Registration of Securities of a Small-Business Issuer — Form 10-SB
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10SB12G Registration Statement 30± 147K
2: EX-3 Article of Incorporation 2± 7K
3: EX-3 Articles of Incorporation/Organization or By-Laws 14± 55K
-- bylaws
4: EX-4 Specimen Stock Certificate 2± 6K
5: EX-23 Consent of Certified Public Accountants 1 6K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
TUTTLE INDUSTRIES CORP.
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(Name of Small Business Issuer in its Charter)
Delaware 11-3649089
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
213 D Thompson Street, East Haven, Connecticut 06512
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(Address of principal executive officers, including Zip Code)
Telephone: (203) 469-6112
Facsimile: (203) 445-0456
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(Issuer's Telephone Number)
Securities to be registered under Section 12(b) of the Act:
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None
Securities to be registered under Section 12(g) of the Act:
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Common Stock, $.0001 Par Value Per Share
(Title of Class)
TABLE OF CONTENTS
PART I
ITEM 1. Description of Business....................................... 3
ITEM 2. Plan of Operation............................................. 8
ITEM 3. Description of Property....................................... 14
ITEM 4. Security Ownership of Certain Beneficial Owners
and Management............................................. 14
ITEM 5. Directors, Executive Officers, Promoters and Control
Persons.................................................... 15
ITEM 6. Executive Compensation........................................ 16
ITEM 7. Certain Relationship and Related Transactions................. 16
ITEM 8. Description of Securities..................................... 18
PART II
ITEM 1. Market Price of And Dividends on the Registrant's
Common Equity and Related Stockholder Matters.............. 20
ITEM 2. Legal Proceedings............................................. 20
ITEM 3. Changes in and Disagreements with Accountants................. 21
ITEM 4. Recent Sales of Unregistered Securities....................... 21
ITEM 5. Indemnification of Directors and Officers..................... 21
PART F/S
ITEM 1. Financial Statements and Exhibits............................... 22
SIGNATURE
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Tuttle Industries Corp. (the "Company") was incorporated under the laws
of the State of Delaware on August 23, 2002. The Company was formed as a blank
check company for the purpose of seeking to complete a merger or business
acquisition transaction. The Company has not been involved in any bankruptcy,
receivership or similar proceeding. The Company has not been involved in any
material reclassification, merger consolidation, or purchase or sale of a
significant amount of assets not in the ordinary course of business.
The Company has been in the developmental stage since inception and has
conducted virtually no business operations, other than organizational activities
and preparation of this registration statement on Form 10SB/12g. The Company
has no full-time employees and owns no real estate or personal property.
The executive offices of the Company are located at 213 D Thompson Street,
East Haven, Connecticut 06512. Its telephone number is (203) 469-6112. The
Company's sole officer and the sole director is Helen Pan. Ms. Pan was not the
original incorporator of the Company. As the founder of the Company, Ms. Pan
retained an incorporating agent to incorporate the Company in the State of
Delaware.
The Company is voluntarily filing this registration statement on Form
10-SB in order to become a 12(g) registered company under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). As a "reporting
company," the Company may be more attractive to a private acquisition target
because its common stock shares may thereby be quoted on the OTC Bulletin
Board. As a result of filing this registration statement, the Company is
obligated to file with the Securities and Exchange Commission (the "Commission")
certain interim and periodic reports including an annual report containing
audited financial statements. The Company anticipates that it will continue
to file such reports as required under the Exchange Act.
The Company is a "blank check" company, whose business plan is to seek,
investigate, and, if warranted, acquire one or more properties or businesses,
and to pursue other related activities intended to enhance shareholder value.
The acquisition of a business opportunity may be made by purchase, merger,
exchange of stock, or otherwise, and may encompass assets or a business entity,
such as a corporation, joint venture, or partnership. The Company has no
capital, and it is unlikely that the Company will be able to take advantage of
more than one such business opportunity. The Company intends to seek
opportunities demonstrating the potential of long-term growth as opposed to
short-term earnings.
After this registration statement is cleared by the Commission, the
Company's officer and director intends to contact a number of registered
broker-dealers to advise them of the Company's existence and to determine if
any companies or businesses they represent have an interest in considering
a merger or acquisition with us. All transactions in securities effected in
connection with the business plan of the Company as described in this
registration statement will be conducted through or effected by a registered
broker-dealer. No assurance can be given that the Company will be successful
in finding or acquiring a desirable business opportunity, given that no funds
are available for acquisitions, or that any acquisition that occurs will be on
terms that are favorable to the Company or its stockholders.
To date the Company has not identified any business opportunity that it
plans to pursue, and nor has the Company's officer, director, promoter,
affiliate, or associates had any preliminary contact or discussion with any
specific candidate for acquisition. There are no proposals, arrangements,
or understandings with any representatives of the owners of any business or
company regarding the possibility of an acquisition transaction.
The proposed business activities described herein classify the Company
as a "blank check" company. Many states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check" companies in
their respective jurisdictions. The Company does not intend to undertake any
offering of the Company's securities, either debt or equity, until such time
as the Company has successfully implemented its business plan described
herein. The Company has no plans, proposals, arrangements or understandings
with respect to the sale or issuance of additional securities prior to the
location of a merger or acquisition candidate. Further, Ms. Helen Pan, the
Company's sole officer, director and the sole shareholder, has expressed her
intention not to sell her respective shares of the Company's common stock
until such time as the Company has successfully consummated a merger or
acquisition and the Company is no longer classified as a "blank check"
company.
RISK FACTORS
The Company's business is subject to numerous risk factors, including
the following:
NO OPERATING HISTORY, NO ASSETS, AND NO SOURCE OF REVENUE. The
Company has had no operating history nor any revenues or earnings from
operations. The Company has no assets or financial resources. The Company
will, in all likelihood, continue to sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss
which will increase continuously until the Company can consummate a business
combination with a target company. There is no assurance that the Company
can identify such a target company and consummate such a business combination.
POSSIBLE BUSINESS - NOT IDENTIFIED AND HIGHLY RISKY. To date the
Company has not made attempts to identify, negotiate or consummate a merger
with, or acquisition of, a private company, and there is no arrangement,
agreement or understanding with respect to engaging in a merger with, joint
venture with or acquisition of, a private or public entity, and the Company
has not identified any particular industry or specific business within an
industry for evaluation by the Company. There can be no assurance the Company
will be successful in identifying and evaluating suitable business opportunities
or in concluding a business combination. The Company has not established a
specific length of operating history or a specified level of earnings, assets,
net worth or other criteria which it will require a merger or acquisition
candidate to have achieved, and without which the Company would not consider
a business combination in any form with such business opportunity. Accordingly,
the Company may enter into a business combination with a business opportunity
having no significant operating history, losses, limited or no potential for
earnings, limited assets, negative net worth or other negative characteristics.
ONLY ONE DIRECTOR AND OFFICER. Because management consists of only one
person, while seeking a business combination, Helen Pan, the president of the
Company, will be the only person responsible in conducting the day-to-day
operations of the Company. The Company does not benefit from multiple judgments
that a greater number of directors or officers would provide, and the Company
will rely completely on the judgment of its one officer and director when
selecting a target company. Ms. Pan anticipates devoting only a limited amount
of time per month to the business of the Company and does not anticipate
commencing any services until after this registration statement has been cleared
by the Commission. Ms. Pan has not entered into a written employment agreement
with the Company and she is not expected to do so. The Company has not obtained
key man life insurance on Ms. Pan. The loss of the services of Ms. Pan would
adversely affect development of the Company's business and its likelihood of
continuing operations.
