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EX-3.1 - Cosmos Holdings Inc. | v163209_ex3-1.htm |
EX-5.1 - Cosmos Holdings Inc. | v163209_ex5-1.htm |
EX-3.2 - Cosmos Holdings Inc. | v163209_ex3-2.htm |
EX-23.1 - Cosmos Holdings Inc. | v163209_ex23-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
Prime
Estates & Developments, Inc.
(Name of
small business issuer in our charter)
Nevada
|
6552
|
27
0611758
|
||
(State
or other jurisdiction of
incorporation
or organization)
|
(Primary
Standard
Industrial
Classification
Code
Number)
|
IRS
I.D.
|
4709
West Golf Rd, Suite 425, Skokie, Illinois
|
60076
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number: 224-489-2392
Daniela
Patterson
1599
Bearing Blvd.
Sparks
NV 89434
775-358-1412
(Name,
address and telephone number of agent for service)
Approximate
date of commencement of proposed sale to the public: As soon as practicable
after the effective date of this Registration Statement.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act Registration Statement number of the earlier effective Registration
Statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.
Large
accelerated filer ¨
Accelerated Filer ¨
Non-accelerated
filer ¨Smaller
reporting company x
CALCULATION
OF REGISTRATION FEE
Title
of each class of
securities
to be registered
|
Amount
to be
registered
|
Proposed
maximum
offering
price
per
unit
|
Proposed
maximum
aggregate
offering
price
|
Amount
of
registration
fee
[1] [2]
|
||||||||||||
Common
Stock offered by the Selling Stockholders [3]
|
392,000
|
$
|
.10
|
39,200
|
$ |
2.00
|
(1) Estimated
in accordance with Rule 457(c) of the Securities Act of 1933 solely for the
purpose of computing the amount of the registration fee based on recent prices
of private transactions.
(2) Calculated
under Section 6(b) of the Securities Act of 1933 as .00005580 of the aggregate
offering price.
(3) Represents
shares of the registrant’s common stock being registered for resale that have
been issued to the selling shareholders named in this registration
statement.
The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay our effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a) may
determine.
PROSPECTUS
PRIME
ESTATES & DEVELOPMENTS, INC.
Selling
shareholders are offering up to 392,000 shares of common stock. The
selling shareholders will offer their shares at $.10 per share until our shares
are quoted on the OTC Bulletin Board and, assuming we secure this qualification,
thereafter at prevailing market prices or privately negotiated prices.
We will not receive proceeds from the sale of shares from the selling
shareholders.
There are
no underwriting commissions involved in this offering. We have agreed to
pay all the costs of this offering. Selling shareholders will pay no offering
expenses.
Prior to
this offering, there has been no market for our securities. Our common stock is
not now listed on any national securities exchange, the NASDAQ stock market, or
the OTC Bulletin Board. There is no guarantee that our securities will
ever trade on the OTC Bulletin Board or other exchange.
This
offering is highly speculative and these securities involve a high degree of
risk and should be considered only by persons who can afford the loss of their
entire investment. See “Risk Factors” beginning on page 7.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
The date
of this prospectus is _________________ , 2009.
2
TABLE OF
CONTENTS
SUMMARY
INFORMATION AND RISK FACTORS
|
4
|
RISK
FACTORS
|
6
|
USE
OF PROCEEDS
|
14
|
DETERMINATION
OF OFFERING PRICE
|
15
|
DILUTION
|
15
|
SELLING
SHAREHOLDERS
|
15
|
PLAN
OF DISTRIBUTION
|
17
|
LEGAL
PROCEEDINGS
|
19
|
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
|
20
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
20
|
DESCRIPTION
OF SECURITIES
|
21
|
INTEREST
OF NAMED EXPERTS
|
22
|
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
LIABILITIES
|
23
|
DESCRIPTION
OF BUSINESS
|
23
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
27
|
DESCRIPTION
OF PROPERTY
|
29
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
30
|
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|
30
|
EXECUTIVE
COMPENSATION
|
33
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
34
|
FINANCIAL
STATEMENTS
|
35
|
3
SUMMARY
INFORMATION AND RISK FACTORS
You
should carefully read all information in the prospectus, including the financial
statements and their explanatory notes, under the Financial Statements prior to
making an investment decision. Please do not enter into a investment
decision on our company without proper guidance from your financial advisor or a
registered broker.
