload at the targeted disease site, where it is then released in a controlled and timely manner. Accurins have the potential to significantly increase the net clinical benefit of the therapeutic payload and result in efficacy and safety not currently achievable through other therapeutic approaches. Table of Contents The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and 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 SEPTEMBER 19, 2013 PRELIMINARY PROSPECTUS 4,700,000 Shares Common Stock This is the initial public offering 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 $14.00 and $16.00 per share. Our common stock has been approved for listing on the NASDAQ Global Select Market under the symbol BIND. The underwriters have an option to purchase a maximum of 705,000 additional shares of common stock from us. We are an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. Investing in our common stock involves a high degree of risk. See Risk Factors beginning on page 11. Price to Public Underwriting Discounts and Commissions(1) Proceeds to BIND Therapeutics Per Share $ $ $ Total $ $ $ (1) See Underwriting beginning on page 153 for additional information regarding underwriting compensation. Certain affiliates of our directors and other principal stockholders have indicated an interest in purchasing an aggregate of approximately $14.7 million in shares of our common stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters may determine to sell more, less or no shares in this offering to any of these stockholders, or any of these stockholders may determine to purchase more, less or no shares in this offering. 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 passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. Credit Suisse Cowen and Company Stifel JMP Securities The date of this prospectus is , 2013 Table of Contents Our lead Accurin drug candidate, BIND-014, is a prostate-specific membrane antigen, or PSMA, targeted Accurin that contains docetaxel. PSMA is a clinically-validated tumor marker expressed on prostate cancer cells and the blood vessels of many types of non-prostate solid tumors, including NSCLC. Docetaxel, marketed as Taxotere, is one of the most commonly used cancer chemotherapy drugs. It is approved by the U.S. Food and Drug Administration, or FDA, for the treatment of breast cancer, NSCLC, mCRPC, head and neck cancer, and gastric cancer. Taxotere achieved global sales of approximately $3 billion in 2009, the year prior to its loss of marketing exclusivity in the United States, and generic docetaxel continues to be a mainstay in cancer treatment despite its significant side effects. These side effects include neutropenia, anemia, infection, fluid retention and edema, neuropathy, rash, mucositis, fatigue, muscle weakness, nail loss, hair loss and even death. We are in Phase 2 clinical trials to evaluate the level of clinical activity of BIND-014 in NSCLC and mCRPC and expect to report data from these studies in the second half of 2014. To date, we have clinically tested BIND-014 in over 45 patients with advanced or metastatic cancer who failed prior therapies. In our Phase 1 clinical trial, of the 28 patients who received BIND-014 once every three weeks, there have been one complete response in a patient with cervical cancer and three partial responses in patients with NSCLC, mCRPC and ampullary cancer. A complete response generally refers to the disappearance of all signs of cancer in response to treatment, while a partial response generally refers to a decrease in the size of the tumor or in the extent of cancer in the body. Five additional patients had stable disease lasting longer than 12 weeks. In our preclinical studies, BIND-014 has demonstrated that its ability to destroy tumor cells is differentiated from, and superior to, Taxotere. In addition to our internal development programs, we also consider opportunities to collaborate with recognized biopharmaceutical companies to develop Accurins incorporating therapeutic payloads from their proprietary product portfolios. Our collaborations with industry leaders, including announced agreements with Amgen, Pfizer and AstraZeneca, provide us with the opportunity to develop Accurins with a broader range of therapeutic payloads than we could on our own. Our collaboration agreements generally require the collaborator to pay all the development costs associated with the Accurin, including those incurred by us. In addition, the upfront and potential milestone payments under these agreements provide us with additional capital resources to develop our own proprietary pipeline of Accurins. We expect that at least one of our collaborations will advance an Accurin into the clinic by the end of 2014. Accurins We believe Accurins represent the next stage in the evolution of targeted therapies and nanomedicine. Table of Contents TABLE OF CONTENTS Page PROSPECTUS SUMMARY 1
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+ PROSPECTUS SUMMARY This summary highlights selected information from this prospectus but may not contain all of the information that may be important to you. Accordingly, we encourage you to read carefully this entire prospectus. In this prospectus, the words "Seven Arts", "Company", "we", "our", "ours" and "us" refer to Seven Arts Entertainment Inc., our listing predecessor Seven Arts Pictures PLC ("PLC") and our subsidiaries, unless otherwise stated or the context otherwise requires. The shares of common stock referenced are stated after the 1-for-70 reverse stock split that occurred on August 31, 2012, the 1-for-50 stock split on May 2, 2013, and the 1-for-20 stock split on October 16, 2013. The financial statements and all other financial data included herein are presented in U.S. dollars ($). In this Prospectus, the word "Group" refers to Seven Arts Entertainment Inc. and its subsidiaries listed in Corporate Organization. Our Company We are an independent motion picture production company engaged in developing, financing, producing and licensing theatrical motion pictures with budgets generally in the range of $2 million to $15 million for exhibition in domestic (i.e., the United States and Canada) and foreign theatrical markets and for subsequent post- theatrical worldwide release in other forms of media, including DVD, home video, pay-per-view, and free television. Our motion pictures will either receive only a limited theatrical release, or may even be released directly to post-theatrical markets, primarily DVD. Those pictures that receive either a limited theatrical release or a post-theatrical release typically benefit from lower prints and advertising ("P & A") costs. Recent domestic theatrical releases of our motion pictures include Deal (April 2008), Noise (May 2008), Autopsy (January 2009), Night of the Demons (October 2010), The Pool Boys (September 2011) and Drunkboat (July 2012), all of which received limited United States theatrical releases. We released one motion picture in 2013, Nine Miles Down, and expect to release Schism in March of 2014 . We currently have three motion pictures in development that we anticipate will be released within the next two to three years (i.e., 2015 – 2017), Romeo Spy, The Winter Queen and Neuromancer. We may supplement these motion pictures releases with certain lower cost pictures not yet fully developed, as well as with selected third-party acquisitions. In the last year, we have engaged in development activities on our motion picture projects Winter Queen and Neuromancer (e.g. writing of scripts, preparation of budget, arranging cast and technical, talent, scouting locations), which will have production budgets of approximately $20 million and $60 million, respectfully. By reason of the production costs, underlying material and creative elements attached (director and actor), we believe these larger budget motion pictures will obtain a substantial theatrical release in the United States and international territories such as United Kingdom, Germany, Japan, France, Spain and Australia but there can be no assurance that we will achieve this objective. We have also developed three lower budget motion pictures and acquired two as part of our distribution strategy. We do not yet have firm commitment for the financing and production of the motion picture projects described above. We have no assurance that we will be able to finance production of these motion pictures but expect to do so within the next 18 months. We are currently negotiating financing and distribution arrangements for each project but none is complete. No assurance can be made regarding the timing of financing, completion and delivery on any motion picture we seek to finance and distribute. The "pre-sale" licensing market has become increasingly difficult to access as a film financing device and may materially affect our ability to finance and distribute our films. We currently control copyright interests, directly or through affiliates, for 27 completed motion pictures. An additional 12 motion pictures for which we own distribution rights are now controlled by Arrowhead Target Fund Ltd. ("Arrowhead"), a former hedge fund investor, which receives all of the revenues from these pictures until recoupment of current indebtedness. We are attempting to negotiate an agreement with Arrowhead to re-acquire the licenses of all these 12 motion pictures; however, we cannot provide any assurances that we will be able to reach any such agreement. A substantial portion of our library revenues are derived from only a few of our library titles. On February 23, 2012, we executed definitive agreements to acquire the music assets of David Michery (dated as of December 19, 2011) and 100% of the stock of Big Jake Music (dated as of September 29, 2011). On February 23, 2012, we gained control of the music assets and BJM, although the transactions were negotiated by our listing predecessor and were agreed as well as publicly announced on the effective dates described. As a result, we are now an independent distributor and producer of sound recordings. Mr. Michery s assets include (i) 52 completed sound recordings, embodying the performances of established urban recording artist DMX and the right to record and distribute two additional albums embodying DMX s performance and (ii) up to five albums embodying the performance of established urban act Bone Thugs-N-Harmony, the first of which, Art of War III has been delivered to us. DMX s first album for Seven Arts Music, Undisputed , was released on September 11, 2012. The Company has obtained an executed record distribution agreement with Fontana Distribution which is now in full force and effect. The Company recorded total revenues of $1,522,808 and a net loss after tax of $22,062,539 for the fiscal year ended June 30, 2013, compared to total revenues of $4,058,006 (restated) and a net loss of $11,153,464 (restated) for the fiscal year ended June 30, 2012. CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Amount to be Registered Proposed Maximum Aggregate Offering Price Per Share (1) Proposed Maximum Aggregate Offering Price Amount of Registration Fee Common Stock, $0.01 par value per share 25,000,000 $ 0.03 $ 610,410 $ 83.26 (1) The proposed maximum aggregate price has been estimated solely for the purpose of calculating 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 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. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. 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 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 November [__], 2013. SEVEN ARTS ENTERTAINMENT INC. SUBJECT TO COMPLETION, DATED JANUARY (22), 2013 $610,410 25,000,000 shares of Common Stock This Prospectus relates solely to the registration of shares of the Company s common stock underlying warrants that the Company granted to its record and beneficial stockholders as of the close of the markets on August 31, 2012 (immediately prior to our reverse stock split) issuable on the date registration of Prospectus is effective with the Securities and Exchange Commission. For each 10 pre-reverse split shares of our common stock that were owned by our stockholders as of such date, we granted one warrant (a "Warrant") for the purchase of one post-reverse split share of our common stock, exercisable at a price to be determined by our Board of Directors at such time as this Prospectus is deemed effective, per post-reverse split share (a "Warrant Share"). We did not distribute any Warrants prior to the date of this Prospectus. The Warrants are non-transferrable and, accordingly, we do not expect that a secondary market for the Warrants will develop or be maintained. Our common stock is quoted on the OTC BB and the OTC Market Group Inc. s OTCQB tier under the symbol "SAPX." On November 11, 2013 , the last reported sale price of a share of our common stock was $0.0070 . Investing in our securities involves a high degree of risk. See "Risk Factors" on page 8 of this Prospectus and in any documents incorporated by reference in this Prospectus for a discussion of the factors you should carefully consider before deciding to purchase these securities. 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. The date of this Prospectus is November [__], 2013. As of July 1, 2010, PLC agreed in an Asset Transfer Agreement of that date to transfer certain of its assets (including ownership of the one operating subsidiary) to us, in exchange for assumption by us of certain of its indebtedness. This transfer was agreed to by PLC s shareholders at an Extraordinary General Meeting on June 11, 2010. The purpose of this transfer was to eliminate the Group s status as a foreign private issuer and to assume compliance with all obligations of a U.S. domestic issuer under all applicable state and Federal securities laws. The transfer of assets and liabilities was completed effective January 27, 2011, and NASDAQ trading of our common stock, succeeding to PLC s ordinary shares, commenced on September 1, 2011. Trading of our common stock on The NASDAQ Capital Market was suspended at the opening of business on September 14, 2012, due to our not meeting the $1 minimum bid price stock listing requirement of The NASDAQ Stock Market for ten trading days prior to September 20, 2012, the expiration date on the Company s six-month extension to meet this listing requirement. On September 14, 2012 our common stock began being quoted on the OTC Market Group Inc. s OTCQB tier under our historical symbol "SAPX." Our Business Strategy The Company s current business strategy is: To finance, produce and distribute two to four motion pictures per year with budgets of between $2 million and $15 million each. As previously stated, these pictures will receive only a limited theatrical release. There can be no assurance as to the number of theaters or "print & advertising" expenditures we will be able to arrange on any of these motion pictures. The Company s next motion picture to be released is expected to be Schism in March 2014. To acquire and distribute sound recordings throughout the world, both as singles .and albums of both established and new recording artists. We expect to release 3 to 4 albums per calendar year, including albums by the established urban artists DMX, the next one early in 2014, and Bone Thugs-N-Harmony, in December 2013. To supplement our core strategy by producing an occasional higher cost motion picture (production budgets of $30 - $60 million). We will seek to license such projects to a major studio to guarantee a studio-wide release and obtain a commitment to cover a portion or all of P&A costs as well as other distribution expenses, although no such agreement has yet been completed. To opportunistically acquire distribution rights to an additional two to five motion pictures produced by others, each year, for distribution in theatrical, video and television markets, as an agent, for a 15%-20% fee. We have acquired three motion pictures in the twelve months pursuant to this strategy. To maximize our current use of tax-preferred financing structures around the world to fund our motion picture productions. To enter into arrangements with theatrical and video distributors, to gain more control over and increase our share of the revenues from distribution of our motion pictures by decreasing distribution fees, approval over distribution strategy and distribution costs, and shorter license terms. We have entered into such arrangements in the United States, United Kingdom and Spain in the last twelve months. To expand our library of completed motion pictures, sound recordings, and musical compositions. Competitive Strength The Company s competitive strengths include: The experience of our management and our relationships with independent motion picture distributors. Our relationships with "key talent" (e.g., writer, director, actor and producer) and with independent motion picture distributors around the world. Our experience in structuring tax-preferred financings. Our exclusive recording agreements with DMX and Bone Thugs-N-Harmony. Warrants and Exercise Thereof This Prospectus provides for issuance and re-sale of shares of our common stock to be issued to holders of record on August 31, 2012 of our common stock, on the exercise of warrants ("Warrants") to be issued to each such holder on the effectiveness of this Prospectus. Warrants may be exercised at the election in writing of the holder as with payment of the exercise price of $.___ per share at any time on or before December 31, 2014. As a result, this Offering is a continuous offering until expiration of the warrants. TABLE OF CONTENTS Prospectus Summary 1
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+ PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus and does not contain all of the information 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 under the headings "Risk Factors" and "Management s Discussion and Analysis of Financial Condition and Results of Operations," in each case included elsewhere in this prospectus.
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+ PROSPECTUS SUMMARY This summary contains basic information about us and the resale of the securities being offered by the selling stockholder. 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. The terms American Power, Company, we, our, and us refer to American Power Corp. and its subsidiaries, unless the context suggests otherwise. The Company We are an independent company and our primary business focus is to acquire, explore and develop coal, oil and gas properties in the United States, with a particular focus on the Rocky Mountains region. We have acquired certain coal and mineral rights located in Judith Basin County, Montana, collectively described as the PACE Coal Property. These rights are speculative in nature and additional exploration work is required to determine their value. Our PACE Coal Property and other uncontrolled properties make up the PACE Coal Project. We plan to explore the PACE Coal Property and acquire and explore new properties, including the uncontrolled properties necessary to develop the mine plan, that we believe are prospective for coal and/or hydrocarbons. Our planned exploration drilling program on the PACE Coal Property consists of 61 drilling sites and involves a total of 53,875 feet of drilling in three different phases (which are discussed in more detail below), of which 14,076 feet of drilling and 18 drill sites have been completed to date. All Phase I and Phase II drilling operations and one drill hole corresponding to Phase III of our exploration program have been completed. Drilling operations were suspended in December 2011 due to weather considerations and are expected to resume in the spring of 2013 after finding capable drilling contractors and securing adequate financing. Our technical team has designated 14 Phase III drill holes as priority drill holes. These priority drill holes are expected to further define mineralization, provide additional coal quality data, and provide information to determine if any remaining Phase III drill holes will require coring. We commissioned the preparation of a preliminary Mine Feasibility Study for the PACE Coal Project with the project data obtained during the 2011 drilling season and data from previous exploration work carried out by Mobil Oil Co. This preliminary study was completed by our engineering consultant Weir International, Inc. ( Weir ) in September 2012. Controlled property in the PACE Coal Project is comprised of acreage where the Company owns the coal and mineral rights but not the surface rights. Uncontrolled property in the PACE Coal Project is comprised of acreage where the Company owns neither the coal and mineral rights nor the surface rights; thus, the uncontrolled property will have to be successfully acquired by purchase or lease to develop the mine plan. The Mine Feasibility Study includes information on the geology and mineralization of the PACE Coal Project, a mine plan suitable to geology and production requirements and projections for production capacity, productivity, staffing levels, equipment and facilities, capital expenditures, operating costs and coal sales. According to the preliminary Mine Feasibility Study, 191.3 million tons of coal are expected to be produced over a 15-year mine life. At full production, the mine plan projects annual production of thermal coal at 7.9 million saleable tons (14.9 million ROM tons) per year, utilizing three continuous miner units and one longwall mining unit. Capital expenditures are estimated at approximately $402 million for future initial mine development and $730 million for sustaining capital over the 15-year mine plan. In addition, we estimate the cost of leasing uncontrolled coal properties to be $5.5 million plus royalties to be calculated as a percentage of actual production. The PACE Coal Project clean coal quality, based on the exploration data, is projected to be 11,750 Btu/lb and 2.28 percent sulfur (3.88 Lbs SO2/MBtu). The calorific value (Btu/lb) is among the highest in the major coal producing regions in the western United States. Upon completion of Phase III of our planned exploration drilling program, we expect to obtain a final reserve study setting forth the quantity and classification of proven and probable coal reserves and a valuation thereof and final mine feasibility study by the summer of 2013. These final studies will incorporate the drilling results of all three phases of the exploration program. In light of our current financial condition, we are also exploring other potential strategic alternatives, including joint venture arrangements or the sale of the PACE Coal Property. We have not yet established an ongoing source of revenues sufficient to cover our operating costs and planned exploration activities and, for the years ended September 30, 2012 and 2011, we had net losses of $1,735,586 and $1,952,064, respectively. As such, our independent registered public accounting firm has included in its auditor s report an explanatory paragraph that states that our continuing losses from operations raise substantial doubt as to our ability to continue as a going concern. Our principal executive offices are located at 16 Market Square Center, 1400 16th Street, Suite 400, Denver, CO 80202. Our telephone number is (720) 932 8389. About This Offering On February 17, 2012, we entered into a Standby Equity Distribution Agreement, which was subsequently amended and restated on June 13, 2012 (the SEDA ) with YA Global pursuant to which we may, at our sole and exclusive option, periodically sell to YA Global shares of our Common Stock for a total purchase price of up to four million dollars ($4,000,000). Each sale of Common Stock, pursuant to an advance notice under the SEDA (each an advance notice ), will be limited to the greater of (1) $250,000 and (2) the average of the daily value traded for each of the 10 trading days prior to the applicable advance notice. For each share of Common Stock purchased pursuant to the SEDA, YA Global will pay us ninety five (95%) of the market price, defined as the average of the two lowest daily volume weighted average price of the Common Stock during the five (5) consecutive trading days following delivery by us of an advance notice, which price will not be less than 90% of the volume weighted average price on the trading day prior to the advance notice date. Under the SEDA, we cannot sell shares of Common Stock until such time as the registration statement of which this prospectus forms a part is declared effective by the SEC. We are not obligated to sell any shares of Common Stock under the SEDA and there are no minimum commitments or minimum use penalties. The SEDA terminates automatically twenty-four months from the date that this registration statement becomes effective. We anticipate receiving the full $4,000,000 available under the SEDA over the term of the SEDA, though we will need to file additional registration statements with the SEC to register more shares in order to do so. We anticipate utilizing the funds received under the SEDA for: - the repayment of a promissory due to JBM Energy, which has a current principal balance of $1,350,000 and bears interest at a rate of 5% per annum, and pursuant to which we are obligated to make payments to JBM Energy of (A) $100,000 upon the earlier of (i) sixty (60) days following the effective date of the registration statement of which this prospectus forms a part and (ii) March 9, 2013 and (B) monthly payments of $100,000 plus accrued interest commencing on April 9, 2013 and continuing until full repayment in April 2014. - the repayment of a promissory due to Pace, which has a current principal balance of $1,550,000 and bears interest at a rate of 5% per annum, and pursuant to which we are obligated to make payments to Pace of (A) $100,000 upon the earlier of (i) sixty (60) days following the effective date of the registration statement of which this prospectus forms a part and (ii) March 9, 2013, (B) $200,000 upon the earlier of (i) ninety (90) days following the effective date of the registration statement of which this prospectus forms a part and (ii) March 9, 2013 and (C) monthly payments of $100,000 plus accrued interest commencing on April 9, 2013 and continuing until full repayment in April 2014; - approximately $250,000 for payment of outstanding accounts payable; - approximately $500,000 for the completion of Phase III of the exploration drilling program in Judith Basin County; - approximately $200,000 for the preparation of a final reserve study, mine feasibility study and market study; and - approximately $200,000 for general corporate purposes. As filed with the Securities and Exchange Commission on February 27, 2013. Registration No. 333 182309 Based on the current market price of $0.07, we would receive gross proceeds of approximately $1.04 million from the sale of the 15,700,000 shares covered by this registration statement. Given that the expected gross proceeds from the sale of the shares covered by this registration statement are lower than our funding requirements for the current fiscal year, we will have to prioritize the allocation of those proceeds until we can obtain additional funding. We plan to first use these proceeds to pay amounts due to Pace and JBM Energy on March 9, 2013 (approximately $460,000) and April 9, 2013 (approximately $210,000). We plan to use approximately $250,000 of these proceeds to pay a portion of our outstanding accounts payable, and approximately $70,000 to continue to fund Phase III of the exploration drilling program, with the remaining proceeds to be used for general corporate purposes. Additional funding for the Company could be obtained under the SEDA (upon the filing and effectiveness of an additional registration statement), the Stock Issuance Agreement with Black Sands Holdings, Inc. dated September 10, 2010 or other sources available in the market. The Stock Issuance Agreement with Black Sands Holding, Inc. terminates on March 31, 2013; however it may be extended for an additional term of up to twelve months at the option of the Company or Black Sands Holdings, Inc. On February 17, 2012, we issued to YA Global an aggregate of 734,394 shares (the Commitment Fee Shares ) of Common Stock as complete payment of a $120,000 commitment fee in connection with the contemplated transactions. In accordance with the SEDA, we agreed to register for resale the Commitment Fee Shares and a number of shares to be issued under the SEDA. Therefore, we have prepared and filed this prospectus for the purpose of registering the resale by YA Global of the 734,394 Commitment Fee Shares currently owned by YA Global and up to 14,965,606 shares of Common Stock to be issued pursuant to the SEDA, but we do not know when or whether, or at what price, any or all of the shares may be sold. In the event that we wish to sell shares to YA Global under the SEDA in excess of the number of shares covered by this registration statement, we would need to file a new registration statement to cover those shares. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S 1 (Amendment No. 3) REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 (Exact name of registrant as specified in its charter) Nevada 26 0693872 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 16 Market Square Center 1400 16th Street Suite 400 Denver, CO 80202 (720) 932 8389 (Phone) Alvaro Valencia President and Chief Executive Officer American Power Corp. 16 Market Square Center 1400 16th Street Suite 400 Denver, CO 80202 (720) 932 8389 (Phone) (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) (Address, including zip code, and telephone number, including area code, of agent for service) Copies to: Michelle Shepston Davis Graham & Stubbs LLP 1550 17th Street, Suite 500 Denver, Colorado 80202 303 892 9400 (Phone) 303 892 7400 (Fax) Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement as determined by market conditions. 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, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x
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+ Prospectus summary This summary highlights selected information appearing elsewhere in this prospectus and 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 section entitled Risk factors, and our financial statements and related notes included elsewhere in this prospectus. Overview We develop and manufacture fully functioning human cells in industrial quantities to precise specifications. Our proprietary iCell Operating System (iCell O/S) includes true human cells in multiple cell types (iCell products), human induced pluripotent stem cells (iPSCs) and custom iPSCs and iCell products (MyCell products). Our iCell O/S products provide standardized, easy-to-use, cost-effective access to the human cell, the smallest fully functioning operating unit of human biology. Customers use our iCell O/S products, among other purposes, for drug discovery and screening; to test the safety and efficacy of their small molecule and biologic drug candidates; for stem cell banking; and in researching cellular therapeutics. Our iCell product line currently includes four different cell types: cardiomyocytes, neurons, hepatocytes and endothelial cells. We are actively developing an additional seven different cell types, and we expect to use our platform to continue to expand the iCell product line. iCell products are a consumable designed to be used once and then reordered. We manufacture our iCell products from our iPSCs. An iPSC is a cell that has the ability both to replicate indefinitely and to be transformed into any cell type in the human body. We develop and manufacture our iPSCs from ordinary blood or skin using proprietary techniques that expand upon those pioneered by our founder Dr. James A. Thomson. Once we produce an iPSC, it becomes a renewable source of starting material for our iCell products and stem cell banks. Scientists need access to cellular models that accurately represent the human biology they want to study. Our human cells reproduce, rather than approximate, the operation of the fully functioning human cell. We design our iCell O/S products to empower our customers to: Increase the productivity of their in vitro therapeutic research and development. Pursue novel avenues of biological discovery. Accelerate the regulatory analysis and market introduction of clinical products. Improve quality control of manufactured clinical products. Perform more precise applied and environmental testing. Build or augment stem cell banks. Develop and commercialize in vivo cellular therapeutics. Our customers include biopharmaceutical companies, government research institutions, academic and nonprofit research institutions, clinical research organizations and stem cell banks. In 2012, we sold our products to 18 of the top 20 biopharmaceutical companies (based on worldwide revenue) and grew our customer base to 128 from 60 in 2011. We attribute our growing success to the following differentiating factors: Enabling unparalleled access to human cellular biology. We believe our iCell O/S products: afford researchers superior insight into how human cells react to drug candidates and other 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 state where the offer or sale is not permitted. Subject to completion, dated July 19, 2013 Prospectus 3,846,000 shares Common stock This is the initial public offering of common stock by Cellular Dynamics International, Inc. We are offering 3,846,000 shares of common stock pursuant to this prospectus. We expect the initial public offering price to be between $12.00 and $14.00 per share. No public market currently exists for our common stock. Our common stock has been approved for listing on the NASDAQ Global Market under the symbol ICEL. Per share Total Initial public offering price $ $ Underwriting discounts and commissions $ $ Proceeds, before expenses, to us(1) $ $ (1) We have agreed to reimburse the underwriters for certain FINRA-related expenses. See Underwriting. Certain of our existing shareholders and certain affiliates of us, certain existing shareholders and our directors have indicated an interest in purchasing shares of our common stock in this offering at the initial public offering price. We have requested that the underwriters allocate shares in this offering to these investors. It is not currently anticipated that the aggregate purchase price of the shares to be purchased by these investors in this offering will exceed $10 million. However, because indications of interest are not binding or commitments to purchase, these persons or entities may determine to purchase fewer shares than they have indicated an interest in purchasing or not purchase any shares in this offering. We have granted the underwriters an option for a period of 30 days to purchase up to 576,900 additional shares of common stock. We are an emerging growth company as that term is defined under the Jumpstart Our Business Startups Act of 2012 and, as such, we have elected to comply with certain reduced public company reporting requirements. Investing in our common stock involves a high degree of risk. See Risk factors beginning on page 12. 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 will be made on or about , 2013. Sole book running manager J.P. Morgan Co-managers Cowen and Company Leerink Swann , 2013 Table of Contents chemicals; enable customers to build or augment stem cell banks; and will allow us to design and manufacture cells to precise specifications for developers of cellular therapeutics for their therapeutic candidates. Disruptive technology addressing multiple, large markets. Our iCell O/S products displace existing surrogate models. Our products are currently sold into the $3.5 billion market for cells for in vitro experiments, as well as the $1.3 billion stem cell banking market. Our products position us well to participate in the growing $5.0 billion global human stem cell, tissue and organ therapy market, first as a provider of cells for research, then as a provider of cells for therapeutic trials and potentially for therapeutic use on a collaborative basis. We believe our products will contribute to the growth of our target markets. Full product solution. Our iCell O/S products are designed to be easy-to-use. Our iCell products are standardized, highly pure and manufactured in large volumes to precise specifications. iCell products are packaged as units that fill industry standard 96-well plates. Currently, three of the four iCell products are cryopreserved and may be stored for extended periods of time. Our cells are also validated on life science research platforms commonly used in laboratories. Lastly, we offer training and support for all of our products. Broad and deep intellectual property portfolio. We own or license a portfolio of intellectual property rights related to our technology that exceeds 700 patents and patent applications in the United States and around the world. From our inception, our intellectual property strategy has been designed to afford our customers and ourselves freedom to operate for all the products we sell. In addition, we have exclusively licensed and developed intellectual property and technical know-how that we maintain as trade secrets. We believe that our intellectual property portfolio will provide significant competitive advantages for future business operations. Our target markets The target markets for our products include cells for in vitro drug discovery, toxicity testing and chemical safety; stem cell banking; and in vivo and cell-based therapeutic research. Total expenditures in these markets were approximately $17.1 billion in 2011 and are expected to increase to $40.5 billion by 2020, according to Adivo Associates. Cells for in vitro use in drug discovery, toxicity testing and chemical safety Cells for in vitro use refers to cells studied under laboratory culture conditions for the purpose of drug discovery, toxicity testing and chemical safety analysis. The total spent on cell-based technologies for in vitro use was approximately $10.8 billion in 2011, of which $3.5 billion was spent on cells. By 2020, these markets are expected to grow to $14.7 billion and $5.6 billion, respectively. Customers in this market include: biopharmaceutical companies; government research institutions; academic and nonprofit research institutions; and clinical research organizations. Stem cell banking The stem cell banking market was approximately $1.3 billion in 2011, and is expected to grow to $4.4 billion in 2020. Currently, government entities, academic institutions and industry are 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 WNS Studios, Inc. refers to WNS Studios, Inc. The following summary is not complete and 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. We are an emerging growth company as defined in the Jumpstart Our Business Startups Act ( JOBS Act ). Although we have been in existence for four years, we have never offered securities pursuant to a registration statement prior to this prospectus. The following summary highlights selected information contained in this prospectus. Before making an investment decision, you should read the entire prospectus carefully, including the Risk Factors section, the financial statements and the notes to the financial statements. THE COMPANY Corporate Background: WNS Studios, Inc. was incorporated under the laws of the State of Nevada on May 15, 2009. We are a development stage company, formed to act as a production agent to promote, sell and distribute studio films. From our inception to date, we have not generated any revenues, and our operations have been limited to organizational, start-up, and capital formation activities. We currently have no agreements or contracts in place to act as a production agent for any film or television studio. We have never intended and do not intend to be a blank check company. We have a specific business plan and do not intend to engage in any merger, acquisition or business reorganization with any entity. Our offices are currently located at WNS Studios, Inc., 3811 13th Avenue, Brooklyn, NY 11218, telephone: 718-907-4105. We do not have an internet website. Intellectual Property: We have no intellectual property. Employees: We currently have no employees other than our sole officer and director. Going Concern Considerations: The Company is a development stage company and has not commenced planned principal operations. The Company has no revenues and has incurred a net loss of $42,102 for the fiscal year ended April 30, 2013 and a net loss of $98,784 for the period May 15, 2009 (inception) to July 31, 2013. In addition, the Company has a working capital deficiency of $16,467 and stockholders' deficiency of $85,393 at April 30, 2013 and a working capital deficiency of $21,120 and a stockholders deficiency of $97,524 at July 31, 2013. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.These factors raise substantial doubts about the Company s ability to continue as a going concern, and our independent auditors included an explanatory paragraph regarding this uncertainty in their report on our financial statements for the period May 15, 2009 (inception) to April 30, 2013. The Company has the ability to borrow up to $126,275 from P&G Holdings LLC, an entity owned 33% by our sole officer and director. As of July 31, 2013, we borrowed $76,404 from P&G Holdings. Accordingly, the Company currently has the ability to borrow up to an additional $49,871 from P&G. There can be no assurance that sufficient funds required in the future will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company s existing stockholders. THE OFFERING Securities Being Offered: 250,000 shares of common stock. Price Per Share: $0.20 Duration of the Offering: The offering shall terminate on the earlier of (i) the date when the sale of all 250,000 shares of common stock 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 $50,000 Common Stock Currently Issued and Outstanding: There are 4,500,000 shares of common stock issued and outstanding as of the date of this prospectus, of which 3,600,000 or 80% are held solely by our sole officer and director, Moses Gross. Common Stock Issued and Outstanding if we are successful at selling all the shares offered in this offering: 4,750,000 Subscriptions All subscriptions once accepted by us are irrevocable. Registration Costs We estimate our total offering registration costs to be approximately $15,000. If we raise $15,000 or less in the offering, all proceeds from the offering will be used to cover all or any portion of our offering expenses. Market for the common shares: There has been no market for our securities. Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with the FINRA for our common stock to eligible to be quoted trading on the Over The Counter Bulletin Board ( OTC Bullentin Board ). We do not yet have a market maker who has agreed to file such application. There is no guarantee that our common stock will be eligible for quotation on the OTC Bulletin Board. Consequently, a purchaser of our common stock may find it difficult to resell the securities offered herein should the purchaser desire to do so when eligible for public resale. Use of proceeds: The net proceeds will be used by us for working capital, including legal and accounting fees to maintain our reporting requirements with the Securities and Exchange Commission.