CONFLICTS OF INTEREST. Certain conflicts of interest exist between the
Company and Helen Pan, the Company's sole officer and director. Ms. Pan has
other business interests to which she currently devotes attention, and is
expected to continue to do so. As a result, conflicts of interest may arise
that can be resolved only through her exercise of judgment in a manner which
is consistent with fiduciary duties to the Company. Ms. Pan may in the future
participate in business ventures which could be deemed to compete directly with
the Company. Additional conflicts of interest and non-arms length transactions
may also arise in the future in the event the Company's current and future
officers or directors are is involved in the management of any company with
which the Company transacts business. Management has adopted a policy that the
Company will not seek a merger with, or acquisition of, any entity in which
management serve as officers, directors or partners, or in which they or their
family members own or hold any ownership interest. The Company has established
no other binding guidelines or procedures for resolving potential conflicts of
interest. Failure by management to resolve conflicts of interest in favor of
the Company could result in liability of management to the Company.
REGULATIONS OF PENNY STOCKS. The Commission has adopted a number of rules
to regulate "penny stocks." Such rules include Rule 3a51-1 and Rules 15g-1
through 15g-9 under the Securities Exchange Act of 1934, as amended. Because
the securities of the Company may constitute "penny stocks" within the meaning
of the rules (as any equity security that has a market price of less than
$5.00 per share or with an exercise price of less than $5.00 per share, largely
traded in the NASD's OTC Bulletin Board or the "Pink Sheets"), the rules would
apply to the Company and to its securities.
The Commission has adopted Rule 15g-9 which established sales practice
requirements for certain low price securities. Unless the transaction is
exempt, it shall be unlawful for a broker or dealer to sell a penny stock to,
or to effect the purchase of a penny stock by, any person unless prior to the
transaction: (i) the broker or dealer has approved the person's account for
transactions in penny stock pursuant to this rule and (ii) the broker or dealer
has received from the person a written agreement to the transaction setting
forth the identity and quantity of the penny stock to be purchased. In order
to approve a person's account for transactions in penny stock, the broker or
dealer must: (a) obtain from the person information concerning the person's
financial situation, investment experience, and investment objectives; (b)
reasonably determine that transactions in penny stock are suitable for that
person, and that the person has sufficient knowledge and experience in financial
matters that the person reasonably may be expected to be capable of evaluating
the risks of transactions in penny stock; (c) deliver to the person a written
statement setting forth the basis on which the broker or dealer made the
determination (i) stating in a highlighted format that it is unlawful for the
broker or dealer to affect a transaction in penny stock unless the broker or
dealer has received, prior to the transaction, a written agreement to the
transaction from the person; and (ii) stating in a highlighted format
immediately preceding the customer signature line that (iii) the broker or
dealer is required to provide the person with the written statement; and (iv)
the person should not sign and return the written statement to the broker or
dealer if it does not accurately reflect the person's financial situation,
investment experience, and investment objectives; and (d) receive from the
person a manually signed and dated copy of the written statement. It is also
required that disclosure be made as to the risks of investing in penny stock
and the commissions payable to the broker-dealer, as well as current price
quotations and the remedies and rights available in cases of fraud in penny
stock transactions. Statements, on a monthly basis, must be sent to the
investor listing recent prices for the Penny Stock and information on the
limited market.
Shareholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include (i)
control of the market for the security by one or a few broker-dealers that are
oftenrelated to the promoter or issuer; (ii) manipulation of prices through
rearranged matching of purchases and sales and false and misleading press
releases; (iii) "boiler room" practices involving high-pressure sales tactics
and unrealistic price projections by inexperienced sales persons; (iv) excessive
and undisclosed bid-ask differential and markups by selling broker-dealers; and
(v) the wholesale dumping of the same securities by promoters and broker dealers
after prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker dealers who participate in
the market, management will strive within the confines of practical limitations
to prevent the described patterns form being established with respect to the
Company's securities.
LACK OF MARKET RESEARCH. The Company has neither conducted, nor have
others made available to it, results of market research indicating that market
demand exists for the transactions contemplated by the Company. Even in the
event a business opportunity is identified for a merger or acquisition
contemplated by the Company, there is no assurance the Company will be
successful in completing any such business combination.
COMPETITION. The Company is and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of
established and well-financed entities, including venture capital firms, are
active in mergers and acquisitions of companies which may be desirable target
candidates for the Company. Nearly all such entities have significantly greater
financial resources, technical expertise and managerial capabilities than the
Company and, consequently, the Company will be at a competitive disadvantage in
identifying possible business opportunities and successfully completing a
business combination. Moreover, the Company will also compete in seeking merger
or acquisition candidates with other public "blank check" companies, some of
which may also have funds available for use by an acquisition candidate.
NEED FOR AUDITED FINANCIAL STATEMENTS. The Exchange Act specifically
requires that any merger or acquisition candidates comply with all applicable
reporting requirements, which include providing audited financial statements
to be included in the reporting filings made under the Exchange Act. Thus,
in the event the Company successfully completes the acquisition of or merger
with an operating business entity, that business entity must provide audited
financial statements for at least two most recent fiscal years or, in the event
the business entity has been in business for less than two years, audited
financial statements will be required from the period of inception. The time
and additional costs that may be incurred by some target entities to prepare
such statements may significantly delay or essentially preclude consummation
of an otherwise desirable acquisition by the Company. Merger or acquisition
candidates that do not have, or are unable to provide reasonable assurances that
they will be able to obtain the required audited financial statements would not
considered by the Company to be appropriate for merger or acquisition so long
as the reporting requirements of the Exchange Act are applicable. The Company
will not acquire or merge with any entity which cannot provide audited financial
statements at or within a required period of time after closing of the proposed
transaction.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. In conjunction with completion
of a business acquisition, it is anticipated that the Company will issue an
amount of the Company's authorized but unissued common stock that represents the
greater majority of the voting power and equity of the Company, which will, in
all likelihood, result in shareholders of a target company obtaining a
controlling interest in the Company. As a condition of the business combination
agreement, the current shareholder of the Company may agree to sell or transfer
all or a portion of the Company's common stock she owns so to provide the target
company with all or majority control. The resulting change in control of the
Company will likely result in removal of the present officer and director of
the Company and a corresponding reduction in or elimination of her participation
in the future affairs of the Company.
NO PUBLIC MARKET EXISTS. There is currently no public market for the
Company's common stock, and no assurance can be given that a market will develop
or that a shareholder ever will be able to liquidate his investment without
considerable delay, if at all. If a market should develop, the price may be
highly volatile. Factors such as those discussed in this "Risk Factors" section
may have a significant impact upon the market price of the securities offered
hereby. Owing to the low price of the securities, many brokerage firms may not
be willing to effect transactions in the securities. Even if a purchaser finds
a broker willing to effect a transaction in theses securities, the combination
of brokerage commissions, state transfer taxes, if any, and any other selling
costs may exceed the selling price. Moreover, many lending institutions will
not permit the use of such securities as collateral for any loans.
