Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2 Form SB-2 of Concrete Leveling Systems 50 172K
2: EX-3.1 Articles of Incorporation 5 18K
3: EX-3.2 Bylaws 9 42K
4: EX-4 Speciman Stock Certificate 1 4K
5: EX-5 Opinion & Consent of Legal Counsel 1 8K
6: EX-23.1 Consent of Hobe & Lucas 1 7K
As Filed With the Securities and Exchange Commission on January 16, 2007
Registration No. 333-______
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CONCRETE LEVELING SYSTEMS, INC.
(Name of small business issuer in its charter)
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Nevada 3590 28-0851977
(State of jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code) Identification Number)
Suzanne I. Barth Suzanne I. Barth
5046 East Boulevard Northwest 5046 East Boulevard Northwest 5046 East Boulevard Northwest
Canton, OH 44718 Canton, OH 44718 Canton, OH 44718
(330) 966-8120 (330) 966-8120 (330) 966-8120
(Address and telephone number (Name, address and telephone number (Name, address and telephone number
of principal executive offices) of principal place of business) of agent for service)
Copies to:
Ronald O. Kaffen, Esq.
Baker, Hardesty & Kaffen
520 South Main Street, Suite 500
Akron, Ohio 44311-1077
(330) 762-7477, fax (330) 762-8059
Approximate date of proposed sale to the public As soon as practicable after
this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration of the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Title of each class of Amount of shares Proposed maximum Proposed maximum
securities to be to be offering price aggregate offering Amount of
registered registered per unit price registration fee
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Common $0.001 2,500,000 $0.12 $300,000 $11.79
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(1) The portion of the shares which are being offered by the selling
shareholders has been calculated based upon Rule 457(c) and the amount is
only for purposes of determining the registration fee, the actual amount
received by a selling shareholder will be based upon fluctuating market
prices.
Concrete Leveling Systems, Inc. hereby amends this registration statement on
such date or dates as may be necessary to delay its effective date until
Concrete Leveling Systems, Inc. shall file a further amendment which
specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until
the registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
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PROSPECTUS
2,500,000 SHARES OF COMMON STOCK
CONCRETE LEVELING SYSTEMS, INC.
Concrete Leveling Systems, Inc. (CLS) is offering a maximum of 725,000 shares of
common stock. The offering price for these shares is to be $0.12 per share and
the maximum amount to be raised is $87,000. CLS intends to offer the 725,000
shares through its officers and directors. There will be no underwriter or
broker/dealer involved in the transaction and there will be no commissions paid
to any individuals from the proceeds of this sale. There will be no minimum
amount of shares sold and CL S will not create an escrow account into which the
proceeds from any shares will be placed. Instead, the proceeds from all shares
sold by CL S will be placed into the corporate account.
There are an additional 1,775,000 shares of its common stock being offered for
sale by selling shareholders. These shares will be offered initially at the
price of $0.12 per share. Prior to this registration there is no public market
for the shares of common stock. The Corporation, however, anticipates obtaining
a market maker to commence trading the shares on the OTC Bulletin Board. There
is no guarantee that the Corporation will be able to secure a market maker.
However, if the shares are quoted on the OTC Bulletin Board, the shares will be
offered at the prevailing market prices. No amounts paid to the selling
shareholders for the shares they are selling will go to CLS. All proceeds from
said shares will, instead, be retained by the selling shareholders. Initially,
selling shareholders will seek a broker/dealer to sell their shares, however, if
they are unable to do so, they will attempt to sell the shares themselves.
Prior to this registration, there has been no public market for the shares of
common stock. It is unlikely that an active public trading market can be
established or sustained in the foreseeable future. There is a high degree of
risk involved with this investment, due to the fact that it is in its
developmental stage and there is no market for the securities being purchased.
You are referred to Risk Factors on page 8 for further information. (SEE RISK
FACTORS ON PAGE 8).
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PRICE UNDERWRITING DISCOUNTS PROCEEDS
TO PUBLIC DISCOUNTS OR COMMISSIONS TO COMPANY
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Per share as offered by CLS $ 0.12 None $0.12
Total number of shares $ 87,000 None 100%
offered by CLS (725,000)
Per share (offered by $ 0.12 (1) None (2) None
selling shareholders)
Total shares offered by $213,000 None None
selling shareholders (1,775,000)
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1. The quoted price is the initial asking price by the selling shareholders.
In the event that a market is created to trade these shares, the shares
will be offered at the prevailing market prices.
2. At present, the selling shareholders have no agreements with any
broker/dealer to sell these shares. In the event that shares are sold
through a broker/dealer, a standard commission will be paid from the
proceeds to that broker/dealer.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. AN INVESTMENT IN THE SECURITIES OFFERED HEREIN INVOLVE A HIGH
DEGREE OF RISK AND AN IMMEDIATE SUBSTANTIAL DILUTION OF THE BOOK VALUE OF THE
COMMON STOCK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF
THEIR ENTIRE INVESTMENT. (SEE DILUTION AND RISK FACTORS PAGE 14 AND 7).
This offering will end twelve months from the date of this Prospectus.
The date of this Prospectus is ________.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. CLS MAY
NOT SELL THE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THE SECURITIES IN ANY STATE
WHERE THE OFFER OR SALE IS NOT PERMITTED.
Approximate date of commencement of proposed sale to the public: as soon as
practicable after this registration statement becomes effective.
INSIDE FRONT AND OUTSIDE BACK COVER OF THE PROSPECTUS:
Until ________ , 2009, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealer's obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
TABLE OF CONTENTS
Number Item in Form SB-2 Prospectus Page No.
------ ---------------------------- --------
1 Outside Front Cover Page of Prospectus 1
2 Prospectus Summary Information 3
3 Risk Factors 8
4 Forward Looking Statements 12
5 Use of Proceeds 12
6 Market for Common Equity and Related Stockholder Matters 14
7 Dividend Policy 14
8 Determination of Offering Price, Dates of Offering, Refunds
and Purchase Amounts 15
9 Dilution 15
10 Plan of Operation 16
11 Organization within Last Five Years 18
12 Business of Concrete Leveling Systems, Inc. 18
13 Where You Can Find More Information 23
14 Description of Property 23
15 Directors, Executive Officers, Promoters and Control Persons 23
16 Executive Compensation 24
17 Employment and Related Agreements 25
18 Certain Relationships and Related Transactions 25
19 Security Ownership of Certain Beneficial Owners and Management 25
20 Selling Security Holders 26
21 Disclosure of Commission Position on Indemnification for
Securities Act Liability 29
22 Plan of Distribution 29
23 Description of Securities 31
24 Legal Proceedings 32
25 Interest of Named Experts and Counsel 32
26 Financial Statements 33
27 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 43
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2. PROSPECTUS SUMMARY INFORMATION
CLS was incorporated on August 28, 2007. Since its incorporation CLS has been in
its developmental stages. CLS has had no revenues from operations since its
inception and has incurred, and continues to incur, operating losses. CLS
anticipates to obtain future revenues from the sale of concrete leveling service
units utilized to restore to level, existing concrete surfaces. At the present
time, CLS owns one used unit that must be modified prior to sale, and has the
financial resources from which to modify the current unit and to complete
fabrication of one additional unit for sale. CLS lacks the necessary capital to
market the units and produce additional units.
The Corporation currently has 4,375,000 shares of its $.001 par value common
shares outstanding. Upon the successful completion of this offering, CLS will
have 5,100,000 shares outstanding.
The offering will terminate upon the sale of all shares offered or on
________,2008 whichever occurs first. CLS intends to fabricate the units,
primarily from commercially available components and will outsource certain
custom fabricated parts. In addition, CLS intends to market the units through
its website and commercial publications. The basic unit being fabricated
involves technology that is common to the industry and not subject to any
patents or trade secrets. CLS, has however, made specific improvements to the
currently available technology. The following summary is qualified in its
entirety by reference to the more detailed information and financial statements,
including notes thereto appearing elsewhere in the prospectus. Each prospective
investor is urged to read this prospectus in its entirety. This document
contains no proxy statement.
ORGANIZATION
CLS was incorporated on August 28, 2007 in the State of Nevada. It is operating
in the State of Ohio under the name of CLS Fabricating, Inc. The Corporation's
principal offices are located at 5046 East Boulevard Northwest, Canton, Ohio
44718. It's telephone number is (330) 966-8120. CLS has never declared
bankruptcy, it has never been in receivership, and it has never been involved in
any legal action or proceedings. Since becoming incorporated, CLS has made no
significant purchases that would create a future liability for the company. It
has not sold any assets nor has it been involved in any mergers, acquisitions or
consolidations.
CLS is a developmental stage company that intends to fabricate and market a
concrete leveling service unit utilized in the concrete leveling industry. This
unit secures to the back of a truck and consists of a mixing device (which mixes
lime with water) and a pumping device capable of pumping the mixture under
pressure into pre-drilled holes, in order to raise the level of any flat
concrete surface. CLS has already raised, through a private offering, funds
necessary to improve a current service unit owned by the company, as well as, to
fabricate one additional service unit for sale. The funds that CLS will receive
through this offering will be utilized to provide sufficient working capital to
the company for purposes of promoting and marketing the service units, as well
as, to assure continued operations of the company until the first unit is sold.
There are other concrete leveling service units of a similar nature, currently
being manufactured in the United States. Although CLS believes that the design
changes it has made to the units create a superior unit and, therefore,
competitive in the market, CLS recognizes that there is a limited market for
these units and there are existing manufacturers in the market that have more
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experience in the marketing of these units. The CLS management has, however,
been directly involved in the concrete leveling business for the past 7 1/2
years and, therefore, has direct knowledge as to the operations of the concrete
leveling service unit, as well as, the variety of applications to which is can
be used.
It is doubtful if CLS can continue as a going concern if additional capital is
not raised. CLS requires this capital to continue with the fabrication of
additional service units and to adequately market our product. CLS anticipates
that once the units are sold, it will be able to generate an additional revenue
stream through training the purchasers of these units as to the use of the
product in the field. At the present time, it is anticipated by the management
of CLS that it will take approximately 6 months before it will realize revenue
from the sale of the products. The management of CLS has determined that it is
necessary to seek an additional $87,000 dollars of the capitalization at this
time through the offering of stock. Additional funds may be necessary to
continue marketing and sustain the operations of the company until we are able
to sustain operation through sales. CLS will seek these funds by obtaining loans
through either private sources or financial institutions. If after seeking
sources of debt to proceed with CLS's operations, management determines that it
is unlikely that it will be successful in obtaining debt financing, management
reserves the right to seek other sources of funding either through private
placement or through future offerings of publicly traded common stock.
CLS anticipates that it will continue to experience operating losses for a
period of at least one year and possibly longer.