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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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+ 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 6. References to we, us, our, SW China Imports or the Company mean SW China Imports, 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. Our Company SW China Imports was incorporated under the laws of the State of Nevada on February 23, 2011. Our business plan calls for the importation of high-end handmade lace wigs and hairpieces, as well as other beauty supplies and products, manufactured in China and South Korea into the United States. SW China Imports intends to sell these products in bulk to beauty supply stores, hair salons, and independent hair stylists. SW China Imports also intends to sell its products directly to the retail consumer via the Internet. It is important to note that we are a development stage business with minimal business activity. As of the date of this prospectus we have not begun importing any lace wigs, hairpieces, or beauty supplies. Further, we do not have any formal agreements in place with any beauty supply stores, hair salons, or independent hair stylists; our discussions with potential distributors have been limited solely to exploratory talks until we can demonstrate our ability to procure and deliver our products in a timely manner and in sufficient quantities. As of December 31 , 2012 we had not generated any revenue and have incurred ( $59,044,272 ) in losses since our inception on February 23, 2011, and have relied upon our directors and outside investors to fund our operations. Further, as of December 31 , 2012, we had a working capital deficiency of ( $39,509 ). We are a development stage company and we do not expect to generate revenue which would be sufficient to sustain our operations for at least the next 12 months. These and other factors raise substantial doubt about our ability to continue as a going concern. Accordingly, and for the foreseeable future, we will continue to be dependent on additional financing in order to maintain our operations and continue with our corporate activities. Due to the uncertainty of our ability to meet our financial obligations and to pay our liabilities as they become due, in their report dated February 11, 2013 in our audited financial statements for the fiscal year ended December 31, 2012 , our independent registered public accounting firm included additional comments indicating concerns about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Any investment in our common stock involves a high degree of risk. If we are unable to generate adequate revenue, we may be obliged to cease business operations due to a lack of operating capital. We face many challenges to continue operations, including our lack of operating history, lack of revenues to date, and the losses we have incurred to date. Please review the "Risk Factors" starting on page 6 of this prospectus and Liquidity and Capital Resources on page 21. As of the date of this prospectus, our sole officer and director, Seon Won, owns 59.4% of the issued and outstanding shares of our common stock. Accordingly, he will be able to determine the outcome of all corporate transactions or other matters, including mergers, consolidations, and the sale of all or substantially all of our assets. The interests of Mr. Won may differ from the interests of the other shareholders and thus result in corporate decisions that are disadvantageous to other shareholders. Our principal executive offices are located at 15800 Crabbs Branch Way, Ste. 310, Rockville, MD 20855 and our telephone number at that address is (240) 477-7738. This office space is being provided to us by our former treasurer and secretary, Jae Hwang, free of charge. As of the date of this prospectus, Mr. Hwang continued to own 7.8% of our issued and outstanding shares of common stock.
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+ 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 CBL RESOURCES INC. CORPORATE BACKGROUND AND INFORMATION CBL RESOURCES INC. CBL Resources Inc. was organized under the laws of the State of Nevada on June 1, 2012, to explore mineral properties in North America. CBL Resources Inc. is engaged in the exploration for gold and other minerals. The Company has acquired one mineral claim totaling 61.704 hectares. It is located on Northern Vancouver Island adjacent to Klootchlimmis Creek, about 15 kilometres to the southeast of the town of Port Alice on Northern Vancouver Island, BC, Canada. We refer to these mining claims as the Bluebird Gold Property. This property is without known reserves. The Bluebird Gold Property comprises one mineral claim containing 3 cell claim units totaling 61.704 hectares; BC Tenure # Work Due Date Units Total Area (Ha.) ----------- ------------- ----- ---------------- 1010955 July 10, 2013 3 61.704 We require an estimated total of $117,000 to implement the two 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 CBL Resources Inc.'s financial prospects and the Company's ability to continue as a going concern. We are not a "blank check company," as we do not intend to participate in a reverse acquisition or merger transaction. Securities laws define a "blank check company" as a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person. With its current assets, the Company can remain operational through 2013 if it does not complete Phase 1 of its program and only pays the government fees to keep the claims valid. However, the Company plans to raise the capital necessary to fund our business through a private placement and public offering of our common stock. The Company intends to work directly with private placees once this registration statement is declared effective. The Company anticipates that they will have either a private placement or additional funding from its founder by the end of 2013 in order to conducts its operations. Our offices are located at: EdificioTerramar, Torre 2000, 17D, Panama City, Panama. THE OFFERING Securities offered 5,000,000 shares of common stock Selling stockholder David Richer Offering price $0.002 per share Shares outstanding prior to the offering 12,000,000 shares of common stock Shares to be outstanding after the offering 12,000,000 shares of common stock Use of proceeds The Company will not receive any proceeds from the sale of the common stock by the selling stockholder. SUMMARY FINANCIAL INFORMATION The following tables set forth the summary financial information for the Company. You should read this information together with the financial statements and the notes thereto appearing elsewhere in this prospectus and the information under "Plan of Operation." CONSOLIDATED STATEMENTS OF INCOME Period Ended Period Ended August 31, November 30, 2012 2012 ---------- ---------- Revenues 0 0 Operating expenses 13,675 1,995 Net loss from operations 13,675 1,995 Net loss before taxes 13,675 1,995 Loss per share - basic and diluted 0.00 0.00 Weighted average shares outstanding basic 12,000,000 12,000,000 BALANCE SHEET DATA At At August 31, November 30, 2012 2012 ---------- ---------- Cash and cash equivalents 16,325 16,325 Total current assets 16,325 16,325 Total assets 16,325 16,325 Management Accrual Fee 0 1,995 Total liabilities 0 1,995 Common stock 12,000 12,000 Additional paid-in capital 18,000 18,000 Deficit accumulated during exploration period (13,675) (15,670) Total stockholders' equity 16,325 16,325
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+ PROSPECTUS SUMMARY AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, WE, US, OUR, AND VISTA HOLDING GROUP, CORP. REFERS TO VISTA HOLDING 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. VISTA HOLDING GROUP, CORP. We are a development stage company and intend to commence operations in the business of development of 3D virtual tours and running a web guide of 3D virtual tours for public venues. We plan to conduct our proposed business and locate our prospective customers in Moscow, Russia. In the future when and if we have funds to expand our business, we will be targeting clients in other cities in Russia and Europe. Vista Holding Group, Corp. was incorporated in Nevada on August 2, 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. We expect our operations to begin to generate revenues during months 6-12 after completion of this offering. However, there is no assurance that we will generate any revenue in the first 12 months after completion our offering or ever generate any revenue. Being a development stage company, we have very limited operating history. If we do not generate any revenue we may need a minimum of $10,000 of additional funding to pay for ongoing SEC filing requirements. We do not currently have any arrangements for additional financing. Our principal executive offices are located at Runovsky per., 11/13 str. 2, kv. 36, Moscow, Russia 115184. Our phone number is (702) 425-5735. From inception until the date of this filing, we have had limited operating activities. Our financial statements from inception (August 2, 2012) through February 28, 2013, reports no revenues and a net loss of $4,753. Our independent registered public accounting firm has issued an audit opinion for Vista Holding Group, Corp. which includes a statement expressing substantial doubt as to our ability to continue as a going concern. To date, we have developed our business plan and entered into a consulting agreement with a consultant, Anton Kanin on October 27, 2012. 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 currently considered a shell company within the meaning of Rule 12b-2 under the Exchange Act, in that we currently have nominal operations and nominal assets other than cash. Accordingly, the ability of holders of our common stock to re-sell their shares may be limited by applicable regulations. For us to cease being a shell company we must have more than nominal operations and more than nominal assets or assets which do not consist solely of cash or cash equivalents. Vista Holding Group, Corp. has no current plans to merge with another operating company. We do not anticipate earning revenues until we enter into commercial operation. Since we are presently in the development stage of our business, we can provide no assurance that we will successfully assemble, construct and sell any products or services related to our planned activities. We are not a blank check company and have no intention to engage in a merger or other type of business combination. THE OFFERING The Issuer: VISTA HOLDING GROUP, CORP. Securities Being Offered: 2,500,000 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 2,500,000 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 2,500,000 shares registered under the Registration Statement of which this Prospectus is part. Gross Proceeds $50,000 Securities Issued and Outstanding: There are 2,800,000 shares of common stock issued and outstanding as of the date of this prospectus, held by our sole officer and director, Tatiana Mironenko. If we are successful at selling all the shares in this offering, we will have 5,300,000 shares issued and outstanding. Subscriptions All subscriptions once accepted by us are irrevocable. Registration Costs We estimate our total offering registration costs to be approximately $8,000.
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+ 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 CORONATION MINING CORP. CORPORATE BACKGROUND AND INFORMATION CORONATION MINING CORP. Coronation Mining Corp. was organized under the laws of the State of Nevada on May 31, 2012, to explore mineral properties in North America. Coronation Mining Corp. is engaged in the exploration for quartz and other minerals. The Company has acquired two Mineral Titles Online "MTO" mineral claim totaling 876.48 hectares. The Silver Tusk Property claims are situated 65 kilometers northwest of Vancouver, BC. Access is gained by travelling to Clowhom Falls at the head of Salmon Inlet by float plane light wheeled plane or by water taxi from Sechelt, BC. From Clowhom Falls the showings are located 26km by logging road in the Red Tusk valley. More immediate access is available by helicopter to one of three landing pads cleared along the baseline of the claims. We refer to these mining claims as the Silver Tusk Property. This property is without known reserves. To current date the Company has never commenced any operational/exploration activity other than issuing shares. The Silver Tusk Property comprises two MTO mineral claims containing 42 cell claim units totaling 876.48 hectares in area. BC Tenure # Work Due Date Units Total Area (Ha.) ----------- ------------- ----- ---------------- 984302 May 7, 2013 25 521.78 984322 May 7, 2013 17 354.70 ---- ------ 42 876.48 ==== ====== We require an estimated total of $250,000 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 Coronation Mining Corp.'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 places 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: 12865 West Highway 40, Ocala, Florida, 34481 THE OFFERING Securities offered 15,000,000 shares of common stock Selling stockholder Stuart Carnie Offering price $0.002 per share Shares outstanding prior to the offering 30,000,000 shares of common stock Shares to be outstanding after the offering 30,000,000 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." STATEMENT OF INCOME Period Ended August 31, 2012 --------------- Revenues -- Operating expenses 5,675 Net loss from operations (5,675) Net loss before taxes (5,675) Loss per share - basic and diluted 0.000 Weighted average shares outstanding basic 30,000,000 BALANCE SHEET DATA At August 31, 2012 ------------------ Cash and cash equivalents 18,825 Total current assets 18,825 Mineral Property 8,500 Total Assets 27,325 Accounts payable 3,000 Current liabilities 3,000 Total liabilities 3,000 Common stock 30,000 Additional paid-in capital -- Deficit accumulated during exploration period (5,675) Total stockholders' equity 24,325 Total liabilities and stockholder's equity 27,325
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+ PROSPECTUS SUMMARY The following summary highlights information contained elsewhere in this prospectus. It does not contain all of the information that may be important to you in making your investment decision. You should read this entire prospectus, including the Risk Factors section, before deciding to invest in our units. Throughout this prospectus when there is a reference to you it is a reference to you as a potential investor or limited partner in us.
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+ PROSPECTUS SUMMARY The following is only a summary of the information, financial statements, and notes included in this prospectus. You should read the entire prospectus carefully, including Risk Factors and our financial statements and notes to the financial statements, before making an investment in Sport Stix Inc. Sport Stix, Inc. will contract with Conduit Flavoring Company, Inc. to manufacture the electrolyte drink mix called Sport Stix. Sport Stix contains no sugar, calories or carbohydrates. Sport Stix electrolytes are designed for anyone that needs to stay hydrated during athletic activities without all the calories and carbohydrates. The Company s principle objective with respect to this offering is to increase its capital in order to expand the operations of the Company. The Company has had no sales or distribution arrangements to date. We are not a shell company and do not intend to merge with or sell the company to a private operating company in a reverse merger transaction. EMERGING GROWTH COMPANY We are an Emerging Growth Company as defined in the Jump Start Our Business Start Ups 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 five 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 three 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 structures 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. As a result we may become subject to Section 404(a) and be required to include a report on the effectiveness of our internal controls sooner which would in all likelihood increase our auditing fees. Subject to Completion, Dated August 6, 2013 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. PROSPECTUS SPORT STIX INC. 2,000,000 SHARES OF OUR COMMON STOCK This prospectus relates to the sale of up to 2,000,000 shares of common stock of Sport Stix Inc. by Sport Stix Inc. at $0.50 per share for a total amount of $1,000,000. We estimate net proceeds to be $960,000 for the total offering. All costs associated with this registration will be borne by Sport Stix Inc. Our common stock is not traded on any market or securities exchange. Common stock being registered in this Registration Statement may be sold by the Company at a fixed price of $0.50 per share. We know of no market makers for our common stock. The offering price may not reflect the market price of our shares after the offering. The shares will be offered and sold by our officers and directors without any discounts or other commissions on a best efforts basis. The proceeds of this Offering will not be deposited into an escrow account and there is no minimum subscription that must be reached before the Company can utilize the net proceeds of each subscription as such subscription is received and accepted by the Company. Therefore, funds will become immediately available to the Company. If we choose to sell our shares through broker/dealers, we will file a post effective amendment to this Registration Statement to identify the broker/dealers. This Offering will terminate in 180 days from the date of this Prospectus. Sport Stix Inc. can extend the offering for an additional 180 days at its sole discretion. Our common stock is deemed to be penny stock as that term is defined in Rule 3a51-1 promulgated under the Securities Act of 1934. Brokers/Dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, brokers/dealers are required to determine whether an investment in a penny stock is suitable investment for a prospective investor. THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE RISK FACTORS BEGINNING ON PAGE 3. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. The date of this Prospectus is August 6, 2013.
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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. OnePower is a startup company, with its operations located in Lebanon, engaged in the development of an electronic bill delivery and payment system (the "OP SYSTEM") that will be designed with the intent to provide Middle Eastern utility companies with the ability to present bills and receive payment electronically. OnePower's mission is to become the leading provider of electronic bill delivery and payment services for all business-to-consumer transactions within the utility industry. OnePower plans to use the proceeds its raises from its offering to develop the OP Systems, establish a partnership with a target Middle Eastern utility company, market the OP System and its business, and sign up Middle Eastern utility companies to use the OP System. OnePower will not receive the entire $550,000 in gross proceeds unless the maximum number of shares is sold. To date OnePower has raised $17,000 via offerings completed between April 2010 and October 2010. The following table summarizes the date of offering, the price per share paid, the number of shares sold, and the amount raised for these two offerings. Closing Date Price Per Number of of Offering Share Paid Shares Sold Amount Raised ----------- ---------- ----------- ------------- April 1, 2010 $0.001 2,000,000 $ 2,000 October 15, 2010 $0.001 15,000,000 $15,000 OnePower has no revenues, has achieved losses since inception, has no operations, has been issued a going concern opinion by its auditor and relies upon the sale of its shares of common stock to fund its operations. NAME, ADDRESS, AND TELEPHONE NUMBER OF REGISTRANT OnePower Systems Ltd. Ain El-Mraisseh 73 Bliss Street, Qoreitem Bldg, 3rd Floor Beirut - Lebanon Telephone: (866) 906-7983 Facsimile: (866) 906-7983 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. Securities being offered by selling shareholders: 15,000,000 shares of common stock (These shares are being registered by OnePower for resale on behalf of existing shareholders.) Offering price: $0.055 Offering period: The shares are being offered until June 1, 2014. Net proceeds to OnePower: Up to a maximum of $516,000 (if all 10,000,000 shares offered by OnePower are sold). Use of proceeds: Develop and market products and systems, set up business operations, obtain required licenses and permits, and establish a customer list. Number of shares outstanding before the offering: 17,000,000 Number of shares outstanding after the offering: 27,000,000 SUMMARY FINANCIAL INFORMATION The tables and information below are derived from OnePower's audited financial statements for the years ended November 30, 2012 and November 30, 2011 and its unaudited financial statements for the three month period ended February 28, 2013, respectively. OnePower had a working capital deficit of $(4881) as at November 30, 2012 and $(8,937) as at February 28, 2013. <TABLE> <CAPTION> FINANCIAL SUMMARY November 30, November 30, February 28, February 28, 2012 2011 2012 2011 -------- -------- -------- -------- $ $ $ $ <S> <C> <C> <C> <C> Cash 9,141 12,476 6,822 12,314 Total Assets 9,141 12,476 6,822 12,314 Total Liabilities 14,022 6,412 15,759 7,045 Total Stockholder's Equity (Deficit) (4,881) 6,064 (8,937) 5,269 STATEMENT OF OPERATIONS Accumulated From For the Three For the August 28, 2009 Month Period For the Three Month (Date of Inception) to Ended year ended Period Ended February 28, February 28, November 30, February 28, 2013 2013 2012 2012 -------- -------- -------- -------- $ $ $ $ Revenue -- -- -- -- Net Loss For the Period (25,937) (4,056) (10,945) (796) Net Loss per Share (0.00) (0.00) (0.00) (0.00) </TABLE> The book value of OnePower's outstanding common stock was $0.00 per share as at April 1, 2013.
