Registration of Securities of a Small-Business Issuer — Form 10-SB
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10SB12G Marwich Ii, Ltd. - Form 10SB12G 32± 145K
2: EX-1 Ex 1.1 - Articles of Incorporation 4± 16K
3: EX-1 Ex 1.2 - Articles of Reinstatement 3± 14K
4: EX-1 Ex 1.3 - Certificate of Amendment 5± 19K
5: EX-1 Ex 1.4 - Certificate of Amendment 2± 9K
6: EX-1 Ex 1.5 - Certificate of Amendment 2± 10K
7: EX-1 Ex 1.6 - Certificate of Amendment 3± 13K
8: EX-2 Ex 2.1 - Bylaws 9± 36K
9: EX-23 Ex 23.1 - Consent of Miller and McCollum 1 6K
U.S. 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
MARWICH II, LTD.
------------------------------------------
(Name of Small Business Issuer)
Colorado 84-0925128
------------------------------ --------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
12773 Forest Hill Boulevard, West Palm Beach, Florida 33414
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(Address of Principal Executive Offices, Including Zip Code)
(561) 798-2907
--------------------------
(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act: None
Securities to be Registered Under Section 12(g) of the Act:
Common Stock, No Par Value
--------------------------
(Title of Class)
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Marwich II, Ltd. (the "Company") was incorporated on August 16, 1983, under
the laws of the State of Colorado. The company was in the business of
acquiring, managing and selling residential, rental and commercial real
estate. On January 1, 1991, the Company was dissolved, by administrative
action of the Colorado Secretary of State as a result of non-filing of
required documents with the State of Colorado. Since January 1, 1991, the
Company has not engaged in any operations and has been dormant. Effective
October 13, 2004, the Company reinstated its charter and commenced activities
to become reporting with the SEC with the intention to become a publicly
trading company. Its purpose is to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and acquisitions.
The Company has been in the developmental stage and has no operations since
the renewal of its charter. The Company has not commenced any operational
activities. The Board of Directors of the Company has elected to commence
implementation of the Company's principal business purpose, described below
under "Item 2, Plan of Operation". As such, the Company can be defined as a
"shell" company, whose sole purpose at this time is to locate and consummate a
merger or acquisition with a private entity.
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. Management 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 herein.
The Company's business is subject to numerous risk factors, including the
following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS.
The Company has had no operating history nor any revenues or earnings from
operations since the renewal of its charter. The Company has no significant
assets or financial resources. The Company will, in all likelihood, 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 profitable business
opportunity. There is no assurance that the Company can identify such a
business opportunity and consummate such a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS.
The success of the Company's proposed plan of operation will depend to a great
extent on the operations, financial condition and management of the identified
business opportunity. While management intends to seek business combinations
with entities having established operating histories, there can be no
assurance that the Company will be successful in locating candidates meeting
such criteria. In the event the Company completes a business combination, of
which there can be no assurance, the success of the Company's operations may
be dependent upon management of the successor firm or venture partner firm and
numerous other factors beyond the Company's control.
2
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND COMBINATIONS.
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 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 numerous other small public companies.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO STANDARDS FOR
BUSINESS COMBINATION.
The Company has no arrangement, agreement or understanding with respect to
engaging in a merger with, joint venture with or acquisition of, a private
entity. There can be no assurance the Company will be successful in
identifying and evaluating suitable business opportunities or in concluding a
business combination. Management has not identified any particular industry or
specific business within an industry for evaluations. The Company has been in
the developmental stage since its charter has been renewed and has had no
operations since that date. There is no assurance the Company will be able to
negotiate a business combination on terms favorable to the Company. 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 target business opportunity 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.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY.
While seeking a business combination, management anticipates devoting up to
twenty hours per month to the business of the Company. The Company's officers
have not entered into written employment agreements with the Company and are
not expected to do so in the foreseeable future. The Company has not obtained
key man life insurance on its officers or directors. Notwithstanding the
combined limited experience and time commitment of management, loss of the
services of any of these individuals would adversely affect development of the
Company's business and its likelihood of continuing operations. See
"MANAGEMENT."
CONFLICTS OF INTEREST - GENERAL.
The Company's officers and directors participate in other business ventures
which 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 officers or directors are involved in the management of any firm
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. See "ITEM 5.
3
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS - CONFLICTS OF
INTEREST."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Section 13 of the Securities Exchange Act of 1934 (the "Exchange Act"),
requires companies subject thereto to provide certain information about
significant acquisitions, including certified financial statements for the
company acquired, covering one or two years, depending on the relative size of
the acquisition. 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. Acquisition prospects that do not have or are unable to obtain the
required audited statements may not be appropriate for acquisition so long as
the reporting requirements of the 1934 Act are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION.
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. Moreover, the Company does not have,
and does not plan to establish, a marketing organization. Even in the event
demand 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.
LACK OF DIVERSIFICATION.
The Company's proposed operations, even if successful, will in all likelihood
result in the Company engaging in a business combination with only one
business opportunity. Consequently, the Company's activities will be limited
to those engaged in by the business opportunity which the Company merges with
or acquires. The Company's inability to diversify its activities into a number
of areas may subject the Company to economic fluctuations within a particular
business or industry and therefore increase the risks associated with the
Company's operations.
REGULATION.
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 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.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT.
A business combination involving the issuance of the Company's common stock
will, in all likelihood, result in shareholders of a private company obtaining
a controlling interest in the Company. Any such business combination may
4
require management of the Company to sell or transfer all or a portion of the
Company's common stock held by them, or resign as members of the Board of
Directors of the Company. The resulting change in control of the Company could
result in removal of one or more present officers and directors of the Company
and a corresponding reduction in or elimination of their participation in the
future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS COMBINATION.
The Company's primary plan of operation is based upon a business combination
with a private concern which, in all likelihood, would result in the Company
issuing securities to shareholders of such private company. The issuance of
previously authorized and unissued common stock of the Company would result in
reduction in percentage of shares owned by present and prospective
shareholders of the Company and would most likely result in a change in
control or management of the Company.
DISADVANTAGES OF BLANK CHECK OFFERING.
The Company may enter into a business combination with an entity that desires
to establish a public trading market for its shares. A business opportunity
may attempt to avoid what it deems to be adverse consequences of undertaking
its own public offering by seeking a business combination with the Company.