Mrs. Suzanne I. Barth is the only officer of the Corporation. She is also the
only director of the Corporation. CLS has no other paid employees at this time
and does not expect to hire any staff in the near future. She began receiving a
salary of $1,000 per month commencing January 1, 2008. All fabrication of the
unit will be performed by independent contractors under the direction of Mrs.
Barth.
At the present time, CLS has no significant binding contractual commitments
which would create a future liability. The Corporation has been in existence for
only a short period of time and did not receive sufficient initial
capitalization to continue operations until it received funds through a private
placement. In order to sustain the operations of the Corporation until it had
received the private placement funds, the Corporation borrowed $3,901 from the
Corporation's incorporator, Mrs. Suzanne I. Barth. This loan is evidenced by a
note that provides for interest at the rate of 4% and is payable on demand. The
financing sought through this offering, if fully subscribed, will provide
sufficient financing for CLS to go forward with its business plan. However, if
full subscription is not obtained or, if unforeseen adverse contingencies arise,
CLS would be required to obtain additional financing over the next twelve
months. Should this occur, CLS intends to obtain financing through the purchase
of debt, if available. However, it may become necessary for CLS to sell
additional stock in one or more private placements or subsequent public
offerings. Should this occur, any investor who purchases through this offering
will experience additional dilution in its ownership of this Company.
There is currently no market for CLS stock.
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BLANK CHECK COMPANY ISSUES
Rule 419 of the Securities Act of 1933 (the "Act") governs offerings by "Blank
Check Companies". Rule 419 defines a "Blank Check Company" as a development
stage company that has no specific business plan or purpose or has indicated
that its business plan is to engage in a merger or acquisition with an
unidentified company or companies, or other entity or person; and issuing "penny
stock", as defined in Rule 3a51-1 under the Securities and Exchange Act of 1934.
The management of CLS believes that its company does not meet the definition of
a "Blank Check Company" because, while it is in the development stage, it does
have a specific business plan and purpose and is not in the business to engage
in a merger or acquisition with an unidentified company or companies. CLS formed
in August, 2007 with the purpose of fabricating and marketing concrete leveling
service units. However, to date, the Corporation has failed to complete its
business plan by creating revenues from operations.
The following is a summary of CLS's current financial position based upon the
three months audited financial statements.
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CONCRETE LEVELING SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
OCTOBER 31, 2007
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ASSETS
CURRENT ASSETS
Cash in bank $ 5,075
Inventory 1 $ 5,076
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TOTAL ASSETS $ 5,076
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LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Note payable - officer $ 3,901
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SHAREHOLDER'S EQUITY
Common stock, $.001 par value, 100,000,000 Shares
authorized, 2,600,000 shares issued and outstanding 2,600
(Deficit) accumulated during the development stage (1,425) 1,175
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TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 5,076
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The accompanying notes are an integral part of these financial statements.
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CONCRETE LEVELING SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD BEGINNING AUGUST 28, 2007 (INCEPTION)
AND ENDED OCTOBER 31, 2007
NET SALES $ 0
GENERAL AND ADMINISTRATIVE EXPENSES 1,425
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INCOME (LOSS) FROM OPERATIONS (1,425)
PROVISION FOR (RECOVERY OF) INCOME TAXES 0
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NET INCOME (LOSS) $(1,425)
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(Loss) per share $ (.00)
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The accompanying notes are an integral part of these financial statements.
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3. RISK FACTORS
THE SECURITIES OFFERED HEREIN ARE HIGHLY SPECULATIVE AND SHOULD BE PURCHASED
ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT IN CONCRETE
LEVELING SYSTEMS, INC. EACH PROSPECTIVE INVESTOR SHOULD CAREFULLY CONSIDER THE
FOLLOWING RISK FACTORS, AS WELL AS ALL OTHER INFORMATION SET FORTH ELSEWHERE IN
THIS PROSPECTUS.
MANAGEMENT LACKS OPERATIONAL EXPERIENCE IN THE FABRICATION INDUSTRY. THIS MAY
ADVERSELY AFFECT CLS'S ABILITY TO BE PROFITABLE. Although management of CLS has
operated a concrete leveling business and has utilized the type of
service unit being fabricated by the Company, it has no direct experience in
the fabrication of the product. CLS is a start-up company, in its development
stage. It is possible that the lack of relevant operational experience in the
fabrication of the concrete leveling service units could prevent CLS from
becoming a profitable business.
CLS IS OPERATING AT A LOSS WHICH MAY CONTINUE IN THE FUTURE. IT CANNOT BE
DETERMINED IF AN ADDITIONAL CAPITAL INVESTMENT IN CLS WILL PERMIT CLS TO
RECOGNIZE A PROFIT IN THE FUTURE. As of October 31, 2007, CLS has sustained
operating losses of $1,425.00. The amount of this loss should not be indicative
of future losses sustainable by CLS. As of October 31, 2007, CLS has expended
only a small amount of non-production expenses and had not yet begun accruing
any expenses with regard to the actual fabrication of the concrete leveling
service unit. CLS intends to utilize any funds raised through this offering
toward expenses necessary to operate its business and for the fabrication of the
additional concrete leveling service units. It cannot be predicted when CLS will
be able to realize a profit from operations, even though additional capital is
being invested by investors.
IT REMAINS UNCERTAIN WHETHER AN INVESTMENT IN CLS WILL RESULT IN AN INVESTOR
REALIZING A RETURN ON HIS INVESTMENT, SINCE MANAGEMENT HAS NOT YET DETERMINED
THE SIZE OF THE MARKET FOR ITS PRODUCT. At the present time, CLS has only
evaluated the marketability of its product, based upon its personal knowledge
and the utilization of its product in a commercial setting. Management is aware
that the need for concrete leveling has geographical restrictions and is
restricted to areas where poured concrete is undermined as the result of loss of
support due to erosion and/or the freeze thaw cycle. Once CLS obtains the
necessary capitalization, it will commence to determine if the demand for the
concrete leveling service units is of a sufficient size to warrant a large scale
production of the units. In the event CLS does not identify a large scale demand
for the units, CLS will not have a potential source of income and it will be
necessary for CLS to seek another means of obtaining income or the business will
fail.
CLS WILL BE COMPETING WITH OTHER MANUFACTURERS OF CONCRETE LEVELING SERVICE
UNITS WHO HAVE ALREADY ESTABLISHED A MARKET FOR THEIR PRODUCT. THE INVESTOR'S
ABILITY TO REALIZE A RETURN ON HIS PURCHASE OF SHARES WILL BE DEPENDENT UPON
MANAGEMENT'S ABILITY TO DIFFERENTIATE ITS CONCRETE LEVELING SERVICE UNIT FROM
COMPETITIVE UNITS CURRENTLY IN THE MARKETPLACE. The practice of re-leveling
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existing concrete surfaces has been in existence for approximately 50 years. The
concrete leveling process was greatly improved with the use of service units,
similar to the ones to be fabricated by CLS. This improvement occurred in 1990.
Since that time, several manufacturers of concrete leveling service units have
commenced marketing the units either through direct sales to individuals who
wish to start a concrete leveling business, or, through the concept of combining
the sale of a concrete leveling service unit with a franchise type operation, to
enable an individual, without any prior business knowledge to establish a
concrete leveling business. In order to compete with the companies that are
currently established in this market, CLS will have to be assured that it can
produce a quality product, at a competitive price. At the present time, it is
not known whether these goals can be met, although CLS believes that it can be
competitive in its pricing.
IN THE EVENT THAT THIS OFFERING IS NOT FULLY SUBSCRIBED BY INVESTORS, THIS
OFFERING MAY NOT PRODUCE SUFFICIENT CAPITAL FOR CLS TO BRING ITS PRODUCT TO
MARKET. THE INVESTORS SHOULD BE AWARE THAT ITS INVESTMENT MAY HAVE NO VALUE IF
THE OFFERING IS NOT FULLY SUBSCRIBED AND CLS IS UNABLE TO OBTAIN ADDITIONAL
CAPITAL TO PROCEED WITH ITS OPERATIONS. CLS may require additional financing in
order to establish a profitable operation. The financing to be sought may not be
forthcoming and even if additional financing becomes available, it may not be
available on terms which are favorable to CLS. CLS expects that it may be
required to obtain at least $87,000 of additional financing over the next 12
months. In the event that it cannot sell all of the shares being offered, CLS
will concentrate its efforts in obtaining financing through the purchase of
debt. However, it may become necessary for CLS to sell additional stock in one
or more private placements or subsequent public offerings. If CLS cannot obtain
the requisite financing, it will have to cease operations and the investors'
investment will be lost.
CLS MAY NOT RECOGNIZE AN OPERATING PROFIT IN THE FUTURE UNLESS IT CAN EMPLOY
EXPERIENCED MANAGEMENT TO OPERATE THE BUSINESS. AN INVESTMENT OF ADDITIONAL
CAPITAL IN CLS WILL NOT ASSURE THAT THE BUSINESS WILL BE SUCCESSFUL, UNLESS A
FULL TIME MANAGEMENT TEAM IS HIRED BY CLS. CLS is currently dependent upon the
efforts of Suzanne I. Barth, the sole officer of the Corporation. Mrs. Barth
devotes a substantial number of hours to other business concerns, therefore,
there are no full time employees for the Company at this time. CLS recognizes
that in order to go forward, it will be necessary to employ full time
individuals who have the experience and expertise in marketing the concrete
leveling service unit. Without CLS obtaining the necessary employees within the
next 12 months, it is doubtful as to whether CLS can be successful in its
efforts to bring the product to market, since Mrs. Barth is the only individual
promoting the Company at this time and may not be able to contribute enough
hours toward the Company's operations.
WHEN MAKING AN INVESTMENT IN CLS, AN INVESTOR SHOULD NOT EXPECT TO RECEIVE CASH
DIVIDENDS FROM CLS. AN INVESTOR MUST EVALUATE THE POTENTIAL FOR HIS RETURN ON
HIS INVESTMENT, BASED UPON THE INVESTOR'S FUTURE ABILITY TO SELL THE SHARES
PURCHASED THROUGH THIS OFFERING FOR A GREATER AMOUNT IN THE FUTURE. The holders
of CLS common stock are entitled to receive dividends when and if declared by
the Board of Directors. CLS does not intend to pay cash dividends in the
foreseeable future, but instead intends to retain any and all earnings to
finance the growth of the business. To date, CLS has not paid cash dividends on
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its common stock. Therefore, for an investor to realize a profitable return on
his investment in the Company's common stock, the investor will have to be able
to sell the shares purchased through this offering for an amount greater than
the purchase price of the shares.