RULE 144 SALES. All of the presently outstanding shares of the Company's
common stock are "restricted securities" within the meaning of Rule 144 under
the Securities Act of 1933, as amended (the "Securities Act"). As restricted
shares, these shares may be resold only pursuant to an effective registration
statement or under the requirements of Rule 144. However, it is the position
of the Commission that securities issued by a blank check company cannot be
resold under Rule 144, regardless of technical compliance with that rule, but
must be registered under the Securities Act. Accordingly, none of the shares
held by the present shareholder of the Company may be resold under Rule 144,
but may only be sold pursuant to an effective registration statement under the
Securities Act. A sale pursuant to subsequent registration statement of common
stock of the present shareholder may have a depressive effect upon the price of
the common stock in any market that may develop.
BLUE SKY RESTRICTIONS. Transferability of the shares of the Company's
common stock is very limited because a significant number of states have
enacted regulations or "blue sky" laws restricting or, in many instances,
prohibiting, the initial sale and subsequent resale of securities of "blank
check" companies such as the Company within that state. Moreover, many states,
while not specifically prohibiting or restricting "blank check" companies,
would not register the securities of the Company for sale or resale in their
states. The Company has no plan to register any securities of the Company
with any state. To ensure that any state laws are not violated through the
resale of the securities of the Company, the Company will refuse to register
the transfer of any securities of the Company, to residents of any state,
which prohibit such resale or if no exemption is available for such resale.
It is not anticipated that a secondary trading market for the Company's
securities will develop in any state until subsequent to consummation of a
business combination, if at all.
ADDITIONAL RISKS - DOING BUSINESS IN A FOREIGN COUNTRY. The Company may
effectuate a business combination with a merger target whose business operations
or even headquarters, place of formation or primary place of business are
located outside the United States. In such event, the Company may face the
significant additional risks associated with doing business in that country.
In addition to the language barriers, different presentations of financial
information, different business practices, and other cultural differences and
barriers that may make it difficult to evaluate such a merger target, ongoing
business risks result from the international political situation, uncertain
legal systems and applications of law, prejudice against foreigners, corrupt
practices, uncertain economic policies and potential political and economic
instability that may be exacerbated in various foreign countries.
TAXATION. Federal and state tax consequences will, in all likelihood,
be major considerations in any business combination that the Company may
undertake. Currently, such transactions may be structured so as to result
in tax-free treatment to both companies, pursuant to various federal and state
tax provisions. The Company intends to structure any business combination so
as to minimize the federal and state tax consequences to both the Company and
the target entity; however, there can be no assurance that such business
combination will meet the statutory requirements of a tax- free reorganization
or that the parties will obtain the intended tax-free treatment upon a transfer
of stock or assets. A non-qualifying reorganization could result in the
imposition of both federal and state taxes, which may have an adverse effect
on both parties to the transaction.
ITEM 2. PLAN OF OPERATION
The Company's purpose is to seek, investigate and, if such investigation
warrants, merge or acquire an interest in business opportunities presented to
it by persons or companies who or which desire to seek the perceived advantages
of a Securities Exchange Act of 1934 registered corporation. As to the date
of this registration statement, the Company has no particular acquisitions in
mind and has not entered into any negotiations regarding such an acquisition,
and neither the Company's officer and director nor any promoter and affiliate
has engaged in any negotiations with any representatives of the owners of any
business or company regarding the possibility of a merger or acquisition
between the Company and such other company.
Management
The Company is in the development stage and currently has no full-time
employees. Helen Pan is the Company's sole officer, director, and the sole
shareholder. There are no any other persons than Ms. Pan who devote any of
their time to the affairs of the Company. All references herein to management
of the Company are to Helen Pan. Ms. Pan, as president of the Company, has
agreed to allocate a limited portion of her time to the activities of the
Company after the effective date of the registration statement without
compensation. Potential conflicts may arise with respect to the limited time
commitment by Ms. Pan and the potential demands of the Company's activities.
See Item 7, " Certain Relationships and Related Transactions - Conflicts of
Interest."
The amount of time spent by Helen Pan on the activities of the Company
is not predictable. Such time may vary widely from an extensive amount when
reviewing a target company to an essentially quiet time when activities of
management focus elsewhere, or some amount in between. It is impossible to
predict with any precision the exact amount of time Ms. Pan will actually be
required to spend to locate a suitable target company. Ms. Pan estimates
that the business plan of the Company can be implemented by devoting
pproximately 10 to 25 hours per month over the course of several months but
such figure cannot be stated with precision.
Search for Business Opportunities
The Company's search will be directed toward small and medium-sized
enterprises, which have a desire to become reporting corporations and which
are able to provide audited financial statements. The Company does not
propose to restrict its search for investment opportunities to any particular
geographical area or industry, and may, therefore, engage in essentially any
business, to the extent of its limited resources. This includes industries
such as service, manufacturing, high technology, product development, medical,
communications and others. The Company's discretion in the selection of
business opportunities is unrestricted, subject to the availability of such
opportunities, economic conditions, and other factors. No assurance can be
given that the Company will be successful in finding or acquiring a desirable
business opportunity, and no assurance can be given that any acquisition, which
does occur, will be on terms that are favorable to the Company or its current
stockholder.
After this registration statement is cleared by the Commission, the
Company's officer and director intends to contact a number of registered broker-
dealers to advise them of the Company's existence and to determine if any
companies or businesses they represent have an interest in considering a merger
or acquisition with us. Business opportunities may also come to the Company's
attention from various sources, including professional advisers such as
attorneys and accountants, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. If such person
is not a registered broker-dealer, the Company will retain the professional
services of a registered broker-dealer. All transactions in securities effected
in connection with the business plan of the Company as described in this
registration statement will be conducted through or effected by a registered
broker-dealer.
In selecting the services of a registered broker-dealer, the Company would
consider the years such broker-dealer had been in the business, its rate of
success in matching target companies with acquiring companies, and the form and
amount of compensation required by the broker-dealer. Such broker-dealer shall
have necessary state and federal licenses and registered with the Securities and
Exchange Commission ("SEC"), the National Association of Secutities Dealers
("NASD"), and the Securities Investor Protection Corp. ("SIPC"). The Company
expects the broker-dealer retained would participate all the important parts of
securities transactions of the Company, including solicitation, negotiation, and
execution of the transactions, and would effect all securities transactions in
connection with the Company's business plan as described in this registration
statement.
As to date there has been no discussions, agreements or understandings with
any broker-dealers regarding the Company's search for business opportunities.
Management of the Company is not affiliated with any broker-dealers, and has not
in the past retained a broker-dealer to search for business opportunities.
In the event of a successful acquisition or merger, the Company may pay a
finder's fee, in the form of cash or common stock in the merged entity retained
by the Company, to persons instrumental in facilitating the transaction. The
amount of any finder's fee will be subject to negotiation, and cannot be
estimated at this time, but is expected to be comparable to consideration
normally paid in like transactions. Management believes that such fees are
customarily between 1% and 5% of the size of the transaction, based upon a
sliding scale of the amount involved. Such fees are typically in the range of
5% on a $1,000,000 transaction ratably down to 1% in a $4,000,000 transaction.
Any cash finder's fee earned will need to be paid by the prospective merger or
acquisition candidate, as the Company has no cash assets with which to pay such
obligation. The registered broker-dealers will be compensated solely in
accordance with the NASD regulations. No fees of any kind will be paid to the
promoter and management of the Company or to its associates or affiliates by
the Company.