Such consequences may include, but are not limited to, time delays of the
registration process, significant expenses to be incurred in such an offering,
loss of voting control to public shareholders and the inability or
unwillingness to comply with various federal and state laws enacted for the
protection of investors.
TAXATION.
Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination 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.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS
OPPORTUNITIES.
Management of the Company believes that any potential business opportunity
must provide audited financial statements for review, and for the protection
of all parties to the business combination. One or more attractive business
opportunities may choose to forego the possibility of a business combination
with the Company, rather than incur the expenses associated with preparing
audited financial statements.
5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
The Registrant intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues, in exchange for its
securities. The Registrant has no particular acquisitions in mind and has not
entered into any negotiations regarding such an acquisition. None of the
Company's officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any other
company regarding the possibility of an acquisition or merger between the
Company and such other company as of the date of this registration statement.
While the Company will attempt to obtain audited financial statements of a
target entity, there is no assurance that such audited financial statements
will be available. The Board of Directors does intend to obtain certain
assurances of value of the target entity's assets prior to consummating such a
transaction, with further assurances that an audited statement would be
provided within seventy-five days after closing of such a transaction. Closing
documents relative thereto will include representations that the value of the
assets conveyed to or otherwise so transferred will not materially differ from
the representations included in such closing documents.
The Registrant has no full time employees. The Registrant's officers have
agreed to allocate a portion of their time to the activities of the
Registrant, without compensation. Management anticipates that the business
plan of the Company can be implemented by each officer devoting approximately
twenty hours per month to the business affairs of the Company and,
consequently, conflicts of interest may arise with respect to the limited time
commitment by such officers. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS."
The Company's officers and directors may, in the future, become involved with
other companies which have a business purpose similar to that of the Company.
As a result, conflicts of interest may arise in the future. If such a conflict
does arise and an officer or director of the Company is presented with a
business opportunity under circumstances where there may be a doubt as to
whether the opportunity should belong to the Company or another company they
are affiliated with, they will disclose the opportunity to all such companies.
If a situation arises in which more than one company desires to merge with or
acquire that target company and the principals of the proposed target company
have no preference as to which company will merge or acquire such target
company, the company of which Mr. Porath first became an officer and director
will be entitled to proceed with the transaction.
The Company is filing this registration statement on a voluntary basis because
the primary attraction of the Registrant as a merger partner or acquisition
vehicle will be its status as an SEC reporting company. Any business
combination or transaction will likely result in a significant issuance of
shares and substantial dilution to present stockholders of the Registrant. The
Articles of Incorporation of the Company provides that the Company may
indemnify officers and/or directors of the Company for liabilities, which can
include liabilities arising under the securities laws. Therefore, assets of
the Company could be used or attached to satisfy any liabilities subject to
such indemnification. See "PART II, ITEM 5, INDEMNIFICATION OF DIRECTORS AND
OFFICERS."
6
GENERAL BUSINESS PLAN
At this time, the Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business opportunities
presented to it by persons or firms who or which desire to seek the perceived
advantages of an Exchange Act registered corporation. The Company will not
restrict its search to any specific business, industry, or geographical
location and the Company may participate in a business venture of virtually
any kind or nature. This discussion of the proposed business is purposefully
general and is not meant to be restrictive of the Company's virtually
unlimited discretion to search for and enter into potential business
opportunities. Management anticipates that it may be able to participate in
only one potential business venture because the Company has nominal assets and
limited financial resources. See Item 7, "Financial Statements and
Supplemental Data." This lack of diversification should be considered a
substantial risk to shareholders of the Company because it will not permit the
Company to offset potential losses from one venture against gains from
another.
The Company may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets,
to develop a new product or service, or for other corporate purposes. The
Company may acquire assets and establish wholly-owned subsidiaries in various
businesses or acquire existing businesses as subsidiaries.
The Company intends to advertise and promote the Company privately. The
Company has not yet prepared any notices or advertisements.
The Company anticipates that the selection of a business opportunity in which
to participate will be complex and extremely risky. Due to general economic
conditions, rapid technological advances being made in some industries and
shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation.
Such perceived benefits may include facilitating or improving the terms on
which additional equity financing may be sought, providing liquidity for
incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statutes) for all
shareholders and other factors. Potentially, available business opportunities
may occur in many different industries and at various stages of development,
all of which will make the task of comparative investigation and analysis of
such business opportunities extremely difficult and complex.
The Company has, and will continue to have, little or no capital with which to
provide the owners of business opportunities with any significant cash or
other assets. However, management believes the Company will be able to offer
owners of acquisition candidates the opportunity to acquire a controlling
ownership interest in a publicly registered company without incurring the cost
and time required to conduct an initial public offering. The owners of the
business opportunities will, however, incur significant legal and accounting
costs in connection with the acquisition of a business opportunity, including
the costs of preparing Form 8-K's, 10-K's or 10-KSB's, agreements and related
reports and documents. The Securities Exchange Act of 1934 (the "34 Act"),
specifically requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited financial
statements to be included within the numerous filings relevant to complying
with the 34 Act. Nevertheless, the officers and directors of the Company have
not conducted market research and are not aware of statistical data, which
7
would support the perceived benefits of a merger or acquisition transaction
for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under the
supervision of, the officers and directors of the Company. Management intends
to concentrate on identifying preliminary prospective business opportunities
which may be brought to its attention through present associations of the
Company's officers and directors, or by the Company's shareholders. In
analyzing prospective business opportunities, management will consider such
matters as the 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. Officers and directors of the
Company do expect to meet personally with management and key personnel of the
business opportunity as part of their investigation. To the extent possible,
the Company intends to utilize written reports and investigation to evaluate
the above factors. The Company will not acquire or merge with any company for
which audited financial statements cannot be obtained within a reasonable
period of time after closing of the proposed transaction.
The officers of the Company have limited experience in managing companies
similar the Company, and shall rely upon their own efforts and, to a much
lesser extent, the efforts of the Company's shareholders, in accomplishing the
business purposes of the Company. The Company may from time to time utilize
outside consultants or advisors to effectuate its business purposes described
herein. No policies have been adopted regarding use of such consultants or
advisors, the criteria to be used in selecting such consultants or advisors,
the services to be provided, the term of service, or regarding the total
amount of fees that may be paid. However, because of the limited resources of
the Company, it is likely that any such fee the Company agrees to pay would be
paid in stock and not in cash.