INVESTORS MAY NOT BE ABLE TO SELL SHARES ACQUIRED IN THIS OFFERING BECAUSE CLS
COMMON STOCK IS NOT CURRENTLY PUBLICLY TRADED. There is no public trading market
for CLS common stock. It is unlikely that any active public trading market can
be established or sustained in the foreseeable future. CLS intends to have its
common stock quoted on the OTC electronic bulletin board as soon as practicable,
however, there can be no assurance that CLS shares will be quoted on the over
the counter bulletin board. Until there is an established trading market,
holders of CLS common stock will find it difficult to sell or to obtain accurate
quotations for the price of the common stock. CLS does not currently meet the
requirement to have shares listed on the American Stock Exchange ("AMEX") or the
NASDAQ stock market, therefore, any market for securities that does develop will
be highly illiquid. It is unlikely that CLS common shares will achieve
sufficient distribution or that it will be able to obtain the number of market
makers necessary to obtain a listing on the NASDAQ stock market in the
foreseeable future.
THE SHARES SOLD BY CLS IN THIS OFFERING ARE CONSIDERED PENNY STOCK. FEDERAL LAW
IMPOSES ADDITIONAL DISCLOSURE REQUIREMENTS FOR THIS STOCK, WHICH MAY ADVERSELY
AFFECT THE INVESTORS' ABILITY TO RESELL THEIR SHARES IN THE PUBLIC MARKET. CLS's
common stock is currently considered a "Penny Stock" under federal securities
laws since its market price is below $5.00 per share. Penny Stock rules
generally impose additional sale practice and disclosure requirements on
broker/dealers who sell or recommend CLS's shares to certain investors.
Broker/dealers who sell Penny Stock to certain types of investors may be
required to comply with the S.E.C.'s regulations concerning the transfer of
Penny Stock. If an exemption is not available, these regulations require
broker/dealers to make a suitability determination prior to selling Penny Stock
to the purchaser, receive the purchaser's written consent to the transaction,
and provide certain written disclosures to the purchaser. These rules may affect
the ability of broker/dealers to make a market in or to trade CLS shares. In
turn, this may affect the investors' ability to re-sell those shares in the
public market.
EVEN THOUGH CLS'S BUSINESS PLAN IS BASED UPON THE COMPLETE SUBSCRIPTION OF THE
ADDITIONAL SHARES OFFERED THROUGH THIS OFFERING, THE OFFERING MAKES NO
PROVISIONS FOR A REFUND TO AN INVESTOR. CLS WILL UTILIZE ALL AMOUNTS RECEIVED
FROM NEWLY ISSUED STOCK PURCHASED THROUGH THIS OFFERING, EVEN IF THE AMOUNT
OBTAINED THROUGH THIS OFFERING IS NOT SUFFICIENT TO ENABLE CLS TO GO FORWARD
WITH ITS PLANNED OPERATIONS. Any funds received from the sale of stock will be
placed into CLS's corporate bank account. The management of CLS does not intend
to escrow any funds received through this offering. Once funds are received as
the result of a completed sale of common stock being issued by CLS, those funds
will be placed into the Corporate bank account and may be used at the discretion
of management.
In the event that sufficient capital is not raised through this offering, there
will be insufficient funds to continue CLS's business and CLS will fail. Funds
received from any stock sold under this offering will not be returned. CLS may
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not have the funds to be able to continue business, further, CLS may not have
the funds to be able to file its quarterly and annual reports and may cease
filings with the S.E.C. If such event occurs, investors may be unable to trade
their stock and might lose their investment.
ALL DECISIONS REGARDING BOTH POLICY AND OPERATIONS OF CLS ARE MADE BY ONE
INDIVIDUAL. THE SUCCESS OF CLS IS CONTINGENT UPON THIS INDIVIDUAL'S ABILITY TO
MAKE APPROPRIATE BUSINESS DECISIONS. THE ABILITY OF AN INVESTOR TO OBTAIN A
RETURN ON HIS INVESTMENT IS CONTINGENT UPON THIS INDIVIDUAL BEING ABLE TO MAKE
CORRECT BUSINESS DECISIONS. A company the size of CLS does not have a large
number of Directors or employees who can advise the decision makers as to an
appropriate course of action. Mrs. Suzanne I. Barth has effective control over
all aspects of the business with no oversight from other management, except from
the Board of Directors, of which she is the sole member of the board. While it
is expected that other management will be added over time, there are no
assurances that such will occur. Further, it is anticipated that in the future,
there will be additional numbers added to the Board of Directors, however, this
also may not occur in the future.
The Corporation recognizes that at the present time all corporate decisions are
being made by one person, without the benefit of obtaining the points of view of
other individuals. The lack of additional officer's and director's opinions
could result erroneous decisions being made by management and the Board of
Directors. It is doubtful whether the Corporation can proceed, in the event that
any events should occur that would prohibit Mrs. Barth from devoting her
attention to the Corporation. The Corporation lacks any backup plan for
management, in the event that Mrs. Barth is no longer able to act on behalf of
the Corporation.
AN INVESTOR WHO PURCHASES SHARES THROUGH THIS OFFERING SHOULD BE AWARE THAT OUR
AUDITOR HAS EXPRESSED CONCERN ABOUT THE CONTINUING OPERATION OF THIS BUSINESS.
THE CAPITAL PLACED INTO CLS THROUGH THIS OFFERING MAY NOT BE SUFFICIENT TO
PERMIT CLS TO CONTINUE OPERATIONS AS AN ON GOING BUSINESS. ANY INVESTMENT MADE
THROUGH THIS OFFERING MAY BE LOST. Our auditor has expressed substantial doubt
about our ability to continue as a going concern. An investor should be aware
that his investment will be lost if the Company cannot continue to operate. The
projected need for additional capital in our business may not be sufficient to
sustain CLS's operation over the next 12 months. Therefore, even if all of the
shares offered pursuant under this offering are purchased, the investors'
investment may be of little or no value should future events not occur as
projected.
IN THE EVENT OF A SUCCESSFUL COMPLETION OF THIS OFFERING, A RISK STILL EXISTS
THAT THERE WILL NOT BE SUFFICIENT FUNDS IN OUR BUSINESS TO FULFILL OUR PLANS
OVER THE NEXT 12 MONTHS. We may require additional financing to fabricate the
concrete leveling service units and to operate the business until sufficient
revenue can be generated for us to be self-sustaining. Our management projects
that in order to go forward as an operating entity, CLS will spend approximately
$87,000 over the next 12 months to cover costs involved in the marketing,
production and the cost of advertising. Additionally, we currently are obligated
to pay rent on a month to month basis at the rate of $1,250 per month for
facility currently occupied by the company, commencing January 1, 2008. In the
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event that we are unable to generate sufficient revenues and before all of the
funds now held by us and obtained by us through this offering are expended, the
business will fail and the investment made in this Company will become
worthless.
4. FORWARD LOOKING STATEMENTS
The statements, other than statements of historical fact, included in this
prospectus are forward-looking statements. Forward-looking statements generally
can be identified by forward-looking terminology such as "may," "will,"
"expect," "intend," "estimate", "anticipate," "plan," "seek," or "believe." CLS
believes that the expectations reflected in such forward-looking statements are
accurate. However, CLS cannot assure that such expectations will occur. The
factual future performance could differ materially from such statements. Factors
that could cause or contribute to such differences include, but are not limited
to: CLS's ability to continue to operate CLS through equity and debt financing,
larger competitors' response to the entry into the concrete leveling service
unit marketplace, or the inability of outside suppliers to provide the
components to fabricate the concrete leveling service units or the price of
components rising to a degree that the sales price of the service unit would
become prohibition.
5. USE OF PROCEEDS
This offering has no minimum offering amount. The maximum amount sought to be
raised for CLS from this offering is $87,000 (the remaining $213,000 in this
offering represent shares sold by selling shareholders). CLS intends to raise
$87,000 from the sale of 725,000 shares at $0.12 per share. CLS intends to use
these proceeds as follows, based upon the percentage of the offering that is
actually sold:
Expenditure Item 100% 75% 50% 25%
---------------- ------- ------- ------- -------
Professional fees $25,000 $10,000 $ 0 $ 0
Production costs $25,000 $25,000 $25,000 $10,000
Marketing costs $18,500 $18,500 $12,000 $10,000
Selling & administrative
expenses $18,500 $11,750 $ 6,500 $ 1,750
TOTAL $87,000 $65,250 $43,500 $21,750
The above listing indicates the reduction in the expenditures based upon the
percentage of the offering actually sold. In all instances, the proceeds from
the sale of common stock, as received, will be allocated to each item, as
expenditures occur, in a method that will be most advantageous to the promotion
of the company's product and the marketing thereof. Mrs. Suzanne I. Barth is
currently receiving a salary of $1,000 per month. Funds received from this
offering may be used to satisfy her salary.
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The above categories reflect the following expenditures:
PROFESSIONAL FEES: These fees relate to legal and accounting costs for remaining
balances due in the preparation of this offering and for statutory filing
requirements. CLS has already paid a portion of the legal and accounting fees
from cash obtained in a prior private offering. In the event that less than 100%
of the offering is sold, CLS will request terms from its accountants and
attorney to defer professional fees until such time as CLS begins to receive
proceeds from the sale of the first units sold. Although CLS does not have a
written agreement with either its accountants or attorney with regard to the
deferral of professional fees, CLS has consulted with both its accountant and
its attorney and they have indicated that they will be willing to defer
professional fees. The deferral of professional fees will be until such time as
CLS begins to receive proceeds from the sale of its units, but no later than one
year from the date any fee is incurred. All accountant's fees will be due and
payable no more than one year from the date services are performed, since fees
older than one year will impair the accountant's independence. Since the
majority of the outstanding balance due for professional fees will be for
attorney fees, CLS maintains that it will not be adversely impacted by this
limitation.
MARKETING COSTS: The Board of Directors of CLS has placed a high priority on the
allocation of the proceeds from the sale of shares to marketing costs. Marketing
costs are the costs that will be incurred in advertising the concrete leveling
service units in trade publications and the costs involved in establishing a
commercially viable internet website.
PRODUCTION COSTS: This is the cost to locate and contract with companies who
will be providing components for the fabrication of the concrete leveling
service units and to improve the current unit owned by the company, as well as
the fabrication of subsequent units.
SELLING AND ADMINISTRATIVE EXPENSES: This is the cost associated with the
operation of the business prior to the receipt of any revenues. This category
includes the cost of telephone charges, the monthly rental fee for the
production/warehouse space being rented by CLS, salaries, and the cost of
producing and maintaining the company's website.
The Board of Directors of CLS maintains that it will be necessary for CLS to
receive at least 25% of the maximum sought to be raised through this offering,
in order for CLS to go forward from its developmental stages to a fully
operating company. At this minimum level of funding, CLS would have to allocate
all of the funds received between initial marketing costs and selling and
administrative expenses. These allocations may change, however, if it takes the
entire term of the offering in order to realize this minimum subscription level.
Should that occur, CLS will not have sufficient operating capital to maintain
its offices and funds from the offering will have to be utilized for selling and
administrative expenses, as well as, the payment of fees associated with
periodic tax and securities compliance.