The Company may merge with a company that has retained one or more
consultants or outside advisors. In that situation, the Company expects that
the business opportunity will compensate the consultant or outside advisor.
The Company will not restrict its search to any specific kind of firm, but
may acquire a venture which is in its preliminary or development stage, one
which is already in operation, or in a more mature stage of its corporate
existence. The acquired business may need to seek additional capital, may
desire to have its shares publicly traded, or may seek other perceived
advantages which the Company may offer. However, the Company does not intend
to obtain funds to finance the operation of any acquired business opportunity
until such time as the Company has successfully consummated the merger or
acquisition transaction. There are no loan arrangements or arrangements for
any financing whatsoever relating to any business opportunities.
Evaluation of Business Opportunities
The analysis of business opportunities will be under the supervision of the
Company's sole officer and director, who is not a professional business analyst.
In analyzing prospective business opportunities, management will consider such
matters as available technical, financial and managerial resources; working
capital and other financial requirements; history of operations, if any;
prospects for the future; nature of present and expected competition; the
quality and experience of management services which may be available and the
depth of that management; the potential for further research, development, or
exploration; specific risk factors not now foreseeable, but which then may be
anticipated to impact the proposed activities of the Company; the potential for
growth or expansion; the potential for profit; the perceived public recognition
or acceptance of products, services, or trades; name identification; and other
relevant factors. In many instances, it is anticipated that the historical
operations of a specific business opportunity may not necessarily be indicative
of the potential for the future because of a variety of factors, including, but
not limited to, the possible need to expand substantially, shift marketing
approaches, change product emphasis, change or substantially augment management,
raise capital and the like.
Management intends to meet personally with management and key personnel
of the target business entity as part of its investigation. To the extent
possible, the Company intends to utilize written reports and personal
investigation to evaluate the above factors.
Prior to making a decision to participate in a business opportunity, the
Company will generally request that it be provided with written materials
regarding the business opportunity containing as much relevant information as
possible. Including, but not limited to, such items as a description of
products, services and company history; management resumes; financial
information; available projections, with related assumptions upon which they
are based; an explanation of proprietary products and services; evidence of
existing patents, trademarks, or service marks, or rights thereto; present and
proposed forms of compensation to management; a description of transactions
between such company and its affiliates during the relevant periods; a
description of present and required facilities;, an analysis of risks and
competitive conditions; a financial plan of operation and estimated capital
requirements; audited financial statements, or if they are not available at
that time, unaudited financial statements, together with reasonable assurance
that audited financial statements would be able to be produced within a required
period of time; and the like.
The Company will subject to the reporting requirements of the Exchange Act
60 days after filing the initial registration statement on Form 10-SB. Under
the Exchange Act, any merger or acquisition candidate will become subject to
the same reporting requirements of the Exchange Act as the Company following
consummation of any merger or acquisition. Thus, in the event the Company
successfully completes the acquisition of or merger with an operating business
entity, that business entity must provide audited financial statements for at
least two most recent fiscal years or, in the event the business entity has been
in business for less than two years, audited financial statements will be
required from the period of inception. Acquisition candidates that do not
have or are unable to obtain the required audited statements may not be
considered appropriate for acquisition. The Company will not acquire or merge
with any entity which cannot provide audited financial statements at or within
a required period of time after closing of the proposed transaction. The
audited financial statements of the acquired company must be furnished with 75
days following the effective date of a business combination.
When a non-reporting company becomes the successor of a reporting company
by merger, consolidation, exchange of securities, acquisition of assets or
otherwise, the successor company is required to provide in a Form 8-K current
report the same kind of information that would appear in a registration
statement, including audited and pro forma financial statements. The
Commission treats these Form 8-K filings in the same way it treats the
registration statements on Form 10-SB filings. The Commission subjects them to
its standards of review selection, and the Commission may issue substantive
comments on the sufficiency of the disclosures represented. If the Company
enters into a business combination with a non-reporting company, such non-
reporting company will not receive reporting status until the Commission has
determined that it will not review the 8-K filing or all of the comments has
been cleared by the Commission.
Management believes that various types of potential merger or acquisition
candidates might find a business combination with the Company to be attractive.
These include acquisition candidates desiring to create a public market for
their shares in order to enhance liquidity for current stockholders, acquisition
candidates which have long-term plans for raising capital through public sale
of securities and believe that the possible prior existence of a public market
for their securities would be beneficial, and acquisition candidates which plan
to acquire additional assets through issuance of securities rather than for
cash, and believe that the possibility of development of a public market for
their securities will be of assistance in that process. Acquisition candidates,
who have a need for an immediate cash infusion, are not likely to find a
potential business combination with the Company to be an attractive
alternative. Nevertheless, the Company has not conducted market research and
is not aware of statistical data which would support the perceived benefits of
a merger or acquisition transaction for the owners of a business opportunity.
The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals and
the selection of a business opportunity may take several months or more.
Acquisition of a Business Opportunity
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another entity. It may also acquire
stock or assets of an existing business. In connection with a merger or
acquisition, it is highly likely that an amount of stock constituting control
of the Company would either be issued by the Company or be purchased from the
current principal stockholder of the Company by the acquiring entity or its
affiliates, and accordingly, the shareholders of the target company, typically,
become the majority of the shareholders of the combined company, the board of
directors and officers of the target company become the new board and officers
of the combined company and often the name of the target company becomes the
name of the combined company. There are currently no arrangements that would
result in a change of control of the Company.
It is anticipated that any securities issued as a result of consummation
of a business combination will be issued in reliance upon one or more exemptions
from registration under applicable federal and state securities laws to the
extent that such exemptions are available. In some circumstances, however, as
a negotiated element of its transaction, the Company may agree to register all
or a part of such securities immediately after the transaction is consummated
or at specified times thereafter. If such registration occurs, of which there
can be no assurance, it will be undertaken by the surviving entity after the
Company has entered into an agreement for a business combination or has
consummated a business combination and the Company is no longer considered
a blank check company. Until such time as this occurs, the Company will not
attempt to register any additional securities. The issuance of substantial
additional securities and their potential sale into any trading market may
have a depressive effect on the market value of the Company's securities in the
future if such a market develops, of which there is no assurance. There has
been no plans, proposals, arrangements or understandings with respect to the
sale or issuance of additional securities.
While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a "tax-free" reorganization under Sections
351 or 368 of the Internal Revenue Code of 1986, as amended. In order to obtain
tax-free treatment, it may be necessary for the owners of the surviving entity
to own 80% or more of the voting stock of the surviving entity. In this event,
the shareholders of the Company would retain less than 20% of the issued and
outstanding shares of the surviving entity, which could result in significant
dilution in the equity of such shareholders. However, treatment as a tax free
reorganization will not be a condition of any future business combination and
if it is not the case, the Company will not obtain an opinion of counsel that
the reorganization will be tax free.
With respect to any merger or acquisition, negotiations with target
company management are expected to focus on the percentage of the Company which
the target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's only shareholder will in
all likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may be
subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's shareholder at such time.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of
such agreements cannot be predicted, generally such agreements will require
certain representations and warranties of the parties thereto, will specify
certain events of default, will detail the terms of closing and the conditions
which must be satisfied by the parties prior to and after such closing, outline
the manner of bearing costs, including costs associated with the Company's
attorneys and accountants, and will include miscellaneous other terms.