Organization
Prime
Estates & Developments, Inc. is a Nevada corporation formed on July 21,
2009.
Our
principal office is located at 4709 West Golf Rd, Suite 425, Skokie, Illinois,
60076.. Telephone: 224-489-2392.
Business
We intend
to acquire and operate commercial real estate and real estate related-assets in
Greece, Bulgaria, Romania and the United States. We intend to focus on acquiring
commercial properties with such as those requiring development, redevelopment or
repositioning, those located in markets and submarkets with what we believe to
be high growth potential and those available from sellers who are distressed or
face time-sensitive deadlines.
In
addition, given current economic circumstances in the real estate industry, our
investment strategy may also include investments in real estate-related assets
that we believe present opportunities for significant current income. Such
investments may also have what we believe to be opportunities for capital gain,
whether as a result of a discount purchase or related equity
participations.
We may
acquire a wide variety of commercial properties, including office, industrial,
retail, hospitality, recreation and leisure, single-tenant, multifamily and
other real properties. These properties may be existing, income-producing
properties, newly constructed properties or properties under development or
construction and may include multifamily properties purchased for conversion
into condominiums and single-tenant properties that may be converted for
multifamily use.
Assuming
we raise sufficient funding, our investment strategy is designed to provide
investors with a diversified portfolio of real estate assets. Although we
have reviewed the real estate markets in the countries in which we intend to
acquire properties, we have no contract, agreement or commitment to acquire any
property as of the date of this Prospectus.
The
Offering
As of the
date of this prospectus, we had 20,493,960 shares of common stock
outstanding.
Selling
shareholders are offering up to 392,000 shares of common stock. The
selling shareholders will offer their shares at $.10 per share until our shares
are quoted on the OTC Bulletin Board and thereafter at prevailing market prices
or privately negotiated prices. We will pay all expenses of registering
the securities, estimated at approximately $60,000. We will not receive
any proceeds of the sale of these securities.
4
To be
quoted on the OTC Bulletin Board, a market maker must file an application on our
behalf in order to make a market for our common stock. The current absence
of a public market for our common stock may make it more difficult for you to
sell shares of our common stock that you own.
Financial
Summary
Because
this is only a financial summary, it does not contain all the financial
information that may be important to you. Therefore, you should carefully read
all the information in this prospectus, including the financial statements and
their explanatory notes before making an investment decision.
As
of
|
||||
July
31, 2009
|
||||
(Audited)
|
||||
Balance
Sheet
|
||||
Total
assets
|
- | |||
Total
liabilities
|
4,600 | |||
Stockholders'
deficit
|
(4,600 | ) | ||
For
the Period from July
21,
2009 (Date of
Inception)
to July 31,
2009
|
||||
(Audited)
|
||||
Income
Statement
|
||||
Revenues
|
- | |||
Expenses
|
4,600 | |||
Net
Loss
|
(4,600 | ) |
5
RISK
FACTORS
In
addition to the other information provided in this prospectus, you should
carefully consider the following risk factors in evaluating our business before
purchasing any of our common stock. All material risks are discussed in
this section.
There is substantial doubt
about our ability to continue as a going concern as a result of our lack of
revenues and if we are unable to generate significant revenue or secure
financing we may be required to cease or curtail our
operations.
We are a
development stage company. We have generated no revenues to date.
Our auditors have raised substantial doubt as to our ability to continue as a
going concern. We will need to secure additional funding funds to
implement our business plan in the next 12 months, which funds will be used for
real estate acquisition. We hope to be able to raise additional funds from
an offering of our stock in the future. However, this offering may not
occur, or if it occurs, may not raise the required funding. We also will
need debt financing. We do not have any plans or specific agreements for
these sources of funding.