The Company will not restrict its search for any specific kind of firms, but
may acquire a venture which is in its preliminary or development stage, which
is already in operation, or in essentially any stage of its corporate life. It
is impossible to predict at this time the status of any business in which the
Company may become engaged, in that such 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 in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein. The Company has minimal
capital with which to pay these anticipated expenses.
ACQUISITION OF OPPORTUNITIES
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 corporation or entity. It may also acquire
8
stock or assets of an existing business. On the consummation of a transaction,
it is probable that the present management and shareholders of the Company
will no longer be in control of the Company. In addition, the Company's
directors may, as part of the terms of the acquisition transaction, resign and
be replaced by new directors without a vote of the Company's shareholders or
may sell their stock in the Company. Any and all such sales will only be made
in compliance with the securities laws of the United States and any applicable
state.
It is anticipated that any securities issued in any such reorganization would
be issued in reliance upon exemption from registration under applicable
federal and state securities laws. 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 successfully consummated a merger or acquisition and the Company
is no longer considered a "shell" 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 which may develop in the Company's securities may have a depressive
effect on the value of the Company's securities in the future, if such a
market develops, of which there is no assurance.
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 so-called "tax-free" reorganization
under Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code").
In order to obtain tax-free treatment under the Code, it may be necessary for
the owners of the acquired business to own 80% or more of the voting stock of
the surviving entity. In such event, the shareholders of the Company, would
retain less than 20% of the issued and outstanding shares of the surviving
entity, which would result in significant dilution in the equity of such
shareholders.
As part of the Company's investigation, officers and directors of the Company
may personally meet with management and key personnel, may visit and inspect
material facilities, obtain analysis of verification of certain information
provided, check references of management and key personnel, and take other
reasonable investigative measures, to the extent of the Company's limited
financial resources and management expertise. The manner in which the Company
participates in an opportunity will depend on the nature of the opportunity,
the respective needs and desires of the Company and other parties, the
management of the opportunity and the relative negotiation strength of the
Company and such other management.
With respect to any merger or acquisition, negotiations with target company
management is expected to focus on the percentage of the Company which 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 shareholders 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
9
Company can be expected to have a significant dilutive effect on the
percentage of shares held by the Company's then-shareholders.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the
terms of such agreements cannot be predicted, generally such agreements will
require some specific representations and warranties by all of the parties
thereto, will specify certain events of default, will detail the terms of
closing and the conditions which must be satisfied by each of the parties
prior to and after such closing, will outline the manner of bearing costs,
including costs associated with the Company's attorneys and accountants, will
set forth remedies on default and will include miscellaneous other terms.
As stated herein above, the Company will not acquire or merge with any entity
which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction. The
Company is subject to all of the reporting requirements included in the 34
Act. Included in these requirements is the affirmative duty of the Company to
file independent audited financial statements as part of its Form 8-K to be
filed with the Securities and Exchange Commission upon consummation of a
merger or acquisition, as well as the Company's audited financial statements
included in its annual report on Form 10-K (or 10-KSB, as applicable). If such
audited financial statements are not available at closing, or within time
parameters necessary to insure the Company's compliance with the requirements
of the 34 Act, or if the audited financial statements provided do not conform
to the representations made by the candidate to be acquired in the closing
documents, the closing documents may provide that the proposed transaction
will be voidable, at the discretion of the present management of the Company.
When companies elect to become reporting companies under Rule 12g-3 of the
Securities Exchange Act of 1934, the Securities and Exchange Commission (SEC)
will treat Form 8-Ks pertaining to 12g-3 successor issuers in the same manner
as Form 10 and Form 10SB filings. Accordingly, as is the case for issuers
filing Form 10 filings, in order to be deemed an eligible security under Rule
6530, an issuer electing 12g-3 successor issuer status must have received
notification that the SEC will not review the Form 8-K12g-3 or, in cases where
the SEC has elected to review the Form 8-K12g-3, must clear all SEC comments
on such Form 8-K12g-3 prior to the security's becoming an eligible reporting
security.
If such transaction is voided, the agreement will also contain a provision
providing for the acquisition entity to reimburse the Company for all costs
associated with the proposed transaction.
The Company does not intend to provide the Company's security holders with any
complete disclosure documents, including audited financial statements,
concerning an acquisition or merger candidate and its business prior to the
consummation of any acquisition or merger transaction.
COMPETITION
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited financial
resources and limited management availability, the Company will continue to be
at a significant competitive disadvantage compared to the Company's
competitors.
10
ITEM 3. DESCRIPTION OF PROPERTY
The Registrant has no properties and at this time has no agreements to acquire
any properties. The Company currently maintains a mailing address at 444 Park
Forest Way, Wellington, FL 33414, which is the address of its President. The
Company pays no rent for the use of this mailing address. The Company does
not believe that it will need to maintain an office at any time in the
foreseeable future in order to carry out its plan of operations described
herein.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of April 30, 2005, each person known by the
Company to be the beneficial owner of five percent or more of the Company's
Common Stock, all Directors individually and all Directors and Officers of the
Company as a group. Except as noted, each person has sole voting and
investment power with respect to the shares shown.
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
--------------------------------- -------------------- ----------
Michael Schumacher, beneficially 480,000 shares 50.72%
through Pride Equities, Inc.
2525 Fifteenth Street, Suite 3H
Denver, CO 80211
George A. Powell 200 shares -0-
7209 S. Garland Court
Littleton, CO 80121
All Officers and Directors as a 480,200 shares 50.72%
Group
Marq J. Warner 177,900 shares 18.79%
17096 E. Dorado Circle
Centennial, CO 80015
Michael R. Deans 177,900 shares 18.79%
5225 S. Jamaica Way
Englewood, CO 80111
All Officers, Directors, and
more than 5% owners, as a group 836,000 shares 88.33%
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Directors and Officers of the Company are as follows:
Name Age Positions and Offices Held
------------------- --- ----------------------------------
Michael Schumacher 56 President, Treasurer, Director and
Chief Financial Officer
Peter Porath 73 Vice-President and Director
George Powell 80 Secretary and Director
11
There are no agreements or understandings for any officer or director to
resign at the request of another person and none of the above named officers
and directors are acting on behalf of or will act at the direction of any
other person.
There is no family relationship between any Director or Executive Officer of
the Company.