It is anticipated that the Company will not be able to diversify, but
will essentially be limited to the acquisition of one business opportunity
because of the Company's limited financing. This lack of diversification will
not permit the Company to offset potential losses from one business opportunity
against profits from another, and should be considered an adverse factor
affecting any decision to purchase the Company's securities.
The Company intends to seek to carry out its business plan as discussed
herein. In order to do so, the Company needs to pay ongoing expenses,
including particularly legal and accounting fees incurred in conjunction with
preparation and filing of this registration statement, and in conjunction with
future compliance with its on-going reporting obligations. Because the Company
has no capital with which to pay these anticipated expenses, Helen Pan, the sole
shareholder of the Company, has agreed that she will, on behalf of the Company,
pay all expenses of the Company as they may be incurred with her personal funds.
Such payments will be made without expectation of repayment unless the owners
of the business which the Company acquires or merges with agree to repay all or
a portion of such expenses. There is no minimum or maximum amount Ms. Pan will
pay on behalf of the Company. Ms. Pan has agreed to continue to pay those
expenses until the Company completes a business combination. Should, Ms. Pan
fail to pay such expenses, the Company has not identified any alternative
sources, there is substantial doubt about the Company's ability to continue as
a going concern. The Company currently does not intend to raise funds, either
debt or equity, from investors while the Company is a blank check company, and
the Company will not borrow any funds to make any payments to the Company's
promoter, management or her affiliates or associates.
The Company does not intend to make any loans to any prospective merger
or acquisition candidates or unaffiliated third parties. The Company has
adopted a policy that it will not seek an acquisition or merger with any
entity in which the Company's officer, director, and controlling shareholder
or any affiliate or associate serves as an officer or director or holds any
ownership interest.
Investment Company Act of 1940
Although the Company will be subject to regulation under the Securities
Exchange Act of 1934, management believes the Company will not be subject to
regulation under the Investment Company Act of 1940, insofar as the Company
will not be primarily engaged in the business of investing or trading in
securities. In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register
as an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from
the Securities and Exchange Commission as to the status of the Company under
the Investment Company Act of 1940 and, consequently, any violation of such
Act would subject the Company to material adverse consequences.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to
acquire any properties. The Company currently maintains a mailing address at
the office of its president, Helen Pan, located at 213 D Thomson Street, East
Haven, Connecticut 06512. The Company pays no rent or other fees for the use
of this office spaces. The president of the Company has agreed to continue
this arrangement until the Company completes a business combination. The
Company does not believe that presently it will need to maintain an office in
order to carry out its plan of operations described herein.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
As of the date of this registration statement, there are 5,000,000 shares
of the Company's common stock, par value $.0001 per share, issued and
outstanding. The following table sets forth certain information regarding
the beneficial ownership of the Company's common stock by (i) each stockholder
known by the Company to be the beneficial owner of more than 5% of the
Company's common stock; (ii) by each director and executive officer of the
Company; and (iii) by all executive officer and directors of the Company as a
group. Each of the persons named in the table has sole voting and investment
power with respect to the shares beneficially owned.
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
--------------------------- ----------------------- ----------------
Helen Pan 5,000,000 100%
213 D Thompson Street
East Haven, CT 06512
All officers and directors 5,000,000 100%
As a group (1 person)
--------------------------------------------------------------------------
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Company has one director and executive officer as set forth below:
Name Age Position
----------------- -------- -------------------------------
Helen Pan 46 President, Secretary & Director
The director named above will serve until the next annual meeting of the
Company's stockholders or until his successors are duly elected and have
qualified. Directors will be elected for one-year terms at the annual
stockholders meeting. Officers will hold their positions at the pleasure of
the board of directors, absent any employment agreement, of which none
currently exists or is contemplated.
There are no agreements or understandings for the Company's sole officer
or director to resign at the request of another person, and the above-named
officer and director is neither acting on behalf of, nor will act at the
direction of, any other person.
Set forth below is the name of the director and officer of the Company,
all positions and offices with the Company held, the period during which she
has served as such, and the business experience during at least the last five
years:
Helen Pan has served as president, secretary and director of the Company
since its inception, and will serve on the board until the next annual
meeting of shareholders or until a successor is elected. Since October 1993,
Ms. Pan, as the founder, has been the president of Japanese Noodle House, a
Japanese restaurant located in New Haven, Connecticut. From 1997 to present,
Ms. Pan has been the owner and president of Pan's Package Store, a liquor store
in New Haven, Connecticut. From 1997 to the present, Ms. Pan is the president
and secretary of United Asia International, Inc., an import/export company
that Ms. Pan founded in September 1997, and this company has been inactive
since then.
The Officer and Director identified in the above is the Company's only
promoter.
During the past five years, no present or former directors, executive
officers or persons nominated to become a director or an executive officer of
the Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the bankruptcy
or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or
(4) was found by a court of competent jurisdiction (in a civil action),
the Commission or the Commodity Futures Trading Commission to have violated
a federal or state securities or commodities law, and the judgment has not
been reversed, suspended or vacated.
Previous Blank Check Offerings
The Company's management and promoter has never been involved in any blank
check or blind pool offerings.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's sole officer and director does not receive any compensation
for her services rendered to the Company since inception, has not received such
compensation in the past, and is not accruing any compensation pursuant to any
agreement with the Company. The Company has no retirement, pension, profit
sharing, stock option or insurance programs or other similar programs for the
benefit of directors, officers, or other employees.
The sole officer and director of the Company will not receive any finder's
fee, either directly or indirectly, as a result of her efforts to implement the
Company's business plan outlined herein.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 23, 2002 (inception), the Company issued 5,00,000 restricted
shares of its common stock to Helen Pan, the Company's sole officer and the
director for her services and expenses in incorporating the Company valued
at $500.
The Company currently uses the offices of the Company's sole officer,
director and the sole shareholder, Helen Pan, as its mailing address, for
which the Company pays no rent, and for which Ms. Pan has agreed to continue
this arrangement until the Company completes a business combination.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein. Because the Company
has no capital, the Company's sole officer, director and the sole shareholder,
Helen Pan, has agreed that she will, on behalf of the Company, pay all of the
ongoing expenses of the Company as they may be incurred with her personal funds.
Such payments will be made without expectation of repayment unless the owners
of the business which the Company acquires or merges with agree to repay all
or a portion of such expenses. There is no minimum or maximum amount Ms. Pan
will pay on behalf of the Company. Ms. Pan has agreed to continue to pay those
expenses until the Company completes a business combination.
The Company did not and will not enter into any transactions with any
business with which its officer or director are affiliated. No officer,
director, promoter, or affiliates of the Company has or proposes to have any
direct or indirect material interest in any asset proposed to be acquired by
the Company through security holdings, contracts, options, or otherwise.
Conflicts of Interest
The Company's proposed business raises potential conflicts of interest
exist between the Company and Helen Pan, the Company's sole officer and
director. Ms. Pan has other business interests to which she currently devotes
attention, and is expected to continue to do so. As a result, conflicts of
interest may arise that can be resolved only through her exercise of judgment
in a manner which is consistent with her fiduciary duties to the Company.
Ms. Pan intends to devote as much time to the activities of the Company as
required. However, should such a conflict arise, there is no assurance that
Ms. Pan would not attend to other matters prior to those of the Company.