In the event that less than 25% of the maximum amount sought to be raised
through this offering is sold, it will be necessary for CLS to seek other
sources of financing, or it will not be able to operate and begin sales of its
product.
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6. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
NO PUBLIC MARKET FOR COMMON STOCK
There is presently no public market for CLS's common stock. The management of
CLS anticipates applying for trading in its common stock on the over the counter
bulletin board upon the effectiveness of the registration statement of which
this prospectus forms a part. However, CLS can provide no assurances that its
shares will be traded on the bulletin board, or, if traded, that a public market
will materialize.
HOLDERS OF E & S COMMON STOCK
As of the date of this registration statement, CLS has 15 registered
shareholders.
RULE 144 SHARES
At present, there are no shares of CLS common stock which are available for
resale to the public pursuant to Rule 144 of the Securities Act of 1933. In
general, under Rule 144, as currently in effect (until February 8, 2008), a
person who has beneficially owned shares of a company's common stock for at
least one year, is entitled to sell within any three month period a number of
shares that does not exceed the greater of:
1. One percent of the number of shares of CLS's common stock then
outstanding which, in the case of CLS, will equal approximately 43,750
shares as of the date of this prospectus; or
2. The average weekly trading volume of CLS's common stock during the
four calendar weeks preceding the filing of a notice on Form 144 with
respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions and notice
requirements and to availability of current public information about CLS. At
present, there are no shareholders whose shares would qualify under Rule 144.
Under Rule 144 (k) a person who is not one of CLS's affiliates at any time
during the three months preceding a sale, and who has beneficially owned the
shares proposed to be sold for at least 2 years, is entitled to sell shares
without complying with manner of sale, public information, volume limitation, or
notice provisions of Rule 144.
As of the date of this prospectus, no shares may be sold pursuant to Rule 144.
7. DIVIDEND POLICY
There are no restrictions in CLS's Articles of Incorporation or Bylaws that
prevent it from declaring dividends. The Nevada revised statutes, however, do
prohibit CLS from declaring dividends, where, after giving effect to the
distribution of the dividend:
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1. CLS would not be able to pay its debts as they became due in the usual
course of business; or
2. The total assets of CLS would be less than the sum of the total
liabilities plus the amount that would be needed to satisfy the rights
of shareholders who have preferential rights superior to those
receiving the distribution.
CLS has not declared any dividends and does not plan to declare any dividends in
the foreseeable future.
8. DETERMINATION OF OFFERING PRICE, DATES OF OFFERING, REFUNDS AND PURCHASE
AMOUNTS
There is no established public market for the common shares of CLS. The offering
prices for the shares to be sold, pursuant to this offering has been set at
$0.12 per share. The offering price is substantially higher than the price of
CLS's common stock when it was sold to the existing shareholders through private
placements. The initial offering price for the shares which were purchased by
Mrs. Suzanne I. Barth in the registrant's initial offering was $0.001 per share.
The selling shareholders have purchased their shares in CLS for $0.04, per
share.
With respect to the common shares being offered for sale by the selling
shareholders, the offering price will be determined by market factors and the
independent decision of the selling shareholders. The initial offering price,
however, has been established at $0.12 per share.
The management of CLS has set the offering price for the new shares to be issued
as part of this offering largely based upon the cash needs of the Corporation to
go forward. The additional factors considered when determining the sales price
of the new shares in this offering are the lack of liquidity in the shares
(since there is presently no public market for the resale of these shares), the
high level of risk considering the lack of operating history of CLS and the fact
that CLS currently lacks sufficient knowledge to determine the number of
concrete leveling service units that it may be able to sell during any one year.
9. DILUTION
The common stock to be sold by the selling shareholders is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to
CLS's existing shareholders. However, the 725,000 shares of common stock which
is to be sold by CLS, as part of this offering, will create an immediate
dilution to the purchasers of those shares. The initial 2,600,000 common shares
sold by CLS were sold to Mrs. Suzanne I. Barth in a private offering for a value
of $.001 per share. Thereafter, a second private offering of 1,775,000 shares of
common stock was sold by CLS for the selling price of $.04 per share.
Additionally, in the first quarter of operation of CLS, it has experienced an
operating loss of approximately $1,425.00. This amount does not reflect
expenditures which have been made by CLS since its last statement, nor does it
reflect any accrued liabilities of CLS which may have occurred since the last
statement. In the event all new common shares included in this offering are
15
sold, the dilution experienced by the purchasers of these shares will be
substantial. The effect of the dilution is described as follows:
Prior to Upon Completion
Offering of Offering
-------- -----------
Net tangible book value per share $.016 $.031
(As adjusted for proceeds from private offering)
Amount of the increase in the above described net tangible book value per share
attributable to the cash payments made by the purchasers of the shares being
offered is $.015 per share. The amount of immediate dilution from the public
offering price which will be absorbed by the purchasers of these common shares
will be $.089 per share.
In the event that only a nominal of new common shares included in this offering
are sold, such as 25% of the offering, the dilution upon the investors shares is
described as follows:
Prior to Upon Completion
Offering of Offering
-------- -----------
Net tangible book value per share $.016 $.021
(As adjusted for proceeds from private offering)
Amount of the increase in the above described net tangible book value per share
attributable to the cash payments made by the purchasers of the shares being
offered is $.005 per share. The amount of immediate dilution from the public
offering price which will be absorbed by the purchasers of these common shares
will be $.099 per share.
10. PLAN OF OPERATION
During the next 12 months, CLS plans to continue as a Company within its
developmental stages. At the present time, it has raised from its prior
offerings, a total of $73,600 in cash. As of October 31, 2007, there was $5,075
of cash currently held as assets by CLS. Since that time an additional $71,000
was raised through a private offering. It is anticipated that the amounts
already raised will satisfy all operating costs expended by CLS to the date of
this offering, including some of the costs associated with professional fees for
both attorneys and accountants in the preparation of this offering. It is
anticipated that $25,000 from the proceeds received in this offering may be
required to satisfy the balance owing to CLS's attorney and accountants for
services rendered in the preparation of this offering. CLS has accrued loans to
date, totaling $3,901. This loan represents an advance of cash, in the amount of
$3,900 and the transfer of a used complete concrete leveling service package,
which has been valued at $1. The sole officer and director of the Corporation
began receiving a salary of $1,000 per month, commencing January 1, 2008. Mrs.
Barth has agreed to continue working on behalf of the Corporation, at this rate,
until such time as the Corporation commences to realize revenue from sale of its
product, her salary will then be determined by the Board of Directors. As of the
end of CLS's first fiscal quarter, it has experienced a total net loss of
$1,425. Since CLS is in its developmental stage, it has had no revenues from the
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sale of goods, but has incurred expenses of $1,425. The additional amounts
sought by CLS through this offering, may be sufficient to provide the necessary
capital for CLS to continue production of the concrete leveling service units,
satisfy current debts and provide funds for marketing of the concrete leveling
service units. The management of CLS is of the belief that the $87,000 sought
through this offering would provide sufficient cash flow to permit CLS to stay
current with all liabilities reflected on its balance sheet in addition to
performing the necessary marketing and fabricating of its product. However,
because the management of CLS may run into unforeseen expenses, the amount
raised through this offering may not be enough to provide CLS with sufficient
capital to continue the marketing and production of the portable concrete
leveling unit. In the event that only a nominal amount of this offering is
purchased by investors, CLS will not have sufficient assets to go forward with
its plan of operation, unless it is able to obtain capital from other sources.
In anticipation of the commencement of fabricating of the concrete leveling
service units, CLS has secured a lease for production/storage space at a
building located at 7484 Strauss Avenue, North Canton, Ohio, commencing January
1, 2008. The area contains approximately 2,500 square feet. The property is
being leased at the rate of $1,250.00 per month, including, all utilities. The
property is being leased, on a month-to-month basis, from Mr. Edward Barth, the
husband of the Company's sole shareholder, Mrs. Suzanne I. Barth.
It is the intent of CLS to fabricate and market concrete leveling service units
that are placed upon trucks for the concrete leveling industry. The design being
utilized by the Corporation is a design already utilized by its competitors
however; certain modifications have been made to the original design by CLS
which, in the opinion of CLS, is an improved unit.
The Corporation currently owns one complete service package, consisting of a
used concrete leveling service unit, mounted upon a truck, which must first be
modified prior to being offered for sale. This unit was transferred to the
Corporation by Suzanne I. Barth, and placed on the corporation's books at a
value of $1. Once modifications are completed and the unit is refurbished, it
will be offered for sale by the Corporation.
The Corporation has identified the components necessary to create additional
concrete leveling service units. Almost all of the components of the concrete
leveling service units are in stock units which are available from several
suppliers. There are a small number of components which must be specially
fabricated to the Corporation's specifications. The Corporation has identified a
metal fabricator who will make the items required to complete the units. The
Corporation has contracted with the fabricator to make three sets of the
required components for the purpose of retrofitting the existing service unit
and building two new service units. All parts ordering and fabrication design is
being completed by Mr. Edward A. Barth. Mr. Barth has operated a concrete
leveling business for the past seven years and is responsible for the design of
the improvements to the service units. Mr. Barth is currently working without a
salary for the Corporation and will continue to do so until such time as the
Corporation commences to receive income from the sale of its service units.
17
CLS anticipates it will have sufficient capital to produce the first unit and to
upgrade the used unit that it owns, with the funds that it has received through
its private offering. However, in order to produce a second new service unit and
become profitable, it is necessary to raise additional capital so that the
Corporation can go forward with its current marketing plan.
Due to the seasonal nature of the use of the concrete leveling service units
produced by CLS, the Corporation does not anticipate selling any units until the
spring of 2008. Therefore, funds obtained through this offering will be utilized
to maintain the Corporation's operations until such time as the first unit can
be sold. In the event that the full amount sought is subscribed for within the
first six months of the offering, CLS believes that a majority of the funds will
be expended during that time frame. If the full amount is not received, CLS will
have to scale back its efforts proportionately. Should this occur, CLS
contemplates its ability to have sufficient inventory of the concrete leveling
service units will be delayed and it will take a longer time for CLS to generate
sufficient revenues to become self sustaining.
11. ORGANIZATION WITHIN LAST FIVE YEARS
CLS has been in existence only since August, 2007. It therefore has no operating
history. Since its inception, there have been one transaction between the
Corporation and any related person, promoter, or control persons. The
Corporation borrowed the sum of $3,901 from Mrs. Suzanne I. Barth for operating
capital. This indebtedness is evident by a note. The terms of the note provide
that it is repayable on demand and shall bear interest at the rate of 4%.
This loan was approved by the Board of Directors. At the present time, the
Corporation has only one Director, Mrs. Suzanne I. Barth, who is the majority
Shareholder in the Corporation, as well as the only Officer and Director of the
Corporation.