There is
uncertainty regarding our ability to commence operations or implement our
business plan without additional financing. Our future success is
dependent upon our ability to commence operations, generate cash from operating
activities and obtain additional financing. There is no assurance that we will
be able to commence operations, generate sufficient cash from operations, sell
additional shares of common stock or borrow additional funds. Our inability to
obtain additional cash could have a material adverse affect on our ability to
continue in business and implement our business plan.
We do not expect to pay
dividends on our common stock.
To date,
we have not paid any dividends on our common stock. We do not anticipate paying
any cash dividends on our common stock in the foreseeable future. Any payment of
future dividends and the amounts thereof will depend upon our distributions to
us, which in turn will depend upon our earnings, financial requirements and
other factors deemed relevant by our management.
You will not be able to
approve future real estate transactions.
Our
management will have complete discretion in making investments on our behalf in
a range of real estate, which may include all types of properties. Consequently,
prospective investors will not be able to evaluate for themselves the merits of
the specific properties that may be acquired in the future and may not like the
properties acquired. You will not be entitled to a return of your investment if
you do not like the properties purchased. Our investment decisions are not made
through reliance on sophisticated mathematical models or arbitrage
programs. Instead, you are relying on the judgment of our management
alone to locate suitable properties which meet our investment criteria.
All properties acquired will be in Greece, Romania, Bulgaria, and the
USA.
We will have limited
investment diversification which could increase your risk of investment
loss.
We will
have limited investment diversification in that we may own only one or a limited
number of properties. If a property does not perform or increase in value
as expected, your risk of investment loss will be greater due to our lack of
diversification.
6
Our ownership of real estate
may result in losses if demand for property declines.
We will
be subject to risks incident to the ownership of real estate, including: changes
in general economic or local conditions, such as a decrease in demand for
residential, commercial and industrial space due to a decrease in population or
employment or changes in technology or adverse downturns in the general economy;
changes to preferences that reduce the attractiveness of our properties to end
users; fluctuation in mortgage rates, building ownership or operating expenses;
rises and falls in undeveloped land values; costs of infrastructure,
construction or other development costs; changes in supply or demand of
competing properties in an area; changes in interest rates, zoning and other
governmental regulations and availability of permanent mortgage funds that may
render the sale of a property difficult or unattractive; increases in the cost
of adequate maintenance, insurance and other operating costs, including real
estate taxes, associated with one or more properties, which may occur even when
a property is not generating revenue; inflation; and changes in tax laws and
rates. A negative change in any of these risks could reduce the demand for our
properties and a reduction in demand could result in a loss to us in the
operation of or upon the sale of a property.
Property improvement and
repositioning costs are difficult to estimate and if costs exceed our budget, we
may lose money on the development and sale of a property.
Acquisition
of any properties for improvement, repositioning and sale entails risks such as
those contemplated by us that include the following, any of which could
adversely affect our financial performance and the value of your
investment: Our estimate of the costs of improving or repositioning an
acquired property may prove to be too low, and, as a result, the property may
fail to meet our estimates of the profitability of the property, either
temporarily or for a longer time. Our pre-acquisition evaluation of each new
investment may not detect certain requirements, limitations, defects or
necessary improvements until after the property is acquired, which could
significantly increase our total costs.
The real estate market is
cyclical, and is experiencing a downturn which could increase your risk of loss
of your investment.
Investment
in real estate involves a high degree of business and financial risk, which can
result in substantial losses and accordingly should be considered speculative.
The market for property in the in Greece, Bulgaria, Romania and the United
States tends to be cyclical, with periods in which the prices of properties rise
and fall. Prices are now falling and have for a significant period of time,
which may reduce any return generated upon the sale of our
property.
Many real estate costs are
fixed and must be paid even if the property is not generating revenue which
could increase your risk of loss of your investment.
Our
financial results depend primarily on being able to add value and then sell
properties to others on favorable terms. Many costs associated with real estate
investment, such as debt service, real estate taxes and maintenance costs,
generally are not reduced even when a property is not fully improved or used.