Ms. Pan estimates that the business plan of the Company can be implemented in
theory by devoting approximately 10 to 25 hours per month over the course of
several months but such figure cannot be stated with precision.
No finder's fee of any kind will be paid by the Company to the Company's
sole director, officer, promoter, or affiliates, and no loans of any type have,
or will be, made by the Company to the Company's director, officer, promoter,
or affiliates.
Management of the Company is not currently affiliated or associated,
directly or indirectly, with other blank check companies. Accordingly, there
is no company with which management of the Company is affiliated that either
competes with or would have a conflict of interest with this Company.
Additional conflicts of interest and non-arms length transactions may also
arise in the future in the event the Company's current and future officers or
directors are is involved in the management of any company with which the
Company transacts business. The Company has adopted a policy that the Company
will not enter into a business combination, or acquire any assets of any kind
for its securities, in which management of the Company or any affiliates or
associates have any interest, direct or indirect. The Company has established
no other binding guidelines or procedures for resolving potential conflicts of
interest. Failure by management to resolve conflicts of interest in favor of
the Company could result in liability of management to the Company.
Other than described above, there have been no transactions that are
required to be disclosed pursuant to Item 404 of Regulation S-B.
ITEM 8. DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 80,000,000 shares
of common stock, par value $.0001 per share, of which there are 5,000,000 issued
and outstanding and 20,000,000 shares of preferred stock, par value $.0001 per
share, of which none have been designated or issued. The following summarizes
the important provisions of the Company's capital stock. For more information
about the Company's capital stock, please see the copy of our articles of
incorporation and bylaws that have been filed as exhibits to the registration
statement of which this prospectus is a part.
Common Stock
Holders of shares of common stock are entitled to one vote for each share
on all matters to be voted on by the stockholders. Holders of common stock do
not have cumulative voting rights, which means that the holders of a majority
of the outstanding shares of our common stock voting for the election of
directors can elect all members of the Board of Directors. Holders of common
stock are entitled to share ratably in dividends, if any, as may be declared
from time to time by the Board of Directors in its discretion from funds
legally available therefor. In the event of a liquidation, dissolution or
winding up of the Company, the holders of common stock are entitled to share
pro rata all assets remaining after payment in full of all liabilities. All of
the outstanding shares of common stock are fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the Company's
common stock. There are no conversion or redemption rights or sinking fund
provisions with respect to the common stock.
Preferred Stock
The Board of Directors is authorized to provide for the issuance of shares
of preferred stock in series and, by filing a certificate pursuant to the
applicable law of Delaware, to establish from time to time the number of shares
to be included in each such series, and to fix the designation, powers,
preferences and rights of the shares of each such series and the qualifications,
limitations or restrictions thereof without any further vote or action by the
shareholders. Any shares of preferred stock so issued would have priority over
the common stock with respect to dividend or liquidation rights. Any future
issuance of preferred stock may have the effect of delaying, deferring or
preventing a change in control of the Company without further action by the
shareholders and may adversely affect the voting and other rights of the holders
of common stock. At present, the Company has no plans to issue any preferred
stock nor adopt any series, preferences or other classification of preferred
stock.
The issuance of shares of preferred stock, or the issuance of rights to
purchase such shares, could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of preferred stock might
impede a business combination by including class voting rights that would
enable the holder to block such a transaction, or facilitate a business
combination by including voting rights that would provide a required percentage
vote of the stockholders. In addition, under certain circumstances, the
issuance of preferred stock could adversely affect the voting power of the
holders of the common stock. Although the Board of Directors is required to
make any determination to issue such stock based on its judgment as to the best
interests of the stockholders of the Company, the Board of Directors could act
in a manner that would discourage an acquisition attempt or other transaction
that some, or a majority, of the stockholders might believe to be in their best
interests or in which stockholders might receive a premium for their stock over
the then market price of such stock. The Board of Directors does not at present
intend to seek stockholder approval prior to any issuance of currently
authorized stock, unless otherwise required by law or stock exchange rules.
The Company has no present plans to issue any preferred stock.
Dividends
Dividends, if any, will be contingent upon the Company's revenues and
earnings, if any, capital requirements and financial conditions. The payment
of dividends, if any, will be within the discretion of the Company's Board of
Directors. The Company presently intends to retain all earnings, if any, for
use in its business operations and accordingly, the Board of Directors does not
anticipate declaring any dividends prior to a business combination.
Trading of Securities in Secondary Market
The Company presently has 5,000,000 shares of common stock issued and
outstanding, all of which are "restricted securities", as that term is defined
under Rule 144 promulgated under the Securities Act, in that such shares were
issued in private transactions not involving a public offering. The Commission
has concluded that Rule 144 is not available for resale transactions for
securities issued by blank check companies and, consequently, the resale of such
securities cannot occur without registration under the Securities Act. Further,
promoters and affiliates of a blank check company and their transferees would be
considered "underwriters" under the Securities Act of 1933 when reselling the
securities of a blank check company. The Commission also states that these
securities can only be resold through a registered offering. Rule 144 would
not be available for those resale transactions despite technical compliance
with the requirements of that Rule. This requirement, however, may not apply
to transactions not involving the blank check company's promoters, affiliates
or their transferees. As a result of the foregoing, the Company's current
sole shareholder will not be able to rely on the provisions of Rule 144. She
will instead be required to file a registration statement under Securities Act
of 1933 in order to complete any public sales of her shares. Further
information may be found in the NASD Notice to Members 00-49.
Following a business combination, the Company may apply for quotation of
its securities on the OTC Bulletin Board. To qualify for quotation of its
securities on the OTC Bulletin Board, an equity security must have at least
one registered broker-dealer, known as the market maker, willing to list bid
or sale quotations and to sponsor the company for the quotation on the OTC
Bulletin Board. There have been no preliminary discussions, understandings
or agreements between the Company and any broker-dealer that would enable the
broker-dealer to act as a market maker for the Company's securities in the
future.
Transfer Agent
It is anticipated that the Company will act as its own transfer agent
for the common stock of the Company.
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) MARKET PRICE. There is no trading market for the Company's common
stock at present and there has been no trading market to date. There is no
assurance that a trading market will ever develop, or if developed, will be
sustained.
The proposed business activities described herein classify the Company
as a "blank check" company. A blank check company is 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. The Securities and Exchange Commission and many states
have enacted statutes, rules and regulations limiting the sale of securities
of blank check companies. Therefore, management will not undertake any efforts
to cause a market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan described herein.
There are no plans, proposals, arrangements or understandings with any person
with regard to the development of a trading market in any of the Company's
securities.
(b) OPTIONS, WARRANTS, ETC. There are no outstanding options or
warrants to purchase, nor any securities convertible into, the Company's common
shares. Additionally, there are no shares that could be sold pursuant to Rule
144 under the Securities Act or that the Company has agreed to register under
the Securities Act for sale by security holders. Further, there are no common
shares of the Company being, or proposed to be, publicly offered by the Company.
(c) HOLDERS. There is one (1) holder of the Company's common stock. The
issued and outstanding shares of the Company's common stock were issued in
accordance with the exemptions from registration afforded by Section 4(2) of
the Securities Act of 1933, as amended.