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+ all historical periods described. Please see The Separation for a description of the separation. This summary is qualified in its entirety by the more detailed information contained elsewhere in this prospectus, which should be read in its entirety. Unless otherwise indicated, this prospectus assumes that the underwriters option to purchase additional shares will not be exercised. Our Company Overview We are one of the largest independent retailers of motor fuel and convenience merchandise items in the U.S. and eastern Canada. Our operations include (i) the sale of motor fuel at convenience stores, filling stations and cardlocks, (ii) the sale of convenience merchandise items and services at convenience stores and (iii) the sale of heating oil to residential customers and heating oil and motor fuel to small commercial customers. We have two operating segments: Retail U.S. As of June 30, 2013, we had 1,034 convenience stores located in Arkansas, Arizona, California, Colorado, Louisiana, New Mexico, Oklahoma, Texas and Wyoming; and Retail Canada As of June 30, 2013, we had 841 retail sites located in New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island and Qu bec. On May 1, 2013, Valero completed the separation of Valero s retail business and we became an independent public company. The separation was accomplished through a series of transactions in which the assets and liabilities associated with Valero s retail business were transferred to us or our subsidiaries. After the transfer of the Valero retail business to us, Valero effected a pro rata distribution of 80% of the outstanding shares of our common stock to Valero s stockholders. The remaining 20% of our common stock was retained by Valero, and 13,112,564 of such shares are being offered pursuant to this prospectus. Retail U.S. We sell motor fuel primarily under the Valero and Diamond Shamrock brands, convenience merchandise items and other services through convenience stores operated predominantly under the Corner Store name in nine states, with significant concentrations in Texas and Colorado. Most of these retail sites are located in metropolitan areas where there are high concentrations of consumers and daily commuters. Of these retail sites, as of June 30, 2013, 838 are owned and 196 are leased under leases that generally contain renewal options for periods ranging from five to ten years. We carry a broad selection of immediately consumable and take-home items, including beverages, tobacco products, snacks, freshly prepared and pre-packaged foods (including sandwiches, kolaches, tacos, salads, 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 NOVEMBER 4, 2013 13,112,564 Shares CST Brands, Inc. Common Stock This prospectus relates to the offer and sale of 13,112,564 shares of common stock, $.01 par value, of CST Brands, Inc. All of these shares of our common stock are currently held by Valero Energy Corporation ( Valero ). Valero, in its capacity as selling stockholder for federal securities law purposes, is offering the shares of our common stock if and to the extent Citicorp North America, Inc., which we refer to as the debt exchange party, acquires such shares from Valero prior to the completion of this offering in exchange for Valero s indebtedness held by the debt exchange party. See Underwriting (Conflicts of Interest). The debt exchange party will then sell the shares of our common stock to the underwriters and the underwriters will sell the shares of our common stock pursuant to this offering. Under the federal securities laws, Valero will be deemed the selling stockholder and an underwriter of any of the shares sold in this offering. However, the debt exchange party, and not Valero, will receive the cash proceeds from the offering. The debt exchange party will also be deemed an underwriter in this offering. The debt exchange party, Citicorp North America, Inc., is an affiliate of Citigroup Global Markets Inc., which is the representative of the underwriters in this offering. We will not receive any proceeds from the sale of shares of our common stock in the offering. Our common stock trades on the New York Stock Exchange under the symbol CST. On November 1, 2013, the last reported sale price of our common stock on the New York Stock Exchange was $33.01 per share. The underwriters have an option to acquire a maximum of up to 1,966,884 additional shares from the debt exchange party as described in Underwriting (Conflicts of Interest). Neither we nor Valero will receive any of the proceeds from the shares of common stock sold pursuant to the underwriters option to purchase additional shares. Investing in our common stock involves a high degree of risk. Before buying any common stock, you should carefully read the discussion of material risks of investing in our common stock in Risk Factors beginning on page 15. Price to Public Underwriting Commission Paid by Valero Proceeds to Debt Exchange Party, Before Expenses Per Share $ $ $ Total $ $ $ Delivery of the shares of common stock will be made on or about November , 2013. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. Joint Book-Running Managers Citigroup Wells Fargo Securities J.P. Morgan Mizuho Securities RBC Capital Markets Co-Managers Credit Suisse Mitsubishi UFJ Securities Piper Jaffray PNC Capital Markets LLC RBS Scotiabank SMBC Nikko SunTrust Robinson Humphrey The date of this prospectus is November , 2013 Table of Contents FORWARD LOOKING STATEMENTS Forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act ), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act ), are made throughout this prospectus. This prospectus includes forward-looking statements, including in the sections entitled Summary,
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+ PROSPECTUS SUMMARY This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under Risk Factors and our financial statements and the related notes included elsewhere in this prospectus, before investing. Unless otherwise stated in this prospectus: references in this prospectus to we, us or our company refer to HF2 Financial Management Inc.; references in this prospectus to Highbury refer to Highbury Financial Inc.; references in this prospectus to our public shares refer to shares of our Class A Common Stock sold in this offering (whether they are purchased in this offering or thereafter in the open market) and references to public stockholders refer to the holders of our public shares, including our sponsors (as defined below) to the extent our sponsors purchase public shares, provided that their status as public stockholders shall only exist with respect to such public shares; references in this prospectus to our Class A Common Stock refer to our Class A common stock, par value $0.0001 per share; references in this prospectus to our Class B Common Stock refer to our Class B common stock, par value $0.000001 per share; references in this prospectus to our common stock refer to our Class A Common Stock and Class B Common Stock; references in this prospectus to our founders shares refer to the 4,398,750 shares of our Class A Common Stock purchased by our sponsors in December 2012 and February 2013 for an aggregate of $25,845; references in this prospectus to our management or our management team refer to our officers and directors; references in this prospectus to our sponsors refer to our initial stockholders prior to this offering; references in this prospectus to our sponsors shares refer to the 1,414,874 shares of our Class A Common Stock (or 1,598,400 shares of our Class A Common Stock if the the underwriters exercise their over-allotment in full) our sponsors have committed to purchase at a price of $10.00 per share; references in this prospectus to taxes or tax obligations refer to income, franchise or other tax obligations of any kind; and except as specifically provided otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer is not permitted. General We are a blank check company formed under the laws of the State of Delaware on October 5, 2012. We were formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, which we refer to throughout this prospectus as our initial business combination, with one or more businesses or entities, which we refer to throughout this prospectus as a target 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 MARCH 21, 2013 PRELIMINARY PROSPECTUS HF2 Financial Management Inc. $153,000,000 15,300,000 Shares of Class A Common Stock HF2 Financial Management Inc. is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, which we refer to throughout this prospectus as our initial business combination, with one or more businesses or entities, which we refer to throughout this prospectus as a target business. Our efforts to identify an initial business combination will not be limited to a particular industry or geographic region, although we intend to focus on companies operating in the financial services industry. We do not have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any prospective target business or had any discussions, formal or otherwise, with respect to such a transaction. If we are unable to consummate our initial business combination within 18 months from the date of this prospectus (or 24 months from the date of this prospectus if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 18 months from the date of this prospectus but have not completed the initial business combination within such 18-month period), we will redeem 100% of the public shares for a pro rata portion of the trust account described below. This is an initial public offering of our Class A Common Stock. We are offering 15,300,000 shares at an offering price of $10.00. We have also granted the underwriters a 45-day option to purchase up to an additional 2,295,000 shares to cover over-allotments, if any. We will seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to convert their shares, 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 (net of taxes payable and interest income), 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 (after giving effect to the payment of a cash advisory fee to EarlyBirdCapital, Inc. and Sandler O Neill & Partners, L.P. that is due upon consummation of our initial business combination) and a majority of the outstanding shares of Class A Common Stock voted are voted in favor of the business combination. Our sponsors have committed to purchase from us an aggregate of 1,414,875 shares of Class A Common Stock at a price of $10.00 per share (for a total purchase price of $14,148,750) in a private placement that will occur simultaneously with the consummation of this offering. Our sponsors also have agreed that if the over-allotment option is exercised by the underwriters, they will purchase from us at a price of $10.00 per share the number of shares of Class A Common Stock (up to a maximum of 183,525 shares of Class A Common Stock) that is necessary to maintain in the trust account an amount equal to $10.50 per share sold to the public in this offering. These shares will be purchased in a private placement that will occur simultaneously with the purchase of shares resulting from the exercise of the over-allotment option. There is presently no public market for our shares of Class A Common Stock. We have applied to have our shares listed on the Nasdaq Capital Market, or Nasdaq, under the symbol HTWO . We cannot assure you that our shares will continue to be listed on Nasdaq following this offering. We are an emerging growth company under the federal securities laws and will be subject to reduced public company reporting requirements. Investing in our shares involves a high degree of risk. See Risk Factors beginning on page 22 of this prospectus for a discussion of information that should be considered in connection with an investment in our shares. Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Price to Public Underwriting Discounts and Commissions(1) Proceeds, Before Expenses, to us Per Share $ 10.00 $ 0.29 $ 9.71 Total $ 153,000,000 $ 4,437,000 $ 148,563,000 (1) Please see the section titled Underwriting for further information relating to the underwriting arrangements agreed to between us and the underwriters in this offering. Upon consummation of this offering, an aggregate of $160,650,000 or $10.50 per share sold to the public in this offering (or $184,747,500 if the over-allotment option is exercised in full) will be deposited into a United States-based trust account at UBS Financial Services Inc., maintained by Continental Stock Transfer & Trust Company, acting as trustee. Except as described in this prospectus, these funds will not be released to us until the earlier of the completion of our initial business combination and our redemption of our public shares (which may not occur until , 2015). The underwriters are offering the shares on a firm commitment basis. EarlyBirdCapital, Inc., acting as the representative of the underwriters, expects to deliver the shares to purchasers on or about , 2013. EarlyBirdCapital, Inc. Sandler O Neill + Partners, L.P. , 2013 Table of Contents business. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not selected any target business on which to concentrate our search for our initial business combination. None of our officers, directors, promoters, Advisory Board members and other affiliates has engaged in discussions on our behalf with representatives of other companies regarding the possibility of a potential merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with us, nor have we, nor any of our agents or affiliates, been approached by any candidates (or representatives of any candidates) with respect to a possible business combination with us. We intend to focus our search on businesses that may provide significant opportunities for attractive investor returns. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region, although we intend to focus on companies operating in the financial services industry where our management team has significant experience. Our officers, consisting of R. Bruce Cameron, our Chairman of the Board, Richard S. Foote, our President and Chief Executive Officer, and R. Bradley Forth, our Executive Vice President and Chief Financial Officer, share a common background at Berkshire Capital Securities LLC, or Berkshire Capital, an investment bank focused on providing advice to financial institutions. Over Berkshire Capital s 30-year history, its partners have developed long-term relationships with a wide range of U.S. and foreign private and public financial services organizations of all sizes. We believe these relationships will provide us with exposure to a broad population of potential acquisition targets. In January 2006, Highbury Financial Inc., a blank check company founded by our management and certain of our sponsors including R. Bruce Cameron, Richard S. Foote, R. Bradley Forth and Broad Hollow LLC, consummated its initial public offering, raising approximately $46.5 million. In November 2006, Highbury acquired the U.S. mutual fund business of ABN AMRO and subsequently rebranded the acquired business as Aston Asset Management LLC, or Aston. Aston is a mutual fund investment management firm that offers mutual funds and separately managed accounts through sub-advisory partnerships with high quality investment management firms. Highbury worked with Aston s management team to build and strengthen the business, including closing or merging 11 mutual funds and launching 16 new mutual funds. Highbury also introduced new sub-advisors to the Aston management team and provided $6.9 million of seed capital to launch new Aston mutual funds. Aston s assets under management increased from approximately $5.5 billion at the time of the acquisition in November 2006 to approximately $7.3 billion at the end of March 2010. In April 2010, Highbury was sold to Affiliated Managers Group, Inc., or AMG, in a tax-deferred stock-for-stock transaction. See Proposed Business Introduction for additional information regarding Highbury. R. Bruce Cameron served as Chairman of the Board of Directors of Highbury from its inception until its acquisition by AMG. Richard S. Foote served as President and Chief Executive Officer and a Director of Highbury from its inception until its acquisition by AMG. R. Bradley Forth served as Executive Vice President and Chief Financial Officer of Highbury from its inception until its acquisition by AMG. We will have until 18 months from the date of this prospectus (or 24 months from the date of this prospectus if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 18 months from the date of this prospectus but have not completed the initial business combination within such 18-month period) to consummate our initial business combination. If we are unable to consummate our initial business combination within such time periods, we will, as promptly as possible but not more than ten business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account and then seek to dissolve and liquidate. We expect the per share redemption price to be $10.50 per share of Class A Common Stock, without taking into account any interest earned on such funds, which will be distributed to pay our tax obligations and to meet our working capital requirements. However, we may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our public stockholders. Table of Contents PROSPECTUS SUMMARY 1
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+ SUMMARY OF OUR OFFERING OUR BUSINESS We were incorporated on October 22, 2012. We are an exploration stage corporation engaged in the search for oil and gas. Our business plan is to develop oil and gas leases with the intent of reworking older drilled wells which are not currently producing, but still have the well-bore in place. Due to the higher price of crude oil and natural gas and utilizing new technology the wells can be reworked with the intent of making them profitable. We have no revenues, have a loss since inception, have minimal operations, have been issued a going concern opinion and rely upon the sale of our securities and loans from our officer and director to fund operations. Our mailing address is located at 2316-A Willemar Avenue, Courtenay, B.C. V9N 3M8, Canada and our telephone number is (250) 898 8882. This is the home of Lawrence Jean, our president. We use approximately 100 square feet on a rent free basis. Our registered statutory office is located at 711 S. Carson Street, Suite 4, Carson City, Nevada 89701. 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. THE OFFERING Following is a brief summary of this Offering: Following is a brief summary of this Offering: Securities being offered A minimum of 3,000,000 of common stock and a maximum of 6,000,000 shares of common stock, par value $0.001. Offering price per share $0.01 Offering period The shares are being offered for a period not to exceed 180 days. Net proceeds to us $30,000, assuming the minimum number of shares are sold and $60,000, assuming the maximum number of shares are sold. Use of proceeds We will use the proceeds to pay for offering expenses, research and exploration. Number of shares outstanding before the Offering 7,500,000 Number of shares outstanding after the Offering if all of the shares are sold 13,500,000
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+ PROSPECTUS SUMMARY The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in the ADSs discussed under "Risk Factors," before deciding whether to buy our ADSs. Our Business We are a leading global digital cinema solutions provider with the largest installed base of digital cinema servers in the Asia-Pacific region and the second largest globally as of March 31, 2013. In the first quarter of 2013, we became the global market leader by capturing the largest market share of incremental digital cinema servers installations on a worldwide basis. We develop, manufacture and sell digital cinema servers that meet the highly demanding performance, security and reliability requirements established by Hollywood studios. Since our inception, we have shipped over 25,000 digital cinema servers worldwide. We also partner with other manufacturers to offer a one-stop solution for exhibiting digital cinema content, including integrated projection systems and 3D products. We have the largest installed base of digital cinema servers in a number of territories, including China, Japan, South Korea, Taiwan, Singapore and Hong Kong as of March 31, 2013. All of the top 10 cinema chains in China, as measured by their respective number of cinema screens at the end of 2012, have installed our digital cinema servers. We have installed digital cinema servers for 7,927 screens in China as of March 31, 2013. We have installed 8,377 digital cinema servers in the United States as of March 31, 2013. In 2012, we shipped 300 integrated projection systems to the second largest cinema chain in India, as measured by its total number of cinema screens at the end of 2012. We have entered into a contract to ship 1,750 digital cinema servers to the second largest cinema chain in Mexico, as measured by its total number of cinema screens at the end of 2012, and have shipped over 400 units as of March 31, 2013. We believe our substantial installed base provides us with strong market recognition and significant long-term revenue opportunities from repeat purchases by both exhibitors and resellers. We are one of the few manufacturers in the world with digital cinema servers that are compliant with the specifications of Digital Cinema Initiatives, LLC, or DCI, a body formed by Hollywood studios to establish digital cinema industry standards. Our digital cinema servers allow exhibitors to exhibit digital cinema content securely in a wide range of formats, including 3D, high frame rate playback and live broadcasting. Our proprietary theatre management system, or TMS, enables exhibitors to effectively and remotely manage multiple screens and streamline theatre operations. We also resell a comprehensive suite of digital cinema products that includes integrated projection systems, 3D systems, projector lamps and silver screens. We maintain a broad service network that provides prompt and reliable services 24/7 to exhibitors, with offices in Hong Kong, the United States, China, Japan, Singapore, Spain, India and Mexico. We have developed a number of proprietary technologies that improve the audiovisual experience, security, delivery and exhibition of digital cinema content. In 2011, we were the first company to showcase a standalone integrated media block, which we believe will eliminate the need for the projection booths found in many exhibition halls today and, as a result, reduce equipment footprint and personnel costs. We were honored as Hong Kong's "Most Innovative Company of 2012" by Mediazone Publishing, a media consulting firm based in Hong Kong, which presented the annual award to select winners for, among other criteria, innovation in products or services and industry accolades. In 2013, we entered into a content distribution agreement with China Film Digital Film Development (Beijing) Limited and have begun offering cinema-grade digital cinema content to private venues, providing high-net-worth individuals in China with the ability to watch the latest Amendment No. 3 FORM F-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CONVENTIONS THAT APPLY TO THIS PROSPECTUS Unless otherwise indicated, references in this prospectus to: "GDC Technology Limited," the "Company," "we," "us," "our," "our company" and "our business" are to GDC Technology Limited (Cayman), together with its subsidiaries as a consolidated entity; "GDC Technology Limited (BVI)" are to GDC Technology Limited, a company incorporated in the British Virgin Islands; "GDC Technology Limited (Cayman)" are to GDC Technology Limited, a company incorporated in the Cayman Islands, which became the ultimate holding company of our business after the Reorganization Transactions; "ADSs" are to our American depositary shares, each of which represents 15 ordinary shares, par value US$0.0001 per share; "Central and South America" are to the countries in the Americas excluding the United States and Canada; "China" and the "PRC" are to the People's Republic of China, excluding, for the purposes of this prospectus only, Taiwan and the special administrative regions of Hong Kong and Macau; "HK$" and "H.K. dollar" are to the legal currency of the special administrative region of Hong Kong; "Hollywood studios" are to the major motion picture studios in the United States, including Twentieth Century Fox Film Corporation, Paramount Pictures Corporation, Sony Pictures Entertainment Inc., Universal Studios, Inc., The Walt Disney Company and Warner Bros. Entertainment Inc. and their respective subsidiaries and affiliates; "incremental installed base" are to the net increase in installed base over a period of time; "installed base" are to the equipment installed in a region at a certain point in time; "ordinary shares" are to our ordinary shares, par value US$0.0001 per share; "North America" are to the United States and Canada; "RMB" and "Renminbi" are to the legal currency of China; "$", "US$" and "U.S. dollar" are to the legal currency of the United States of America; and "VPF" arrangement are to the "virtual print fee" arrangement, which is an arrangement where studios or distributors subsidize the purchase costs of digital cinema equipment by paying exhibitors fees for showing digital cinema content from such studios or distributors using such digital cinema equipment. Unless otherwise indicated, information in this prospectus assumes that the underwriters do not exercise their option to purchase additional ADSs. We report under International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or the IASB. None of the financial statements were prepared in accordance with generally accepted accounting principles in the United States. We have historically conducted our business through GDC Technology Limited (BVI) and its subsidiaries. Therefore, our historical financial statements present the results of operations of GDC Technology Limited (BVI). In May 2013, we underwent the Reorganization Transactions described in "Prospectus Summary The Reorganization Transactions" pursuant to which GDC Technology Limited Table of Contents theatrical releases in the privacy of their own homes. We also recently entered into contracts for licensing and reselling China Film Giant Screen systems in Asia (excluding China) on an exclusive basis and in the rest of the world on a non-exclusive basis. We have experienced significant growth in recent years. Our market share of incremental digital cinema server installations grew from 16% in 2010 to 35% in the first quarter of 2013. Our revenue grew from US$72.7 million in 2010 to US$90.0 million in 2011 and US$116.6 million in 2012. Our revenue for the three months ended March 31, 2013 amounted to US$32.4 million, representing an increase of 37.5% from the same period in 2012. Our profit for the year grew from US$19.9 million in 2010 to US$22.7 million in 2011 and US$27.7 million in 2012. Our profit for the three months ended March 31, 2013 amounted to US$5.3 million, representing an increase of 10.7% from the same period in 2012, after reflecting listing expenses of US$0.4 million. Our Industry The global cinema industry as measured by box office revenues grew from US$29.4 billion in 2009 to an estimated US$34.4 billion in 2012 and is forecasted to grow at a three-year compound annual growth rate, or CAGR, of 6.4% to US$41.4 billion by 2015. The number of cinema screens grew by a CAGR of 3.1% from 118,491 at the end of 2009 to 129,766 at the end of 2012. Over the same period, the number of cinema screens expected to be equipped with DCI-compliant or other equipment capable of exhibiting digital cinema content, or digital cinema screens, grew by a CAGR of 76.3% from 16,375 to 89,744. The first digital projector was commercially tested in June 1999 when Texas Instruments publicly demonstrated its DLP Cinema projector technology, the digital light processing technology widely used today in projectors for cinemas. By the end of 2013, over 80% of the world's cinema screens are expected to be digital cinema screens. The key drivers of analog-to-digital cinema screen conversion have been distribution cost savings, equipment incentive programs and growing consumer demand for new types of content that can only be shown using digital cinema technology. The key sources of demand for digital cinema equipment are expected to come from: (i) the analog-to-digital cinema screen conversion; (ii) new digital cinema screen installations as a result of new cinema construction; (iii) upgrades and replacements for digital cinema products, driven by new technology requirements and product replacement cycles; and (iv) installations of digital cinema solutions in private venues. Our Strengths We believe the following competitive strengths enable us to successfully compete in the growing digital cinema market: Strong global market leadership We believe our proven track record of delivering comprehensive, high-quality and innovative solutions has and will continue to help us expand our market share. For instance, our market share of incremental digital cinema servers installations in the United States increased from less than 1% in 2009 to approximately 34% in the first quarter of 2013. We were also the market leader in incremental digital cinema servers installations globally (35%), as well as in the Asia-Pacific region (54%) and China (66%) in the first quarter of 2013. We had the largest installed base of digital cinema servers in the Asia-Pacific region (44%) and the second largest installed base globally (23%) as of March 31, 2013. We also had the largest installed base in a number of territories, including China (56%), Japan (36%), South Korea (51%), Taiwan (52%), Singapore (84%) and Hong Kong (79%) as of Table of Contents GDC TECHNOLOGY LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) (In U.S. Dollar, except share and per share data, unless otherwise stated) 31. SHARE-BASED PAYMENT TRANSACTIONS (Continued) Number of share options Category of grantees Date of grant Exercise period Exercise price per share Balance as of 1.1.2011 Exercised during the year Cancelled/forfeited during the year Balance as of 31.12.2011 Directors 2.11.2007 2.11.2007 1.11.2012 HK$ 2.00 3,300,000 (3,300,000 ) 14.12.2010 14.12.2010 13.12.2015 HK$ 2.00 3,100,000 (3,100,000 ) Employees 14.12.2010 14.12.2010 13.12.2015 HK$ 2.00 2,600,000 (2,066,000 ) (95,000 )a 439,000 Other participants 2.11.2007 2.11.2007 1.11.2012 HK$ 2.00 330,000 (330,000 ) 14.12.2010 14.12.2010 13.12.2015 HK$ 2.00 6,300,000 (4,300,000 ) (2,000,000 )b Totals 15,630,000 (13,096,000 ) (2,095,000 ) 439,000 Exercisable at the end of the year 439,000 Weighted average exercise price HK$ 2 HK$ 2 HK$ 2 HK$ 2 Number of share options Category of grantees Date of grant Exercise period Exercise price per share Balance as of 1.1.2012 Exercised during the period Forfeited during the year Balance as of 31.12.2012 Employees 14.12.2010 14.12.2010 13.12.2015 HK$ 2.00 439,000 (14,000 )a 425,000 Totals 439,000 (14,000 ) 425,000 Exercisable at the end of the period 425,000 Weighted average exercise price HK$ 2 HK$ 2 HK$ 2 HK$ GDC TECHNOLOGY LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (In U.S. Dollar, except share and per share data, unless otherwise stated) 20. SHARE-BASED PAYMENT TRANSACTIONS (Continued) Number of share options Category of grantees Date of grant Exercise period Exercise price per share Balance as of 1.1.2013 Forfeited during the period Balance as of 31.3.2013 Employees 14.12.2010 14.12.2010 13.12.2015 HK$ 2.00 425,000 425,000 Totals 425,000 425,000 Exercisable at the end of the period 425,000 Weighted average exercise price HK$ 2 HK$ 2 HK$ GDC Technology 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) 3663 (Primary Standard Industrial Classification Code Number) Not Applicable (I.R.S. Employer Identification Number) Unit 1-7, 20/F, Kodak House II 39 Healthy Street East, North Point Hong Kong +852.2523.6851 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) (BVI) became a wholly owned subsidiary of GDC Technology Limited (Cayman), a newly formed holding company. Beginning in the second quarter of 2013, our financial statements will present the results of operations of GDC Technology Limited (Cayman) and its consolidated subsidiaries. This prospectus contains statistical data that we obtained from various government and private publications. We have not independently verified the data in these reports. Statistical data in these publications also include projections based on a number of assumptions. If any one or more of the assumptions underlying the statistical data turns out to be incorrect, actual results may differ from the projections based on these assumptions. Unless context otherwise requires, market data regarding the digital cinema industry, including data concerning our installed base, represents management's estimates based on third-party sources. We calculated our incremental installed base, the net increase in our installed base over a period of time, by subtracting our installed base as of the beginning of a period from our installed base as of the end of the period. We calculated our market share of incremental digital cinema server installations in a region for a period by dividing our incremental installed base in the region for the period by the total incremental installed base in the region for the period. This prospectus contains conversions of H.K. dollar amounts into U.S. dollars solely for the convenience of the reader. Unless otherwise noted, all conversions from H.K. dollars to U.S. dollars and from U.S. dollars to H.K. dollars in this prospectus were made at a rate of HK$7.80 to US$1.00. The noon buying rate certified for customs purposes by the Federal Reserve Bank of New York in effect as of March 29, 2013 was HK$7.7629 to US$1.00. On June 14, 2013, the noon buying rate was HK$7.7612 to US$1.00. Any discrepancies in any table between totals and sums of amounts listed therein are due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures preceding them. Table of Contents March 31, 2013. We believe our large market share provides us with significant long-term revenue opportunities from repeat purchases by both exhibitors and resellers. Proven track record of technology leadership and innovation Since our inception in 1999, we have been at the forefront of technological advancements for the digital cinema industry. We have worked closely with Hollywood studios and international industry standards-setting bodies such as the Society of Motion Picture and Television Engineers to help define digital cinema industry standards. We have developed a number of proprietary technologies that have improved the audiovisual experience, security, delivery and exhibition of digital cinema content. We are one of a few manufacturers in the world to achieve DCI compliance for all of our digital cinema server models. Comprehensive portfolio of digital cinema solutions We offer a one-stop solution for exhibiting digital cinema content, including: digital cinema servers; integrated projection systems, 3D systems, projector lamps and silver screens from our partners; TMS and network operations center, or NOC, which offer exhibitors a centralized point of control to automate and streamline their cinema operations; and support services globally 24/7 through a NOC and 27 support centers. Close collaboration with industry leaders providing insights and opportunities We collaborate closely with digital cinema industry leaders, including standards-setting bodies, production companies, distributors, digital cinema equipment manufacturers and exhibitors, to anticipate and capitalize on changing technology requirements. Together, we jointly develop and market our solutions to capture additional revenue opportunities and satisfy our customers' needs for a one-stop solution, including 3D products, projector lamps and silver screens. We work with China Film Digital Film Development (Beijing) Limited to offer cinema-grade digital cinema content to private venues. We recently entered into contracts for licensing and reselling China Film Giant Screen systems in Asia (excluding China) on an exclusive basis and in the rest of the world on a non-exclusive basis. Our collaboration with reseller partners in the United States, Korea and Japan expands our customer base and geographic reach. Experienced management team with strong industry expertise We have an experienced management team focused on developing innovative technologies and solutions for the digital cinema industry. Dr. Man-Nang Chong, our chairman of the board of directors and chief executive officer, founded our company in Singapore in 1999, our chief technology officer, Mr. Pranay Kumar, has been with us since 2001 and our chief financial officer, Mr. Kent (Ming-Kin) Chiu, has been with us since 2006. They are experienced in managing our growing digital cinema business and have led us through a number of significant challenges. We believe that our experienced and dedicated management team, coupled with our proven track record and strong technological and execution capabilities, has contributed significantly to our past success and will continue to lead our future growth. Our Strategies We intend to capitalize on our global market leadership, technology capabilities, industry relationships and market reputation to continue developing and delivering innovative digital cinema solutions. Key elements of our strategies include: Increase global market share; Maintain and enhance technology leadership; Expand our digital cinema solutions offerings; Leverage existing technologies to expand into complementary markets; and Pursue strategic partnerships and acquisitions. GDC Technology (USA), LLC 1016 West Magnolia Boulevard Burbank, CA 91506 United States of America +1.818.972.4370 (Name, address, including zip code, and telephone number, including area code, of agent for service) Table of Contents Our Challenges Our ability to successfully execute our strategies is subject to risks and uncertainties, including but not limited to those relating to the following: Industry demand for digital cinema products and services Our revenue and profitability depend on continuing demand for digital cinema equipment from (i) analog-to-digital cinema screen conversion, (ii) new digital cinema screen installations, (iii) upgrades and replacements for digital cinema products and (iv) installations of digital cinema solutions in private venues. We cannot assure you that any of these sources of demand will be sustained over time. We expect that the demand for digital cinema products from analog-to-digital conversion will decrease in most developed markets such as the United States, Europe and Japan, primarily as a result of the substantial completion of the industry transition from analog to digital cinema. Our ability to continue to develop and deliver innovative products and services Our success will depend on our ability to address the varied needs of existing and prospective customers by responding to rapid technological changes, evolving industry standards, such as support for high frame rate playback, as well as changes in consumer preferences and behavior, such as the increasing use of digital cinema technologies in private venues and online content streaming services. Our ability to comply with DCI specifications for our digital cinema equipment From time to time, DCI may release new recommendations and specifications which require technical improvements to both hardware and software. We cannot assure you that we will always be able to develop products that meet new DCI specifications in a timely or cost-effective manner or that all of the products that we manufacture, distribute and market as DCI-compliant products, including those supplied by third-party manufacturers, will always comply with DCI specifications. We may incur significant costs to develop and manufacture DCI-compliant products. If we or our suppliers, partners or customers use technology that does not comply with DCI specifications, there may be no viable market for our products and services. Competition within existing and new markets for digital cinema products and services The markets for our digital cinema products and services are highly competitive. Our reseller and digital projector partners may also be our current or potential competitors. Our competitors may be able to offer digital cinema products and services at more competitive prices than us. Exhibitors may perceive our competitors' products and services to be superior to ours. In addition, we may not be able to provide exhibitors the level and scope of localized after-sales services and support that our competitors provide in certain markets. Decreases in cinema attendance worldwide Cinema admissions worldwide may decrease, as home theatre and other private venues attract viewership away from cinemas. An increase in the popularity of alternative film distribution channels and competing forms of entertainment could drive down cinema attendance further and potentially cause exhibitors to close their theatres. Large scale theatre closures could significantly reduce demand from analog-to-digital cinema screen conversion, new installations, extend the product replacement cycle and discourage exhibitors from making additional investments on upgrades. Our ability to manage our business expansion and growth, including geographical expansion and expansion of our product and service offerings We have business expansion plans to increase our global market share and to expand our product and service offerings. We aim to increase our market share in key emerging markets, such as China, India, Central and South America and South East Asia. We also aim to increase our market share in key developed markets, such as North America and Western Europe, by capturing demand from upgrades and replacements. We plan to open new post-production facilities across Asia. We Copies to: Matthew Bersani Shuang Zhao Shearman & Sterling LLP c/o 12th Floor, Gloucester Tower, The Landmark 15 Queen's Road Central Hong Kong +852.2978.8000 Z. Julie Gao Skadden, Arps, Slate, Meagher & Flom LLP c/o 42nd Floor, Edinburgh Tower, The Landmark 15 Queen's Road Central Hong Kong +852.3740.4700 Table of Contents also intend to pursue VPF agreements for markets with significant analog-to-digital cinema screen conversion demand, such as Central and South America. We cannot assure you that any of these plans will be successful. Moreover, this business expansion could place significant additional demands on our operational and financial resources. Seasonality in our business We have historically experienced higher sales in the fourth quarter of a year, compared to the other three quarters of the same year, as our customers tend to purchase digital cinema equipment immediately before the winter holiday season, which is typically the peak season for box office revenues. We have historically experienced the lowest sales in the first quarter of a year for similar reasons. The timing of movie releases can have a significant effect on our results of operations. The results of one quarter are not necessarily indicative of results for the next quarter or any other quarter. Our customer concentration We depend upon a few major customers for a significant portion of our revenue. Our top five customers collectively accounted for 31.9%, 33.3%, 41.4% and 54.0% of our revenue for 2010, 2011, 2012 and the three months ended March 31, 2013, respectively. Our top customer in 2010, 2011 and 2012 was our largest reseller partner in the United States. It accounted for 12.3%, 11.8% and 14.4% of our revenue for 2010, 2011 and 2012, respectively. Our top customer for the three months ended March 31, 2013 was an exhibitor in the Asia-Pacific region. It accounted for 19.7% of our revenue for the period. A decision by any of our major customers not to purchase our products, or any failure to pay amounts owed to us could materially and adversely affect our business. In particular, we rely significantly on reseller partners, some of whom are our major customers, to market and distribute our digital cinema servers in certain regions. The loss of a major reseller partner or the inability or unwillingness of our reseller partners to dedicate the resources necessary to promote our portfolio of products could materially and adversely affect our revenue. Our relationships with exhibitors and studios Our relationships with exhibitors and studios are critical to our business. For example, our business expansion strategies, including signing additional VPF agreements and providing post-production services, may depend on our relationships with the studios and exhibitors in any given geographic market. Our relationships with suppliers We rely on third-party manufacturers for key components of our products as well as the digital projectors we use in our integrated projection systems and other digital cinema products that we resell, such as 3D products, projector lamps and silver screens. We do not have formal agreements in place with all of our suppliers for the continued supply of components and we may have no recourse or remedies in the event our suppliers fail to meet our requirements. Our reliance on sole-source suppliers for some of our key components We rely on sole-source suppliers for some of the key components that we use in our products, such as media decoders and processors used in our digital cinema servers, and for some of the products that we resell, such as 3D products. Our inability to obtain timely delivery of key components of acceptable quality and quantity, any significant increases in the prices of components or the redesign of our products could result in material production delays, increased costs and reductions in shipments of our products, any of which could increase our operating costs or harm our customer relationships. See
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1
+ Summary Financial Information
2
+
3
+ The following financial information summarizes the more complete historical financial information at the end of this prospectus.