Thus, even a small increase in the time to which a real estate property can be
sold can result in a significant increase in the carry costs of the
property. New properties that we may acquire may not produce any
significant revenue immediately, and the cash flow from existing operations may
be insufficient to pay the operating expenses and debt service associated with
that property until the property is sold.
7
Because there is no assured
market for properties, we may be unable to sell a property when it desires,
which could increase your risk of loss of your investment.
Liquidity
relates our ability to sell a property in a timely manner at a price that
reflects the fair market value of that property. The illiquidity of properties
may adversely affect our ability to dispose of such properties in a timely
manner and at a fair price at times when we deem it necessary or advantageous.
The timing and likelihood of liquidation events is uncertain and unpredictable
and affected by general economic and property-specific conditions. There may not
be a market, or the market may be very limited, for the real estate which
we will try to sell, even though we make appropriate efforts to cover the
available market. Investments in real properties are generally not liquid. We
may not be able to dispose of future properties within its anticipated time
schedule and the sales of such properties may not be made at the prices
projected by us.
We are subject to zoning and
environmental controls that may restrict the use of our
property.
Governmental
zoning and land use regulations may exist or be promulgated that could have the
effect of restricting or curtailing certain uses of our real estate. Such
regulations could adversely affect the value of any of our properties affected
by such regulations. In recent years real estate values have also sometimes been
adversely affected by the presence of hazardous substances or toxic waste on,
under or in the environs of the property. A substance (or the amount of a
substance) may be considered safe at the time the property is purchased but
later classified by law as hazardous. Owners of properties have been liable for
substantial expenses to remedy chemical contamination of soil and groundwater at
their properties even if the contamination predated their ownership.
Although we intend to exercise reasonable efforts to assure that no
properties are acquired that give rise to such liabilities, chemical
contamination cannot always be detected through readily available means, and the
possibility of such liability cannot be excluded.
Under
various foreign, federal, state and local laws, ordinances and regulations, we
may be required to investigate and clean up certain hazardous or toxic
substances released on or in properties we own or operate, and also may be
required to pay other costs relating to hazardous or toxic substances. This
liability may be imposed without regard to whether we knew about the release of
these types of substances or were responsible for their release. The presence of
contamination or the failure to remediate property contaminations at any of our
properties may adversely affect our ability to sell or lease the properties or
to borrow using the properties as collateral. The costs or liabilities could
exceed the value of the affected real estate. We have not been notified by
any governmental authority, however, of any non-compliance, liability or other
claim in connection with any of our properties, and we are not aware of
any other environmental condition with respect to any of our properties that
management believes would have a material adverse effect on our business, assets
or results of operations taken as a whole.
Although
we will attempt to determine the environmental condition of each property as
part of our due diligence, we cannot be certain that this investigation will
reveal all conditions that may impose an obligation on us to mitigate the
environmental condition. If we were subject to environmental liability, which
could be imposed based on our ownership of its property, such liability could
adversely affect the value of your investment.
8
We may be subject to
uninsured losses that may require substantial payments which could reduce the
value of your investment.
We
currently carry no comprehensive liability and casualty insurance and even if it
obtains such insurance in the future, certain disaster insurance (such as
earthquake insurance) may not be available or may be available only at prices
which we deems prohibitive. We carry no such insurance and do not intend to
obtain such insurance in the future. In addition, losses may exceed
insurance policy limits, and policies may contain exclusions with respect to
various types of losses or other matters. Consequently, all or a portion of our
properties may not be covered by disaster insurance and insurance may not cover
all losses which could reduce the value of your investment.
We cannot control certain
factors affecting the performance and value of a property, which may cause the
value of that property and your investment to decline.