Due to the start up nature of this business, and the fact that there is only one
member of the Board of Directors, the Corporation currently does not have a
separately designated audit, nominating or compensation committee or committee
performing similar functions. The Corporation recognizes the need for
independent directors in order for it to operate. However, it is not currently
feasible to elect additional directors, who would be deemed to be independent
directors, in order to review such matters as related party transactions,
audits, compensation of officers or nominations for the Board of Directors.
12. BUSINESS OF CONCRETE LEVELING SYSTEMS, INC.
CLS was incorporated on August 28, 2007 under the laws of the State of Nevada.
It is operating in the State of Ohio under the name of CLS Fabricating, Inc.,
due to the fact that the corporations name was not available for use in the
State of Ohio. The purpose the Corporation was formed is to fabricate and sell
concrete leveling service units. CLS has no plans to seek a business combination
with any other entity in the near future. CLS's President, Suzanne I. Barth is
also CLS's sole promoter since its inception. As part of her initial purchase of
common shares of stock, Mrs. Barth has transferred ownership of a used complete
service package, consisting of a concrete leveling service unit, mounted upon a
truck, to the Corporation to upgraded and sell. Mrs. Barth has also loaned the
Corporation the sum of $3,900.00 on October 31, 2007 for working capital. This
loan is evidenced by a demand note bearing interest at the rate of 4% per annum.
Mrs. Barth, who is the sole individual operating CLS, began to receive a salary
18
of $1,000.00 per month commencing on January 1, 2008 for her services as an
officer of the Corporation. She will receive no compensation for her services as
a director of the Corporation. Mrs. Barth received 2,600,000 shares of CLS's
common stock in exchange for the payment of $2,600. In addition, Mrs. Barth has
transferred a complete service package (including a used concrete leveling
service unit, which is mounted upon a truck) to the Corporation as CLS, has
placed the service unit on its books at the value of $1. Mrs. Barth purchased
her shares effective September 26, 2007.
CLS is a Corporation that is in its developmental stages and has been in
existence for approximately four months. It has no prior operating experience
and has no predecessor businesses from which it evolved. The plan of operation
of CLS is to fabricate and sell a concrete leveling service unit. CLS is
currently in possession of a used complete service package, which includes a
used concrete leveling service unit, mounted upon a truck, which it plans to
upgrade and sell for operating capital. It currently has sufficient funds from a
private offering to fabricate one additional new unit for sale, as well.
The practice of concrete leveling has been in existence for over 50 years. The
concrete leveling industry was created to address a common problem in the
construction industry. The construction industry has chosen to utilize concrete
for purposes of establishing building foundations, creating driveways,
sidewalks, patios, and in ground swimming pools. Governments have also chosen
concrete for purposes of creating roadways, catch basins and curbing. Concrete
is chosen for these various applications because it creates a hard permanent
surface that will last for a long period of time in various climates. One of the
largest problems with concrete is that after it has cured, it is very ridged.
Due to its ridged nature, if the support beneath a portion of concrete is
removed, pressures applied to the surface of the concrete will cause settlement,
resulting in an uneven surface. Prior to the development of the concrete
leveling industry, the only solution to repair an area with uneven concrete, was
to remove the old concrete and pour new concrete in its place. This procedure is
very labor intensive, creates unwanted construction waste and has become
increasingly expensive, due to the high cost of concrete.
The concrete leveling industry has developed a procedure whereby agricultural
grade limestone is mixed with water on a concrete leveling servicing unit. The
resulting mixture is pumped, under pressure, through a tube in a predrilled hole
in the concrete. The mixture fills the void created by the loss of the
subsurface support and forces the broken portion of concrete to float back up to
its original position. It is often necessary to drill several holes into a large
section of concrete in order to completely level that section.
Once the concrete section has attained its desired level, all of the holes are
refilled with a quick drying concrete. The mixture will solidify below the
concrete and create a stable base upon which the concrete will then rest.
The major causes of loss of support for concrete are water run off, which
removes soil under the concrete section and the freeze/thaw cycle that occurs in
those areas of the country that experience harsh winters.
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The concrete leveling service units which will be fabricated by CLS, are
designed to be placed upon the back of trucks that are capable of sustaining the
weight of the unit and the materials necessary to perform the concrete leveling
process. Usually, the minimum requirements would be a one ton truck with dual
wheels supporting the bed of the truck. It is the intent of CLS only to sell the
concrete leveling servicing units, and not the vehicles upon which the units
will be affixed.
Management has made preliminary calculations as to the costs involved in the
fabrication of the concrete leveling service units and has determined that the
units it will produce can be sold, at retail, for a price below those currently
sold from the market. A one year warranty for parts and labor, will be provided
with all new units. In addition, the Corporation intends to earn additional
revenue by offering a training package with the sale of the units. The training
package will involve a trained CLS technician to travel to the purchaser's place
of business and install the concrete leveling service unit on the purchaser's
truck. The technician will then perform field training for the purchaser so that
the purchaser will become familiar with the operation of the servicing unit, as
well as the techniques involved in concrete leveling.
During the next 12 months, CLS has two major goals to accomplish in the
development of its business.
1 FABRICATION OF UNITS: CLS anticipates that during the next 12 months,
it will have sufficient resources from its private offering to update
the used concrete leveling service unit that has been placed in the
Corporation, as well as fabricate a new concrete leveling service
unit. Management of the Corporation, through personal experience, is
familiar with the practical application of the service units and has
the expertise necessary, in house, to fabricate the unit, with the
help of independent contractors. CLS anticipates that it will be able
to complete a second service unit for sale within the next twelve
months, in the event that it receives sufficient funding from this
offering. CLS is of the opinion that the components necessary to
complete the new service units are readily available, from several
suppliers. There are two components of the servicing units that must
be fabricated. The fabricated components do not require extraordinary
skill in fabrication and CLS has located a fabrication shop within a
close proximity to its offices to fabricate the necessary components.
This shop has commenced fabricating the necessary parts for three
service units.
2 MARKETING EFFORTS: Upon the receipt of necessary funding from this
offering, CLS will devote a substantial portion of the proceeds
received to establish a marketing program. It is anticipated that the
majority of sales of the servicing units will be through the website
that the Corporation intends to establish during the next 12 months.
In addition, the Corporation shall expend available funds in order to
place advertisements in various trade magazines that are published for
the concrete industry. Management is of the opinion that an
advertising campaign through these publications, over several months,
will create additional interest in the concrete leveling industry and
therefore, interest a greater number of individuals and companies to
invest in concrete leveling equipment. CLS has already secured a web
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address. It is www.CLSystems.net. Management is currently working with
outside consultants to design the website.
MARKETING
The management of CLS is of the belief that the Corporation can best reach
potential purchasers of the concrete leveling servicing units through
advertising and trade journals devoted to the concrete industry. In addition,
secondary information will be available to interested parties through the
website which will be developed by the Corporation online within the next 6
months. Management has commenced work on a website with the help of outside
consultants. If has also secured the web address of www.CLSystems.net. When
funds become available, CLS also plans to attend trade shows to promote the
units. It is the belief of management that the continued increase in cost for
repair of concrete sections in the relatively low cost of entering into the
concrete leveling industry and repairing fallen concrete at a competitive price
will create additional interest in the concrete leveling industry.
COMPETITION
The concrete leveling industry has been in existence for over 50 years, however,
it has only been since improvements were made to servicing units in 1990 that it
became practical for individuals and companies to commence operations solely
devoted to the repair of the sunken concrete. Due to the relatively recent
development of the servicing units, there are few competitors who manufacture
the concrete leveling service units. Management has been able to identify two
major manufacturers of concrete leveling service units. These units are almost
identical in design to the service units that will be fabricated by CLS. CLS has
made certain improvements to the design, but the improvements would not be
considered substantial enough to differentiate the units currently on the market
from the units that will be fabricated by CLS. If CLS is to become competitive
within the market place, it will have to rely heavily upon its advertising and
marketing to attempt to differentiate its servicing units from those currently
being offered by the other two major manufacturers.
CLS has limited financial, marketing, technical and other resources that are
necessary to implement its business plan. The competitors of CLS may have
significantly greater financial, marketing, technical and other resources. These
competitors may be able to devote greater resources to the promotion and sale of
its units.
PATENTS, TRADEMARKS AND LICENSES
CLS holds no specific patent, trademark or license with respect to the concrete
leveling service units. It is the belief of management that the fabricated
servicing units are not subject to any patent, trademark or license and that the
technology required to produce these units are not proprietary.
NEED FOR GOVERNMENT APPROVAL
The management of CLS does not believe that there are any governmental
restrictions on their production or marketing of the servicing units.
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PRODUCT LIABILITY
Because CLS will be fabricating large machinery with moving parts, management
believes that it may be subject to product liability claims, in the event that
the servicing units cause injury to its user, as the result of faulty
workmanship and/or faulty design. Prior to fabricating the servicing units and
placing them into the market place, CLS anticipates securing sufficient product
liability insurance to satisfy any judgment which may be taken against it. In
the event, however, CLS lacks sufficient capital to obtain, or continue product
liability insurance, any product liability claim which is filed against CLS may
result in the failure of CLS, either as a result of costs expended by CLS in
defending the lawsuit or, as a result of CLS being unable to satisfy a judgment
taken against it.
EMPLOYEES
At the present time, CLS has one paid employee. All work currently being
performed for CLS is being done, by its President, Suzanne I. Barth. Mrs. Barth
receives a salary of $1,000 per month for her services, until such time as the
Corporation begins to recognize revenue from the sale of the servicing units.
Her new salary will then be set by the Board of Directors. CLS contemplates
utilizing independent contractors for purposes of both fabrication of its
service units and the marketing of its service units, until such time as the
Board of Directors is of the opinion that continued sales of the service units
are of a sufficient level to make it feasible to commence hiring individuals for
the fabrication, marketing and support of the service units. It is anticipated
that the first employee to be employed will be a technical support individual
who will be responsible to install the product at the customer's location and
train the customer and subsequent employees of the customer in the use of the
concrete leveling service unit. Mrs. Barth's efforts are being aided by her
husband, Mr. Edward A. Barth, on an unpaid basis. Mr. Barth has seven years
experience in the concrete leveling business and is responsible for the
improvements made to the service units. It is contemplated that Mr. Barth may be
hired by the Corporation in the future to provide technical support to the
purchasers of the service units.
CONTINGENCY PLAN
The Management of CLS is aware that despite its best efforts, the sale of its
concrete leveling service units may not be sufficient to result in a profitable
corporation. Since the sole purpose of organizing CLS is to fabricate and sell
the concrete leveling service units, the Management of CLS currently has no
plans regarding the direction of CLS, in the event that it is unable to sell a
sufficient quantity of service units to create a profitable business. In the
event the Management of CLS is unable, through its efforts to create a
profitable business solely through the fabrication and sale of the concrete
leveling service units, CLS believes that the knowledge of the concrete leveling
industry that it possesses, as well as its experience in improving the concrete
leveling service units will provide value to the company to the extent that it
should be able to sell any inventory to either a competitor or a larger company
that would have a greater capacity to profitably market the service units. While
22
many future courses of action are possible, the Management of CLS has no
intention to go forward with any business plan, other than the business plan set
forth in this prospectus.
13. WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form SB-2 under the Securities Act of
1933 with the Securities and Exchange Commission with respect to the shares of
CLS's common stock offered through this prospectus. This prospectus is filed as
part of that registration statement and does not contain all of the information
contained in the registration statement and exhibits. Statements made in the
registration statement are summaries of material terms of the referenced
contracts, agreements, or documents of CLS and are not necessarily complete. We
refer you to our registration statement and each exhibit attached to it for a
more complete description of matters involving CLS, and the statements we have
made in this prospectus are qualified in their entirety by reference to these
additional materials. You may inspect the registration statement and exhibits
and schedules filed with the Securities and Exchange Commission at the
Commission's principal office in Washington D.C. Copies of all or any part of
the registration statement may be obtained from the public reference section of
the Securities and Exchange Commission, 450 Fifth Street NW, Washington, D.C.
20549. Please call the Commission at 1-800-SEC-0330 for further information on
the operation of this Public Reference Rooms. The Securities and Exchange
Commission also maintains a website at http://www.sec.gov that contains reports,
proxy statements and information regarding registrants that file electronically
with the Commission. CLS's registration statement and the referenced exhibits
can also be found on this site.
14. DESCRIPTION OF PROPERTY
At the present time, CLS's principal offices are located at 5046 East Boulevard
NW, Canton, Ohio 44718. These offices are being utilized, rent free, by CLS and
are owned by Mrs. Suzanne I. Barth. Commencing January 1,2008, CLS has rented
commercial space for the purpose of the fabrication of the concrete leveling
service units and storage of completed units. The rented space is approximately
2,500 square feet, located at 7484 Strauss Avenue, North Canton, Ohio. The
Corporation is leasing the space, on a month-to-month basis from Mr. Edward
Barth, husband of Mrs. Suzanne I. Barth. The monthly rental fee of $1,250, which
includes all utilities, has been determined to be a fair rental price for
similar space in Canton, Ohio. Management for CLS believes that the rented space
will be sufficient for the needs of the Corporation for at least the next 12
months.
15. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Executive Officers and Directors and their respective ages as of November 1,
2007 are as follows:
DIRECTORS
Name of Director: Age:
----------------- ----
Suzanne I. Barth 46
23
EXECUTIVE OFFICERS
Executive Officer: Age: Office:
------------------ ---- -------
Suzanne I. Barth 46 President, Chief Executive Officer
and Chief Financial Officer
Suzanne I. Barth, age 46, is the Founder and sole Officer and Director of CLS.
Mrs. Barth received an AAS degree in Business Management from Stark Technical
College in 1983. Over the past 20 years, Mrs. Barth has been involved as an
office manager for various businesses in the construction industry. For the past
7 1/2years, she has been the sole Shareholder, Director and Officer of E.A.B
Technical Services Co., Inc., an Ohio Corporation, located in Canton, Ohio that
is involved in the concrete leveling industry.
TERM OF OFFICE:
The Directors of CLS are appointed for a period of one year or until such time
as their replacements have been elected by the Shareholders. The Officers of the
Corporation are appointed by the Board of Directors and hold office until they
are removed by the Board.
SIGNIFICANT EMPLOYEES:
CLS at this time has one significant employee. All work performed on behalf of
the Corporation, at this time, is performed, by Mrs. Suzanne I. Barth, who
receives a salary of $1,000 per month, commencing January 1, 2008. She will
continue to work, at this salary , until such time as the Corporation commences
to receive revenue from sales of its product. At such time as the Corporation
commences to receive revenues, Mrs. Barth's salary will be re-evaluated by the
Board of Directors. At the present time, work is being performed for the
Corporation, on an unpaid basis by Mr. Edward A. Barth. Mr. Barth is involved in
the ordering of components for the service units and the supervision of the
fabrication of the service units. All fabrication work to be performed and
marketing services will be performed on an independent contracting basis with
outside companies. The Corporation does not contemplate hiring any employees
until such time as revenues from the business can justify hiring an employee on
a full time basis.
16. EXECUTIVE COMPENSATION
The table below summarizes all compensation awarded to, earned by, or paid to
the executive officers of CLS by any person for all services rendered in any
capacity to CLS for the present fiscal year.
[Enlarge/Download Table]
Other Securities
Name and Annual Restricted Underlying All Other
Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary($) Bonus sation($) Award(s)($) SARs($) Payouts($) sation($)
-------- ---- --------- ----- --------- ----------- ------- ---------- ---------
Suzanne I.
Barth,
President, CEO 2008 $1,000.00 0.00 0.00 0.00 0.00 0.00 0.00
24
The company currently has one director, Mrs. Suzanne I. Barth who is serving as
Director without compensation.
17. EMPLOYMENT AND RELATED AGREEMENTS
The Corporation does not have a written employment agreement or consulting
agreement with Mrs. Suzanne I. Barth, the Corporation's President, CEO, COO and
Director. Mrs. Barth provides services to CLS on a part-time basis and receives
a salary of $1,000 per month,
18. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mrs. Suzanne I. Barth is the sole promoter of CLS, further, she currently holds
a control position in the business, owning a total of 59.4% of the outstanding
common stock. Mrs. Barth is to receive no additional compensation from CLS with
regard to her efforts in selling the new common shares to be registered through
this offering.
Mrs. Barth received the 2,600,000 shares of common stock in CLS in exchange for
a payment of $2,600.
The Corporation is currently leasing the commercial space from which it will be
conducting its operations from Mr. Edward A. Barth, who is the husband of the
Corporation's sole shareholder, Mrs. Suzanne I. Barth. The Corporation is
leasing this space on a month-to-month basis. It is leasing approximately 2,500
square feet of space for a monthly rental of $1,250 per month, including
utilities, commencing January 1, 2008. CLS maintains that the space leased from
Mr. Barth is leased at a fair market value for similar commercial space in
Canton, Ohio.
19. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners and Management
The following table provides the names and addresses of each person known to own
directly or beneficially more than a 5% of the outstanding common stock as of
December 11, 2007 and by the officers and directors, individually and as a
group. Except as otherwise indicated, all shares are owned directly.
25
Name and address Amount of beneficial Percent of
Class of Stock of beneficial owner ownership class
-------------- ------------------- --------- -----
Common stock Suzanne I. Barth 2,600,000 59.4%
Director, President and
Chief Executive Officer
5046 East Boulevard NW
Canton, OH 44718
Common stock Charlene A. Barth 500,000 11.4%
5020 East Boulevard NW
Canton, OH 44718
Common stock Larry E. Williams 250,000 5.7%
2129 Market Ave. N
Canton, OH 44714
Common stock Glenn Silverhart 250,000 5.7%
5680 Wiclif Dr. NE
North Canton, OH 44721
Common stock John A. Williams 250,000 5.7%
17421 Schenely Ave.
Cleveland, Ohio 44119
Common stock: All Officers and Directors as a group that consist of one person,
2,600,000 shares of direct ownership, 59.4%. The percent of class is based on
4,375,000 shares of common stock issued and outstanding as of December 11, 2007.
20. SELLING SECURITY HOLDERS
The selling shareholders named herein are offering 1,775,000 of the 2,500,000
shares of common shares offered through this prospectus. None of the selling
shareholders are broker-dealers or affiliates of broker-dealers. The shares
include the following:
26
1. 1,775,000 shares of CLS's common stock that the selling shareholders
acquired from CLS in an offering that was exempt from registration
under Regulation D of the Securities Act of 1933 and completed on
December 11, 2007.
The following table provides as of December 11, 2007, the information regarding
the beneficial ownership of the common shares held by each of the selling
shareholders including:
1. The number of shares owned by each prior to this offering
2. The total number of shares that are now being offered for each
3. The total number of shares that will be owned by each upon the
completion of this offering
4. The percentage owned by each
5. The identity of the beneficial holder of any entity that owns the
shares
[Enlarge/Download Table]
Total number of Total shares to
Shares owned shares being offered be owned upon Percent owned upon
Name and address prior to this for selling completion of completion of
of selling shareholder offering shareholders account this offering this offering
---------------------- -------- -------------------- ------------- -------------
Charlene A. Barth 500,000 500,000 0 0
5020 East Blvd. NW
Canton, Ohio 44718
Larry E. Williams 250,000 250,000 0 0
2129 Market Ave. N
Canton, Ohio 44714
John A. Williams 250,000 250,000 0 0
17421 Schenely Ave.
Cleveland, Ohio 44119
Glenn Silverhart 250,000 250,000 0 0
5680 Wiclif Dr. NW
North Canton, Ohio 44721
Evelyn M. Kolbl 150,000 150,000 0 0
1313 19th Street, NW
Canton, Ohio 44709
27
[Download Table]
Judith Shaffer 125,000 125,000 0 0
5456 Mapleton SE
East Canton, Ohio 44730
Carrie F. Mahaffey 50,000 50,000 0 0
5414 Frank Rd. NW
Canton, Ohio 44720
Robert A. Bales 37,500 37,500 0 0
3066 Lindale Street
Akron, Ohio 44312
John Heropoulos 37,500 37,500 0 0
5040 East Boulevard NW
Canton, Ohio 44718
Paul Cruciani 25,000 25,000 0 0
2904 Sutherland Cir. NW
North Canton, Ohio 44720
Don Darrah 25,000 25,000 0 0
6113 Whipple Ave. NW
North Canton, Ohio 44720
Keith Rawling 25,000 25,000 0 0
8750 Grimes Ave. NW
North Canton, Ohio 44720
Eugene H. Swearengin 25,000 25,000 0 0
8022 Amberly Cr. NW
North Canton, Ohio 44720
David A. Wolfarth 25,000 25,000 0 0
737 Twp. Rd. 156
Chesapeake, Ohio 45619
NOTE: Except as otherwise noted in the above table, the named shareholder
beneficially owns (either individually or jointly as noted above), and has sole
voting and investment power over all shares or rights to these shares. The
numbers in this table assume that none of the selling shareholders sell shares
of common stock which are not being offered in this prospectus or purchases
additional shares of common stock being offered by CLS. It further assumes that
all shares offered in this offering are sold. The percentages are based upon
5,100,000 shares of common stock which would be outstanding upon the successful
completion of this offering.
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NOTE: Except as noted above, none of the selling shareholders or their
beneficial owners has had a material relationship with CLS other than that of
shareholder, or has ever been an officer or director of CLS or any of its
predecessors or affiliates.
21. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITY
CLS's Officers and Directors are indemnified as provided by the Nevada Revised
Statutes and our Bylaws.