The Company presently has no committees.
Set forth below are the names of all Directors and Executive Officers of the
Company, all positions and offices with the Company held by each such person,
the period during which he has served as such, and the business experience of
such persons during at least the last five years:
MICHAEL SCHUMACHER. Michael Schumacher has been President, Treasurer, Chief
Financial Officer and a Director of the Company since January 2005. Mr.
Schumacher was President and Chairman of the Board of Prime Rate Income and
Dividend Enterprises, Inc., a public company, until December 2002. Mr.
Schumacher was a director and officer of Sun Vacation Properties Corporation
(formerly Commonwealth Equities, Inc.), a public company, from November 2000
until February 2001, and a director and officer of Vacation Ownership
Marketing, Inc., a public company) from May 2000 until August 2001. Since
January 2003, Mr. Schumacher has been Vice-President and a Director of Federal
Mortgage Corporation of Puerto Rico (Federal), which was an inactive public
company until March 31, 2005. Effective March 31, 2005, Federal acquired 100%
ownership of Pride Lending, Inc. from a related party. Pride Lending, Inc.
principally invests in mortgage loans. He was also, from June 2003 to May 31,
2005, a Vice-President and Director of National Superstars, Inc, an inactive
pubic company until May 31, 2005. Effective May 31, 2005, National
Superstars, Inc. completed a business combination with MSO Holdings, Inc.
resulting in a change in control of National Superstars, Inc. Since January
2005, he has been President, Treasurer, CFO and a director of Springfield
Financial, Inc., an inactive public company. Since March 2005, he has been
Secretary, Treasurer and a director of American Telstar, Inc., an inactive
public company. Mr. Schumacher is President, Chairman of the Board, and
controlling shareholder of Pride, Inc. and its wholly-owned subsidiaries,
including Pride Equities, Inc. Pride, Inc. and its subsidiaries are primarily
in the real estate investment business. Mr. Schumacher is President and
Treasurer of Birch Branch, Inc., a real estate investment company. Mr.
Schumacher is also a Director and President of Schumacher & Associates, Inc.,
a certified public accounting firm located in Denver, Colorado that provides
audit services, principally to public companies on a national basis throughout
the U.S.A. Mr. Schumacher is a Certified Public Accountant, Certified
Management Accountant and an Accredited Financial Planning Specialist. Mr.
Schumacher has a Bachelor of the Sciences Degree in Business Administration
with a major in accounting from the University of Nebraska at Kearney and a
Masters in Business Administration from the University of Colorado.
PETER PORATH. Peter Porath has been Vice-President and a director of the
Company since October 2004. Since January 2003, Mr. Porath has been President
and a Director of Federal Mortgage Corporation of Puerto Rico (Federal), which
was an inactive public company until March 31, 2005. Effective March 31,
2005, Federal acquired 100% ownership of Pride Lending, Inc. from a related
party. Pride Lending, Inc. principally invests in mortgage loans. He has
also, since June 2003, been a President and Director of National Superstars,
Inc, an inactive pubic company until May 31, 2005. Effective May 31, 2005,
National Superstars, Inc. completed a business combination with MSO Holdings,
12
Inc. resulting in a change in control of National Superstars, Inc. Since
January 2005, he has been Vice-President and a director of Springfield
Financial, Inc., an inactive public company. Since March 2005, he has been
Vice-President and a director of American Telstar, Inc., an inactive public
company. Mr. Porath was a director of Sun Vacation Properties Corporation
(formerly Commonwealth Equities, Inc.), a public company, and was President
from November 2000 until February 2001. Mr. Porath was a director and
president of Vacation Ownership Marketing, Inc., (a public company) from May
2000 until August 2001. Mr. Porath was a director for Plants For Tomorrow, an
environmental mitigation concern through the years from 1989-1991. From 1990
through 2001, Mr. Porath, semi-retired operated a retail magic supply store in
Fort Lauderdale, Florida, Merlin's Festival of Magic. From 1978 to 1979, Mr.
Porath was executive vice-president and director of International Resort
Properties, Inc., a timesharing company in Hillsboro Beach, Florida where he
was responsible for the development of a 20-unit project. Prior to 1978, Mr.
Porath was Vice President of Investment Corporation of Florida, a public
company on the American Stock Exchange, and developer of Wellington and Palm
Beach Polo, now a city of 40,000 people. Prior to this, Mr. Porath was
President of San Andros, Inc., doing real estate workouts for the Bank of
Virginia; Vice-President of Magnuson Corp., a real estate developer;
Supervisor of Customer Service for General Development Corp., a New York Stock
Exchange Company; and Assistant to the Vice-President of Moody's Investors
Service, Chicago, now a New York Stock Exchange Company. Mr. Porath attended
Syracuse University in the U.S. Air Force Security Service and holds a
Bachelor of the Arts Degree in English from Ripon College and a Juris Doctor
from De Paul University in Chicago.
GEORGE A. POWELL. George A. Powell has been Secretary and a Director of the
Company since October 2004. Mr. Powell has been a director, secretary and
vice-president of PRIDE, Inc. Mr. Powell was previously, until September 22,
1999, a director, secretary and vice-president of Rocky Mountain Power Co., a
public reporting company. Mr. Powell was previously, until November 12, 2002,
a director, secretary and vice-president of Prime Rate Income & Dividend
Enterprises, Inc. (PIDV). Since December 2004, he has been Vice-President and
Secretary of Springfield Financial, Inc., an inactive public company. Mr.
Powell is currently a director, secretary, and vice-president of Birch Branch,
Inc. Mr. Powell was previously a director and president of Continental
Investors Life, Inc., a public reporting insurance company. Since Mr. Powell's
retirement from the insurance business in 1988, he has been self-employed as a
business consultant.
PREVIOUS BLANK-CHECK EXPERIENCE
Mr. Michael Schumacher, President, Treasurer, Chief Financial Officer and a
Director of the Company, Mr. Peter Porath, Vice-President and a Director of
the Company, and Mr. George Powell, Secretary and a Director of the Company,
have been involved either as an officer or director, or both, with other
blank-check companies, which have completed some form of corporate
reorganization. The following is a list of the blank-check companies with
which the Company's officers and directors have previously been involved
during the last five years:
Sun Vacation Properties, Inc. (SVPI), formerly Commonwealth Equities, Inc.