4
+
5
+
6
+
7
+ As of January 31, 2013 (Audited)
8
+
9
+ Balance Sheet
10
+
11
+
12
+
13
+
14
+
15
+ Total Assets
16
+
17
+
18
+
19
+ $
20
+
21
+ 31,560
22
+
23
+ Total Liabilities
24
+
25
+
26
+
27
+ $
28
+
29
+ 552
30
+
31
+ Stockholders Equity
32
+
33
+
34
+
35
+ $
36
+
37
+ 31,008
38
+
39
+
40
+
41
+ Period from February 9, 2012 (date of inception) to January 31, 2013(Audited)
42
+
43
+ Income Statement
44
+
45
+
46
+
47
+
48
+
49
+ Revenue
50
+
51
+
52
+
53
+ $
54
+
55
+ 2,475
56
+
57
+ Total Expenses
58
+
59
+
60
+
61
+ $
62
+
63
+ 715
64
+
65
+ Corporate Income Taxes
66
+
67
+
68
+ $
69
+
70
+ 352
71
+
72
+ Net income from operations
73
+
74
+
75
+
76
+ $
77
+
78
+ 1,404
79
+
80
+
81
+
82
+ As of April 30, 2013 (Unaudited)
83
+
84
+ Balance Sheet
85
+
86
+
87
+
88
+
89
+
90
+ Total Assets
91
+
92
+
93
+
94
+ $
95
+
96
+ 24,047
97
+
98
+ Total Liabilities
99
+
100
+
101
+
102
+ $
103
+
104
+ 288
105
+
106
+ Stockholders Equity
107
+
108
+
109
+
110
+ $
111
+
112
+ 23,759
113
+
114
+
115
+
116
+ Period from February 9, 2012 (date of inception) to April 30, 2013(Unaudited)
117
+
118
+ Income Statement
119
+
120
+
121
+
122
+
123
+
124
+ Revenue
125
+
126
+
127
+
128
+ $
129
+
130
+ 2,475
131
+
132
+ Total Expenses
133
+
134
+
135
+
136
+ $
137
+
138
+ 8,228
139
+
140
+ Net loss from operations
141
+
142
+
143
+
144
+ $
145
+
146
+ 5,841
147
+
148
+ Risk Factors related to our Business and Industry
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+ AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW AND THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE INVESTING IN OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS OCCUR, OUR BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION COULD BE SERIOUSLY HARMED. WE DO NOT CURRENTLY HAVE A TRADING PRICE FOR OUR COMMON STOCK. IF AND WHEN OUR COMMON STOCK BECOME ELIGIBLE FOR TRADING ON THE OVER-THE-COUNTER BULLETIN BOARD, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. THERE IS NO ASSURANCE OUR COMMON STOCK WILL BE ELIGIBLE FOR TRADING ON THE OTCBB.
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+ BECAUSE OUR AUDITORS HAVE RAISED A GOING CONCERN, THERE IS A SUBSTANTIAL UNCERTAINTY THAT WE WILL CONTINUE OPERATIONS IN WHICH CASE YOU COULD LOSE YOUR INVESTMENT.
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+ 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.
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+ IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
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+ While on April 30, 2013, we had cash on hand of $24,047 we had operating expenses of $8,228 in business development and administrative expenses. Our current cash reserves are not sufficient to meet our obligations for the next twelve-month period. We anticipate that the minimum additional capital necessary to fund our planned operations for the 12-month period will be approximately $5,000 and will be needed for general administrative expenses, business development, marketing costs, support materials and costs associated with being a publicly reporting company. In order to expand our business operations, we anticipate that we will have to raise additional funding. There is no assurance that we will be able to raise additional funding. If we are not able to raise the capital necessary to fund our business expansion objectives, we may have to delay the implementation of our business plan.
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+ We do not currently have any arrangements for financing. Obtaining additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations. These factors may impact the timing, amount, terms or conditions of additional financing available to us. Management s time that may be spent trying to secure additional financing will take away time that management could spend on our operations.
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+ We are not raising any money in this offering. The most likely source of future funds available to us is through the sale of additional shares of common stock or advances from our sole officer and director. Any additional funding we arrange through the sale of our common stock will result in dilution to existing shareholders. Irina Petrzhikovskaya, our sole officer and director, has agreed to loan the Company funds to meet our obligations and complete our 12-months business plan. However, Ms. Petrzhikovskaya has no firm commitment, arrangement or legal obligation to advance or loan funds to the Company. There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us. Failure to raise additional financing will cause us to go out of business. If this happens, you could lose all or part of your investment.
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+ WE LACK AN OPERATING HISTORY AND THERE IS NO ASSURANCE OUR FUTURE OPERATIONS WILL RESULT IN REVENUES OR PROFITABILITY. IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE MAY SUSPEND OR CEASE OPERATIONS.
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+ We were incorporated on February 9, 2012, and our net income since inception to January 31, 2013 is $1,404. We have very little operating history upon which an evaluation of our future success or failure can be made. Based upon current plans, we expect to incur operating losses in the foreseeable future because we will be incurring large expenses associated with SEC filings, establishing office, website development and marketing campaign without generating revenues. Failure to generate significant revenues in the future will cause us to go out of business.
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+ COMPETITORS WITH MORE RESOURCES MAY FORCE US OUT OF BUSINESS.
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+ Many competitors with similar products are significantly larger and have substantially greater financial, marketing and other resources and have achieved public recognition for their services. Competition by existing and future competitors could result in an inability to secure adequate consumer relationships sufficient enough to support Company endeavors. We cannot be assured that we will be able to compete successfully against present or future competitors or that the competitive pressure we may face will not force us to cease our operations.
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+ PRICE COMPETITION COULD NEGATIVELY AFFECT OUR GROSS MARGINS.
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+ Price competition could negatively affect our operating results. To respond to competitive pricing pressures, we will have to sell our products at lower prices in order to retain or gain market share and customers. If our competitors offer discounts on certain products in the future, we will need to lower prices to match the competition, which could adversely affect our gross margins and operating results. All of our larger competitors have significantly greater resources than we have and are better able to absorb losses. Our market is new and our business model is unproven, which makes it difficult to evaluate our current business and future prospects. Because this market is new, it is difficult to predict the future growth rate and size of this market. The factors that are beyond our control reduce our ability to accurately evaluate our future prospects and forecast quarterly or annual performance. We expect that our visibility into future sales of our products, including both sales volumes and prices, will continue to be limited for the foreseeable future.
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+ AS OF TODAY WE HAVE EXECUTED AGREEMENT WITH ONE CUSTOMER ONLY. IF THAT MAJOR CUSTOMER DECREASED OR TERMINATED ITS RELATIONSHIP WITH US OUR BUSINESS WOULD LIKELY FAIL IF WE ARE UNABLE TO FIND NEW CUSTOMERS FOR OUR PRODUCT.
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+ As a result of being totally dependent on a single customer, we may be subject to certain risks. As of today, we have executed only one agreement with customer, Aldent, LLC. Our agreement with this company does not prevent it from buying similar products from our competitors or directly from no-line stores. If this company decreased, modified or terminated its association with us for any other reason, we would suffer an interruption in our business unless and until we found new customers. If we were unable to find a substitute for that customer, our business would likely fail. We cannot predict what the likelihood would be of finding an acceptable substitute customer.
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+ IF WE FAIL TO SUCCESSFULLY MANAGE OUR RELASHIONSHIPS WITH RESELLERS OUR BUSINESS WOULD BE HARMED.
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+ We may lose sales opportunities if we do not successfully develop and maintain strategic relationships with resellers of our products. Our relationships with all of our resellers will be new, and we are unable to predict the extent to which resellers will be successful in marketing and selling our products. Also, these relationships may be terminated at any time. We need to maintain and expand our relationships with these companies, develop additional channels for the distribution and sale of our products and effectively manage these relationships. If we fail to do so, our resellers may decide not to include our products among those that they sell or they may not make marketing and selling our products a priority. In addition, our resellers may sell products that are competitive with ours. If we fail to successfully manage our relationships with our resellers, our ability to sell our teeth whitening strips into new markets and to increase our penetration into existing markets may be impaired and our business would be harmed.
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+ OUR BUSINESS CAN BE AFFECTED BY CURRENCY RATE FLUCTUATIONS AS OUR WHOLESALERS/RESELLERS ARE IN LATVIA AND WE PURCHASE OUR PRODUCT IN AMERICAN DOLLARS.
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+ We intend to sell our teeth whitening strips to distributors in Latvia whose operations are in Latvian lats, while we will purchase the product in American Dollars, so we are affected by changes in foreign exchange rates. If we are not able to successfully protect ourselves against currency fluctuations, our profits will also fluctuate and could cause us to be less profitable or incur losses, even if our business is doing well.
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+ BECAUSE OUR PRINCIPAL ASSETS ARE LOCATED OUTSIDE OF THE UNITED STATES AND IRINA PETRZHIKOVSKAYA, OUR SOLE DIRECTOR AND OFFICER, RESIDES OUTSIDE OF THE UNITED STATES, IT MAY BE DIFFICULT FOR AN INVESTOR TO ENFORCE ANY RIGHT BASED ON U.S. FEDERAL SECURITIES LAWS AGAINST US AND/OR MS. PETRZHIKOVSKAYA, OR TO ENFORCE A JUDGMENT RENDERED BY A UNITED STATES COURT AGAINST US OR MS. PETRZHIKOVSKAYA.
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+ Our principal operations and assets are located outside of the United States, and Irina Petrzhikovskaya, our sole officer and director, is a non-resident of the United States. Therefore, it may be difficult to effect service of process on Ms. Petrzhikovskaya in the United States, and it may be difficult to enforce any judgment rendered against Ms. Petrzhikovskaya. As a result, it may be difficult or impossible for an investor to bring an action against Ms. Petrzhikovskaya, in the event that an investor believes that such investor s rights have been infringed under the U.S. securities laws, or otherwise. Even if an investor is successful in bringing an action of this kind, the laws of Republic of Latvia may render that investor unable to enforce a judgment against the assets of Ms. Petrzhikovskaya. As a result, our shareholders may have more difficulty in protecting their interests through actions against our management, director or major shareholder, compared to shareholders of a corporation doing business and whose officers and directors reside within the United States.
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+ Additionally, because of our assets are located outside of the United States, they will be outside of the jurisdiction of United States courts to administer, if we become subject of an insolvency or bankruptcy proceeding. As a result, if we declare bankruptcy or insolvency, our shareholders may not receive the distributions on liquidation that they would otherwise be entitled to if our assets were to be located within the United States under United States bankruptcy laws.
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+ OUR SOLE OFFICER AND DIRECTOR HAS LACK OF EXPERIENCE MANAGING PUBLIC REPORTING COMPANY AND ACCOUNTING WHICH IS REQUIRED TO ESTABLISH AND MAINTAIN DISCLOSURE CONTROL AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING.
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+ We have never operated as a public company. Irina Petrzhikovskaya, our sole officer and director has no experience managing a public company that is required to establish and maintain disclosure controls and procedures and internal control over financial reporting. Also, Ms. Irina Petrzhikovskaya has only limited experience in accounting. As our operations become more complex we will be required to hire additional accounting personal to comply with our reporting obligations. If we cannot operate successfully as a public company, your investment may be materially adversely affected.
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+ BECAUSE OUR SOLE OFFICER AND DIRECTOR OWNS 71.77% OF OUR ISSUED AND OUTSTANDING COMMON STOCK, SHE WILL HAVE THE ABILITY TO MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO MINORITY SHAREHOLDERS.
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+
210
+ Our sole officer and director, Irina Petrzhikovskaya, owns approximately 71.77% of the outstanding shares of our common stock. Accordingly, she will have the ability to determine the outcome of all corporate transactions or other matters, including mergers, consolidations, and the sale of all or substantially all of our assets. She will also have the power to prevent or cause a change in control. The interests of our sole officer and director may differ from the interests of the other stockholders and thus result in corporate decisions that are disadvantageous to other shareholders.
211
+
212
+ 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.
213
+
214
+ Our sole officer and director, Ms. Irina Petrzhikovskaya, will only be devoting limited time to our operations. Ms. Petrzhikovskaya intends to devote approximately 20 hours a week of her business time to our affairs. Because our sole officer and director will only be devoting limited time to our operations, our operations may be sporadic and occur at times which are convenient to her. As a result, our operations may be periodically interrupted or suspended which could result in a lack of revenues and a possible cessation of operations. It is possible that the demands on Ms. Petrzhikovskaya 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. Petrzhikovskaya may not possess sufficient time for our business if the demands of managing our business increase substantially beyond current levels.
215
+
216
+ IF MS. PETRZHIKOVSKAYA, 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.
217
+
218
+ We extremely depend on the services of our sole officer and director, Ms. Petrzhikovskaya, for the future success of our business. The loss of the services of Ms. Petrzhikovskaya 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.
219
+
220
+ 9 | Page
221
+
222
+ AS AN EMERGING GROWTH COMPANY UNDER THE JOBS ACT, WE ARE PERMITTED TO RELY ON EXEMPTIONS FROM CERTAIN DISCLOSURE REQUIREMENTS.
223
+
224
+ 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:
225
+
226
+ -
227
+
228
+ have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
229
+
230
+ -
231
+
232
+ provide an auditor attestation with respect to management s report on the effectiveness of our internal controls over financial reporting;
233
+
234
+ -
235
+
236
+ 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);
237
+
238
+ -
239
+
240
+ submit certain executive compensation matters to shareholder advisory votes, such as say-on-pay and say-on-frequency; and
241
+
242
+ -
243
+
244
+ 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.
245
+
246
+
247
+
248
+ 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.
249
+
250
+ We will remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a large accelerated filer as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. Even if we no longer qualify for the exemptions for an emerging growth company, we may still be, in certain circumstances, subject to scaled disclosure requirements as a smaller reporting company. For example, smaller reporting companies, like emerging growth companies, are not required to provide a compensation discussion and analysis under Item 402(b) of Regulation S-K or auditor attestation of internal controls over financial reporting.
251
+
252
+ 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.
253
+
254
+ 10 | Page
255
+
256
+ ANY ADDITIONAL FUNDING WE ARRANGE THROUGH THE SALE OF OUR COMMON STOCK WILL RESULT IN DILUTION TO EXISTING SHAREHOLDERS.
257
+
258
+ We must raise additional capital in order for our business plan to succeed. We are not raising any money in this offering. Our most likely source of additional capital will be through the sale of additional shares of common stock. Such stock issuances will cause stockholders' interests in our company to be diluted. Such dilution will negatively affect the value of investors shares.
259
+
260
+ 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.
261
+
262
+ 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.
263
+
264
+ 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.
265
+
266
+ 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.
267
+
268
+ 11 | Page
269
+
270
+ 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.
271
+
272
+ 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.
273
+
274
+ There is currently no established public trading market for our securities and an active trading market in our securities may not develop or, if developed, may not be sustained. We intend to have a market maker apply for admission to quotation of our securities on the Over-the-Counter Bulletin Board after the Registration Statement relating to this prospectus is declared effective by the SEC. We do not yet have a market maker who has agreed to file such application. If for any reason our common stock is not quoted on the Over-the-Counter Bulletin Board or a public trading market does not otherwise develop, purchasers of the share may have difficulty selling their common stock should they desire to do so. No market makers have committed to becoming market makers for our common stock and none may do so.
275
+
276
+ WE MAY BE EXPOSED TO POTENTIAL RISKS AND SIGNIFICANT EXPENSES RESULTING FROM THE REQUIREMENTS UNDER SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002.
277
+
278
+ We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, to include in our annual report our assessment of the effectiveness of our internal control over financial reporting. We expect to incur significant continuing costs, including accounting fees and staffing costs, in order to maintain compliance with the internal control requirements of the Sarbanes-Oxley Act of 2002. Development of our business will necessitate ongoing changes to our internal control systems, processes and information systems. If our business develops and grows, our current design for internal control over financial reporting will not be sufficient to enable management to determine that our internal controls are effective for any period, or on an ongoing basis. Accordingly, as we develop our business, such development and growth will necessitate changes to our internal control systems, processes and information systems, all of which will require additional costs and expenses.
279
+
280
+ In the future, if we fail to complete the annual Section 404 evaluation in a timely manner, we could be subject to regulatory scrutiny and a loss of public confidence in our internal controls. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. However, as an emerging growth company, as defined in the JOBS Act, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an emerging growth company. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.
281
+
282
+ 12 | Page
283
+
284
+ THE COSTS TO MEET OUR REPORTING AND OTHER REQUIREMENTS AS A PUBLIC COMPANY SUBJECT TO THE EXCHANGE ACT OF 1934 ARE SUBSTANTIAL AND MAY RESULT IN US HAVING INSUFFICIENT FUNDS TO EXPAND OUR BUSINESS OR EVEN TO MEET ROUTINE BUSINESS OBLIGATIONS.
285
+
286
+ As a public entity subject to the reporting requirements of the Exchange Act of 1934, we incur ongoing expenses associated with professional fees for accounting, legal and SEC filings and compliance. We estimate that these costs will increase if our business volume and activity increases. As a result of such expenses, we may not have sufficient funds to grow our operations.
287
+
288
+ Forward-Looking Statements
289
+
290
+ This prospectus contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in the Risk Factors section and elsewhere in this prospectus.
291
+
292
+ Use of Proceeds
293
+
294
+ We will not receive any proceeds from the sale of the common stock offered through this prospectus by the selling shareholders.
295
+
296
+ Determination of Offering Price
297
+
298
+ The selling shareholders will sell our shares at $0.03 per share. We determined this offering price arbitrarily, by adding a $0.02 premium to the last sale price of our common stock to investors. This offering is priced at the time of the commencement of the offering and must remain offered at such price during the entire duration of the offering.
299
+
300
+ Dilution
301
+
302
+ 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.
303
+
304
+ Selling Shareholders
305
+
306
+ The selling shareholders named in this prospectus are offering all of the 2,360,000 shares of common stock offered through this prospectus. These shares were acquired from us in private placements that were exempt from registration under Regulation S promulgated pursuant to the Securities Act of 1933. All shares were acquired outside of the United States by non-U.S. persons. The shares include the following:
307
+
308
+ -
309
+
310
+ 2,360,000 shares of our common stock that the selling shareholders acquired from us in an offering that was completed on December 14, 2012.
311
+
312
+ 13 | Page
313
+
314
+ 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:
315
+
316
+ 1. the number of shares owned by each prior to this offering;
317
+
318
+ 2. the total number of shares that are to be offered for each;
319
+
320
+ 3. the total number of shares that will be owned by each upon completion of the offering; and
321
+
322
+ 4. the percentage owned by each upon completion of the offering.
323
+
324
+ Name Of Selling Shareholder
325
+
326
+ Shares Owned Prior To This Offering
327
+
328
+ Total Number Of Shares To Be Offered For Selling Shareholders Account
329
+
330
+ Total Shares to Be Owned Upon Completion Of This Offering
331
+
332
+ Percentage of Shares owned Upon Completion of This Offering
333
+
334
+ Ahmet Aladdin Tavrak
335
+
336
+ 75,000
337
+
338
+ 75,000
339
+
340
+ Nil
341
+
342
+ Nil
343
+
344
+ Aleksandrs Makovskis
345
+
346
+ 120,000
347
+
348
+ 120,000
349
+
350
+ Nil
351
+
352
+ Nil
353
+
354
+ Anton Lim
355
+
356
+ 100,000
357
+
358
+ 100,000
359
+
360
+ Nil
361
+
362
+ Nil
363
+
364
+ Cunrong Chen
365
+
366
+ 100,000
367
+
368
+ 100,000
369
+
370
+ Nil
371
+
372
+ Nil
373
+
374
+ Denis Ivanchenko
375
+
376
+ 80,000
377
+
378
+ 80,000
379
+
380
+ Nil
381
+
382
+ Nil
383
+
384
+ Dmitry Duplishchev
385
+
386
+ 80,000
387
+
388
+ 80,000
389
+
390
+ Nil
391
+
392
+ Nil
393
+
394
+ Fuat Bal
395
+
396
+ 65,000
397
+
398
+ 65,000
399
+
400
+ Nil
401
+
402
+ Nil
403
+
404
+ Iveta Kokina
405
+
406
+ 120,000
407
+
408
+ 120,000
409
+
410
+ Nil
411
+
412
+ Nil
413
+
414
+ Laila Ozola
415
+
416
+ 120,000
417
+
418
+ 120,000
419
+
420
+ Nil
421
+
422
+ Nil
423
+
424
+ Leonids Beloglazovs
425
+
426
+ 120,000
427
+
428
+ 120,000
429
+
430
+ Nil
431
+
432
+ Nil
433
+
434
+ MD Mazharul Alam
435
+
436
+ 80,000
437
+
438
+ 80,000
439
+
440
+ Nil
441
+
442
+ Nil
443
+
444
+ Michael Nagel
445
+
446
+ 65,000
447
+
448
+ 65,000
449
+
450
+ Nil
451
+
452
+ Nil
453
+
454
+ Milan Lackanovic
455
+
456
+ 100,000
457
+
458
+ 100,000
459
+
460
+ Nil
461
+
462
+ Nil
463
+
464
+ Mingchun Shen
465
+
466
+ 100,000
467
+
468
+ 100,000
469
+
470
+ Nil
471
+
472
+ Nil
473
+
474
+ Mohi Ahamed
475
+
476
+ 80,000
477
+
478
+ 80,000
479
+
480
+ Nil
481
+
482
+ Nil
483
+
484
+ Nazmul Alam
485
+
486
+ 80,000
487
+
488
+ 80,000
489
+
490
+ Nil
491
+
492
+ Nil
493
+
494
+ Olha Marholych
495
+
496
+ 100,000
497
+
498
+ 100,000
499
+
500
+ Nil
501
+
502
+ Nil
503
+
504
+ Remi Martin Eikemo
505
+
506
+ 85,000
507
+
508
+ 85,000
509
+
510
+ Nil
511
+
512
+ Nil
513
+
514
+ Roman Vert
515
+
516
+ 100,000
517
+
518
+ 100,000
519
+
520
+ Nil
521
+
522
+ Nil
523
+
524
+ Rui Zhang
525
+
526
+ 100,000
527
+
528
+ 100,000
529
+
530
+ Nil
531
+
532
+ Nil
533
+
534
+ Sigita Berzina
535
+
536
+ 90,000
537
+
538
+ 90,000
539
+
540
+ Nil
541
+
542
+ Nil
543
+
544
+ Silva Rudasa
545
+
546
+ 120,000
547
+
548
+ 120,000
549
+
550
+ Nil
551
+
552
+ Nil
553
+
554
+ Syed Iftikharul Sakif
555
+
556
+ 80,000
557
+
558
+ 80,000
559
+
560
+ Nil
561
+
562
+ Nil
563
+
564
+ Tatyana Kim
565
+
566
+ 100,000
567
+
568
+ 100,000
569
+
570
+ Nil
571
+
572
+ Nil
573
+
574
+ Yevgeniya Gorislavets
575
+
576
+ 100,000
577
+
578
+ 100,000
579
+
580
+ Nil
581
+
582
+ Nil
583
+
584
+ 14 | Page
585
+
586
+ The named party beneficially owns and has sole voting and investment power over all shares or rights to these shares. The numbers in this table assume that none of the selling shareholders sells shares of common stock not being offered in this prospectus or purchases additional shares of common stock, and assumes that all shares offered are sold. The percentages are based on 2,360,000 shares of common stock issued and outstanding on the date of this prospectus.
587
+
588
+ Other than disclosed above, none of the selling shareholders:
589
+
590
+ 1.
591
+
592
+ has had a material relationship with us other than as a shareholder at any time within the past three years;
593
+
594
+ 2.
595
+
596
+ has ever been one of our officers or directors;
597
+
598
+ 3.
599
+
600
+ is a broker-dealer; or a broker-dealer's affiliate.
601
+
602
+ Plan of Distribution
603
+
604
+ 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.
605
+
606
+ The selling shareholders will sell our shares at $0.03 per share. We determined this offering price arbitrarily by adding a $0.02 premium to the last sale price of our common stock to investors. This offering is priced at the time of the commencement of the offering and must remain offered at such price during the entire duration of the offering.
607
+
608
+ The shares may also be sold in compliance with the Securities and Exchange Commission's Rule 144, when eligible.
609
+
610
+ 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.
611
+
612
+ We can provide no assurance that all or any of the common stock offered will be sold by the selling shareholders.
613
+
614
+ 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.
615
+
616
+ The selling shareholders must comply with the requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934 in the offer and sale of the common stock. The selling shareholders must comply with the enumerated conditions for the duration of the offering:
617
+
618
+
619
+
620
+ 1.
621
+
622
+ Not engage in any stabilization activities in connection with our common stock;
623
+
624
+
625
+
626
+
627
+
628
+
629
+
630
+
631
+ 2.
632
+
633
+ 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
634
+
635
+
636
+
637
+
638
+
639
+
640
+
641
+
642
+ 3.
643
+
644
+ 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.
645
+
646
+ 15 | Page
647
+
648
+ 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).
649
+
650
+ The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the Commission, which contains:
651
+
652
+ -
653
+
654
+ a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
655
+
656
+ -
657
+
658
+ 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;
659
+
660
+ -
661
+
662
+ 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;
663
+
664
+ -
665
+
666
+ a toll-free telephone number for inquiries on disciplinary actions;
667
+
668
+ -
669
+
670
+ a definition of significant terms in the disclosure document or in the conduct of trading penny stocks; and
671
+
672
+ -
673
+
674
+ such other information and is in such form (including language, type, size, and format) as the Commission shall require by rule or regulation.
675
+
676
+ The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with:
677
+
678
+ -
679
+
680
+ bid and offer quotations for the penny stock;
681
+
682
+ -
683
+
684
+ the compensation of the broker-dealer and its salesperson in the transaction;
685
+
686
+ -
687
+
688
+ 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
689
+
690
+ -
691
+
692
+ monthly account statements showing the market value of each penny stock held in the customer's account.
693
+
694
+ 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.