The
economic performance and value of our real estate assets will be subject to the
risks described below that are normally associated with changes in national,
regional and local political, economic and market conditions. These factors may
adversely affect the ability of our customers to buy our real estate. Other
local economic conditions that may affect the performance and value of the
properties include the local economy of a given real estate project; competition
for buyers, including competition based on attractiveness and location of the
property; and the quality of amenities a project has to offer. In addition,
other factors may affect the performance and value of a property adversely,
including changes in laws and governmental regulations (including those
governing usage, zoning and taxes), changes in interest rates (including the
risk that increased interest rates may result in a decline in the liquidity of
our properties), declines in housing or commercial property purchases and the
availability of financing. Adverse changes in any of these factors, each of
which is beyond the our and our control of the Company, could reduce the cash
flow that we receive from our properties, and adversely affect the value
of your investment
Inability to make secured
debt payments could result in loss of mortgaged property and reduce the value of
your investment.
Debt
financing carries risks of refinancing difficulties, loss of mortgaged
properties, reduced ability to obtain new financing and increases in interest.
Moreover, conduit and mezzanine lenders may require cross-collateralization that
would put non-leveraged properties at risk of foreclosure. We may
use debt financing in connection with future properties. If we cannot meet our
secured debt obligations, the lender could take the collateral and we would lose
both the secured property and the income, if any, it produces. Foreclosure on
mortgaged properties or an inability to refinance existing indebtedness would
likely have a negative impact on our financial condition and results of
operations. We could have to pay substantial legal costs in connection with
foreclosure of a property, and thus be subject to a deficiency judgment if the
foreclosure sale amount is insufficient to satisfy the mortgage.
Rising interest rates could
adversely affect our interest expense and thus our cash flow and reduce the
value of your investment.
We may
borrow money at variable interest rates in the future to finance operations.
Increases in interest rates would increase our interest expense on our variable
rate debt, which would adversely affect cash flow and our ability to service our
debt and make distributions to us.
9
Our lack of an established
brand name and relative lack of resources could negatively impact our ability to
effectively compete in the real estate market which could reduce the value
of your investment.
We do not
have an established brand name or reputation in the real estate business.
We also have a relative lack of resources to conduct our business operations.
Thus, we may have difficulty effectively competing with companies that
have greater name recognition and resources than we do. Presently, we have no
patents, copyrights, trademarks and/or service marks that would protect our
brand name or our proprietary information, nor do we have any current
plans to file applications for such rights. Our inability to promote and/or
protect our brand name may have an adverse effect on our ability to compete
effectively in the real estate market.
We may have substantial
near-term capital needs, and we may be unable to obtain the additional funding
needed to enable us to operate profitably in the future.
We will
need additional funding over the next twelve months to develop our business. We
have less than $40,000 worth of liquid assets with which to contribute to our
expenses and conduct our operations, including real estate acquisition.
Additional operational developments could put our cash flow at risk, such as
tenant rent defaults, vacancies in our property, and repairs. Accordingly, we
will seek outside sources of capital such as conventional bank financing;
however, there can be no assurance that additional capital will be available on
favorable terms to us. If adequate funds are not available, we may be required
to curtail operations or shut down completely.
In
addition, we have no credit facility or other committed sources of capital. We
may be unable to establish credit arrangements on satisfactory terms. If capital
resources are insufficient to meet our future capital requirements, we may have
to raise funds to continue development of our operations. To the extent that
additional capital is raised through the sale of equity and/or convertible debt
securities, the issuance of such securities could result in dilution to our
shareholders and/or increased debt service commitments. If adequate funds are
not available, we may be unable to sufficiently develop our operations to become
profitable.
Risks Related to Management
and Personnel
We depend heavily on key
personnel, and turnover of key senior management could harm our
business.
Our
future business and results of operations depend in significant part upon the
continued contributions of our senior management personnel, including Spiros
Sinnis, President and CEO and Vasileios Mavrogiannis, Treasurer and Panagiotis
Drakopoulos, Secretary. If we were to lose Spiros Sinnis, President and CEO and
Vasileios Mavrogiannis, Treasurer and Panagiotis Drakopoulos, Secretary or if
Spiros Sinnis, President and CEO and Vasileios Mavrogiannis, Treasurer and
Panagiotis Drakopoulos, Secretary fail to perform in their respective current
position, or if we are not able to attract and retain skilled employees as
needed, our business could suffer. We have no key person insurance on these
members of management. We have no employment agreements with any
management.