Under the Nevada Revised Statutes, director immunity from liability to a company
or its shareholders from monetary liabilities applies automatically unless it is
specifically limited by a company's articles of incorporation. Our Articles of
Incorporation do not specifically limit our Directors' immunity. Excepted from
that immunity are: (a) a willful failure to deal fairly with CLS or its
shareholders in connection with a matter in which the Director has a material
conflict of interest; (b) a violation of criminal law, unless the Director had
reasonable cause to believe that his or her conduct was lawful, or had no
reasonable cause to believe that his or her conduct was unlawful; (c) a
transaction from which the Director derived an improper personal profit; and (d)
willful misconduct.
CLS's Bylaws provide that it will indemnify its Directors and Officers, and hold
them harmless to the fullest extent legally permissible under the general
corporation law of the State of Nevada. These rights of indemnification shall
not be exclusive of any other right which any Officer or Director may have or
may thereafter acquire under any bylaw, agreement, vote of stockholders,
provision of law or otherwise.
The Bylaws require CLS to pay all expenses, liability and losses (including
attorney fees, judgments, fines and amounts paid or to be paid in the settlement
of a matter); which are reasonably incurred or suffered by the Officer or
Director. Any expenses of the Officer or Director incurred in defending a civil
or criminal action, suit or proceeding must be paid by the Corporation as they
are incurred in an advance of the final distribution of the action, suit or
proceeding upon receipt of an undertaking by or on behalf of the Director or
Officer to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he or she is not entitled to be indemnified by the
Corporation.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
22. PLAN OF DISTRIBUTION
The selling shareholders will sell their common shares at the price of $0.12 per
share until our shares are quoted on the OTC Bulletin Board and thereafter,
29
shares will be sold at the prevailing market prices or at privately negotiated
prices. These shareholders may be underwriters as defined by the Securities Act.
The selling shareholders may sell some or all of their common stock in one or
more transactions, including block transactions:
1. On such public markets or exchanges as the common stock may from time
to time be trading;
2. In privately negotiated transactions;
3. Through the writing of options on the common stock;
4. In short sales;
5. In any combination of these methods of distribution.
These sales price to the public may be:
1. The market price prevailing at the time of sale;
2. A price related to such prevailing market price; or
3. Such other price as the selling shareholders determine from time to
time.
The shares may also be sold in compliance with the Securities and Exchange
Commission's Rule 144.
The selling shareholders may also sell their shares directly to market makers
acting as principals, brokers or dealers, who may act as agent or acquire the
common stock as a principal although no such market makers have been established
at this time. There is no guarantee, however, that CLS will be able to secure a
market maker to establish a market for its shares. Any broker or dealer
participating in such transactions as agent, may receive a commission from the
selling shareholders, or, if they act as an agent for the purchaser of such
common stock from such purchaser. The selling shareholders will pay the usual
and customary brokerage fees for such services. Brokers or dealers may agree
with the selling shareholders to sell a specified number of shares at a
stipulated price per share and, to the extent such broker or dealer is unable to
do so acting as agent for the selling shareholder, to purchase, as principal,
any unsold shares at the price required to fulfill their respective brokers' or
dealers' commitment to the selling shareholders. Brokers or dealers who acquire
shares as principals may thereafter re-sell such shares from time to time, in
transactions in a market or on an exchange, in negotiated transactions or
otherwise, at market prices prevailing at the time of sale, or at negotiated
prices, and in connection with such re-sales may pay or receive commissions to
or from the purchasers of such shares. These transactions may involve cross and
block transactions that may involve sales to and through other brokers or
dealers. The selling shareholders may distribute shares to one or more of their
partners who are unaffiliated with CLS. CLS provides no assurance that all or
any of the common shares offered will be sold by the selling shareholders.
CLS is bearing all costs related to the registration of its common shares. The
selling shareholders, however, will pay any commissions or other fees payable to
brokers or dealers in connection with any sale of their common stock. The
selling shareholders must comply with the requirements of the Securities Act and
the Securities Exchange Act in the offer and sale of the common stock. In
30
particular, during such times as the selling shareholders may deem to be engaged
in a distribution of the common stock, and therefore be considered to be an
underwriter, they must comply with applicable law and may, among other things:
1. Not engage in any stabilization activities in connection with CLS's
common stock;
2. Furnish each broker or dealer through which common stock may be
offered, such copies of this prospectus, as amended from time to time
as may be required by such broker or dealer;
3. Not bid for or purchase any of CLS's securities or attempt to induce
any person to purchase any of CLS's securities other than as permitted
under the Securities Exchange Act.
With respect to the shares of common stock to be offered by CLS, CLS at the
present time has no agreement with any underwriter for any type of underwriting
of the shares to be offered by CLS. Instead, Mrs. Suzanne I. Barth, CLS's
President may, but will not be required to sell shares directly to investors or
to market makers acting as principals, brokers or dealers, who may act as agent
or acquire the common stock as a principal. Mrs. Barth is not registered as a
broker or dealer under the Exchange Act of 1934. Instead, she will derive the
authority to sell the CLS's shares to the public under the exemption contained
in Rule 3a4-1 of the Exchange Act. Mrs. Barth qualifies under this exemption
because, as an officer and director of CLS, she is defined as an associated
person of the issuer. As an associated person of the issuer, she will not be
deemed to be a broker solely by reason of her participation in the sale of the
common shares for CLS since she meets all the requirements contained in the
rule. These requirements are (1) she is not subject to any statutory
disqualification; (2) she will not be compensated in connection with her
participation either through the payment of commissions or any other
remuneration based directly on the sale of the common shares; (3) she is not an
associated person of a broker or a dealer; and (4) she has intended primarily to
perform at the end of the offering, substantial duties for CLS; she has not been
a broker or dealer or an associated person of a broker or dealer within the past
12 months and she does not participate in the selling of an offering of
securities for any issuer more than once every 12 months (aside from certain
other exceptions which are not pertinent to the sale of the common shares).
Any broker or dealer participating in such transactions as agent, may receive a
commission from CLS in an amount not to exceed 10% of the purchase price.
Further, such agents will be governed by the rules and regulations established
under the Securities Act of 1933 and the Securities Exchange Act of 1934. The
registrant will file a post-effective amendment to this registration, in the
event a market maker or underwriter of the securities offered herein is
established or identified.
23. DESCRIPTION OF SECURITIES
CLS's authorized capital stock consists of 100,000,000 shares of common stock at
a par value of $.001. At the present time CLS has 4,375,000 shares of common
stock outstanding which is held by 15 stockholders of record.
31
Holders of common stock are entitled to one vote for each share on all matters
submitted to a stockholder for vote. Holders of common stock do not have
cumulative voting rights. Therefore, holders of a majority of the shares of
common stock voting for the election of a Director can elect all of the
Directors. The holders of a majority of the common stock issued and outstanding
and entitled to vote thereat, present in person or represented by a proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business. A vote by a holder of the majority of outstanding shares is required
to effectuate certain fundamental corporate changes such as liquidation, merger,
or an amendment to the Articles of Incorporation.
Holders of common stock are entitled to share in all dividends that the Board of
Directors, in its discretion, declares from legally available funds. In the
event of a liquidation, dissolution, or winding up, each outstanding share
entitles its holder to participate pro rata and all assets that remain after
payment of liabilities and after providing for each class of stock, if any,
having preference over the common stock. No such stock at this time exists.
Holders of our common stock have no preemptive rights, no conversion rights and
no redemption provisions applicable to the common stock.
24. LEGAL PROCEEDINGS
CLS is not currently a party to any legal proceedings.
25. INTEREST OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus who has prepared or certified any
part of this prospectus or has given an opinion on the validity of the
securities being registered or upon the legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis. Further, no expert or counsel has or is to receive in connection with
this offering, a substantial interest, direct or indirect, in Concrete Leveling
System, Inc. No expert or counsel named in this prospectus has been connected
with CLS as a promoter, managing or principal underwriter, voting trustee,
director, officer or employee.
Ronald O. Kaffen, of Hardesty, Kaffen & Zimmerman our independent legal counsel,
has provided an opinion on the validity of CLS's common stock.
The financial statements included in this prospectus and in the registration
statement have been audited by Hobe & Lucas, Certified Public Accountants, Inc.,
to the extent and for the period set forth in their report appearing elsewhere
herein and in the registration statement, and are included in reliance upon such
report given upon the authority of said firm as experts in auditing and
accounting.
32
26. FINANCIAL STATEMENTS
Index to Financial Statements:
1. Auditor's report F-1
2. Audited financial statements for calendar year ending
October 31, 2007, including:
a. Balance sheet as of October 31, 2007 F-2
b. Statements of operations for the period from
August 28, 2007 through October 31, 2007 F-3
c. Statements of cash flows for the period beginning
August 28, 2007 through October 31, 2007 F-4
d. Notes to financial statements F-5
27. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
CLS has no changes in or disagreements with its accountants.
33
CONCRETE LEVELING SYSTEMS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
OCTOBER 31,2007
Hobe & Lucas
Certified Public Accountants, Inc.
4807 Rockside Road, Suite 510 Phone: (216) 524.8900
Independence, Ohio 44131 Fax: (216) 524.8777
http://www.hobe.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
of Concrete Leveling Systems, Inc.
Canton, Ohio
We have audited the balance sheet of Concrete Leveling Systems, Inc. (a
development stage company) as of October 31, 2007, and the related statements of
operations, stockholder's equity (deficit), and cash flows for the period
beginning August 28, 2007 (inception) and ended October 31, 2007. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. 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
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Concrete Leveling Systems, Inc.
as of October 31, 2007, and the results of its operations and its cash flows for
the period beginning August 28, 2007 (inception) and ended October 31, 2007 in
conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming Concrete
Leveling Systems, Inc. will continue as a going concern. As discussed in Note 1
to the financial statements, the nature of the industry in which the Company
operates raises substantial doubt about the Company's ability to continue as a
going concern. Management's plans regarding this matter are described in Note 1.
The financial statements do not include any adjustments that might result from
the outcome it this uncertainty.
/s/ Hobe & Lucas
Certified Public Accountants, Inc.
Independence, Ohio
January 9, 2008
F-1
CONCRETE LEVELING SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
OCTOBER 31, 2007
[Download Table]
ASSETS
CURRENT ASSETS
Cash in bank $ 5,075
Inventory 1 $ 5,076
------- -------
TOTAL ASSETS $ 5,076
=======
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Note payable - officer $ 3,901
-------
SHAREHOLDER'S EQUITY
Common stock, $.001 par value, 100,000,000 Shares
authorized, 2,600,000 shares issued and outstanding 2,600
(Deficit) accumulated during the development stage (1,425) 1,175
------- -------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 5,076
=======
The accompanying notes are an integral part of these financial statements.