695
+
696
+ 16 | Page
697
+
698
+ Description of Securities
699
+
700
+ General
701
+
702
+ Our authorized capital stock consists of 75,000,000 shares of common stock at a par value of $0.001 per share.
703
+
704
+ Common Stock
705
+
706
+ As of
707
+
708
+ May 30
709
+
710
+ , 2013 there were 8,360,000 shares of our common stock issued and outstanding held by 26 stockholders of record.
711
+
712
+ 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.
713
+
714
+ 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.
715
+
716
+ Preferred Stock
717
+
718
+ We do not have an authorized class of preferred stock.
719
+
720
+ Dividend Policy
721
+
722
+ 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.
723
+
724
+ Share Purchase Warrants
725
+
726
+ We have not issued and do not have any outstanding warrants to purchase shares of our common stock.
727
+
728
+ Options
729
+
730
+ We have not issued and do not have any outstanding options to purchase shares of our common stock.
731
+
732
+ Convertible Securities
733
+
734
+ 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.
735
+
736
+ 17 | Page
737
+
738
+ Interests of Named Experts and Counsel
739
+
740
+ 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.
741
+
742
+ Scott D. Olson, Esq. has provided an opinion on the validity of our common stock.
743
+
744
+ 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.
745
+
746
+ Description of Business
747
+
748
+ Overview
749
+
750
+ We are a development stage company which plans to engage in the distribution of teeth whitening strips in Latvia. We were incorporated in the State of Nevada on February 9, 2012 and cannot state with certainty whether we will achieve profitability. To date, our business operations have been limited to primarily the development of a business plan, the completion of private placements for the offer and sale of our common stock and the signing of the sales distribution agreement with Aldent LLC, a privet Latvian company. As of today, gross profit of $2,475 was recognized from the sale transaction.
751
+
752
+ 100% of your revenues to date are derived from our one customer.
753
+
754
+ We have earned minimal revenues since inception and have minimal assets. Our plan of operation is forward-looking. It is likely that we will not be able to achieve profitability and might need to cease operations due to the lack of funding. Our business office is located at Darzinu 22 linija, 10 Majas, Riga, Latvia LV-1063. Our telephone number is (702) 605-0519.
755
+
756
+ We intend to distribute teeth whitening strips in Latvia. Our current cash reserves are not sufficient to meet our obligations for the next twelve-month period. As a result, we will need to seek additional funding in the near future. The most likely source of this additional capital is through the sale of additional shares of common stock or advances from our sole officer and director. Irina Petrzhikovskaya, our sole officer and director, has agreed to loan the Company funds to meet our obligations and complete our 12-months business plan. However, Ms. Petrzhikovskaya has no firm commitment, arrangement or legal obligation to advance or loan funds to the Company.
757
+
758
+ Product Description
759
+
760
+ A child's deciduous teeth are generally whiter than the adult teeth that follow. As a person ages the adult teeth often become darker due to changes in the mineral structure of the tooth, as theenamel becomes less porous and phosphate-deficient. Teeth can also become stained by bacterial pigments, food-goods and vegetables rich with carotenoids or xanthonoids. Certain antibacterial medications (like tetracycline) can also cause teeth stains or a reduction in the brilliance of the enamel. Ingesting colored liquids like coffee, tea and red wine can also discolor teeth. There are several whitening methods to restores natural teeth color. According to the American Dental Association, different whitening include: in-office bleaching, which is applied by a professional dentist; at-home bleaching, which is used at home by the patient; over-the-counter, which is applied by patients, over a counter; and options called non-dental, which are offered at mall kiosks, spas, salons etc. There is also the option of whitening one's own teeth by natural teeth bleaching methods and stain out swabs.
761
+
762
+ 18 | Page
763
+
764
+ Whitening Strips are another popular over-the-counter method of at-home whitening of the teeth. The product is used by placing a disposable plastic strip directly onto the teeth that contains an enamel safe whitening gel. The strips are coated with whitening gel and are usually applied only to the tooth surfaces that are visible when smiling. Typically, the whitening strips are applied to the front surfaces of the front teeth. Some of the whitening strips have a higher concentration of whitening gel and as a result, quicker whitening results. These whitening gel coated strips should not be used on children under age 12. Exposure of the gel on the strips to the gingiva (gums) should be avoided since it can cause irritation to the tissue. Overall, the teeth whitening strips provide a quick, affordable and convenient method of whitening the most visible teeth. Teeth whitening strips are a great low-cost alternative to costly teeth whitening at the dentist.
765
+
766
+ We expect to be able to purchase our inventory from on-line stores. We will be purchasing our inventory from different online stores. As of today we have no agreements with any stores. We plan on selling different brands of whitening strips. We will take prepayments from our clients prior to purchasing and shipment. Potential customers will have two options to pay for the product: by wire transfer or by sending a check/money order. Our customers will be responsible to cover the shipping costs, custom duties, taxes or any other additional charges that might incur.
767
+
768
+ As of today, we executed Sales Distribution Agreement with Aldent LLC and filled Aldent's first orders for our products and sold to it our teeth whitening strips. As a result we realized our net income in the amount of $1,404.
769
+
770
+ 100% of your revenues to date are derived from our one customer.
771
+
772
+ This income was achieved through our contractual relationship with Aldent.
773
+
774
+ Marketing Our Product
775
+
776
+ We intend to enter into agreements with numerous local dental care product distributors, dental and cosmetic clinics and dentists who can order teeth whitening strips from us. As of today, we have signed a Sales Distribution Agreement with Aldent LLC, a private Latvian company. We have not identified any other potential counterparties to these agreements and we have not entered into any discussions with other distributors.
777
+
778
+ We intend to use marketing strategies, such as web advertisements, direct mailing, and phone calls to acquire potential customers. We plan to develop a website to market and display our products. As of the date of this prospectus we have not yet identified or registered any domain names for our website. To accomplish this, we plan to contract an independent web designing company. Our website will describe our product in detail, show our contact information, and include some general information and pictures of teeth whitening strips. 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 and metatags, and utilizing link and banner exchange options. We intend to promote our website by displaying it on our promotion materials.
779
+
780
+ To draw attention from potential customers and end users we plan to market and advertise our company though social networking. Websites such as Facebook and Twitter have come a long way in only a few years to be household names all over the world. We intend to use these websites to spread out information about our whitening strips. We intend to implement word of mouth advertising into our business model. We believe a huge marketing opportunity on the internet is spreading word of mouth, a form of free advertising.
781
+
782
+ We also plan to attend trade shows in dental industry to showcase our product with a view to find new customers. We will intend to continue our marketing efforts during the life of our operations. We intend to spend at least $11,000 on marketing efforts during the first year. 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.
783
+
784
+ 19 | Page
785
+
786
+ Competition
787
+
788
+ The dental care products distribution industry is extremely fragmented and competitive. Competitors will include companies with substantial customer bases and working history. There can be no assurance that we can maintain a competitive position against current or future competitors, particularly those with greater financial, 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. There can be no assurance that we will be able to compete successfully against current and future competitors, and competitive pressures faced by us may have a material adverse effect on our business, financial condition and results of operations.
789
+
790
+ Some of the competitive factors that may affect our business are as follows:
791
+
792
+ 1. Number of Competitors Increase: other companies may follow our business model of distributing lower priced teeth whitening products, which will reduce our competitive edge.
793
+
794
+ 2. Price: Our competitors may be selling similar product at a lower price forcing us to lower our prices as well and possibly sell our product at loss.
795
+
796
+ 3. Substitute Products: teeth whitening strips may be substituted by other whitening products. Consumer preferences for may change overtime which may affect our business positively or negatively depending on whether whitening strips is preferred more or less.
797
+
798
+ We also expect the competition from the online stores where we will be purchasing our inventory as our potential customers can buy products directly from them. If this happens our business would likely fail.
799
+
800
+ Sales Distribution Agreement
801
+
802
+ On January 14, 2013 we signed a Sales Distribution Agreement with Aldent LLC, a private Latvian company. The agreement with Aldent LLC contains the following material terms:
803
+
804
+ 1.
805
+
806
+ Alphala agrees to supply the Products and fill Aldent's written orders for Products in a timely manner, and in any event will use its best efforts to fill placed orders within a period of thirty (30) days or less following receipt of prepayment.
807
+
808
+ 2.
809
+
810
+ Aldent shall prepay for Products under this Agreement by wire transfer or credit card prior to product shipment.
811
+
812
+ 3.
813
+
814
+ The currency of this Agreement is American dollars.
815
+
816
+ 4.
817
+
818
+ Alphala is entitled to make reasonable adjustment(s) to the price of the products.
819
+
820
+ 5.
821
+
822
+ Aldent will pay shipping, unless other arrangements have been made.
823
+
824
+ 6.
825
+
826
+ Termination of the Agreement may be commenced upon thirty (30) days written Notice. Termination will be effective sixty days (60) days following the date that Notice of termination is received by the non-terminating Party.
827
+
828
+ 7.
829
+
830
+ The Agreement is non-exclusive; therefore, Alphala can distribute the Products to any third party who may then attempt to sell, market, or distribute the Products to the General Public.
831
+
832
+ 8.
833
+
834
+ There are no set minimum quota requirements for sales under this Agreement. Alphala is obliged to assist in the completion of each sales order regardless of the quantity. Orders will be taken on a case by cases basis by Alphala.
835
+
836
+ A copy of the Sales Distribution Agreement is filed as Exhibit 10.1 to this registration statement.
837
+
838
+ As of today, we depend on one major customer, Aldent, LLC. Our agreement with this company does not prevent it from buying similar products from our competitors or directly from no-line stores. If this company decreased, modified or terminated its association with us for any other reason, we would suffer an interruption in our business unless and until we found new customers. If we were unable to find a substitute for that customer, our business would likely fail. We cannot predict what the likelihood would be of finding an acceptable substitute customer.
839
+
840
+ Description of property
841
+
842
+ We do not have an ownership or leasehold interest in any property. We have no plans to hold inventory of teeth whitening strips in the United States or in Latvia, and we have no plans to obtain the space necessary to hold such inventory.
843
+
844
+ 20 | Page
845
+
846
+ Insurance
847
+
848
+ 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.
849
+
850
+ Employees. Identification of Certain Significant Employees
851
+
852
+ We are a development stage company and currently have no employees, other than our sole officer and director Ms. Irina Petrzhikovskaya. We intend to hire additional employees on an as needed basis.
853
+
854
+ Research and Development Expenditures
855
+
856
+ We have not incurred any other research or development expenditures since our incorporation.
857
+
858
+ Government Regulation
859
+
860
+ We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to export and import of products to European Union and to operation of any facility in any jurisdiction which we would conduct activities. We believe that government regulation will have no material impact on the way we conduct our business. We do not need to receive any government approvals necessary to conduct our business, however we will have to comply with all applicable export and import regulations.
861
+
862
+ Subsidiaries
863
+
864
+ We do not have any subsidiaries.
865
+
866
+ Patents and Trademarks
867
+
868
+ We do not own, either legally or beneficially, any patents or trademarks.
869
+
870
+ Offices
871
+
872
+ Our office is currently located at Darzinu 22 linija, 10 Majas, Riga, Latvia LV-1063. Our telephone number is (702) 605-0519. This is the office of our Sole Officer and Director, Ms. Irina Petrzhikovskaya. We do not pay any rent to Ms. Petrzhikovskaya and there is no agreement to pay any rent in the future. As of the date of this prospectus, we have not sought or selected a new office location. We plan to establish an office in Latvia by the end of June, 2013.
873
+
874
+ Legal Proceedings
875
+
876
+ 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.
877
+
878
+ 21 | Page
879
+
880
+ Market for Common Equity and Related Stockholder Matters
881
+
882
+ No Public Market for Common Stock
883
+
884
+ There is presently no public market for our common stock. We anticipate applying for trading of our common stock on the over the counter bulletin board upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize.
885
+
886
+ Stockholders of Our Common Shares
887
+
888
+ As of the date of this registration statement we have 26 registered shareholders.
889
+
890
+ Rule 144 Shares
891
+
892
+ A total of 6,000,000 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.
893
+
894
+ 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:
895
+
896
+
897
+
898
+
899
+
900
+ 1% of the total number of securities of the same class then outstanding, which will equal 83,600 shares as of the date of this prospectus; or
901
+
902
+
903
+
904
+
905
+
906
+
907
+
908
+
909
+
910
+
911
+
912
+
913
+
914
+
915
+
916
+
917
+
918
+ 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;
919
+
920
+
921
+
922
+ 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.
923
+
924
+ As of the date of this prospectus, persons who are our affiliates hold all of the 6,000,000 shares that may be sold pursuant to Rule 144. Under Rule 144 the shares of an issuer that is not required to file reports under the Exchange Act can be publicly sold, subject to volume restrictions and restrictions on the manner of sale, commencing one year after their acquisition.
925
+
926
+ Stock Option Grants
927
+
928
+ To date, we have not granted any stock options.
929
+
930
+ Registration Rights
931
+
932
+ We have not granted registration rights to the selling shareholders or to any other persons.
933
+
934
+ 22 | Page
935
+
936
+ Dividends
937
+
938
+ 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:
939
+
940
+ 1.
941
+
942
+ we would not be able to pay our debts as they become due in the usual course of business; or
943
+
944
+
945
+
946
+
947
+
948
+ 2.
949
+
950
+ 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.
951
+
952
+
953
+
954
+ We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.
955
+
956
+ Management s Discussion and Analysis of Financial Condition and Results of OperationsWe are a development stage corporation. To date, our business operations have been limited to primarily, the development of a business plan and the completion of private placements for the offer and sale of our common stock. As of today, we have realized revenue in the amount of $2,475 and have earned minimal revenues and have minimal assets.. 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.
957
+
958
+ Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. We are not raising any money in this offering. Our only sources for cash at this time are investments by shareholders in our company and cash advances from our sole officer and director Irina Petrzhikovskaya. 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.
959
+
960
+ Our office is currently located at Darzinu 22 linija, 10 Majas, Riga, Latvia LV-1063. Our telephone number is (702) 605-0519. This is the office of our Sole Officer and Director, Ms. Irina Petrzhikovskaya. We do not pay any rent to Ms. Petrzhikovskaya and there is no agreement to pay any rent in the future. As of the date of this prospectus, we have not sought or selected a new office location. We plan to establish an office in Latvia by the end of June, 2013. 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.
961
+
962
+ 23 | Page
963
+
964
+ 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:
965
+
966
+
967
+
968
+
969
+
970
+
971
+
972
+ have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
973
+
974
+
975
+
976
+
977
+
978
+
979
+
980
+ provide an auditor attestation with respect to management s report on the effectiveness of our internal controls over financial reporting;
981
+
982
+
983
+
984
+
985
+
986
+
987
+
988
+ 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);
989
+
990
+
991
+
992
+
993
+
994
+
995
+
996
+
997
+
998
+ submit certain executive compensation matters to shareholder advisory votes, such as say-on-pay and say-on-frequency; and
999
+
1000
+
1001
+
1002
+
1003
+
1004
+
1005
+
1006
+
1007
+
1008
+ 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.
1009
+
1010
+
1011
+
1012
+ 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.
1013
+
1014
+ 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.
1015
+
1016
+ Following the date of this registration statement, our business plan for the next 12 months is as follows:
1017
+
1018
+ April 2013-June 2013: Set up Office. Estimated cost $2,500.
1019
+
1020
+ By the end of June, 2013, we plan to set up office in and acquire the necessary equipment to begin our business operations. We believe that it will cost at least $2,500 to set up office and obtain the necessary equipment to begin operations. Our sole officer and director will handle our administrative duties.
1021
+
1022
+ 24 | Page
1023
+
1024
+ May, 2013 September, 2013: Negotiate agreements with potential customers.
1025
+
1026
+ Initially, our sole officer and director, Ms. Petrzhikovskaya, will look for potential customers. On January 14, 2013, we signed a Sales Distribution Agreement with Aldent LLC, a private Latvian company. During June-September, 2013 we plan to contact and start negotiations with other potential customers in Latvia. We will negotiate terms and conditions of collaboration. We will continue to search for new potential customers during the life of our operations. As of
1027
+
1028
+ May 30
1029
+
1030
+ , 2013 Aldent LLC is the only Latvian company with which we have signed service agreement.
1031
+
1032
+ Even though the negotiation of additional 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.
1033
+
1034
+ 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.
1035
+
1036
+ June, 2013- September, 2013: Develop Our Website. Estimated cost $3,000
1037
+
1038
+ Our director, Ms. Petrzhikovskaya will be in charge of registering our web domain. We have not registered any web domain as of the date of this prospectus. Once we register our web domain, we plan to hire a web designer to help us design and develop our website. We do not have any written agreements with any web designers at current time. The website development costs, including site design and implementation will be approximately $3,000. Updating and improving our website will continue throughout the lifetime of our operations.
1039
+
1040
+ August, 2013- December, 2013: Commence Marketing Campaign. Estimated cost $11,000.
1041
+
1042
+ Once we commence website development, we will begin to market our products. Initially, our sole officer and director, Irina Petrzhikovskaya, will look for potential customers. We intend to use marketing strategies, such as web advertisements, direct mailing, and phone calls. We also expect to get new clients from Internet, social networking and "word of mouth" advertising. We intend to spend about $11,000 on marketing efforts during the first year. Marketing is an ongoing matter that will continue during the life of our operations.
1043
+
1044
+ October, 2013-March, 2014: Hire a Salesperson. Estimated cost $6,000
1045
+
1046
+ Initially, our sole officer and director will look for potential customers for our product. Once we begin to sell our teeth whitening strips we may hire one part-time salesperson with good knowledge and broad connections to the dental industry to introduce our product. This individual will be an independent contractor compensated solely in the form of commissions.
1047
+
1048
+ 25 | Page
1049
+
1050
+ We therefore expect to incur the following costs in the next 12 months in connection with our business operations:
1051
+
1052
+ Office set up
1053
+
1054
+ $2,500
1055
+
1056
+ Marketing costs
1057
+
1058
+ $11,000
1059
+
1060
+ Website development costs
1061
+
1062
+ $3,000
1063
+
1064
+ Estimated cost of this offering
1065
+
1066
+ $10,000
1067
+
1068
+ Costs associated with being a publicly reporting company
1069
+
1070
+ $10,000
1071
+
1072
+ Total
1073
+
1074
+ $36,500
1075
+
1076
+ Our current cash reserves are not sufficient to meet our obligations for the next twelve-month period. As a result, we will need to seek additional funding in the near future. We are not raising any money in this offering. Our only sources for cash at this time are investments by shareholders in our company and cash advances from our sole director, Ms. Irina Petrzhikovskaya. 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.
1077
+
1078
+
1079
+
1080
+ Limited operating history; need for additional capital
1081
+
1082
+ There is no historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage operations and have generated just $2,475 in revenue. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
1083
+
1084
+ As of
1085
+
1086
+ May 30
1087
+
1088
+ , 2013 our cash balance is $24,047. We can currently remain in operation without additional financing for approximately 8 month. Our current cash reserves are not sufficient to meet our obligations for the next twelve-month period. As a result, we will need to seek additional funding in the near future. We anticipate that additional funding will be from the sale of additional common stock. We may seek to obtain short-term loans from our director as well, although there is no guarantee that we will be able obtain such funds. Irina Petrzhikovskaya, our sole officer and director, has verbally agreed to loan the company funds. However, there is no written agreement in place and no limit on the amount of funds that she has agreed to provide has been indicated. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our director to meet our obligations over the next twelve months. We do not have any arrangements in place for any future equity financing. If we are unable to raise the required financing, our operations could be materially adversely affected and we could be forced to cease operations.
1089
+
1090
+ Results of Operations for Period Ending April 30, 2013
1091
+
1092
+ Since our inception on February 9, 2012 to April 30, 2013, we have realised net loss of $5,841. As of April 30, 2013 we had cash of $24,047 in our bank accounts. However, we anticipate that we will incur substantial losses over the next 12 months.
1093
+
1094
+ 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.
1095
+
1096
+ 26 | Page
1097
+
1098
+ Changes In and Disagreements with Accountants
1099
+
1100
+ We have had no changes in or disagreements with our accountants.
1101
+
1102
+ Available Information
1103
+
1104
+ 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.
1105
+
1106
+ 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.
1107
+
1108
+ Reports to Security Holders
1109
+
1110
+ 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.
1111
+
1112
+ 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.
1113
+
1114
+ Directors, Executive Officers, Promoters and Control Persons
1115
+
1116
+ Our executive officer and director and his age as of the date of this prospectus is as follows:
1117
+
1118
+ 27 | Page
1119
+
1120
+ Director:
1121
+
1122
+ Name of Director
1123
+
1124
+
1125
+
1126
+ Age
1127
+
1128
+
1129
+
1130
+
1131
+
1132
+
1133
+
1134
+
1135
+
1136
+
1137
+
1138
+
1139
+
1140
+
1141
+
1142
+ Irina Petrzhikovskaya
1143
+
1144
+
1145
+
1146
+ 32
1147
+
1148
+
1149
+
1150
+
1151
+
1152
+
1153
+
1154
+
1155
+
1156
+
1157
+
1158
+
1159
+
1160
+
1161
+
1162
+ Executive Officers:
1163
+
1164
+
1165
+
1166
+
1167
+
1168
+
1169
+
1170
+
1171
+
1172
+
1173
+
1174
+
1175
+
1176
+
1177
+
1178
+
1179
+
1180
+
1181
+
1182
+ Name of Officer
1183
+
1184
+
1185
+
1186
+ Age
1187
+
1188
+
1189
+
1190
+ Office
1191
+
1192
+
1193
+
1194
+
1195
+
1196
+
1197
+
1198
+
1199
+
1200
+
1201
+
1202
+ Irina Petrzhikovskaya
1203
+
1204
+
1205
+
1206
+ 32
1207
+
1208
+
1209
+
1210
+ President, Chief Executive Officer, Treasurer, Chief Financial Officer and Chief Accounting Officer, Secretary
1211
+
1212
+ Biographical Information
1213
+
1214
+ Set forth below is a brief description of the background and business experience of our officers and sole director for the past five years.
1215
+
1216
+ Ms. Petrzhikovskaya owns 71.77% of the outstanding shares of our common stock.
1217
+
1218
+ Ms. Irina Petrzhikovskaya has acted as our President, Chief Executive Officer, Treasurer, Chief Financial Officer, Chief Accounting Officer, Secretary and sole member of our board of directors since our incorporation on February 9, 2012.
1219
+
1220
+ At the time of incorporation she owned 100% of the company s shares.
1221
+
1222
+ As such,
1223
+
1224
+ she appointed herself as
1225
+
1226
+ our sole President, Chief Executive Officer, Treasurer, Chief Financial Officer, Chief Accounting Officer, Secretary and sole member of our board of directors.
1227
+
1228
+ There were no other persons who nominated and appointed Ms. Petrzhikovskaya as a director.
1229
+
1230
+ This decision did not in any manner relate to Ms. Petrzhikovskaya s previous employments. Ms. Petrzhikovskaya s previous experience, qualifications, attributes or skills were not considered when he 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. Since 2006, Ms. Petrzhikovskaya has been working as sole proprietor in real estate. She owns few income properties in Riga, Latvia. Ms. Petrzhikovskaya intends to devote close to 20 hours a week to planning and organizing activities of Alphala Corp.
1231
+
1232
+ During the past ten years, Ms. Petrzhikovskaya has not been the subject to any of the following events:
1233
+
1234
+ 1. Any bankruptcy petition filed by or against any business of which Ms. Petrzhikovskaya was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time.
1235
+
1236
+ 2. Any conviction in a criminal proceeding or being subject to a pending criminal proceeding.
1237
+
1238
+ 3. An order, judgment, or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting Mr. Petrzhikovskaya s involvement in any type of business, securities or banking activities.
1239
+
1240
+ 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.
1241
+
1242
+ 28 | Page
1243
+
1244
+ Significant Employees
1245
+
1246
+ We have no significant employees other than our officers and sole director.
1247
+
1248
+ Audit Committee Financial Expert
1249
+
1250
+ 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.
1251
+
1252
+ Conflicts of Interest
1253
+
1254
+ Ms. Irina Petrzhikovskaya, our President will be devoting approximately 20 hours/week to our operations. Because Ms. Petrzhikovskaya will only be devoting limited time to our operations, our operations may be sporadic and occur at times which are convenient to her. As a result, operations may be periodically interrupted or suspended which could result in a lack of revenues and a cessation of operations.
1255
+
1256
+ Executive Compensation
parsed_sections/prospectus_summary/2013/CIK0001567503_turnkey_prospectus_summary.txt ADDED
@@ -0,0 +1,1733 @@
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1
+ Summary Financial Information
2
+
3
+ The following financial information summarizes the more complete historical financial information at the end of this prospectus.
4
+
5
+
6
+
7
+ As of March 31, 2013 (Unaudited)
8
+
9
+ Balance Sheet
10
+
11
+
12
+
13
+
14
+
15
+ Total Assets
16
+
17
+
18
+
19
+ $
20
+
21
+ 20,340
22
+
23
+ Total Liabilities
24
+
25
+
26
+
27
+ $
28
+
29
+ 512
30
+
31
+ Stockholders Equity
32
+
33
+
34
+
35
+ $
36
+
37
+ 19,828
38
+
39
+
40
+
41
+ Period from September 7, 2012 (date of inception) to March 31,2013 (Unaudited)
42
+
43
+ Income Statement
44
+
45
+
46
+
47
+
48
+
49
+ Revenue
50
+
51
+
52
+
53
+ $
54
+
55
+ 4,870
56
+
57
+ Total Expenses
58
+
59
+
60
+
61
+ $
62
+
63
+ 7,004
64
+
65
+ Corporate Income Taxes
66
+
67
+
68
+
69
+ $
70
+
71
+ 238
72
+
73
+ Net Loss
74
+
75
+
76
+
77
+ $(2,372)
78
+
79
+ Risk Factors related to our Business and Industry
80
+
81
+ Please consider the following risk factors before deciding to invest in our common stock. Any investment in our common stock is speculative. You should carefully consider the risks described below and all of the information contained in this Prospectus before deciding whether to purchase our common stock. If any of the following risks actually occur, our business, financial condition and results of operations could be harmed. If any of these risks materialize, the trading price of our common stock could decline and you may lose all or part of your investment. All material risks were included in this section.
82
+
83
+ WE LACK AN OPERATING HISTORY AND THERE IS NO ASSURANCE OUR FUTURE OPERATIONS WILL RESULT IN SIGNIFICANT REVENUES OR PROFITABILITY. IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE MAY SUSPEND OR CEASE OPERATIONS.
84
+
85
+ We were incorporated on September 7, 2012, and since inception through March 31, 2013 the Company has generated revenues of $4,870 and has accumulated losses of $2,372. We have little operating history upon which an evaluation of our future success or failure can be made. Based upon current plans, we expect to incur operating losses in the foreseeable future because we will be incurring large expenses consisting mostly of general administrative expenses, business development, marketing costs, support materials and costs associated with being a publicly reporting company and generating small revenues. Failure to generate significant revenues in the future will cause us to go out of business.
86
+
87
+ IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS MAY FAIL.
88
+
89
+ While on March 31, 2013, we had cash on hand of $20,340, our current cash reserves are not sufficient to meet our obligations for the next twelve-month period. We anticipate that the approximate cost of the offering will be $
90
+
91
+ 16,750
92
+
93
+ ($
94
+
95
+ 15,670
96
+
97
+ has already been paid to cover for the offering expenses and comprised $2,500 for the legal fees, $4,750 for the audit fees, $
98
+
99
+ 8,400
100
+
101
+ for the transfer agent fees and $20 for the SEC registration fees). We anticipated that the minimum capital necessary to fund our planned operations for the 12-month period would be approximately $
102
+
103
+ 38,750
104
+
105
+ .
106
+
107
+ The twelve-month period is being measured from January 30, 2013 - the date when our registration statement was filed.