Significant turnover in our senior management could significantly deplete our
institutional knowledge held by our existing senior management team. We depend
on the skills and abilities of these key employees in managing the product
acquisition, marketing and sales aspects of our business, any part of which
could be harmed by turnover in the future.
10
Our management has limited
experience in managing the day to day operations of a public company and, as a
result, we may incur additional expenses associated with the management of our
company.
The
management team, including Spiros Sinnis, President and CEO and Vasileios
Mavrogiannis, Treasurer and Panagiotis Drakopoulos, Secretary is responsible for
the operations and reporting of the combined company. The requirements of
operating as a small public company are new to the management team and the
employees as a whole. This may require us to obtain outside assistance from
legal, accounting, investor relations, or other professionals that could be more
costly than planned. We may also be required to hire additional staff to comply
with additional SEC reporting requirements and compliance under the
Sarbanes-Oxley Act of 2002. Our failure to comply with reporting requirements
and other provisions of securities laws could negatively affect our stock price
and adversely affect our results of operations, cash flow and financial
condition.
We are exposed to increased
expenses from recent legislation requiring companies to evaluate internal
control over financial reporting which could reduce our
revenues.
Section
404 of the Sarbanes-Oxley Act of 2002 ("Section 404") requires our
management to report on the operating effectiveness of our Internal
Controls over financial reporting for the year ended July 31 in the fiscal year
after the fiscal year in which this registration statement is declared
effective. M&K CPAS, PLLC is our independent registered public accounting
firm, will be required to attest to the effectiveness of our internal control
over financial reporting beginning for our fiscal year ended July 31, 2011. We
must establish an ongoing program to perform the system and process evaluation
and testing necessary to comply with these requirements. We expect that the cost
of this program will require us to incur expenses and to devote resources to
Section 404 compliance on an ongoing basis which will reduce our
revenues.
Because we do not have an
audit or compensation committee, shareholders will have to rely on the entire
board of directors, none of which are not independent, to perform these
functions.
We do not
have an audit or compensation committee comprised of independent
directors. Indeed, we do not have any audit or compensation
committee. These functions are performed by the board of directors as a
whole. No members of the board of directors are independent
directors. Thus, there is a potential conflict in that board members who
are management will participate in discussions concerning management
compensation and audit issues that may affect management decisions.
Certain
of our stockholders hold a significant percentage of our outstanding voting
securities which could reduce the ability of minority shareholders to effect
certain corporate actions.
Our
officers, directors and majority shareholders are the beneficial owners of
approximately 97.6% of our outstanding voting securities. As a result, they
possess significant influence and can elect a majority of our board of directors
and authorize or prevent proposed significant corporate transactions. Their
ownership and control may also have the effect of delaying or preventing a
future change in control, impeding a merger, consolidation, takeover or other
business combination or discourage a potential acquirer from making a tender
offer.
11
Risks Related to Our Foreign
Operations
Because
properties we acquire may be located in Greece, Romania and Bulgaria, the
following risks could affect our business and thus harm our
revenues.
General economic conditions
in Greece, Romania and Bulgaria could reduce our revenues.
General
economic conditions in Greece, Romania and Bulgaria have an impact on our
business and financial results. The global economy in general and in Greece,
Romania and Bulgaria specifically remains uncertain. Weak economic conditions
could result in lower demand for our properties, resulting in lower sales,
earnings and cash flows.
The value of our securities
will be affected by the foreign exchange rate between U.S. dollars and the
currencies of Greece, Romania and Bulgaria.