File #000-49615, with a registration date of February 6, 2002, is a
development stage enterprise. During January 2003, majority ownership and
control of SVPI changed. Current officers and directors of Marwich II, Ltd.
are not currently officers, directors or employees of SVPI, and therefore,
13
have no direct knowledge of the business operations or possible pending
acquisitions, business combinations or mergers of SVPI.
National Superstars, Inc. (NSI) File #2-98395, was initially registered in
1985, and is current on its filings. NSI was a development stage company,
and had no business operations through May 31, 2005. Effective May 31, 2005,
National Superstars, Inc. completed a business combination with MSO Holdings,
Inc., resulting in a change in control of National Superstars, Inc.
Vacation Ownership Marketing, Inc. (VOMI) File #000-09879 was initially
registered in approximately 1980. During August 2001, majority ownership and
control of VOMI changed. Current officers and directors of Marwich II, Ltd.
are not currently officers, directors or employees of VOMI, and therefore,
have no direct knowledge of the business operations or possible pending
acquisitions, business combinations or mergers of VOMI.
CONFLICTS OF INTEREST
The Company's officers and directors have in the past and may in the future be
officers and directors of other companies of a similar nature and with a
similar purpose as the Company. Consequently, there are potential inherent
conflicts of interest in Mr. Porath and Mr. Schumacher acting as officers and
directors of the Company. Insofar as the officers and directors are engaged in
other business activities, management anticipates it will devote only a minor
amount of time to the Company's affairs. The officers and directors of the
Company may in the future become shareholders, officers or directors of other
companies which may be formed for the purpose of engaging in business
activities similar to those conducted by the Company. The Company does not
currently have a right of first refusal pertaining to opportunities that come
to management's attention insofar as such opportunities may relate to the
Company's proposed business operations.
The officers and directors are, so long as they are officers or directors of
the Company, subject to the restriction that all opportunities contemplated by
the Company's plan of operation which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this requirement will
be a breach of the fiduciary duties of the officer or director. If a situation
arises in which more than one company desires to merge with or acquire that
target company and the principals of the proposed target company have no
preference as to which company will merge or acquire such target company, the
company of which Mr. Porath first became an officer and director will be
entitled to proceed with the transaction. As between the Company and the other
companies formed, the Company which first filed a registration statement with
the Securities and Exchange Commission will be entitled to proceed with the
proposed transaction. Except as set forth above, the Company has not adopted
any other conflict of interest policy with respect to such transactions.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Securities Act of
1933 and 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 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
14
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 6. EXECUTIVE COMPENSATION.
None of the Company's officers and/or directors receive any compensation for
their respective services rendered to the Company, nor have they received such
compensation since the renewal of the Company's charter. They have agreed to
act without compensation until authorized by the Board of Directors, which is
not expected to occur until the Registrant has generated revenues from
operations after consummation of a merger or acquisition. As of the date of
this registration statement, the Company has minimal funds available to pay
directors. Further, none of the directors are accruing any compensation
pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or more members of the Company's management for the purposes of
providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy
whereby the offer of any post-transaction remuneration to members of
management will not be a consideration in the Company's decision to undertake
any proposed transaction. Each member of management has agreed to disclose to
the Company's Board of Directors any discussions concerning possible
compensation to be paid to them by any entity which proposes to undertake a
transaction with the Company and further, to abstain from voting on such
transaction. Therefore, as a practical matter, if each member of the Company's
Board of Directors is offered compensation in any form from any prospective
merger or acquisition candidate, the proposed transaction will not be approved
by the Company's Board of Directors as a result of the inability of the Board
to affirmatively approve such a transaction.
It is possible that persons associated with management may refer a prospective
merger or acquisition candidate to the Company. In the event the Company
consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for
their referral in the form of a finder's fee. It is anticipated that this fee
will be either in the form of restricted common stock issued by the Company as
part of the terms of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
Company has minimal cash available. The amount of such finder's fee cannot be
determined as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like transactions. No member
of management of the Company will receive any finders fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan outlined herein.
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Registrant for the benefit of
its employees.
15
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Effective January 2005, Pride Equities, Inc. agreed to fund the Company with
$30,000 in exchange for 480,000 (post-split) shares of the Company's common
stock. Securities issued by blank check companies cannot be resold under Rule
144, but must be registered under the Securities Act of 1933. All shares
owned by Pride Equities, Inc. and other company officers, promoters,
affiliates, and controlled persons will be registered under the Securities Act
of 1933. Pride Equities, Inc. is a related party since Mr. Schumacher is the
President and Director of Pride, Inc., the parent company of Pride Equities,
Inc., and an officer and director of Pride Equities, Inc.
The Board of Directors has passed a resolution which contains a policy that
the Company will not seek an acquisition or merger with any entity in which
any of the Company's Officers, Directors, principal shareholders or their
affiliates or associates serve as officer or director or hold any ownership
interest. Management is not aware of any circumstances under which this
policy, through their own initiative may be changed.
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. Management does not intend at this time to
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.
ITEM 8. DESCRIPTION OF SECURITIES.
PREFERRED STOCK
The Company's Articles of Incorporation authorize the issuance of 1,000,000
shares of Preferred Stock, with a par value of $.01.
COMMON STOCK
The Company's Articles of Incorporation authorize the issuance of 100,000,000
shares of Common Stock, no par value. Each record holder of Common Stock is
entitled to one vote for each share held on all matters submitted to the
stockholders for their vote. Cumulative voting for the election of directors
is not permitted by the Articles of Incorporation.
Holders of outstanding shares of Common Stock are entitled to such dividends
as may be declared from time to time by the Board of Directors out of legally
available funds; and, in the event of liquidation, dissolution or winding up
of the affairs of the Company, holders are entitled to receive, ratably, the
net assets of the Company available to stockholders. Holders of outstanding
shares of Common Stock are, and all unissued shares when offered and sold will
be, duly authorized, validly issued, fully paid, and nonassessable. To the
extent that additional shares of the Company's Common Stock are issued, the
relative interests of the existing stockholders may be diluted.
DIVIDENDS
No dividends have been paid by the Company on any of its securities since the
renewal of its charter and such dividends are not contemplated in the
foreseeable future.