108
+
109
+ As of
110
+
111
+ June 25
112
+
113
+ , 2013 we have already incurred and paid $
114
+
115
+ 15,670
116
+
117
+ included into $
118
+
119
+ 38,750
120
+
121
+ and therefore the estimated minimum capital necessary to fund our planned operations
122
+
123
+ is
124
+
125
+ approximately $
126
+
127
+ 23,080
128
+
129
+ and will be needed for general administrative expenses, business development, marketing costs, support materials and costs associated with being a publicly reporting company. Since inception through March 31, 2013 the Company has generated revenues of $4,870 and has accumulated losses of $2,372. In order to expand our business operations, we anticipate that we will have to raise additional funding. If we are not able to raise the capital necessary to fund our business expansion objectives, we may have to delay the implementation of our business plan.
130
+
131
+ 7 | Page
132
+
133
+ 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.
134
+
135
+ 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, revenues realized pursuant to the agreement signed with Finca La Esmeralda or advances from our sole director.
136
+
137
+ 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.
138
+
139
+ 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.
140
+
141
+ Vanell, Corp. was incorporated on September 7, 2012. We are a development stage company. Even though we have earned revenues of $
142
+
143
+ 6,870
144
+
145
+ as of the date of this prospectus the company has accumulated losses of $2,372 since inception to March 31, 2013 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 consulting services with potential customers, and the signing of the consulting service agreement with Finca La Esmeralda, a private El Salvador 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.
146
+
147
+ We cannot guarantee that we will be successful in generating significant 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.
148
+
149
+ WE FACE STRONG COMPETITION FROM LARGER AND WELL ESTABLISHED COMPANIES, WHICH COULD HARM OUR BUSINESS AND ABILITY TO OPERATE PROFITABLY.
150
+
151
+ Our industry is competitive. There are many different companies that provide consulting services in commercial cultivation and processing of coffee in El Salvador 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.
152
+
153
+ COMPETITION FOR POTENTIAL CUSTOMER ACCOUNTS IS INTENSE. FAILURE TO COMPETE WILL AFFECT OUR FINANCIAL CONDITION.
154
+
155
+ Winning customers will be critical to our ability to grow our business. Competition for potential customer accounts is intense. Failing to obtain orders for our services from potential customers, for competitive reasons or otherwise, would materially adversely affect our operating results and financial condition.
156
+
157
+ WE PROVIDE OUR CONSULTING SERVICES TO ONE CUSTOMER. IF THAT CUSTOMER DECREASED, MODIFIED OR TERMINATED ITS RELATIONSHIP WITH US, OUR BUSINESS WOULD LIKELY FAIL IF WE ARE UNABLE TO FIND A SUBSTITUTE FOR THAT CUSTOMER.
158
+
159
+ We signed the consulting service agreement with Finca La Esmeralda, a private El Salvador company. Our agreement with this company does not prevent it from termination of its relationship with us. If this company decreased, modified or terminated its association with us for any reason, we would suffer an interruption in our business unless and until we found a substitute for that customer. If we were unable to find a substitute for that customer, our business would likely fail. We cannot predict what the likelihood would be of finding an acceptable substitute customer.
160
+
161
+ 8 | Page
162
+
163
+ PRICE COMPETITION COULD NEGATIVELY AFFECT OUR GROSS MARGINS.
164
+
165
+ 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.
166
+
167
+ BECAUSE MR. MAGANA, OUR SOLE OFFICER AND DIRECTOR, IS NOT A RESIDENT OF THE UNITED STATES IT MAY BE DIFFICULT TO ENFORCE ANY LIABILITIES AGAINST HIM.
168
+
169
+ Accordingly, if an event occurs that gives rise to any liability, shareholders would likely have difficulty in enforcing such liabilities because Mr. Francisco Douglas Magana, 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.
170
+
171
+ BECAUSE 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.
172
+
173
+ While we are organized under the laws of State of Nevada, our 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 El Salvador, they will be outside of the jurisdiction of United States courts to administer, if we become subject of an insolvency or bankruptcy proceeding. As a result, if we declare bankruptcy or insolvency, our shareholders may not receive the distributions on liquidation that they would otherwise be entitled to if our assets were to be located within the United States under United States bankruptcy laws.
174
+
175
+ WE MAY BE EXPOSED TO POTENTIAL RISKS RESULTING FROM NEW REQUIREMENTS UNDER SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002.
176
+
177
+ 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.
178
+
179
+ 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.
180
+
181
+ 9 | Page
182
+
183
+ AS AN EMERGING GROWTH COMPANY UNDER THE JOBS ACT, WE ARE PERMITTED TO RELY ON EXEMPTIONS FROM CERTAIN DISCLOSURE REQUIREMENTS.
184
+
185
+ 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:
186
+
187
+ -
188
+
189
+ have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
190
+
191
+ -
192
+
193
+ 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);
194
+
195
+ -
196
+
197
+ submit certain executive compensation matters to shareholder advisory votes, such as say-on-pay and say-on-frequency; and
198
+
199
+ -
200
+
201
+ 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.
202
+
203
+
204
+
205
+ 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.
206
+
207
+ 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.
208
+
209
+ 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.
210
+
211
+ BECAUSE OUR SOLE OFFICER AND DIRECTOR HAS OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
212
+
213
+ Our sole officer and director, Mr. Francisco D. Magana, will only be devoting limited time to our operations. Mr. Magana intends to devote approximately 25 hours a week of his 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 him. 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 possible that the demands on Mr. Magana from his other obligations could increase with the result that he would no longer be able to devote sufficient time to the management of our business. In addition, Mr. Magana may not possess sufficient time for our business if the demands of managing our business increase substantially beyond current levels.
214
+
215
+ 10 | Page
216
+
217
+ BECAUSE OUR SOLE DIRECTOR HAS AN INTEREST IN A COMPANY INVOLVED IN THE SAME INDUSTRY, THERE IS A POTENTIAL CONFLICT OF INTEREST, INCLUDING THE AMOUNT OF TIME HE IS ABLE TO DEDICATE TO VANELL, CORP. AND ITS BUSINESS.
218
+
219
+ Our sole director Mr. Magana is associated with another company that is engaged in business activities similar to those conducted by us. Mr. Magana is owner of the agricultural company FDMag S.A. de C.V. while also providing consulting services to commercial coffee growers in El Salvador. FDMag S.A. de C.V. is not an affiliate of Vanell, Corp. Potential conflict of interest may arise in future that may cause our business to fail, including conflict of interest in allocating Mr. Magana 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, which is inconsistent with Mr. Magana s fiduciary duties under Nevada state law that provides that corporations may include a provision in their articles of incorporation relieving directors of monetary liability for breach of their fiduciary duty as directors, provided that such provision shall not eliminate or limit the liability of a director for any beach of the director s duty of loyalty to the corporation and its shareholders. While our sole officer and director has verbally agreed to present business opportunities first to us, subject to any pre-existing duty he may have, we have not adopted a policy that expressly prohibits our sole officer and director Mr. Magana 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 Mr. Magana may favor him own interests and the interests of FDMag S.A. de C.V. over our interests and those of our shareholders, which could have a material adverse effect on our business and results of operations.
220
+
221
+ IF MR. MAGANA, 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.
222
+
223
+ We extremely depend on the services of our sole officer and director, Mr. Magana, for the future success of our business. The loss of the services of Mr. Magana could have an adverse effect on our business, financial condition and results of operations. If he 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.
224
+
225
+ BECAUSE OUR SOLE OFFICER AND DIRECTOR OWNS 77.84% OF OUR ISSUED AND OUTSTANDING COMMON STOCK, HE COULD MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO MINORITY SHAREHOLDERS.
226
+
227
+ Our sole officer and director, Francisco Magana, owns approximately 77.32% of the outstanding shares of our common stock. However, Francisco Douglas Magana and Claudia Morales de Magana are husband and wife. Accordingly, each is deemed to be the beneficial owners of their spouse s shares. Therefore the total approximate percentage of shares, including Claudia Morales de Magana s shares, owned by our sole officer and director Mr. Francisco Douglas Magana is 77.84%. Accordingly, he will have a significant influence in determining the outcome of all corporate transactions or other matters, including mergers, consolidations, and the sale of all or substantially all of our assets. He 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.
228
+
229
+ 11 | Page
230
+
231
+ WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE.
232
+
233
+ 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.
234
+
235
+ ANY ADDITIONAL FUNDING WE ARRANGE THROUGH THE SALE OF OUR COMMON STOCK WILL RESULT IN DILUTION TO EXISTING SHAREHOLDERS.
236
+
237
+ We must raise additional capital in order for our business plan to succeed. We are not raising any money in this offering. Our most likely source of additional capital will be through the sale of additional shares of common stock. Such stock issuances will cause stockholders' interests in our company to be diluted. Such dilution will negatively affect the value of investors shares.
238
+
239
+ 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.
240
+
241
+ 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.
242
+
243
+ 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.
244
+
245
+ 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.
246
+
247
+ 12 | Page
248
+
249
+ On April 1, 2013 we signed the agreement with Spartan Securities, Ltd. to file the Form 211 listing application for Vanell, Corp. with FINRA. 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.
250
+
251
+ 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.
252
+
253
+ 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.
254
+
255
+ 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.
256
+
257
+ There is currently no established public trading market for our securities and an active trading market in our securities may not develop or, if developed, may not be sustained. We intend to have a market maker apply for admission to quotation of our securities on the Over-the-Counter Bulletin Board after the Registration Statement relating to this prospectus is declared effective by the SEC. On April 1, 2013 we signed the agreement with Spartan Securities, Ltd. to file the Form 211 listing application for Vanell, Corp. with FINRA. If for any reason our common stock is not quoted on the Over-the-Counter Bulletin Board or a public trading market does not otherwise develop, purchasers of the share may have difficulty selling their common stock should they desire to do so.
258
+
259
+ WE HAVE NO EXPERIENCE AS A PUBLIC COMPANY.
260
+
261
+ We have never operated as a public company. Mr. Magana our sole director and officer has no experience managing a public company which is required to establish and maintain disclosure controls and procedures and internal control over financial reporting. 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.
262
+
263
+ 13 | Page
264
+
265
+ Forward-Looking Statements
266
+
267
+ 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 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 the Risk Factors section and elsewhere in this prospectus.
268
+
269
+ Use of Proceeds
270
+
271
+ We will not receive any proceeds from the sale of the common stock offered through this prospectus by the selling shareholders.
272
+
273
+ Determination of Offering Price
274
+
275
+ The selling shareholders will sell our shares at $0.06 per share until our shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. 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 until and unless the security is subsequently listed on an exchange or is listed by a market maker on the OTC BB. Currently the company is not so listed and there is no assurance that the stock will ever be so listed.
276
+
277
+ Dilution
278
+
279
+ 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.
280
+
281
+ Selling Shareholders
282
+
283
+ The selling shareholders named in this prospectus are offering all of the 880,000 shares of common stock offered through this prospectus. These shares were acquired from us in private placements that were exempt from registration under Regulation S promulgated pursuant to the Securities Act of 1933. All shares were acquired outside of the United States by non-U.S. persons. The shares include the following:
284
+
285
+ 1. 720,000 shares of our common stock that the selling shareholders acquired from us in an offering that was completed on November 19, 2012;
286
+
287
+ 2. 160,000 shares of our common stock that the selling shareholders acquired from us in an offering that was completed on December 14, 2012.
288
+
289
+ 14 | Page
290
+
291
+ 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:
292
+
293
+ 1. the number of shares owned by each prior to this offering;
294
+
295
+ 2. the total number of shares that are to be offered for each;
296
+
297
+ 3. the total number of shares that will be owned by each upon completion of the offering; and
298
+
299
+ 4. the percentage owned by each upon completion of the offering.
300
+
301
+ Name Of
302
+
303
+ Selling Shareholder
304
+
305
+ Shares Owned Prior To This Offering
306
+
307
+ Total Number Of Shares To Be Offered For Selling Shareholders Account
308
+
309
+ Total Shares to Be Owned Upon Completion Of This Offering
310
+
311
+ Percentage of Shares owned Upon Completion of This Offering
312
+
313
+ Position, office or other material relationship to the Company
314
+
315
+ Adan Adolfo Merlos Linares
316
+
317
+ 40,000
318
+
319
+ 40,000
320
+
321
+ Nil
322
+
323
+ Nil
324
+
325
+
326
+
327
+ Luis Alonso Barrientos Lopez
328
+
329
+ 40,000
330
+
331
+ 40,000
332
+
333
+ Nil
334
+
335
+ Nil
336
+
337
+
338
+
339
+ Roberto Orlando Garcia Tejada
340
+
341
+ 40,000
342
+
343
+ 40,000
344
+
345
+ Nil
346
+
347
+ Nil
348
+
349
+
350
+
351
+ Edgar Orlando Rivera
352
+
353
+ 40,000
354
+
355
+ 40,000
356
+
357
+ Nil
358
+
359
+ Nil
360
+
361
+
362
+
363
+ Marvin Benedicto Lue Morales
364
+
365
+ 40,000
366
+
367
+ 40,000
368
+
369
+ Nil
370
+
371
+ Nil
372
+
373
+
374
+
375
+ Sarai Del Socorro Beltran Leonardo
376
+
377
+ 40,000
378
+
379
+ 40,000
380
+
381
+ Nil
382
+
383
+ Nil
384
+
385
+
386
+
387
+ Fatima Sofia Rodas Delgado
388
+
389
+ 40,000
390
+
391
+ 40,000
392
+
393
+ Nil
394
+
395
+ Nil
396
+
397
+
398
+
399
+ Sergio Ulises Armas Hernandez
400
+
401
+ 40,000
402
+
403
+ 40,000
404
+
405
+ Nil
406
+
407
+ Nil
408
+
409
+
410
+
411
+ Elmer Leonidas Mendez Aquino
412
+
413
+ 40,000
414
+
415
+ 40,000
416
+
417
+ Nil
418
+
419
+ Nil
420
+
421
+
422
+
423
+ Nelson Gerardo Paredez Guzman
424
+
425
+ 40,000
426
+
427
+ 40,000
428
+
429
+ Nil
430
+
431
+ Nil
432
+
433
+
434
+
435
+ Xiomara Magdalena Ventura de Fajardo
436
+
437
+ 40,000
438
+
439
+ 40,000
440
+
441
+ Nil
442
+
443
+ Nil
444
+
445
+
446
+
447
+ Antonio de Jesus Ortiz Espinoza
448
+
449
+ 40,000
450
+
451
+ 40,000
452
+
453
+ Nil
454
+
455
+ Nil
456
+
457
+
458
+
459
+ Cecilia del Carmen Morales Ramon
460
+
461
+ 40,000
462
+
463
+ 40,000
464
+
465
+ Nil
466
+
467
+ Nil
468
+
469
+
470
+
471
+ Cesar Armando Castillo Acevedo
472
+
473
+ 40,000
474
+
475
+ 40,000
476
+
477
+ Nil
478
+
479
+ Nil
480
+
481
+
482
+
483
+ Tatiana Fabiola Alas Morales
484
+
485
+ 40,000
486
+
487
+ 40,000
488
+
489
+ Nil
490
+
491
+ Nil
492
+
493
+
494
+
495
+ Claudia Maria Colindres Mendez
496
+
497
+ 40,000
498
+
499
+ 40,000
500
+
501
+ Nil
502
+
503
+ Nil
504
+
505
+
506
+
507
+ Guadalupe Araceli Barillas Lopez
508
+
509
+ 40,000
510
+
511
+ 40,000
512
+
513
+ Nil
514
+
515
+ Nil
516
+
517
+
518
+
519
+ Leticia Lizzette Gracia Chavez
520
+
521
+ 40,000
522
+
523
+ 40,000
524
+
525
+ Nil
526
+
527
+ Nil
528
+
529
+
530
+
531
+ Jaime Henry Martinez Lemus
532
+
533
+ 20,000
534
+
535
+ 20,000
536
+
537
+ Nil
538
+
539
+ Nil
540
+
541
+
542
+
543
+ Claudia Morales de Magana
544
+
545
+ Claudia Morales de Magana including shares of Francisco D. Magana (1)
546
+
547
+ 20,000
548
+
549
+ 3,020,000
550
+
551
+ 20,000
552
+
553
+ 20,000
554
+
555
+ Nil
556
+
557
+ 3,000,000 (*)
558
+
559
+ Nil
560
+
561
+ 77.32%(**)
562
+
563
+ Spouse of our sole Director and Officer
564
+
565
+ Douglas Antonio Orozco Lemus
566
+
567
+ 20,000
568
+
569
+ 20,000
570
+
571
+ Nil
572
+
573
+ Nil
574
+
575
+
576
+
577
+ Guillermo Alexander Lopez Moran
578
+
579
+ 20,000
580
+
581
+ 20,000
582
+
583
+ Nil
584
+
585
+ Nil
586
+
587
+
588
+
589
+ Julio Renaldo Catota
590
+
591
+ 20,000
592
+
593
+ 20,000
594
+
595
+ Nil
596
+
597
+ Nil
598
+
599
+
600
+
601
+ Mauricio Marcelo Shupan Pinto
602
+
603
+ 20,000
604
+
605
+ 20,000
606
+
607
+ Nil
608
+
609
+ Nil
610
+
611
+
612
+
613
+ Moises Alberto Mejia Rivas
614
+
615
+ 20,000
616
+
617
+ 20,000
618
+
619
+ Nil
620
+
621
+ Nil
622
+
623
+
624
+
625
+ Sandra Elizabeth Ruiz Lemus
626
+
627
+ 20,000
628
+
629
+ 20,000
630
+
631
+ Nil
632
+
633
+ Nil
634
+
635
+
636
+
637
+ (1) Francisco Douglas Magana and Claudia Morales de Magana are husband and wife. Accordingly, each is deemed to be the beneficial owners of their spouse s shares. Ms. Claudia Morales de Magana owns 20,000 shares and is deemed to be the beneficial owner of 3,000,000 shares owned by Mr. Francisco Douglas Magana, our sole officer and director.
638
+
639
+ (*)
640
+
641
+ 3,000,000 shares of our common are available for resale to the public in accordance with the volume and trading limitations of Rule 144.
642
+
643
+ (**) This percentage is based on 3,880,000 shares of common stock issued and outstanding on the date of this prospectus.
644
+
645
+ Besides the above, there are no relationships between our selling shareholders and our sole officer and director.
646
+
647
+ 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 880,000 shares of common stock issued and outstanding on the date of this prospectus.
648
+
649
+ Other than disclosed above, none of the selling shareholders:
650
+
651
+ 1.
652
+
653
+ has had a material relationship with us other than as a shareholder at any time within the past three years;
654
+
655
+ 2.
656
+
657
+ has ever been one of our officers or directors;
658
+
659
+ 3.
660
+
661
+ is a broker-dealer; or a broker-dealer's affiliate.
662
+
663
+ 15 | Page
664
+
665
+ Plan of Distribution
666
+
667
+ 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.
668
+
669
+ The selling shareholders will sell our shares at $0.06 per share until our shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. 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 until and unless the security is subsequently listed on an exchange or is listed by a market maker on the OTC BB. Currently the company is not so listed and there is no assurance that the stock will ever be so listed.
670
+
671
+ The shares may also be sold in compliance with the Securities and Exchange Commission's Rule 144, when eligible.
672
+
673
+ 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.
674
+
675
+ We can provide no assurance that all or any of the common stock offered will be sold by the selling shareholders.
676
+
677
+ 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.
678
+
679
+ 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 may be 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 may, among other things:
680
+
681
+
682
+
683
+ 1.
684
+
685
+ Not engage in any stabilization activities in connection with our common stock;
686
+
687
+
688
+
689
+
690
+
691
+
692
+
693
+
694
+ 2.
695
+
696
+ 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
697
+
698
+
699
+
700
+
701
+
702
+
703
+
704
+
705
+ 3.
706
+
707
+ 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.
708
+
709
+ 16 | Page
710
+
711
+ 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).
712
+
713
+ The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the Commission, which contains:
714
+
715
+ -
716
+
717
+ a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
718
+
719
+ -
720
+
721
+ 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;
722
+
723
+ -
724
+
725
+ 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;
726
+
727
+ -
728
+
729
+ a toll-free telephone number for inquiries on disciplinary actions;
730
+
731
+ -
732
+
733
+ a definition of significant terms in the disclosure document or in the conduct of trading penny stocks; and
734
+
735
+ -
736
+
737
+ such other information and is in such form (including language, type, size, and format) as the Commission shall require by rule or regulation.
738
+
739
+ The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with:
740
+
741
+ -
742
+
743
+ bid and offer quotations for the penny stock;
744
+
745
+ -
746
+
747
+ the compensation of the broker-dealer and its salesperson in the transaction;
748
+
749
+ -
750
+
751
+ 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
752
+
753
+ -
754
+
755
+ monthly account statements showing the market value of each penny stock held in the customer's account.
756
+
757
+ 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.
758
+
759
+ Description of Securities
760
+
761
+ General
762
+
763
+ Our authorized capital stock consists of 75,000,000 shares of common stock at a par value of $0.001 per share.
764
+
765
+ 17 | Page
766
+
767
+ Common Stock
768
+
769
+ As of
770
+
771
+ June 25
772
+
773
+ , 2013 there were 3,880,000 shares of our common stock issued and outstanding held by 27 stockholders of record.
774
+
775
+ 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.
776
+
777
+ 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.
778
+
779
+ Preferred Stock
780
+
781
+ We do not have an authorized class of preferred stock.
782
+
783
+ Dividend Policy
784
+
785
+ 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.
786
+
787
+ Share Purchase Warrants
788
+
789
+ We have not issued and do not have any outstanding warrants to purchase shares of our common stock.
790
+
791
+ Options
792
+
793
+ We have not issued and do not have any outstanding options to purchase shares of our common stock.
794
+
795
+ Convertible Securities
796
+
797
+ 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.
798
+
799
+ Interests of Named Experts and Counsel
800
+
801
+ 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.
802
+
803
+ Stepp Law Corporation has provided an opinion on the validity of our common stock.
804
+
805
+ 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.
806
+
807
+ 18 | Page
808
+
809
+ Description of Business
810
+
811
+ Overview
812
+
813
+ We were incorporated in the State of Nevada on September 7, 2012. To date, our business operations have been limited to primarily, the development of a business plan and execution of the consulting agreement with a Finca La Esmeralda, a private El Salvadorian company. We provide consulting services in commercial cultivation and processing of coffee in El Salvador. 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 significant profitability. We have earned minimal revenues since inception and have minimal assets. Our plan of operation is forward-looking. It is likely that we will not be able to achieve significant 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 Res. San Antonio Bk. 10, Pje. 7 N5 San Antonio Del Monte, Sonsonate, El Salvador SV-106090030. Our telephone number is +011-503-79511698.
814
+
815
+ Consulting Services
816
+
817
+ Our consulting services for commercial growers of coffee include:
818
+
819
+ - Consulting in cultivation and harvesting processes
820
+
821
+ - Quality control
822
+
823
+ - Hygiene check
824
+
825
+ - Improvement of cultivation methods
826
+
827
+ - Improvement of fruiting techniques
828
+
829
+ - Improvement of coffee quality
830
+
831
+ - Instructing and training of staff
832
+
833
+ Our specific areas of services include the following:
834
+
835
+ Client s existing cultivation facilities:
836
+
837
+ 1.
838
+
839
+ Review of the current cultivation process used by clients.
840
+
841
+ 2.
842
+
843
+ Prepare a written recommendation for improvement of harvesting methods that are appropriate for existing facility. Special consideration should be given to the selection of the right seed for plantation conditions, rational harvesting, coffee quality, dissolved and injected fertilization and farm mechanization. After approval of any recommendations by client provide necessarily instructing and training of staff (if required).
844
+
845
+ 3.
846
+
847
+ Review of the harvesting methods, processing, packaging and storing of the product.
848
+
849
+ 4.
850
+
851
+ Review of the pest management, especially of berry borers, nematodes, and leaf rust fungus (Hemileia vastatix Berk. And Br.).
852
+
853
+ 5.
854
+
855
+ Prepare a written recommendation for improvement of harvesting, processing, packaging and storing of the product.
856
+
857
+ 6.
858
+
859
+ After the revision of contracts with product distributors prepare a written recommendation regarding marketing strategies, new distributor s networks and logistic solutions.
860
+
861
+ 19 | Page
862
+
863
+ On-Call service:
864
+
865
+ 1.
866
+
867
+ Give verbal or written recommendations or instructions via phone, mail or email regarding any client s questions that are not mentioned above, but are related to commercial cultivation and processing of coffee.
868
+
869
+ Coffee Description
870
+
871
+ Coffee is a small perennial tree, 2 to 5 meters high, with opposing branches that are long, flexible and very thin. The coffee plant is a member of the family Rubiaceae, genus Coffea, of which two species are currently grown commercially: Coffea arabica L. and Coffea canephora. Coffea arabica is the most valued species due to its quality, making it the best known and most widely grown in the world.
872
+
873
+ El Salvadorian coffee varieties:
874
+
875
+ 1.
876
+
877
+ BOURBON
878
+
879
+ ORIGIN: Ethiopia; then to Arabia, Netherlands, France and Martinique, and from there to El Salvador. DESCRIPTION: tall plant, long branches, long internode spacing, open architecture, deep red berries.
880
+
881
+ GROWING ALTITUDE: from 800-1500 meters.
882
+
883
+ BEAN SIZE: length 0.95 cm; width 0.70 cm; thickness 0.36 cm.
884
+
885
+ BOURBON CUP QUALITY EVALUATION: Aroma: penetrating and rich, floral overtones, sweet, chocolate-like. Body: full-bodied with excellent mouthfeel. Acidity: medium to high, good brightness, very well balanced. Flavor: sweet and pleasant, with long persistence and complex chocolate- like attributes.
886
+
887
+ 2.
888
+
889
+ TEKISIC OR SALVADORAN BOURBON
890
+
891
+ ORIGIN: The Tekisic cultivar was obtained from the Bourbon variety in El Salvador. Its selection began in 1949 and it was released in 1977. The word Tekisic comes from the Nahuat tekiti, meaning work, and ISIC, Instituto Salvadore o de Investigaciones del Caf (Salvadoran Institute for Coffee Research). Therefore, Tekisic means the work of ISIC.
892
+
893
+ DESCRIPTION: tall plant, long internode spacing, broad plant architecture, branches that tend to form fans of secondary shoots, light green shoots.
894
+
895
+ GROWING ALTITUDE: from 800-1500 meters.
896
+
897
+ BEAN SIZE: length 0.82 cm; width 0.64 cm; thickness 0.35 cm.
898
+
899
+ 3.
900
+
901
+ PACAS
902
+
903
+ ORIGIN: Mutation of the Bourbon variety reported in Santa Ana, El Salvador in 1949.
904
+
905
+ DESCRIPTION: short plant; long branches; short internode spacing; dark green leaves; well-developed roots; tolerates wind, sun and drought; compact architecture.
906
+
907
+ GROWING ALTITUDE: from 600- 1000 meters.
908
+
909
+ BEAN SIZE: length 0.85 cm; width 0.66 cm; thickness 0.34 cm.
910
+
911
+ PACAS CUP QUALITY EVALUATION: Aroma: mild with a rich fragrance. Body: medium, with pleasant mouth feel. Acidity: medium, with notable finesse. Flavor: subtle sweetness and lots of finesse.
912
+
913
+ 4.
914
+
915
+ PACAMARA
916
+
917
+ ORIGIN: A Coffea arabica hybrid originating in El Salvador in 1958 by artificially crossing Pacas with Red Maragogipe, from where it gets the name Pacamara.
918
+
919
+ DESCRIPTION: mid-size plant; short internode spacing; large, corrugated, dark green leaves; large berries.
920
+
921
+ GROWING ALTITUDE: 1000 meters and higher.