(d) DIVIDENDS. The Company has not paid any dividends to date, and has
no plans to do so in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company has not changed accountants since its formation and there are
no disagreements with accountants on accounting or financial disclosure matters.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
The following sets forth information relating to all previous sales of the
Company's common stock, which sales were not registered under the Securities
Act of 1933.
In connection with the Company's organization, on August 23, 2002, the
Company issued 5,000,000 shares of the Company's restricted common stock to
Helen Pan, the president of the Company, in exchange for her services and
contribution of expenses in incorporating the Company. The shares were issued
for an aggregate consideration of $500, which we believe represents the fair
value of the services performed by Helen Pan.
The aforementioned securities were issued under the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.
The Company believes this exemption is available because this issuance was a
transaction not involving a public offering. There was no general solicitation
or advertising used to offer the Company's shares; the sole investor had the
knowledge and experience in financial and business matters to evaluate the
merits and risks of this prospective investment and therefore was either
accredited or sufficiently sophisticated to undertake such an investment.
Additionally, securities were not offered or sold to more than thirty-five (35)
unaccredited investors.
The Company has never utilized an underwriter for an offering of the
Company's securities, and there were no underwriting discounts or commissions
involved. Other than the securities described above, the Company has not
issued or sold any securities.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision
eliminating the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
provided that such provision shall not eliminate or limit the liability of
a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 (relating to liability for unauthorized acquisitions or
redemptions of, or dividends on, capital stock) of the General Corporation Law
of the State of Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit. The Company's certificate of
incorporation and bylaws contain such a provision.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS AND
CONTROLLING PERSONS OF THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT
IS THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE SUCH ACT AND
IS THEREFORE UNENFORCEABLE.
PART F/S
FINANCIAL STATEMENTS.
Set forth below are the audited financial statements for the Company for the
period from August 23, 2002 (inception) to October 31, 2002. The following
financial statements are attached to this report and filed as a part thereof.
TUTTLE INDUSTRIES CORP.
(A Development Stage Company)
Financial Statements As of October 31, 2002
With Independent Auditor's Audit Report
INDEPENDENT AUDITOR'S AUDIT REPORT ................................. F-1
FINANCIAL STATEMENTS
Balance Sheet as of October 31, 2002.............................. F-2
Statements of Operations for the period beginning August 23,
2002 (inception) to October 31, 2002 ........................... F-3
Statements of Changes in Stockholder's Equity for the period
beginning August 23, 2002 (inception) to October 31, 2002....... F-4
Statements of Cash Flows for the Period for the period beginning
August 23, 2002 (beginning) to October 31,2002.................. F-5
NOTES TO FINANCIAL STATEMENTS....................................... F-6
Stan J. H. Lee, CPA
A member firm of DMHD Hamilton Clark & Co. Tel: (201) 681-7475
2182 Lemoine Ave., Suite 200 Fax: (815) 846-7550
Fort Lee, NJ 07024 E-mail: stanL@dmhdxcpa.com
INDEPENDENT AUDITOR'S AUDIT REPORT
To the Board of Directors and
Management of Tuttle Industries Corp.
East Haven, Connecticut
I have audited the accompanying balance sheet of Tuttle Industries Corp.
(a development stage company) as of October 31, 2002 and the related
statements of operations, change in stockholder's equity and cash flows for
the period beginning August 23, 2002 (inception) to October 31, 2002. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based
on our audit.
I conducted our audit in accordance with generally accepted auditing
standards in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Tuttle Industries Corp.
(a development stage company) as of October 31, 2002, and the results of its
operations and its cash flows for the period from August 23, 2002 (inception)
through October 31, 2002 in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that
Tuttle Industries Corp. will continue as a going concern. As discussed in
Note 1 to the financial statements, Tuttle Industries Corp. was only
recently formed, has incurred losses since its inception and has not yet
been successful in establishing profitable operations, raising substantial
doubt about its ability to continue as a going concern. Management's plans
in regards to these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome
of these uncertainties.
/s/ Stan J.H. Lee /s/
---------------------
Stan J. H. Lee, CPA
License # CC 23007
November 12th, 2002
Fort Lee, New Jersey
F-1
TUTTLE INDUSTRIES CORP.
(A Development Stage Company)
BALANCE SHEET
As of October 31, 2002
ASSETS
CURRENT ASSETS ................................................. $ 0
OTHER ASSETS ................................................... 0
--------
TOTAL ASSETS ................................................... $ 0
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES ............................................ $ 0
--------
TOTAL LIABILITIES .............................................. 0
--------
STOCKHOLDERS' EQUITY
Common stock, $0.0001 par value; 80,000,000 shares
authorized; 5,000,000 shares issued and outstanding .......... 500
Preferred stock, $0.0001 par value; 10,000,000 shares
authorized, zero shares issued and outstanding ............... 0
Additional paid-in capital ................................... 3,500
Accumulated deficit during development stage ................. (4,000)
--------
TOTAL STOCKHOLDERS' EQUITY ................................. 0
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..................... $ 0
========
The accompanying notes to financial statements are an integral
part of these statements
F-2
TUTTLE INDUSTRIES CORP.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the period beginning from August 23, 2002
(Inception) to October 31, 2002
INCOME ...................................................... $ 0
OPERATING EXPENSES:
General and administrative expenses ..................... 3,500
Organization expense .................................... 500
-------
Total operating costs and expenses .......................... 4,000
-------
Income (loss) Before Tax Provision .......................... (4,000)
Provision for income taxes .................................. 0
------
NET LOSS .................................................... $(4,000)
========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING .................. 5,000,000
=========
NET LOSS PER COMMON SHARE ................................... $ (.0008)
=========
The accompanying notes to financial statements are an integral
part of these statements
F-3
TUTTLE INDUSTRIES CORP.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
for the period beginning August 23, 2002
(inception) to October 31, 2002
[Enlarge/Download Table]
Total
Common Stock Additional Accumulated Stockholders'
Shares Amount Paid-in Capital Deficit Equity
--------------- ----------- ----------------- ------------- ----------
Balance
At August 23,2002 -- -- -- -- --
Issuance of Common
Stocks for services
on 8/23/2002 5,000,000 $500 $3,500 -- $4,000
Net Loss -- -- -- $(4,000) (4,000)
Balance
At October 31, 2002 5,000,000 $500 $3,500 $(4,000) $ 0
========== ===== ======= ======== =======
The accompanying notes to financial statements are an integral part of these statements.
F-4
TUTTLE INDUSTRIES CORP.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
The Period from August 23, 2002 (Inception) to October 31, 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ...................................................... $(4,000)
Adjustment to reconcile net loss to net cash
provided by Operating activities ............................ 0
--------
Net cash used in operating activities ........................ (4,000)
--------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by investing activities..................... 0
-------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for service........................... 500
Additional paid-in capital..................................... 3,500
-------
Net cash provided by financing activities...................... 4,000
--------
NET INCREASE (DECREASE).......................................... $ 0
--------
CASH, beginning of period........................................ 0
=========
CASH, end of period.............................................. $ 0
=========
The accompanying notes to financial statements are an
integral part of these statements.
F-5
TUTTLE INDUSTRIES CORP.
(A Development Stage Company)
Notes to Financial Statements
October 31, 2002
NOTE 1 - GOING CONCERN CONSIDERATION
------------------------------------
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States, which
contemplates the continuation of the Company as a going concern. The Company
is in the development stage and has no current sources of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern.