16
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
There is no trading market for the Registrant' s Common Stock at present and
there has been no trading market to date. Management has not undertaken any
discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the aftermarket for the
Company's securities and management does not intend at this time to initiate
any such discussions until such time as the Company has consummated a merger
or acquisition. There is no assurance that a trading market will ever develop
or, if such a market does develop, that it will continue.
(a) MARKET PRICE. The Registrant's Common Stock is not quoted on a public
market at the present time.
(b) HOLDERS. There are approximately 36 holders of the Company's Common
Stock.
(c) DIVIDENDS. The Registrant has not paid any dividends since the
renewal of its charter, and has no plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Registrant recently engaged its current auditors and has not had
previously engaged accountants since 1995. There are no disagreements with
the prior accountants on accounting and financial disclosures.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, there have been no sales of the Registrant's
stock except the issuance of 480,000 (post-split) shares of restricted common
stock issued to Pride Equities, Inc., previously described above.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only statute, charter provision, bylaw, contract, or other arrangement
under which any controlling person, Director or Officer of the Registrant is
insured or indemnified in any manner against any liability which he may incur
in his capacity as such, is as follows:
(a) The Company has the right to indemnify any person who was or is a
party or is threatened to be made a party to any action, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is or was a Director, Officer, employee, fiduciary, or agent of the
Company or was serving at its request in a similar capacity for another
entity, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection therewith if he acted in good faith and in a manner he reasonably
believed to be in the best interest of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. In case of an action brought by or in the right of the
Company such persons are similarly entitled to indemnification if they acted
17
in good faith and in a manner reasonably believed to be in the best interests
of the Company but no indemnification shall be made if such person was
adjudged to be liable to the Company for negligence or misconduct in the
performance of his duty to the Company unless and to the extent the court in
which such action or suit was brought determines upon application that despite
the adjudication of liability, in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnification. In such event,
indemnification is limited to reasonable expenses. Such indemnification is not
deemed exclusive of any other rights to which those indemnified may be
entitled under the Articles of Incorporation, Bylaws, agreement, vote of
shareholders or disinterested directors, or otherwise.
(b) The Registrant's Articles of Incorporation provides in general that
the Registrant is authorized to indemnify its Officers and Directors to the
fullest extent permitted by law.
18
PART F/S
FINANCIAL STATEMENTS.
Attached are audited financial statements for the Company for the years ended
December 31, 2004 and 2003, and for the periods ended March 31, 2005 and 2004.
The following financial statements are attached to this report and filed as a
part thereof. See pages F-1 through F-13.
Page
----
1) Table of Contents - Financial Statements F-1
2) Report of Independent Certified Public Accountants F-2
3) Balance Sheets F-3
4) Statements of Operations F-4 to F-5
5) Statement of Changes in Stockholders' Equity F-6
6) Statements of Cash Flows F-7 to F-8
7) Notes to Financial Statements F-9 to F-13
19
MARWICH II, LTD.
(A Development Stage Company)
FINANCIAL STATEMENTS
With
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Page
----
Report of Independent Certified Public Accountants F-2
Financial Statements:
Balance Sheets F-3
Statements of Operations F-4 to F-5
Statement of Changes in Stockholders' Equity F-6
Statements of Cash Flows F-7 to F-8
Notes to Financial Statements F-9 to F-13
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors
Marwich II, Ltd.
Denver, CO
We have audited the accompanying balance sheet of Marwich II, Ltd. as of
January 31, 2005, and the related statements of operations, stockholders'
equity and cash flows for the years ended January 31, 2005 and 2004. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards
require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit
of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit 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. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements, referred to above, present fairly,
in all material respects, the financial position of Marwich II, Ltd. (a
development-stage company) as of January 31, 2005, and the results of its
operations, changes in its stockholders' equity and its cash flows for the
years ended January 31, 2005 and 2004 in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 1, the Company
has limited working capital and no active business operations, which raises
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Miller and McCollum
Miller and McCollom
Certified Public Accountants
4350 Wadsworth Blvd., Suite 300
Wheat Ridge, CO 80033
April 26, 2005
F-2
MARWICH II, LTD.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
April 30,
2005 January 31, January 31,
(Unaudited) 2005 2004
----------- ----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 19,931 $ 19,931 $ -
--------- --------- ---------
Total current assets 19,931 19,931 -
--------- --------- ---------
Total assets $ 19,931 $ 19,931 $ -
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued
expenses $ 5,575 $ 648 $ -
--------- --------- ---------
Total current liabilities 5,575 648 -
--------- --------- ---------
Total liabilities 5,575 648 -
========= ========= =========
Commitments and contingencies (Notes 2 and 3)
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value;
1,000,000 shares authorized, none
issued and outstanding - - -
Common stock, no par value;
100,000,000 shares authorized,
946,416, 946,416 and 466,416
shares issued and outstanding at
March 31, 2005, December 31,
2004 and December 31, 2003,
respectively 333,567 333,567 303,567
Accumulated (Deficit) (303,567) (303,567) (303,567)
Accumulated (Deficit) during the
development stage (15,644) (10,717) -
--------- --------- ---------
Total stockholders' equity 14,356 19,283 -
--------- --------- ---------
Total liabilities and
stockholders' equity $ 19,931 $ 19,931 $ -
========= ========= =========
The accompanying notes are an integral part of the financial statements.
F-3
MARWICH II, LTD.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
For the
period from
October 13,
2004 (date of
Three Three development
Months Months stage)
Ended Ended through
April 30, April 30, April 30,
2005 2004 2005
--------- --------- -------------
Revenues $ - $ - $ -
Costs and Expenses -
Professional fees 3,930 - 13,640
Administrative and other 997 - 2,004
--------- --------- ---------
4,927 - 15,644
Net (loss) $ (4,927) $ - $ (15,644)
========= ========= =========
(Loss) per share $ (.01) nil $ (.02)
========= ========= =========
Weighted average shares
outstanding 946,416 466,416 877,845
The accompanying notes are an integral part of the financial statements.'
F-4
MARWICH II, LTD.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
STATEMENTS OF OPERATIONS
For the
period from
October 13,
2004 (date of
development
stage)
Year Ended Year Ended through
January 31, January 31, January 31,
2005 2004 2005
-------- --------- -----------
Revenues $ - $ - $ -
Costs and Expenses -
Professional fees 9,710 - 9,710
Administrative and other 1,007 - 1,007
-------- -------- ----------
10,717 - 10,717
Net (loss) $(10,717) $ - $ (10,717)
======== ======== ==========
(Loss) per share $ (.02) $ nil $ nil
======== ======== ==========
Weighted average shares outstanding 566,416 466,416 613,083
======== ======== ==========
The accompanying notes are an integral part of the financial statements.