922
+
923
+ BEAN SIZE: length 1.03 cm; width 0.71; thickness 0.37 cm.
924
+
925
+ PACAMARA CUP QUALITY EVALUATION: Aroma: pronounced, with floral overtones and complex chocolate-like sweetness. Body: pronounced, full- bodied, excellent mouthfeel. Acidity: high, elegant. Flavor: chocolate-like, very persistent. (*)
926
+
927
+ 20 | Page
928
+
929
+ History of coffee growing in El Salvador
930
+
931
+ Since its accidental discovery in Ethiopia thousands of years ago, coffee has become a valuable global commodity, a necessity for millions of people who wake up every morning wanting a great cup of coffee.
932
+
933
+ The wild Coffea Arabica, discovered in ancient Ethiopia, was taken to Arabia between 575 and 850 by African tribes and the Sufis known as whirling dervishes. There, coffee cultivation became so widespread that a jealously guarded monopoly grew up around it, which protected the shipping ports to ensure that no fertile seed left port undetected. Beans would be roasted or boiled before leaving port so they couldn t germinate.(*)
934
+
935
+ El Salvador is more than a country where coffee happens to be grown in many ways, it is a country created on coffee, as the crop is heavily woven into El Salvador s history, culture, economy and ecology.
936
+
937
+ Coffee has a long history in El Salvador, as the first coffee was believed to have arrived there from the Caribbean as early as 1740. Although coffee was grown in the western part of the country for a long period, production did not rise until 1850s and later. The country shipped its first bags of coffee to Europe
938
+
939
+ in 1856, and by the 70s, El Salvador was ranked fourth among coffee export countries, harvesting 3.5 million coffee bags.(**)
940
+
941
+ With such a long history of coffee, it is not surprising that El Salvador knows how to produce a good cup. Coffee flavors range from caramel and chocolate to berries and florals. El Salvador s top quality coffees have been variously described by world-class cuppers as balanced, with vibrant, berry-like, chocolate and floral notes and bright acidity. The coffees are consistent and creamy, with flavors of vanilla and caramel, a good body and a chunky aroma.
942
+
943
+ The country s climate is well-suited for creating delicious coffees, with its six-month long wet and dry seasons, various mountain ranges and volcanoes, and extensive shade canopy. The majority of coffee is grown on volcanic slopes, which experts believe plays a substantial role in the flavor of the coffee.
944
+
945
+ Coffee is grown in five geographical areas of the country, which differ from one another mainly in terms of altitude and flavor characteristics:
946
+
947
+ Apaneca-Ilamatepec Mountain Range -located in the western region, with altitudes ranging from 1,640 to 6,561 feet.
948
+
949
+ Central Belt - comprising the Balsamo Mountain Range and the San Salvador Volcano, with altitudes of 1,540 to 4,920 feet.
950
+
951
+ Chinchontepec or San Vicente Volcano - altitudes are 1,640 to 3,280 feet, with the San Vicente Volcano rising to 7,155 feet.
952
+
953
+ Cacahuatique Mountain Range - ranges in altitudes from 1,640 to 4,920 feet.
954
+
955
+ Tecapa-Chinchontepec Mountain Range - various altitudes, from 1,640 to 4,920 feet and up. The San Miguel or Chaparrastique Volcano is the highest peak with an elevation of 7,017 feet.(***)
956
+
957
+ Cultivation & Processing
958
+
959
+ El Salvador produces only arabica coffees, mostly traditional varieties such as bourbon and pacas. Some hybrids including pacamara, caturra, catuai and catisic are also grown, but in very small amounts. It is estimated that there are some 23,000 coffee growers in the country, about 87 percent of which are small farmers, with farms of 19 hectares or less. Many focus on organic and bird-friendly growing procedures. (****)
960
+
961
+ 21 | Page
962
+
963
+ In addition, most farms are diverse, producing a variety of fruits, vegetables and flowers in addition to coffee.
964
+
965
+ El Salvador has a strong coffee infrastructure, designed to help producers create the best possible crop. Plantations and mills are near each other; thus, coffee is often hand-picked and de-pulped the same day. Strong sunlight allows the coffee to be patio-dried.
966
+
967
+ The El Salvadorian coffee harvest runs from October to March. Cherries are hand-picked when they have a deep red-wine color and are processed the same day. Quality is strictly controlled during every step of processing to ensure that the best attribute of El Salvadorian coffee come through in every cup.
968
+
969
+ El Salvadorian coffee growers recycle the resources extracted when coffee is grown, returning them to the
970
+
971
+ soil and environment. The pulp is used as organic matter and the hulls are used for fuel during processing. Solid and liquid waste are treated and disposed of properly.
972
+
973
+ To summarize El Salvador Coffee at a glance:
974
+
975
+ -
976
+
977
+ Coffee Arabica: 68 percent bourbon, 29 percent pacas and 3 percent hybrids such as pacamara, caturra and catuai.
978
+
979
+ -
980
+
981
+ Flavor: characterized by good body and balanced acidity, an excellent sweetness and rich, penetrating aromas.
982
+
983
+ -
984
+
985
+ Main Growing Regions: Apaneca-Ilamatepec Mountain Range, Central Belt, Chichontepec, Cacahuatique Mountain Range, Tecapa- Chichontepec Mountain Range.
986
+
987
+ -
988
+
989
+ Elevation: 500 to more than 1,200 meters.
990
+
991
+ -
992
+
993
+ Farms: an estimated 23,000 growers, 87 percent of which are small farmers with 19 hectares or less.
994
+
995
+ -
996
+
997
+ Flowering: February May
998
+
999
+ -
1000
+
1001
+ Harves: October March
1002
+
1003
+ -
1004
+
1005
+ Shipping: December August
1006
+
1007
+ -
1008
+
1009
+ Processing: majority washed and sun-dried
1010
+
1011
+ -
1012
+
1013
+ Main Buyers: Germany, United States, Belgium, Canada, The Netherlands(*****)
1014
+
1015
+ Providers of the consulting services in commercial cultivation and processing of coffee
1016
+
1017
+ We are a new and un-established company, have a weak competitive position in the industry, have generated revenues of $4,870 and have accumulated losses of $2,372 since inception through March 31, 2013.
1018
+
1019
+ We need capital to carry out our current business plan. We anticipate
1020
+
1021
+ d
1022
+
1023
+ that we
1024
+
1025
+ would
1026
+
1027
+ require a minimum financing of approximately $
1028
+
1029
+ 38,750
1030
+
1031
+ in order to execute our business plan. As of
1032
+
1033
+ June 25
1034
+
1035
+ , 2013 we have already incurred and paid $
1036
+
1037
+ 15,670
1038
+
1039
+ included into $
1040
+
1041
+ 38,750
1042
+
1043
+ and therefore the estimated minimum capital necessary to fund our planned operations
1044
+
1045
+ is
1046
+
1047
+ approximately $
1048
+
1049
+ 23,080
1050
+
1051
+ . We may not have sufficient financing to sustain our current operations. Many of the companies with whom we compete have greater financial and technical resources than those available to us. It is uncertain whether consulting services offered by Vanell, Corp. will achieve and sustain high levels of demand and market acceptance. The development of the markets for the consulting services in commercial cultivation and processing of coffee will be dependent upon larger corporations, domestic companies and service pricing.
1052
+
1053
+ Presently in the local El Salvadorian market and in especially in Central America there are some well-structured long standing consulting companies in coffee growing and processing in the marketplace.
1054
+
1055
+ Direct competitors include those consulting companies offering services in commercial cultivation and processing of coffee and located throughout El Salvador and Central America.
1056
+
1057
+ Indirect competitors are those coffee consulting companies in El Salvador and Central America that focus on a different target market.
1058
+
1059
+
1060
+
1061
+ 22 | Page
1062
+
1063
+ Marketing Our Product
1064
+
1065
+ We plan to market our services in El Salvador. Initially, our services will be promoted by our President, Mr. Francisco Douglas Magana. He will discuss our product with his friends and business associates. The marketing and advertising will be targeted to commercial coffee growers in the country, farmers, coffee plantations and mills in El Salvador. We intend to develop and maintain a database of potential clients who may want to use Vanell s 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 will ask our satisfied clients for referrals.
1066
+
1067
+ We will market and advertise our product on our web site by showing its advantages over consulting services in coffee growing and processing 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. We also plan to attend business shows in our industry to showcase our services with a view to find new customers.
1068
+
1069
+ We plan to expand our services to North American market in the future only when or if we have the available resources and growth to warrant it. Currently this option is questionable.
1070
+
1071
+ Revenues
1072
+
1073
+ The company s revenues will be what we charge our clients for our consulting services.
1074
+
1075
+ 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.
1076
+
1077
+ Estimated prices for our consulting services are:
1078
+
1079
+ -
1080
+
1081
+ Initial Meeting with Client - free of charge;
1082
+
1083
+ -
1084
+
1085
+ Consulting Fee, small commercial coffee growers in El Salvador and Central America - varies depending on length of the project and scope of work involved, starting from USD 85.
1086
+
1087
+ -
1088
+
1089
+ Consulting Fee, mid-sized commercial coffee growers in El Salvador and Central America - varies depending on length of the project and scope of work involved, starting from USD 100.
1090
+
1091
+ Invoicing will be on a monthly basis, beginning after we have completed our first four weeks of service. Vanell, 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.
1092
+
1093
+ On November 26, 2012 we signed the service agreement with Finca La Esmeralda, an El Salvador based company specializing in cultivation of coffee. We cannot guarantee that we will be able to find additional successful contracts with the potential customers in need of coffee cultivation consulting services in El Salvador and Central America, in which case our business may fail and we will have to cease our operations.
1094
+
1095
+ 23 | Page
1096
+
1097
+ Competition
1098
+
1099
+ Our competitors will include El-Salvadorian companies providing consulting services in commercial cultivation and processing of coffee. We will not be differentiating ourselves from the foregoing, but merely competing with them. The market of consulting services in coffee growing and processing is large and fragmented, and may be difficult to penetrate. Our competitive position within the industry is negligible in light of the fact that we have just started our operations. Older, well-established companies providing similar services with records of success currently attract customers. Since we have just started operations, we cannot compete with them on the basis of reputation. We do expect to compete with them on the basis of the range of coffee consulting services and the quality of consulting services that we intend to provide. There can be no assurance that we can maintain a competitive position against current or future competitors, particularly those with greater financial, 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.
1100
+
1101
+ Agreements
1102
+
1103
+ On November 26, 2012 Consulting Service Agreement was signed with Finca La Esmeralda, an El Salvador based company.
1104
+
1105
+ The agreement with Finca La Esmeralda contains the following material terms:
1106
+
1107
+ 2. Term of Agreement/Termination: The term of this Agreement shall be for 12 months beginning from the Effective Date, unless terminated earlier as provided herein. CLIENT may terminate this Agreement for any reason upon twenty (20) days advance written notice to Consultant. Consultant may terminate this Agreement in the event that CLIENT commits a breach of its material obligations hereunder, upon twenty (20) days advance written notice and where CLIENT does not cure the breach.
1108
+
1109
+ 3. Payment: The CLIENT will pay to Consultant $85.00 per hour for services rendered to the CLIENT under this Agreement. CLIENT should be invoiced for consulting fees in an amount not to exceed $2,500 per month. Invoicing should be on a monthly basis, beginning after the Consultant has completed his first four (4) weeks of service. Under no circumstances shall Consultant perform work having a value (based on the agreed upon per hour rate) in excess of the maximum permitted fee. Consultant 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. Payment by CLIENT is due within thirty (30) days from receipt of an approved invoice. The CLIENT agrees to reimburse Consultant for all actual reasonable and necessary expenditures, which are directly related to the consulting services. These expenditures include, but are not limited to, expenses related to travel (i.e. airfare, hotel, temporary housing, meals, parking, mileage, etc.), telephone calls, and postal expenditure. Expenses incurred by Consultant will be reimbursed by the CLIENT within 15 days of Consultant s proper written request for reimbursement.
1110
+
1111
+ 4. Invoices/Reporting: All invoices submitted to CLIENT by Consultant for payment must include a written, task based report detailing the services actually and reasonably provided by Consultant to CLIENT along with the time spent by Consultant performing the same. Consultant shall certify in writing that each such invoice is complete and accurate. Payment is contingent on provision of such invoices. Consultant shall provide technical reports in accordance with the Scope of Work attached as Exhibit A.
1112
+
1113
+ Initially, our director Mr. Francisco Douglas Magana will work with the current service agreement. In the future we also expect Mr. Magana to work on potential service agreements with other El-Salvadorian/Central American companies.
1114
+
1115
+ We cannot guarantee that we will be able to find additional successful contracts with El-Salvadorian companies, in which case our business may fail and we will have to cease our operations.
1116
+
1117
+ On April 1, 2013 we signed the agreement with Spartan Securities, Ltd. to file an application with FINRA for our common stock to become eligible for trading on the Over-the-Counter Bulletin Board. The 211 agreement signed with Spartan Securities, Ltd. has no material terms. Per the 211 contract signed with Spartan Securities, Ltd.: Vanell, Corp. acknowledges that it has not compensated, or agreed to compensate, Spartan, its affiliates, employees, officers and/or directors, or the employees, officers and/or directors of Spartan s affiliates, either directly or indirectly, in consideration of Spartan s agreement to file the Company s Form 211 Listing Application. There are no services, other than the filing of Form 211 application with FINRA, provided or to be provided to us by Spartan.
1118
+
1119
+ On April 1, 2013 Transfer Agent Agreement was signed with Island Capital Management, LLC. (dba Island Stock Transfer). Island Stock Transfer is an affiliate company to Spartan Securities, Ltd.
1120
+
1121
+ As of June 25, 2013
1122
+
1123
+ the compensation paid pursuant to the signed agreement with Island Capital Management, LLC. is $
1124
+
1125
+ 8,400 and comprised $8,000
1126
+
1127
+ for one time Premiere Service Plan fee and $400 for monthly maintenance fees.
1128
+
1129
+
1130
+
1131
+ We will also incur maintenance fees of $200 per month pursuant to the signed agreement with Island Capital Management in the future.
1132
+
1133
+ Among optional services to be offered by Island Capital Management, LLC are printing fees, design fees, DTC fees and search for lost securities holders. Currently, we have no plans to use these services.
1134
+
1135
+ The agreement with Island Capital Management, LLC (dba Island Stock Transfer) contains the following material terms:
1136
+
1137
+ 2.2. Payment: Payment in full of $8,000 (check or charge card) Premier Plan Fee, payable as of the date of this contract, for the Premier Services Plan ( Premier Plan ), which provides for all account set-up services.
1138
+
1139
+ 2.2.1 The Company understands Agent s Premier Plan Fees do not include:
1140
+
1141
+
1142
+
1143
+ 2.2.1.1. any fees that are charged by third parties as part of the set-up process such as, printing fees, design fees, DTC fees, and CUSIP fees;
1144
+
1145
+
1146
+
1147
+ 2.2.1.2. charges associated with searching for lost securities holders;
1148
+
1149
+
1150
+
1151
+ 2.2.1.3. any charges for services and costs as defined within Exhibit B, including the monthly maintenance fee which is the greater of $200 or 0.12 per shareholder for the first year.
1152
+
1153
+ 7. Fees and Payment of Fees.
1154
+
1155
+ 7.1. The Company agrees to pay Agent the following fees:
1156
+
1157
+ 7.1.1 A one-time Premier Service Plan fee as specified in Section 2.
1158
+
1159
+ 7.1.2. A monthly fee to maintain computerized records of the Company in an orderly and accurate manner, and enable Agent to act as the Company s transfer agent or registrar, or both.
1160
+
1161
+ 7.2. These fees as well as other costs and fees for actions taken by Agent as the transfer agent of company, as described in the Premier Service Plan, which is attached hereto as Exhibit A.
1162
+
1163
+ 7.3. Agent s fees may be increased in Agent s sole discretion upon (30) days written notice to the Company. Company specifically agrees That Agent shall have a lien against all Company records to secure any amounts owed to Agent. In addition Company specifically agrees that Agent may, at its option, refuse to make any transfers of Company s securities until all past due amounts have been paid in full. The issuer acknowledges that its failure to pay transfer agency services is considered a material event to its shareholders, as it could substantially inhibit the liquidity of their security. The issuer therefore agrees that upon its delinquency of 90 days for failure to pay Island Stock Transfer may, in its sole discretion, notify shareholders of the issuers delinquency. The issuer agrees to hold Island Stock Transfer harmless for such notification.
1164
+
1165
+ 8. Transfer Agent Expense. The Company agrees to reimburse Agent for any and all expenses resulting from agent being served with subpoena by a Federal or State agency or a request from one of said agencies, requiring or requesting that Agent produce information or documents to said agency. Said expenses include, but are not limited to, travel expenses, copying charges, computer time, employee time and attorney fees for counsel of Agent.
1166
+
1167
+ The agreement with Island Capital Management, LLC includes, but is not limited to, the services listed below:
1168
+
1169
+ New Client Set-Up:
1170
+
1171
+ 1.1.
1172
+
1173
+ Review and processing of Corporate resolutions to establish Agent as Company s stock transfer and edgarization agent.
1174
+
1175
+ 1.2.
1176
+
1177
+ Receipt and Review of Company s documents, including Articles of Incorporation, Certificate of Incorporation, Amendments to the Articles of Incorporation and Company s resolutions establishing Company s officers.
1178
+
1179
+ 1.3.
1180
+
1181
+ Review, processing, audit and importation of current shareholder information.
1182
+
1183
+ 1.4.
1184
+
1185
+ Formatting and importing records into Agent s shareholder database, including recording stops (Company and SEC issued), restrictions and affiliate/control shareholder statuses.
1186
+
1187
+ 1.5.
1188
+
1189
+ Communication and review with former Company transfer agent.
1190
+
1191
+ 1.6.
1192
+
1193
+ Receipt, verification and organization of former transfer records.
1194
+
1195
+ 1.7.
1196
+
1197
+ New certificate processing, including establishing certificate design, numbers, format and quantity.
1198
+
1199
+ 1.8.
1200
+
1201
+ Storage and retention of previous transfer records, new transfer documents, corporate documents and new certificates.
1202
+
1203
+ 1.9.
1204
+
1205
+ Recording and inventory auditing of records used, unused, lost and destroyed certificates.
1206
+
1207
+ 1.10.
1208
+
1209
+ Communication with, and providing documentation to DTC regarding the transition from previous transfer agent to, or initial establishment of, Island Stock transfer as transfer agent.
1210
+
1211
+ Maintenance:
1212
+
1213
+ 1.11.
1214
+
1215
+ Maintenance of files in secure storage centers, including rated theft locks and fireproof cabinetry.
1216
+
1217
+ 1.12.
1218
+
1219
+ Maintenance of offsite data backup, ensuring continuous operations in the event of any disaster for the Company or transfer service location.
1220
+
1221
+ Custom Reporting:
1222
+
1223
+
1224
+
1225
+ 4.1.
1226
+
1227
+ Develop shareholder reports and transaction journals to perform corporate requests.
1228
+
1229
+ 4.2.
1230
+
1231
+ Formatting reports and databases to enable custom reporting.
1232
+
1233
+ 4.3.
1234
+
1235
+ Perform automated functions and maintenance to ensure reports are continuously available.
1236
+
1237
+ 4.4.
1238
+
1239
+ Enable electronic submissions or hardcopy formats of reports.
1240
+
1241
+ 4.5.
1242
+
1243
+ Perform data and transactional searches, including statistical analysis, as required to create custom reports.
1244
+
1245
+ 4.6.
1246
+
1247
+ Deliver reports as requested by the Company.
1248
+
1249
+ Online Services Island Access:
1250
+
1251
+ 7.1.
1252
+
1253
+ Company set-up for online access and report downloads.
1254
+
1255
+ 7.2.
1256
+
1257
+ Real time report and data updates.
1258
+
1259
+ 7.3.
1260
+
1261
+ Training sessions for Company personnel.
1262
+
1263
+ 7.4.
1264
+
1265
+ Training sessions for Company shareholders.
1266
+
1267
+ 7.5.
1268
+
1269
+ Administrative maintenance and troubleshooting services.
1270
+
1271
+ 7.6.
1272
+
1273
+ Security control and software maintenance.
1274
+
1275
+ Currently, above listed services are the only services to be provided to us by Island Stock Transfer pursuant to the agreement signed on April 1, 2013.
1276
+
1277
+ 24 | Page
1278
+
1279
+ Description of property
1280
+
1281
+ We do not have an ownership or leasehold interest in any property.
1282
+
1283
+ Insurance
1284
+
1285
+ 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.
1286
+
1287
+ Employees. Identification of Certain Significant Employees
1288
+
1289
+ We are a development stage company and currently have no employees, other than our sole officer and director Mr. Francisco Douglas Magana. We intend to hire additional employees on an as needed basis.
1290
+
1291
+ Research and Development Expenditures
1292
+
1293
+ We have not incurred any research or development expenditures since our incorporation.
1294
+
1295
+ Government Regulation
1296
+
1297
+ We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the construction and operation of any facility in any jurisdiction which we would conduct activities. We believe that government regulation will have no material impact on the way we conduct our business.
1298
+
1299
+ Subsidiaries
1300
+
1301
+ We do not have any subsidiaries.
1302
+
1303
+ Patents and Trademarks
1304
+
1305
+ We do not own, either legally or beneficially, any patents or trademarks.
1306
+
1307
+ Offices
1308
+
1309
+ Our office is currently located at Res. San Antonio Bk. 10, Pje. 7 N5 San Antonio Del Monte, Sonsonate, El Salvador SV-106090030. Our telephone number is +011-503-79511698. This is the office of our Director, Mr. Francisco Douglas Magana. We do not pay any rent to Mr. Magana and there is no agreement to pay any rent in the future. Upon the completion of our offering, we do not intend to establish an office elsewhere.
1310
+
1311
+ Legal Proceedings
1312
+
1313
+ 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.
1314
+
1315
+ 25 | Page
1316
+
1317
+ Market for Common Equity and Related Stockholder Matters
1318
+
1319
+ No Public Market for Common Stock
1320
+
1321
+ There is presently no public market for our common stock. We anticipate applying for trading of our common stock on the over the counter bulletin board upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize.
1322
+
1323
+ Stockholders of Our Common Shares
1324
+
1325
+ As of the date of this registration statement we have 27 registered shareholders.
1326
+
1327
+ Rule 144 Shares
1328
+
1329
+ 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.
1330
+
1331
+ 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:
1332
+
1333
+
1334
+
1335
+
1336
+
1337
+
1338
+
1339
+
1340
+
1341
+ 1% of the total number of securities of the same class then outstanding, which will equal 38,800 shares as of the date of this prospectus; or
1342
+
1343
+
1344
+
1345
+
1346
+
1347
+
1348
+
1349
+
1350
+
1351
+
1352
+
1353
+ 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;
1354
+
1355
+
1356
+
1357
+ provided, in each case that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale.
1358
+
1359
+ Such sales must also comply with the manner of sale and notice provisions of Rule 144.
1360
+
1361
+ 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. Under Rule 144 the shares of an issuer that is not required to file reports under the Exchange Act can be publicly sold, subject to volume restrictions and restrictions on the manner of sale, commencing one year after their acquisition.
1362
+
1363
+ 26 | Page
1364
+
1365
+ Stock Option Grants
1366
+
1367
+ To date, we have not granted any stock options.
1368
+
1369
+ Registration Rights
1370
+
1371
+ We have not granted registration rights to the selling shareholders or to any other persons.
1372
+
1373
+ Dividends
1374
+
1375
+ 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:
1376
+
1377
+ 1.
1378
+
1379
+ we would not be able to pay our debts as they become due in the usual course of business; or
1380
+
1381
+
1382
+
1383
+
1384
+
1385
+ 2.
1386
+
1387
+ 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.
1388
+
1389
+ We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.
1390
+
1391
+ Plan of Operation
1392
+
1393
+ We are a development stage corporation. 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 coffee growing consulting services with potential customers and execution of the service agreement with Finca La Esmeralda, a private El-Salvadorian company. As of
1394
+
1395
+ June 25
1396
+
1397
+ , 2013 we realized revenues of $
1398
+
1399
+ 6,870
1400
+
1401
+ from our business operations: $2,400 from inception until December 31, 2012
1402
+
1403
+ ,
1404
+
1405
+ $2,470 on March 15, 2013
1406
+
1407
+ and $2,000 on June 14, 2013
1408
+
1409
+ . The revenues were realized based on services performed pursuant to the service agreement signed with Finca La Esmeralda on November 26, 2012.
1410
+
1411
+ We are not raising any money in this offering. Our only sources for cash at this time are investments by shareholders in our company, cash advances from our sole director Francisco Douglas Magana and revenues pursuant to the signed agreement.
1412
+
1413
+ 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.
1414
+
1415
+ Our office is currently located at Res. San Antonio Bk 10, Pje 7 N5 San Antonio Del Monte, Sonsonate, El Salvador, SV-106090030. This is the office of our Director, Mr. Francisco Douglas Magana. We do not pay any rent to Mr. Magana and there is no agreement to pay any rent in the future. Upon the completion of our offering, we do not intend to establish an office elsewhere. To service our current contract with Finca La Esmeralda we are relying on equipment from Mr. Magana s business, FDMag S.A. de C.V. We anticipate to rely on Mr. Magana s current business resources until we have available funds to obtain our own equipment and PCs. Currently, this option is highly questionable, as no significant revenues are anticipated until we fully implement our business plan.
1416
+
1417
+ 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.
1418
+
1419
+ 27 | Page
1420
+
1421
+ Following the date of this registration statement, our business plan for the next 12 months is as follows:
1422
+
1423
+ February-July, 2013: Negotiate service agreements with potential customers.
1424
+
1425
+ Initially, our sole officer and director, Mr. Magana, will look for potential customers. On November 26, 2012, we signed a service agreement with Finca La Esmeralda, a private El-Salvadorian company. During February-May, 2013 we contacted over 20 potential customers in El Salvador through our officer and sole director Francisco Magana s network of friends and business associates in El Salvador. We negotiated terms and conditions of collaboration. As of
1426
+
1427
+ June 25
1428
+
1429
+ , 2013 Finca La Esmeralda is the only El-Salvadorian company with which we have signed service agreement. We will continue to search for new potential customers during the life of our operations.
1430
+
1431
+ Even though the negotiation of additional 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.
1432
+
1433
+ 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.
1434
+
1435
+ We are not raising any money in this offering. Our only sources for cash at this time are investments by shareholders in our company, cash advances from our sole director Mr. Francisco Douglas Magana and revenues realized pursuant to the signed agreement. 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.
1436
+
1437
+ July-August, 2013: Commence Marketing Campaign. Estimated cost $7,000.
1438
+
1439
+ 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.
1440
+
1441
+ We also plan to attend shows and exhibitions in commercial coffee growing and processing, which help commercial coffee growers in El Salvador come face to face and find new business opportunities and partners. We intend to spend about $7,000 on marketing efforts during the first year. Marketing is an ongoing matter that will continue during the life of our operations.
1442
+
1443
+ August-October, 2013: Develop Website. Estimated Cost $3,000.
1444
+
1445
+ By August of 2013 of 2012, assuming available recourses and company growth as planned we intend to begin developing our website. Our director, Mr. Magana 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 current time. The website development costs, including site design and implementation will be approximately $3,000. Updating and improving our website will continue throughout the lifetime of our operations.
1446
+
1447
+ 28 | Page
1448
+
1449
+ October, 2013-February, 2014: Hire Part-Time Coffee Growing and processing Specialist. Estimated Cost $5,000
1450
+
1451
+ Initially, our director will look for potential customers in commercial coffee growing industry. We intend to use marketing strategies, such as direct mailing, phone calls and e-mails to potential customers. Once we begin to execute additional service agreements and have funds available for growth we may hire one part-time coffee growing and processing specialist with good knowledge and broad connections to the commercial coffee growing 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.