The management's plans include the acquisition of a suitable business venture
to provide the opportunity for the Company to continue as a going concern.
However, there can be no assurance that management will be successful in this
endeavor.
NOTE 2 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------------------------
A. Organization and Business Operations
---------------------------------------
Tuttle Industries Corp. (a development stage company) (the "Company") was
incorporated in the State of Delaware on August 23, 2002. The Company was
formed as a blank check company for the purpose of seeking to complete a
merger or business acquisition transaction. The Company has indicated its
intention to participate in one or more as yet unidentified business ventures,
which management will select after reviewing the business opportunities for
their profit or growth potential. At October 31, 2002, the Company had not
yet commenced any formal business operations. All activity to date relates
to the Company's formation and preparation of the filing of a registration
statement with the U.S. Securities and Exchange Commission on Form 10-SB.
The year-end of the Company is June 30 for both book and tax purposes.
The Company's ability to commence operations is contingent upon its ability
to identify a prospective target business.
B. Cash and Cash Equivalents
-----------------------------
The Company considers all highly liquid investments purchased with an original
maturity of three months or less from the date of purchase that are readily
convertible into cash to be cash equivalents.
C. Start-Up Costs
-----------------
The Company adopted the provisions of the American Institute of Certified
Public Accountants' Statement of Position (SOP) 98-5, "Reporting on the Costs
of Start-Up Activities". The SOP provides guidance on the financial reporting
of start-up and organization costs and requires such costs to be expensed as
incurred.
D. Use of Estimates
-------------------
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
E. Income Taxes
----------------
The Company accounts for income taxes under the Financial Accounting Standards
Board of Financial Accounting No. 109, "Accounting for Income Taxes". Under
Statement 109, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment
date. There was no current or deferred income tax expense or benefits due to
the Company not having any material operations for the period ended October
31, 2002.
F. Basic and diluted net loss per share
----------------------------------------
Net loss per share is calculated in accordance with Statement of Financial
Accounting Standards 128, Earnings Per Share ("SFAS 128"). Basic net loss per
share is based upon the weighted average number of common shares outstanding.
Diluted net loss per share is based on the assumption that all dilutive
convertible shares, stock options and warrants were converted or exercised.
Dilution is computed by applying the treasury stock method. At October 31,
2002 there were no dilutive convertible shares, stock options or warrants.
G. Recent Accounting Pronouncements
------------------------------------
In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS Nos. 141 and 142 changed the accounting for business
combinations and goodwill in two significant ways. First, SFAS No. 141
requires that the purchase method of accounting be used in all business
combinations initiated after June 30, 2001. Use of the pooling-of-interests
method is prohibited. Second, SFAS No. 142 changes the accounting for goodwill
from an amortization method to an impairment only approach. As we had no
recorded goodwill, these pronouncements had no impact on us. Any future
acquisitions will be accounted for in accordance with the new standards.
In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". SFAS 143 requires that obligations associated with the
retirement of tangible long-lived assets be recorded as a liability when
those obligations are incurred, with the amount of liability initially measured
at fair value. SFAS No. 143 will be effective for fiscal years beginning after
June 15, 2002, though early adoption is encouraged. The application of this
statement is not expected to have a material impact on our financial
statements.
In July 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets to be Disposed Of."
SFAS No. 144 applies to all long-lived assets including discontinued
operations, and amends Accounting Principles Board Opinion No. 30, "Reporting
the Effect of Disposal of a Segment of a Business, Extraordinary, Unusual and
Infrequently Occurring Events and Transactions". SFAS No. 144 requires that
long-lived assets that are to be disposed of by sale be measured at the lower
of book or fair value, less cost to sell. SFAS No. 144 is effective for fiscal
years beginning after December 15, 2001 and its provisions are expected to be
applied prospectively. The application of this statement is not expected to
have a material impact on our financial statements.
In May 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections as of April 2002." SFAS 145 rescinds FASB Statement No. 4,
"Reporting Gains and Losses from Extinguishment of Debt" and an amendment of
that statement, FASB Statement No. 64, "Extinguishments of Debt Made to
Satisfy Sinking-Fund Requirements" and eliminates extraordinary gain and loss
treatment for the early extinguishment of debt. This statement also rescinds
FASB Statement No. 44, "Accounting for Intangible Assets of Motor Carriers"
and amends FASB Statement No. 13, "Accounting for Leases," to eliminate an
inconsistency between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions. This statement also
amends other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed
conditions. This statement is effective for fiscal years beginning after
May 15, 2002. We will adopt SFAS 145 for the year ending December 31, 2002.
The application of this statement is not expected to have a material impact
on our financial statements.
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS 146 addresses financial accounting
and reporting for costs associated with exit or disposal activities and
nullifies Emerging Issues Task Force Issue No. 94-3, "Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." The application of
this statement is not expected to have a material impact on our financial
statements.
NOTE 3 - STOCKHOLDER'S EQUITY
-----------------------------
A. Preferred Stock
------------------
The Company is authorized to issue 20,000,000 shares of preferred stock at
$.0001 par value, with such designations, voting and other rights and
preferences as may be determined from time to time by the Board of Directors.
As of October 31, 2002, no preferred stock has been issued.
B. Common Stock and Additional Paid-In Capital
----------------------------------------------
The Company is authorized to issue 80,000,000 shares of common stock at $.0001
par value. On August 23, 2002, the Company issued 5,000,000 shares of its
common stock to the founder of the Company pursuant to Section 4(2) of the
Securities Act of 1933 for an aggregate of $500 in services. As to date all
expenses incurred or paid by the controlling shareholder on behalf of the
Company are recorded as additional paid-in capital.
C. Warrant and Options
----------------------
There are no warrants or options outstanding to issue any additional shares
of common stock.
NOTE 4 - RELATED PARTY TRANSACTIONS
-----------------------------------
Since inception the Company has not paid any compensation to any officers
or directors of the Company.
The Company neither owns nor leases any real property. The Company currently
uses the offices of its sole officer, director and the sole shareholder of
the Company as its mailing address, for which the Company pays no rent, and
for which the president of the Company has agreed to continue this arrangement
until the Company completes a business combination.
The Company's sole officer/director is also the sole shareholder of the
Company.
All expenses incurred or paid by the controlling shareholder on behalf of the
Company to the date have been recorded in the Company's statement of operations
with a related credit to additional paid-in capital.
PART III
ITEM 1. INDEX TO EXHIBITS
Copies of the following documents are filed with this Registration Statement
on Form 10-SB as exhibits.
Exhibit Number Description
-------------------- --------------------------------------------------
3.1 Certificate of Incorporation
3.2 Bylaws
4.1 Specimen Stock Certificate
23.1 Consent of Independent Certified Public Accountants
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Tuttle Industries Corp.
/s/ Helen Pan
By: ---------------------------------------------
Helen Pan, President, Secretary, and Director
Date: November 25, 2002
Dates Referenced Herein and Documents Incorporated by Reference
| This ‘10SB12G’ Filing | | Date | | Other Filings |
|---|
| |  |
| | 12/31/02 | | 10QSB |
| Filed on: | | 11/27/02 |
| | 11/25/02 |
| | 10/31/02 |
| | 8/23/02 |
| | 6/15/02 |
| | 5/15/02 |
| | 12/15/01 |
| | 6/30/01 |
| List all Filings |
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