F-5
MARWICH II, LTD.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From February 1, 2003 through January 31, 2005
(The Period from February 1, 2005 to April 30, 2005 is Unaudited)
[Enlarge/Download Table]
(Deficit) in
Preferred Stock Common Stock Accumulated Development
Shares Amount Shares Amount (Deficit) Stage Total
--------- ------ ------- -------- ----------- ------------- --------
Balance at February 1,
2003 $ - $ - 466,416 $303,567 $(303,567) $ - $ -
Net (loss) for year
ended January 31,
2004 - - - - - - -
---- ---- ------- -------- --------- -------- --------
Balance at January 31,
2004 - - 466,416 303,567 (303,567) - -
Common stock issued
for cash - - 480,000 30,000 - - 30,000
Net (loss) for year
ended January 31,
2005 - - - - - (10,717) (10,717)
---- ---- ------- -------- --------- -------- --------
Balance at January 31,
2005 - - 946,416 333,567 (303,567) (10,717) 19,283
Net (loss) for the
three months ended
April 30, 2005
(Unaudited) - - - - - (4,927) (4,927)
---- ---- ------- -------- --------- -------- --------
Balance at April 30,
2005 (Unaudited) $ - $ - 946,416 $333,567 $(303,567) $(15,644) $ 14,356
==== ==== ======= ======== ========= ======== ========
The accompanying notes are an integral part of the financial statements.
F-6
MARWICH II, LTD.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the
period from
October 13,
2004 (date of
Three Three development
Months Months stage)
Ended Ended through
April 30, April 30, April 30,
2005 2004 2005
--------- --------- -------------
Cash flows from operating activities:
Net loss $(4,927) $ - $(15,644)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Increase in accounts payable
and accrued expenses 4,927 - 5,575
------- ------ --------
Net cash (used in) operating
activities - - (10,069)
Cash flows from investing
activities - - -
------- ------ --------
Cash flows from financing
activities:
Common stock issued for cash - - 30,000
------- ------ --------
Net cash provided by financing
activities - - 30,000
------- ------ --------
Net increase in cash - - 19,931
Cash at beginning of period 19,931 - -
------- ------ --------
Cash at end of period $19,931 $ - $ 19,931
======= ====== ========
Supplemental disclosure of cash
flow information:
Interest paid $ - $ - $ -
======= ====== ========
Income taxes paid $ - $ - $ -
======= ====== ========
The accompanying notes are an integral part of the financial statements.
F-7
MARWICH II, LTD.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the
period from
October 13,
2004 (date of
development
stage)
Year Ended Year Ended through
January 31, January 31, January 31,
2005 2004 2005
-------- --------- -----------
Cash flows from operating activities:
Net loss $(10,717) $ - $ (10,717)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Increase in accounts payable and
accrued expenses 648 - 648
-------- ------ ---------
Net cash (used in) operating
activities (10,069) - (10,069)
Cash flows from investing activities: - - -
-------- ------ ---------
Cash flows from financing activities:
Common stock issued for cash 30,000 - 30,000
-------- ------ ---------
Net cash provided by financing
activities 30,000 - 30,000
-------- ------ ---------
Net increase in cash 19,931 - 19,931
Cash at beginning of period - - -
-------- ------ ---------
Cash at end of period $ 19,931 $ - $ 19,931
======== ====== =========
Supplemental disclosure of cash
flow information:
Interest paid $ - $ - $ -
======== ====== =========
Income taxes paid $ - $ - $ -
======== ====== =========
The accompanying notes are an integral part of the financial statements.
F-8
MARWICH II, LTD.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2005 and 2004
(References to April 30, 2005 and 2004 are unaudited)
Note 1 - Organization and Summary of Significant Accounting Policies
This summary of significant accounting policies of Marwich II, Ltd. (Company)
is presented to assist in understanding the Company's financial statements.
The financial statements and notes are representations of the Company's
management who is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting principles in the
United States of America and have been consistently applied in the preparation
of the financial statements.
(a) Organization and Description of Business
The Company was incorporated on August 16, 1983 under the laws of the State of
Colorado.
The Company was in the business of acquiring, managing, and selling
residential, rental, and commercial real estate. On January 1, 1991, the
Company was dissolved, by administrative action of the Colorado Secretary of
State, as a result of non-filing of required documents with the State of
Colorado. Since January 1, 1991, the Company has not engaged in any
operations and has been dormant.
Effective October 13, 2004, the Company reinstated its charter and commenced
activities to become reporting with the SEC with the intention to become a
publicly trading company.
(b) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
(c) Per Share Information
The computation of loss per share of common stock is based on the weighted
average number of shares outstanding during the periods presented.
(d) Basis of Presentation - Going Concern
F-9
MARWICH II, LTD.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2005 and 2004
(References to April 30, 2005 and 2004 are unaudited)
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America,
which contemplates continuation of the Company as a going concern. However,
the Company has limited working capital and no active business operations,
which raises substantial doubt about its ability to continue as a going
concern.
In view of these matters, realization of certain of the assets in the
accompanying balance sheet is dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability to meet its
financial requirements, raise additional capital, and the success of its
future operations.
Management has opted to resume the filing of Securities and Exchange
Commission (SEC) reporting documentation and then to seek a business
combination. (See Note 5) Management believes that this plan provides an
opportunity for the Company to continue as a going concern.
(e) Recently Enacted Accounting Standards
Statement of Financial Accounting Standards ("SFAS") No. 151, "Inventory Costs
an amendment of ARB No. 43, Chapter 4", SFAS No. 152, "Accounting for Real
Estate Time-Sharing Transactions an amendment of FASB Statements No. 66 and
67", SFAS No. 153, "Exchanges of Nonmonetary Assets an amendment of APB
Opinion No. 29", and SFAS No. 123 (revised 2004), "Share-based Payment", were
recently issued. These standards have no current applicability to the Company
or their effect on the financial statements would have been insignificant.
(f) Risks and Uncertainties
The Company is subject to substantial business risks and uncertainties
inherent in starting a new business. There is no assurance that the Company
will be able to complete a business combination.