1452
+
1453
+ We therefore expect to incur the following costs in the next 12 months
1454
+
1455
+ (the twelve-month period is being measured from January 30, 2013 - the date when our registration statement was filed)
1456
+
1457
+ in connection with our business operations:
1458
+
1459
+ Marketing costs
1460
+
1461
+ $ 7,000
1462
+
1463
+ Website development costs
1464
+
1465
+ 3,000
1466
+
1467
+ Commissions of PT Consulting Specialist
1468
+
1469
+ 5,000
1470
+
1471
+ Estimated cost of this offering
1472
+
1473
+
1474
+
1475
+ 16,750
1476
+
1477
+ *
1478
+
1479
+ Costs associated with being a publicly reporting company
1480
+
1481
+ 7,000
1482
+
1483
+ -
1484
+
1485
+
1486
+
1487
+ Total
1488
+
1489
+ $
1490
+
1491
+ 38,750
1492
+
1493
+ **
1494
+
1495
+ *$
1496
+
1497
+ 15,670
1498
+
1499
+ 0 has already been paid to cover for the offering expenses and comprised $2,500 for the legal fees, $4,750 for the audit fees, $
1500
+
1501
+ 8,400
1502
+
1503
+ for the transfer agent fees and $20 for the SEC registration fees;
1504
+
1505
+ **$
1506
+
1507
+ 15,670
1508
+
1509
+ is included into $
1510
+
1511
+ 38,750
1512
+
1513
+ . As of
1514
+
1515
+ June 25
1516
+
1517
+ , 2013 the estimated minimum capital necessary to fund our planned operations will be approximately $
1518
+
1519
+ 23,080
1520
+
1521
+ ;
1522
+
1523
+ 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 or revenues realized pursuant to the signed agreement with Finca La Esmeralda. We may seek to obtain short-term loans from our director as well, although no such arrangement has been made.
1524
+
1525
+ 29 | Page
1526
+
1527
+ Limited operating history; need for additional capital
1528
+
1529
+ There is no historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage operations. Since inception through March 31, 2013 the Company has generated revenues of $4,870 and has accumulated losses of $2,372. 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.
1530
+
1531
+ Our current cash reserves are not sufficient to meet our obligations for the next twelve-month period
1532
+
1533
+ (the twelve-month period is being measured from January 30, 2013 - the date when our registration statement was filed)
1534
+
1535
+ . As a result, we will need to seek additional funding in the near future.
1536
+
1537
+ 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.
1538
+
1539
+ Results of Operations for Period Ending March 31, 2013
1540
+
1541
+ Since our inception on September 7, 2012 to March 31, 2013 the company has generated revenues of $4,870 and has accumulated losses of $2,372. Pursuant to the consulting agreement signed with Finca La Esmeralda we recognized our first revenues of $2,400 on December 28, 2012 and $2,470 on March 15, 2013. We incurred operating expenses in the amount of $7,004 for the period from our inception on September 7, 2012 to March 31, 2013. These operating expenses were comprised $ 2,500 for the legal fees, $3,250 for the audit fees, $635 for bank charges and $619 for miscellaneous fees comprised of $274 payable in connection with the incorporation of the company, $20 payable to Securities and Exchange Committee and $325 for filing of the annual list of officers.
1542
+
1543
+ We incurred operating expenses in the amount of $
1544
+
1545
+ 10,592
1546
+
1547
+ for the period from March 31, 2013 to
1548
+
1549
+ June 25
1550
+
1551
+ , 2013. These operating expenses were comprised $1,500 for the audit fees, $14 for bank charges, $ 8,
1552
+
1553
+ 400
1554
+
1555
+ for transfer agent fees, $178 for the federal income tax return for 2012 and $500 for tax preparation fees.
1556
+
1557
+ Our operating expenses were $
1558
+
1559
+ 17,596
1560
+
1561
+ for the period from our inception on September 7, 2012 to
1562
+
1563
+ June 25
1564
+
1565
+ , 2013. These operating expenses were comprised $ 2,500 for the legal fees, $4,750 for the audit fees, $649 for bank charges and $619 for miscellaneous fees comprised of $274 payable in connection with the incorporation of the company, $20 payable to Securities and Exchange Committee, $325 for filing of the annual list of officers, $
1566
+
1567
+ 8,400
1568
+
1569
+ for transfer agent fees, $178 for the federal income tax return for 2012 and $500 for tax preparation fees.
1570
+
1571
+ As of March 31, 2013 we had cash of $20,340 in our bank accounts. As of
1572
+
1573
+ June 25
1574
+
1575
+ , 2013 we had cash of $
1576
+
1577
+ 11,748
1578
+
1579
+ in our bank accounts. However, we expect to incur substantial business operation costs including but not limited to marketing costs, website development costs, commissions of part time specialist, costs of this offering and costs associated with being a publicly reporting company and therefore we anticipate that we will incur substantial losses over the next 12 months.
1580
+
1581
+ We are dependent upon obtaining financing to continue with our business plan.
1582
+
1583
+ Changes In and Disagreements with Accountants
1584
+
1585
+ We have had no changes in or disagreements with our accountants.
1586
+
1587
+ Available Information
1588
+
1589
+ 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.
1590
+
1591
+ 30 | Page
1592
+
1593
+ 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.
1594
+
1595
+ Reports to Security Holders
1596
+
1597
+ 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.
1598
+
1599
+ 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.
1600
+
1601
+ Directors, Executive Officers, Promoters and Control Persons
1602
+
1603
+ Our executive officer and director and his age as of the date of this prospectus is as follows:
1604
+
1605
+ Director:
1606
+
1607
+ Name of Director
1608
+
1609
+
1610
+
1611
+ Age
1612
+
1613
+
1614
+
1615
+
1616
+
1617
+
1618
+
1619
+
1620
+
1621
+
1622
+
1623
+
1624
+
1625
+
1626
+
1627
+ Francisco Douglas Magana
1628
+
1629
+
1630
+
1631
+ 31
1632
+
1633
+
1634
+
1635
+
1636
+
1637
+
1638
+
1639
+
1640
+
1641
+
1642
+
1643
+
1644
+
1645
+
1646
+
1647
+ Executive Officers:
1648
+
1649
+
1650
+
1651
+
1652
+
1653
+
1654
+
1655
+
1656
+
1657
+
1658
+
1659
+
1660
+
1661
+
1662
+
1663
+
1664
+
1665
+
1666
+
1667
+ Name of Officer
1668
+
1669
+
1670
+
1671
+ Age
1672
+
1673
+
1674
+
1675
+ Office
1676
+
1677
+
1678
+
1679
+
1680
+
1681
+
1682
+
1683
+
1684
+
1685
+
1686
+
1687
+ Francisco Douglas Magana
1688
+
1689
+
1690
+
1691
+ 31
1692
+
1693
+
1694
+
1695
+ President, Chief Executive Officer, Treasurer, Chief Financial Officer and Chief Accounting Officer, Secretary
1696
+
1697
+ Biographical Information
1698
+
1699
+ Set forth below is a brief description of the background and business experience of our officers and sole director for the past five years.
1700
+
1701
+ Mr. Magana has acted as our sole President, Chief Executive Officer, Treasurer, Chief Financial Officer, Chief Accounting Officer, Secretary and sole member of our board of directors since our incorporation on September 7, 2012. Mr. Magana owns 77.32% of the outstanding shares of our common stock. However, Francisco Douglas Magana and Claudia Morales de Magana are husband and wife. Accordingly, each is deemed to be the beneficial owners of their spouse s shares. Therefore the total approximate percentage of shares, including Claudia Morales de Magana s shares, owned by our sole officer and director Mr. Francisco Douglas Magana is 77.84%.
1702
+
1703
+ 31 | Page
1704
+
1705
+ Mr. Magana graduated with a Bachelor of Science in Agriculture from Universidad de El Salvador (University of El Salvador) in 2004. After graduation Mr. Magana has been working for various coffee plantations and mills in El Salvador (Santa Maria coffee farm from September, 2004 to December, 2005 as a farm supervisor and Coffee Mill Ataspasco from January, 2006 to January, 2007 as a mill supervisor), whose businesses were involved in the cultivation, harvesting methods, processing, packaging, storing and marketing of coffee. In 2007 Mr. Magana opened his own agricultural company FDMag S.A. de C.V. specializing in commercial production of coffee. As of the date of the prospectus Mr. Magana still works for company FDMag S.A. de C.V as a director. His job responsibilities as a director include forecast, plan and implementation of commercial production of coffee with the focus on achieving high standards for plantation cultivation, safety and productivity, and insurance of the sufficient manpower to meet cultivation goals. Since 2009 and until present in addition to production of coffee Mr. Magana has been providing consulting services to coffee growers in El Salvador and Central America. Since 2007 FDMag S.A. de C.V. is the only company Mr. Magana has worked for. Mr. Magana intends to devote close to 40% (25 hours /week) of his time to planning and organizing activities of Vanell, Corp.
1706
+
1707
+ Mr. Magana s qualifications to serve on our Board of Directors are primarily based on his nearly five years of experience as a business owner, his business experience and qualifications with FDMag S.A. de C.V., his entrepreneurial desire to start Vanell, Corp. as a new business. Mr. Magana will assist the Company in the prioritization of tasks to accomplish maximum results, timely completion of projects and address organizational problems with innovative solutions. As a Director of FDMag S.A. de C.V, Mr. Magana brings to Vanell, Corp. experience in commercial coffee growing that is at the heart of Vanell s business plan. Mr. Magana has the background and experience to guide us as we develop our business. Due to Mr. Magana s experience and background in the commercial coffee growing industry, the shareholders felt Mr. Francisco Douglas Magana should serve as a director of the company.
1708
+
1709
+ During the past ten years, Mr. Magana has not been the subject to any of the following events:
1710
+
1711
+ 1. Any bankruptcy petition filed by or against any business of which Mr. Magana was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time.
1712
+
1713
+ 2. Any conviction in a criminal proceeding or being subject to a pending criminal proceeding.
1714
+
1715
+ 3. An order, judgment, or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting Mr. Magana s involvement in any type of business, securities or banking activities.
1716
+
1717
+ 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.
1718
+
1719
+ Significant Employees
1720
+
1721
+ We have no significant employees other than our officers and sole director.
1722
+
1723
+ Audit Committee Financial Expert
1724
+
1725
+ 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.
1726
+
1727
+ Conflicts of Interest
1728
+
1729
+ Mr. Francisco D. Magana, our President will be devoting approximately 40% (25 hours/week) of him time to our operations. Because Mr. Magana will only be devoting limited time to our operations, our operations may be sporadic and occur at times which are convenient to him. As a result, operations may be periodically interrupted or suspended which could result in a lack of significant revenues and a cessation of operations.
1730
+
1731
+ 32 | Page
1732
+
1733
+ Executive Compensation
parsed_sections/prospectus_summary/2013/CIK0001568427_global_prospectus_summary.txt ADDED
@@ -0,0 +1 @@
 
 
1
+ PROSPECTUS SUMMARY The Company Our Business The Company was incorporated in the State of Nevada on October 24, 2012 with the name Global Tech Solutions, Inc. We are a development stage company with a principal business selling computer and mobile device software products. The Company plans to develop and market software product as a mobile application for end users of the current generation iPhone 5 and iPad from Apple, Inc. The mobile application s digital content will be customizable by the owner of the particular device using our software. This should be of particular interest to artists and professional photographers and videographers, who want to have their own iPhone 5/iPad applications. We plan to stay on the cutting edge of the constantly changing mobile application market, and our goal is to create a quality reputation within the mobile software community and marketplace. We plan to sell our initial applications through our own online retail website to professionals, who desire their own mobile applications and want to control the content (photos, videos, etc.). We anticipate that we will receive revenue from the sale of our software products. Specifically, customers will be charged an initial fee to download our basic software product. Additional software features will be available for additional charges. Additionally, customers will be charged ongoing monthly fees for continued use of our products, software upgrades and other software modifications. As of the date of this prospectus, neither our initial mobile application nor any other application has been developed to the point that we can describe specifically its nature and scope. As of the date of this prospectus, we have not developed or sold any of our software or other products nor have we generated any revenue from operations. Our operations to date have been devoted primarily to start-up and development activities. Our President, Kenneth Johnson, has performed all of those activities to date, which include the following: Formation of the Company Development of our business plan Development of initial design and structure for mobile applications and desktop applications Research on three major marketing methods/strategies, including small retail stores, major retail outlets, and online sales Formulated product development and marketing strategies for our product lines to include: o iPhone 5 application for professionals in art and music o iPad application for professionals in art and music o iPhone 5 application for professionals in photography and videography o iPad application for professionals in photography and videography Secured web site domain www.global-tech-solutions.net research on mobile application user demographics We will attempt to become completely operational and anticipate sales to begin during the third quarter of operations following the completion of this offering. In order to generate revenues, we must address the following areas: Table of Contents 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 Amount of Registration Fee Common Stock par value $0.0001 4,000,000 $0.015 $60,000 $8.18 (1) The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457 under the Securities Act of 1933, as amended. 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. Table of Contents Finalize and implement our marketing plan: In order to effectively penetrate our targeted market, we will use a multi-faceted and long-term marketing plan that includes a high-end website, targeting professional photographers and videographers, artists, and musicians, and specific distribution channels using independent representatives. Long-term, independent commissioned sales representatives will work as middlemen between us and any potential retailers or websites that wish to offer our products. Their responsibilities would include approaching appropriate retailers, attend trade shows and utilize creative marketing techniques to attract websites and stores to offer our products. Our long term marketing plan is entirely dependent on future financing and, thus, may not occur. We currently, do not have any engagements, agreements, or contracts with independent commissioned sales representatives. Complete our website: we have secured the web domain located at www.global-tech-solutions.net. The site is currently under construction, and we plan to utilize thissite with strategic e-commerce retailers. We have budgeted the necessary funding to develop a quality site. Constantly monitor our market: We plan to constantly monitor our target market and adapt to consumers needs and desires. To be successful, we plan to evolve and diversify our product lines to satisfy the consumer. Operate the Company ethically and responsibly: Conduct our business and ourselves ethically and responsibly. We were incorporated in Nevada on October 24, 2012, as Global Tech Solutions, Inc. Our principal executive offices are located at 80713 Alexandria Court, Indio, California 92201. Our phone number is 714.473.9728. Our fiscal year ends on October 31. As of the date of this prospectus, we have 10,000,000 shares of our $.0001 par value common stock issued and outstanding and held by one shareholder. We are registering for sale 4,000,000 shares of our common stock pursuant to the Securities Act of 1933. 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 12 months. The financial statements included in the registration statement of which this prospectus is a part do not include any adjustments that might result from the uncertainty about our ability to continue in business. As of April 30, 2013, we had $2,625 in current assets and $21,900 in liabilities. Accordingly, our negative working capital position as April 30, 2013 was $19,275. Currently, we do not have enough cash to finance our operations. We estimate that we need approximately $60,000 to support our operations during the next twelve months. This amount includes (i) $5,000 for costs related to this offering, which have not been paid and (ii) $21,000, which is our estimated cost necessary to comply with our reporting requirements during the next twelve months. We believe the maximum proceeds from this offering will be sufficient to meet our cash requirements for the next twelve months. Our cash shortfall will be $15,000, $30,000 and $45,000, respectively, if we sell 75%, 50% and 25% of the maximum offering. We plan to meet any such shortfall through revenue from operations, private placements of our capital stock, and/or loans from Kenneth Johnson, our sole shareholder; provided, however, we have no commitment from any person for any additional funds. Table of Contents THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE COMPANY MAY NOT SELL ITS SECURITIES UNTIL THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART AND 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 OF THESE SECURITIES IS NOT PERMITTED. PRELIMINARY PROSPECTUS Dated July 17 , 2013 GLOBAL TECH SOLUTIONS, INC. 4,000,000 Shares of Common Stock $0.015 per share Global Tech Solutions, Inc. ( our , we , us the Company) is offering on a best-efforts basis of as many as 4,000,000 shares of its common stock at a price of $0.015 per share. This is the initial offering of our common stock, and no public market exists for the securities being offered. The Company is offering those shares on a self-underwritten , best-efforts, basis directly by our officer and director. There is no minimum number of shares required to be purchased by any investor. Kenneth Johnson, our sole officer and director, intends to sell those shares directly. No commission or other compensation related to the sale of those shares will be paid to Mr. Johnson or any other person. The intended methods of communication regarding the offer and sale of those shares include, without limitation, telephone and personal contact. Our selling efforts will not include any mass media methods, such as Internet or print media. There can be no assurance that all, or any, of the shares offered will be sold. The offering shall terminate on the earlier of (i) the date when the sale of all 4,000,000 shares is completed or (ii) one hundred and eighty (180) days from the effective date the registration statement of which this prospectus is a part. We are a development stage, start-up company. Any investment in the shares offered herein involves significant risks. You should only purchase shares if you can afford a complete loss of your investment. We may not sell all 4,000,000 shares offered. There is no minimum number of shares we must sell before we can utilize the proceeds from the purchase of shares. If we do not sell all 4,000,000 shares within the offering period (180 days), we will close the offering and subscription funds will not be returned to subscribers. In the event we do not sell all 4,000,000 shares offered, the amount of money we receive from the sale of those shares which are, in fact, purchased be minimal and may not be enough to even pay the costs of this offering. Funds from this offering will be deposited in our corporate bank account in our name. As a result, if we are sued for any reason and a judgment is rendered against us, investors subscriptions could be seized in a garnishment proceeding and investors could lose their investments. Investors do not have the right to withdraw invested funds. For more information, see the sections titled PLAN OF DISTRIBUTION and USE OF PROCEEDS herein. We qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act, which became law in April, 2012 and will be subject to reduced public company reporting requirements. See Jumpstart Our Business Startups Act specified herein. We are considered a shell company under applicable securities rules and subject to additional regulatory requirements as a result, including the inability of our shareholders to sell our shares in reliance on Rule 144 promulgated pursuant to the Securities Act of 1933, as well as additional restrictions. Accordingly, investors should consider our shares to be significantly risky and illiquid investments. Refer to the section entitled RISK FACTORS beginning on Page 5. As of the date of this prospectus, we have not developed or sold any of our software or other products nor have we generated any revenue from operations. BEFORE INVESTING, YOU SHOULD CAREFULLY READ THIS PROSPECTUS AND, PARTICULARLY, THE RISK FACTORS SECTION, BEGINNING ON PAGE 5. NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Our common stock is not traded on any public market and, although we intend to apply to have the prices of our common stock quoted on the Over-The-Counter Bulletin Board ( OTCBB ) maintained by the Financial Industry Regulatory Authority ( FINRA ) when the registration statement of which this prospectus is a part is declared effective, there can be no assurance that a market marker will agree to file the necessary documents with FINRA to enable us to participate on the OTCBB, nor can there be any assurance that any application filed by any such market maker for quotation on the OTCBB will be approved. Table of Contents Presently, we have no employees. Our sole officer and director is responsible for all planning, development and operational duties and will continue to do so throughout the early stages of our growth. Human resource planning will be a part of an ongoing process that will include regular evaluation of our operations. We intend to hire employees at such time as we determine it is appropriate. We can provide no assurance or guarantee on the date on which we will hire employees. We have no present plans to be acquired by or to merge with another company, nor does our shareholder have plans to enter into a change of control or similar transaction. Jumpstart Our Business Startups Act We are electing to not opt out of JOBS Act of 2012 extended accounting transition period. This may make our financial statements more difficult to compare to other companies. Pursuant to the JOBS Act of 2012, as an emerging growth company, we can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the PCAOB or the SEC. 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 standard for the private company. This may make comparison of our financial statements with any other public company which is not either an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible, as possible different or revised standards may be used. Emerging Growth Company: The JOBS Act of 2012 is intended to reduce the regulatory burden on emerging growth companies. We meet the definition of an emerging growth company and as long as we qualify as an emerging growth company, we 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 regarding executive compensation pursuant to 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). We 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; Table of Contents TABLE OF CONTENTS Page PROSPECTUS SUMMARY 1
parsed_sections/prospectus_summary/2013/CIK0001569134_tallgrass_prospectus_summary.txt ADDED
@@ -0,0 +1 @@
 
 
1
+ PROSPECTUS SUMMARY 1
parsed_sections/prospectus_summary/2013/CIK0001572317_uneeqo-inc_prospectus_summary.txt ADDED
@@ -0,0 +1,127 @@
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1
+ Prospectus Summary 4
2
+
3
+ Risk Factors 7
4
+
5
+ Use of Proceeds14
6
+
7
+ Determination of Offering Price 14
8
+
9
+ Dilution 14
10
+
11
+ Selling Shareholders 15
12
+
13
+ Plan of Distribution 17
14
+
15
+ Legal Proceedings 20
16
+
17
+ Directors, Executive Officers, Promoters and Control Persons 22
18
+
19
+ Security Ownership of Certain Beneficial Owners and Management 23
20
+
21
+ Description of Securities 23
22
+
23
+ Interest of Named Experts and Counsel 25
24
+
25
+ Disclosure of Commission Position of Indemnification for Securities Act Liabilities 25
26
+
27
+ Organization within Last Five Years 26
28
+
29
+ Description of Business 26
30
+
31
+ Management's Discussion and Analysis 33
32
+
33
+ Description of Property 36
34
+
35
+ Certain Relationships and Related Transactions 34
36
+
37
+ Market for Common Equity and Related Stockholder Matters 38
38
+
39
+ Executive Compensation 39
40
+
41
+ Financial Statements F-2 F-12
42
+
43
+ Changes In and Disagreements with Accountants on Accounting and Financial Disclosure 41
44
+
45
+ Prospectus Summary
46
+
47
+ 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.
48
+
49
+ We were incorporated on January 6, 2012and are a startup exploration stage company without mining operations and we are in the business of mineral exploration. We have no revenues, have achieved losses since inception, have been issued a going concern opinion by our auditors and rely upon the sale of our securities to fund operations. We have not implemented our business plan to date. In order complete Phase 1, with an estimated cost of $7,784 and Phase II, with an estimated cost of $15,225 of our anticipated exploration program.We will need to raise additional funds, with Phase 1 expected to commence between April 1, 2013 and July 31, 2012. To date we have not commenced our exploration program. Our first years exploration obligation is $7,784 on the CPG Prospect. We are having to raise additional funds of approximately $200,000 commencing immediately, to allow us sufficient time to raise the additional capital and to meet our operations, exploration and contractual obligations through December 31, 2015. There is no assurance that a commercially viable copper and secondary gold,molybdenum and or silver mineral deposit exists on our mining claims. Further exploration will be required before a final evaluation as to the economic and legal feasibility of our mining claims can be determined. Even if we complete our current exploration program and it is successful in identifying a copper,gold and or silver deposit, we will have to spend substantial funds on further drilling and engineering studies before we will know if we have a commercially viable mineral deposit or reserve.
50
+ On December 24, 2012, we entered into a Lease with Option to Purchase Agreement to acquire the CPG Prospect comprising of one claim block of 13 claims or 260 acres, with an additional 31 claims available for the price of $7,000 respectively.The claimscanbe accessed via Hawthorne, Nevada about 29 miles via a county gravel and then turning west on an unimproved dirt road for about 4 miles. The property can also be reached from Fallon, Nevada by traveling east on U.S. Highway 50 for about 35 miles, then south on State Route 839 about 19 miles to the end of the pavement and then south along the gravel county road 11 miles to the turn to the dirt access road. The gravel road is in good repair and previously served as an alternate route to Kennecott s Denton-Rawhide Mine. Rail service is available at Hawthorne and Fallon. The nearest commercial airport is at Reno, approximately 110 road miles from the property.The CPG Prospect agreement was entered into for the initial sum of $17,000, comprised of a $10,000 down payment and $7,000for the staking, filing and recording of an additional 31 claims.Costs and subsequent additional payments and exploration expenditures representing an aggregate total of $172,000 in payments and $272,500 in exploration expenditures over a period of five years as outlined in our Lease with Option to Purchase Agreement ( See Exhibit 10.1) to exercise the optionto purchase a 100% interest in the property. There is a 3% royalty interest attached to the claims in favor of Claremont Nevada Mines, LLC.and the claims are registered in the name of Claremont Nevada Mines, LLC.with the State of Nevada. There is no electrical power that can be utilized on the claim other than electrical power that can be provided by gas or diesel generators that we would bring on site.
51
+ Young Ju Yi and Woo Jong Yoo, our directors and officershave not visited the property yet, and have had no previous experience in mineral exploration or operating a mining company.
52
+
53
+ 4
54
+
55
+ Our directors own 54.55% of our outstanding common stock. Since our directors own a majority of our outstanding shares and they are the sole directors and officers of our company they have the ability to elect directors and control the future course of our company. Investors may find that the corporate decisions influenced by our directors are inconsistent with the interests of other stockholders.
56
+
57
+ Our objective is to conduct exploration activities on our mining claims to assess whether the claim possess any commercially viable mineral deposits.
58
+
59
+ Until we can validate otherwise, the claims are without known reserves and we are planning a four phase program to explore our claims.
60
+
61
+ The claims are not accessible all year round, there are periods where our claims may be un-accessible each year due to snow in the area. This means that our exploration activities may be limited to a period of about eight to nine months per year. We plan commence exploration on our claims in April 2013 or May 2013 and our goal is to complete the first phase of exploration before July 31, 2013, and is contingent upon availability of an exploration crew.
62
+
63
+ The following table summarizes the four phases of our anticipated exploration program.
64
+
65
+ Phase Number
66
+
67
+ Planned Exploration Activities
68
+
69
+ Time table
70
+
71
+ Phase 1
72
+
73
+ Preliminary Surface Sampling, Geological and Geochemical Screening.
74
+
75
+ Estimated Cost: $7,784
76
+
77
+ Between April 1, 2013 and December 31, 2013
78
+
79
+ Phase II
80
+
81
+ Detailed Evaluation, Geological Mapping, Site Prep, additional sampling
82
+
83
+ Estimated Cost:$15,225
84
+
85
+ Between January 1, 2014 and December 31, 2014
86
+
87
+ Phase III
88
+
89
+ Permitting and site preparation: drilling and environmental reclamation
90
+
91
+ Estimated Cost:$51,939
92
+
93
+ January 1, 2015 and December 31, 2015
94
+
95
+ If our exploration activities indicate that there are no commercially viable mineral deposits on our mining claims we will abandon the claims and stake or acquire new claims to explore. We will continue to stake and explore claims as long as we can afford to do so.
96
+
97
+ To date we have raised $56,000 via two offerings. The following table summarizes the date of offering, the price per share paid, the number of shares sold and the amount raised for the offering.
98
+
99
+ Closing Date of Offering
100
+
101
+ Price Per Share Paid
102
+
103
+ Number of Shares Sold
104
+
105
+ Amount Raised
106
+
107
+ December 31, 2012
108
+
109
+ $0.001
110
+
111
+ 6,000,000
112
+
113
+ $6,000
114
+
115
+ December 31, 2012
116
+
117
+ $0.01
118
+
119
+ 5,000,000
120
+
121
+ $50,000
122
+
123
+ 5
124
+
125
+ We have no revenues, have achieved losses since inception, have no operations, have been issued a going concern opinion by our auditors and rely upon the sale of our securities to fund operations.
126
+
127
+ Name, Address, and Telephone Number of Registrant
parsed_sections/prospectus_summary/2013/CIK0001573029_broadview_prospectus_summary.txt ADDED
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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
parsed_sections/prospectus_summary/2013/CIK0001573032_broadview_prospectus_summary.txt ADDED
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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
parsed_sections/prospectus_summary/2013/CIK0001573051_trucom_prospectus_summary.txt ADDED
@@ -0,0 +1 @@
 
 
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
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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
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+ Prospectus Summary 1
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+ Prospectus Summary 1
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+ Prospectus Summary 1
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+ Prospectus Summary 1
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+ Prospectus Summary 1