F-2
CONCRETE LEVELING SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD BEGINNING AUGUST 28, 2007 (INCEPTION)
AND ENDED OCTOBER 31, 2007
NET SALES $ 0
GENERAL AND ADMINISTRATIVE EXPENSES 1,425
-------
INCOME (LOSS) FROM OPERATIONS (1,425)
PROVISION FOR (RECOVERY OF) INCOME TAXES 0
-------
NET INCOME (LOSS) $(1,425)
=======
(Loss) per share $ (.00)
=======
The accompanying notes are an integral part of these financial statements.
F-3
CONCRETE LEVELING SYSTEMS, INC.
(A development stage company)
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE PERIOD BEGINNING AUGUST 28, 2007 (INCEPTION)
AND ENDED OCTOBER 31, 2007
[Download Table]
(Deficit)
Accumulated
Common Common Additional During the
Stock Stock Paid-In Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
ISSUE COMMON STOCK
SEPTEMBER, 2007 2,600,000 $2,600 $ 0 $ 0 $ 2,600
NET (LOSS)
OCTOBER 31, 2007 0 0 0 (1,425) (1,425)
--------- ------ ------ ------- -------
BALANCE AT
OCTOBER 31, 2007 2,600,000 $2,600 $ 0 $(1,425) $ 1,175
========= ====== ====== ======= =======
The accompanying notes are an integral part of these financial statements.
F-4
CONCRETE LEVELING SYSTEMS, INC.
(A development stage company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD BEGINNING AUGUST 28, 2007 (INCEPTION)
AND ENDED OCTOBER 31, 2007
CASH FLOWS USED IN OPERATING ACTIVITIES
Net (loss) $(1,425)
Adjustments to reconcile net loss to net cash
used in operating activities:
Increase in inventory (1)
-------
Cash Used in Operating Activities (1,426)
-------
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from stockholder 3,901
Proceeds from issuance of common stock 2,600
-------
Cash Flows from Financing Activities 6,501
-------
NET INCREASE (DECREASE) IN CASH 5,075
CASH AT BEGINNING OF PERIOD 0
-------
CASH AT END OF PERIOD $ 5,075
=======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Income Taxes Paid $ 0
=======
Interest Paid $ 0
=======
The accompanying notes are an integral part of these financial statements.
F-5
CONCRETE LEVELING SYSTEMS, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Concrete Leveling Systems,
Inc. (hereinafter the "Company"), is presented to assist in understanding the
financial statements. The financial statements and notes are representations of
the Company's management, which is responsible for their integrity and
objectivity. These accounting policies conform to accounting principles
generally accepted in the United States of America and have been consistently
applied in the preparation of the financial statements.
NATURE OF OPERATIONS
The Company manufactures for sale specialized equipment for use in the concrete
leveling industry. The Company's product is sold primarily to end users. The
Company recognizes its revenue when the product is shipped or picked up by the
customer.
ACCOUNTS RECEIVABLE
The Company grants credit to its customers in the ordinary course of business.
The Company provides for an allowance for uncollectible receivables based on
prior experience. The allowance was $-0- at October 31, 2007.
INVENTORIES
Inventories which consist of one service unit are recorded at fair market value.
ADVERTISING AND MARKETING
Advertising and marketing costs are charged to operations when incurred.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting
principles generally accepted 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 revenues and
expenses during the period. Actual results could differ from those estimates.
DEVELOPMENT STAGE COMPANY
Concrete Leveling Systems, Inc. (a Nevada corporation) has been in the
development stage since its formation on August 28, 2007. It is primarily
engaged in the manufacturing and marketing of concrete leveling equipment
systems. Realization of a major portion of its assets is dependent upon the
Company's ability to successfully fabricate and market the products, meet its
future financing requirements, and the success of future operations. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. These financial statements do not include any adjustments that
might result from the outcome of this uncertainty. The Company's majority
stockholder has agreed to advance funds necessary to meet the Company's
near-term cash needs.
F-6
CONCRETE LEVELING SYSTEMS, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2007
NOTE 2 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of cash, accounts receivable and liabilities approximates
the fair value reported on the balance sheet.
NOTE 3 - NOTES PAYABLE - STOCKHOLDER
Notes payable to a stockholder of the Company consisted of the following at
October 31, 2007:
Note dated October 31, 2007 payable on demand and
bearing interest at 4.00% per annum $ 3,901
=======
NOTE 4 - LOSS PER COMMON SHARE
Loss per common share is based on the weighted average number of shares
outstanding which was:
2,600,000 for the period ended October 31, 2007
NOTE 5 - PRODUCT WARRANTIES
The Company will sell its products to customers together with limited repair or
replacement warranties. The company warrants the leveling equipment package on a
one-year limited warranty. No sales occurred during the period beginning August
28, 2007 (inception) and ended October 31, 2007.
NOTE 6 - NEW ACCOUNTING PROCEDURES
There are no new accounting procedures that impact the Company for the period
beginning August 28, 2007 (inception) and ended October 31, 2007.
NOTE 7 - INCOME TAXES
Income taxes on continuing operations at October 31, 2007 include the following:
August 28, 2007
(inception) to
October 31, 2007
----------------
Currently payable $ 0
Deferred 0
------
Total $ 0
======
F-7
CONCRETE LEVELING SYSTEMS, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2007
NOTE 7 - INCOME TAXES (CONTINUED)
A reconciliation of the effective tax rate with the statutory U.S. income tax
rate at October 31, 2007 is as follows:
August 28, 2007
(inception) to
October 31, 2007
----------------
% of
Pretax
Income Amount
------ ------
Income taxes per statement of operations $ 0 0%
Loss for financial reporting purposes
without tax expense or benefit (485) (34)%
----- -----
Income taxes at statutory rate $(485) (34)%
===== =====
Deferred taxes are provided for temporary differences in deducting expenses for
financial statement and tax purposes. The only source for deferred tax assets is
net operating loss carryforwards. No deferred taxes are reflected on the balance
sheet at October 31, 2007 due to a valuation allowance.
The components of and changes in the net deferred taxes were as follows:
2007
------
Deferred tax assets:
Net operating loss carryforwards $ 485
Valuation Allowance (485)
------
Net deferred tax assets: $ 0
======
F-8
CONCRETE LEVELING SYSTEMS, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2007
NOTE 7 - INCOME TAXES (CONTINUED)
The Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Code are met. These losses are as
follows:
Expiration
Year of Loss Amount Date
------------ ------ ----
Period Ended 10/31/07 $ 1,425 5/31/2027
NOTE 8 - SUBSEQUENT EVENTS
On December 11, 2007, the Company received $71,000 for 1,775,000 shares of its
$.001 par value common stock, sold at $.04 per share.
On January 1, 2008, the Company entered into a lease agreement with the spouse
of one of its stockholders to rent office space at a rate of $1,250 per month.
F-9
PART TWO: INFORMATION NOT REQUIRED ON PROSPECTUS
28. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Securities and Exchange Commission Registration Fee $ 11.79
Federal taxes Nil
State taxes and fees Nil
Transfer agent fees Nil
Accounting fees & expenses $ 10,000
Legal fees & expenses $ 20,000
Blue Sky fees & expenses $ 2,000
Miscellaneous $ 1,000
----------
TOTAL $33,011.79
==========
All amounts are estimates other than the Commission's Registration Fee.
CLS is paying all expenses of the Offering listed above. No portion of these
expenses will be borne by the selling shareholders. The selling shareholders,
however, will pay any other expenses incurred in selling their common stock,
including any brokerage commissions or costs of sale.
29. RECENT SALES OF UNREGISTERED SECURITIES
CLS issued 2,600,000 shares of common stock on September 26, 2007 to Suzanne I.
Barth, CLS's Chief Executive Officer and sole Director of the Corporation. These
shares were issued pursuant to Section 4(2) of the Securities Act of 1933 at a
cash price of $0.001 per share, for a total value of $2,600.00. These shares
were purchased for cash, in the amount of $2,600.
CLS completed an Offering of 1,775,000 shares of its' common stock at a price of
$0.04 per share to a total of 14 purchasers. The last subscription for shares in
this Offering was completed on December 11, 2007. The total amount received from
this Offering was $71,000. These shares were issued pursuant to Section 4(2) of
the Securities Act of 1933 and Regulation D. All of the purchasers qualify as
accredited investors. Each investor indicated in writing that she was purchasing
the shares for investment purposes and not with a view to resale. Each investor
II-1
indicated in writing that she had sufficient sophistication to evaluate the
investment and could afford to lose the entire investment without adversely
affecting her lifestyle.
30. EXHIBITS
Exhibit 3.1 Articles of Incorporation
Exhibit 3.2 Bylaws
Exhibit 4 Share Certificate
Exhibit 5 Opinion and Consent of Legal Counsel
Exhibit 23.1 Consent of Hobe & Lucas, Certified Public Accountants, Inc.
31. UNDERTAKING
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a post
effective amendment to this Registration Statement:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) to reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in the volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(c) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement
or any material changes as such information in the Registration
Statement.
2. That for the purpose of determining any liability under the Securities Act,
such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered herein, and the offering of
such securities at the time shall be deemed to be the initial bona fide
offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered hereby which remain unsold at the
termination of the Offering.
4. To file during any period in which we offer or sell securities, a post
effective amendment to this registration statement, to reflect in the
II-2
prospectus any facts or events which, or individually or together,
represent a fundamental change in the information in the registration
statement.
5. In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer or expenses incurred
or paid by a director, officer or controlling person of the small business
issuer in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the small business issuer will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
6. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions,
or otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable.
II-3
32. SIGNATURES
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing on Form SB-2 and authorizes this Registration
Statement to be signed on its' behalf by the undersigned in the City of Canton,
State of Ohio, on January 16, 2008.
CONCRETE LEVELING SYSTEMS, INC.
By: /s/ Suzanne I. Barth
-------------------------------------
Suzanne I. Barth, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
/s/ Suzanne I. Barth
-----------------------------------------
Suzanne I. Barth, its principal Executive
Officer, its principal Financial Officer,
and its principal Accounting Officer and
Director
Date: January 16, 2008
II-4
POWER OF ATTORNEY
ALL MEN BY THESE PRESENT, that each person who's signature appears below
constitutes and appoints Suzanne I. Barth, her true and lawful attorney-in-fact
and agent, with full power of substitution and re-substitution, for her and in
her name, place, and stead, in any and all capacities, to sign any and all pre-
or post-effective amendments to this Registration Statement, and to file the
same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorney's-in-fact and agents, and each of them, full power authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney's-in-fact and
agents, or any of them, or his substitutes, may lawfully do or cause to be done
by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the date stated.
CONCRETE LEVELING SYSTEMS, INC.
By: /s/ Suzanne I. Barth
-------------------------------------
Suzanne I. Barth, President
Date: January 16, 2008
/s/ Suzanne I. Barth
-----------------------------------------
Suzanne I. Barth, its principal Executive
Officer, its principal Financial Officer,
and its principal Accounting Officer and
Director
Date: January 16, 2008
II-5
Dates Referenced Herein
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