(g) Revenue Recognition
The Company has had no revenue to date.
(h) Cash and Cash Equivalents
The Company considers cash and cash equivalents to consist of cash on hand and
demand deposits in banks with an initial maturity of 90 days or less.
F-10
MARWICH II, LTD.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2005 and 2004
(References to April 30, 2005 and 2004 are unaudited)
(i) Fair Value of Financial Instruments
Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards No. 107 ("SFAS 107"), "Disclosures About Fair Value of
Financial Instruments." SFAS 107 requires disclosure of fair value information
about financial instruments when it is practicable to estimate that value. The
carrying amount of the Company's cash, cash equivalents, accounts
payable-related party approximate their estimated fair values due to their
short-term maturities.
(j) Income taxes
The Company records deferred taxes in accordance with Statement of Financial
Accounting Standards (SFAS) 109, "Accounting for Income Taxes." The statement
requires recognition of deferred tax assets and liabilities for temporary
differences between the tax bases of assets and liabilities and the amounts at
which they are carried in the financial statements, the effect of net
operating losses, based upon the enacted tax rates in effect for the year in
which the differences are expected to reverse. A valuation allowance is
established when necessary to reduce deferred tax assets to the amount
expected to be realized.
(k) Development Stage Enterprise
Based upon the Company's business plan, it is a development stage enterprise
since planned principal operations have not yet commenced. Accordingly, the
Company presents its financial statements in conformity with the accounting
principals generally accepted in the United States of America that apply in
establishing operating enterprises. As a development state enterprise, the
Company discloses the deficit accumulated during the development stage and the
cumulative statements of operations and cash flows from commencement of
development stage to the current balance sheet date. The development stage
began October 13, 2004 when the Company was reinstated as a Colorado
corporation.
(l) Other
The Company has selected January 31 as its fiscal year end.
The Company has paid no dividends.
No advertising expense has been incurred.
The Company consists of one reportable business segment.
The Company has not entered into any leases.
F-11
MARWICH II, LTD.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2005 and 2004
(References to April 30, 2005 and 2004 are unaudited)
Note 2 - Income Taxes
The Company has an estimated net operating loss carry forward of approximately
$15,644 at March 31, 2005 to offset future taxable income. Net operating
losses prior to 2004 had expired or were restricted due to a change in
ownership. The net operating loss carry forward, if not used, will expire in
various years ending January 31, 2026, and may be restricted if there is a
change in ownership. No deferred income taxes have been recorded because of
the uncertainty of future taxable income to be offset.
Significant components of the Company's net deferred income tax asset are as
follows:
March 31, January 31, January 31,
2005 2005 2004
--------- ----------- -----------
Net operating losses carry forward $ 2,900 $ 2,000 $ -
Deferred income tax allowance (2,900) (2,000) (-)
------- ------- ----
Net deferred income tax asset $ - $ - $ -
======= ======= ====
The reconciliation of income tax (benefit) computed at the federal statutory
rate to income tax expense (benefit) for all periods presented is as follows:
Tax (benefit) at Federal statutory rate (15.00)%
State tax (benefit) net of Federal benefit (3.50)
Valuation allowance 18.50
------
Tax provision (benefit) -
======
Note 3 - Common Stock Issued
On October 3, 1983, the date of inception, the Company issued 440,000 shares
of common stock to two officers of the Company. Prior to January 31, 1984, an
additional 26,107 shares of common stock were issued. During February, 1984,
an additional 308 shares of common stock were issued.
On November 30, 2004, the Company issued 480,000 shares of its common stock to
Pride Equities, Inc. (Pride), representing 50.717% of its common stock
outstanding at November 30, 2004, in exchange for $30,000 cash. Pride has
also agreed to advise the Company as to potential business combinations. This
transaction resulted in a change in control of the Company.
F-12
MARWICH II, LTD.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2005 and 2004
(References to April 30, 2005 and 2004 are unaudited)
As of January 31, 2005, the Company's Articles of Incorporation, as amended,
authorized the issuance of up to 100,000,000 shares of no par value common
stock and up to 1,000,000 shares of $0.01 par value preferred stock. As of
January 31, 2005, there were 946,416 shares of common stock issued and
outstanding and there were no preferred shares issued or outstanding.
Note 4 - Reverse Split
Effective November 30, 2004, the Company effected a reverse split of its
common stock on a one for five basis. All references to common stock in the
financial statements have been retroactively given effect for this split.
F-13
PART IV
ITEM 1. EXHIBIT INDEX.
EXHIBIT
NUMBER DESCRIPTION LOCATION
----------- ---------------------------- -----------------------------
(1) Articles of Incorporation:
1.1 Articles of Incorporation Filed herewith electronically
1.2 Articles of Reinstatement Filed herewith electronically
dated October 13, 2004
1.3 Certificate of Amendment of Filed herewith electronically
Articles of Incorporation
1.4 Certificate of Amendment of Filed herewith electronically
Articles of Incorporation
1.5 Certificate of Amendment of Filed herewith electronically
Articles of Incorporation
1.6 Certificate of Amendment of Filed herewith electronically
Articles of Incorporation
(2) Bylaws
2.1 Bylaws Filed herewith electronically
(23) Consents - Experts:
23.1 Consent of Miller and Filed herewith electronically
McCollom
20
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.
MARWICH II, LTD.
Date: June 10, 2005 By: /s/ Michael L. Schumacher
Michael L. Schumacher
President, Treasurer, Chief
Financial Officer and Director
Date: June 10, 2005 By: /s/ Peter Porath
Peter Porath
Vice-President and Director
Dates Referenced Herein and Documents Incorporated by Reference
| This ‘10SB12G’ Filing | | Date | | Other Filings |
|---|
| |  |
| | 1/31/26 |
| Filed on: | | 6/10/05 |
| | 5/31/05 |
| | 4/30/05 | | 10QSB |
| | 4/26/05 |
| | 3/31/05 |
| | 2/1/05 |
| | 1/31/05 | | 10KSB, NT 10-K |
| | 12/31/04 |
| | 11/30/04 |
| | 10/13/04 |
| | 4/30/04 | | 10QSB |
| | 3/31/04 |
| | 1/31/04 | | 10KSB |
| | 12/31/03 |
| | 2/1/03 |
| | 11/12/02 |
| | 2/6/02 |
| | 9/22/99 |
| List all Filings |
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