The value
of our common stock will be affected by the foreign exchange rate between U.S.
dollars and the currencies of Greece, Romania and Bulgaria, and between those
currencies and other currencies in which our revenues and assets may be
denominated. For example, to the extent that we need to convert U.S. dollars
into the currencies of Greece, Romania and Bulgaria for our operational needs
and should the currencies of Greece, Romania and Bulgaria appreciate against the
U.S. dollar at that time, our financial position, the business of the Company,
and the price of our common stock may be harmed. Conversely, if we decide to
convert our the currencies of Greece, Romania and Bulgaria into U.S. dollars for
the purpose of declaring dividends on our common stock or for other business
purposes and the U.S. dollar appreciates against the currencies of Greece,
Romania and Bulgaria, the U.S. dollar equivalent of our earnings from our
subsidiaries in Greece, Romania and Bulgaria would be reduced.
In the
event that the U.S. dollars appreciate against the currencies of Greece, Romania
and Bulgaria, our costs will increase. If we cannot pass the resulting cost
increase on to our customers, our profitability and operating results will
suffer. In addition, if our sales to international customers will grow rapidly,
we are subject to the risk of foreign currency depreciation.
It may be difficult for
stockholders to enforce any judgment obtained in the United States against
us, which may limit the remedies otherwise available to our
stockholders.
All of
our assets may located outside the United States
and some or all of our future operations may conducted in Greece, Romania
and Bulgaria. Moreover, two of our directors and officers are nationals or
residents of Greece. All or a substantial portion of the assets of these
persons are located outside the United. As a result, it may be difficult
for our stockholders to effect service of process within the United States upon
these persons. In addition, there is uncertainty
as to whether the courts of Greece would recognize or enforce judgments of
U.S. courts obtained against us or such officers and/or directors
predicated upon the civil liability provisions of the
securities law of the United States or any state thereof, or be competent
to hear original actions brought in Greece against us or such persons
predicated upon the securities laws of the United States or
any state thereof.
12
Risks Related to the Market
for our Stock
Investors may have
difficulty in reselling their shares due to the lack of market or state Blue Sky
laws.
Our
common stock is currently not quoted on any market. No market may ever develop
for our common stock, or if developed, may not be sustained in the
future.
The
holders of our shares of common stock and persons who desire to purchase them in
any trading market that might develop in the future should be aware that there
may be significant state law restrictions upon the ability of investors to
resell our shares. Accordingly, even if we are successful in having the shares
available for trading on the OTCBB, investors should consider any secondary
market for the Company's securities to be a limited one. We intend to seek
coverage and publication of information regarding the company in an accepted
publication which permits a "manual exemption." This manual exemption permits a
security to be distributed in a particular state without being registered if the
company issuing the security has a listing for that security in a securities
manual recognized by the state. However, it is not enough for the security to be
listed in a recognized manual. The listing entry must contain (1) the names of
issuers, officers, and directors, (2) an issuer's balance sheet, and (3) a
profit and loss statement for either the fiscal year preceding the balance sheet
or for the most recent fiscal year of operations. We may not be able to
secure a listing containing all of this information. Furthermore, the
manual exemption is a non issuer exemption restricted to secondary trading
transactions, making it unavailable for issuers selling newly issued securities.
Most of the accepted manuals are those published in Standard and Poor's, Moody's
Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and
many states expressly recognize these manuals. A smaller number of states
declare that they “recognize securities manuals” but do not specify the
recognized manuals. The following states do not have any provisions and
therefore do not expressly recognize the manual exemption: Alabama, Georgia,
Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and
Wisconsin.
Accordingly,
our shares should be considered totally illiquid, which inhibits investors’
ability to resell their shares.
We will be subject to penny
stock regulations and restrictions and you may have difficulty selling shares of
our common stock.
The SEC
has adopted regulations which generally define so-called “penny stocks” to be an
equity security that has a market price less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to certain exemptions. If our common
stock becomes a “penny stock”, we may become subject to Rule 15g-9 under the
Exchange Act, or the “Penny Stock Rule”. This rule imposes additional sales
practice requirements on broker-dealers that sell such securities to persons
other than established customers. For transactions covered by Rule 15g-9, a
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser’s written consent to the transaction prior to
sale. As a result, this rule may affect the ability of broker-dealers to sell
our securities and may affect the ability of purchasers to sell any of our
securities in the secondary market.
For any
transaction involving a penny stock, unless exempt, the rules require delivery,
prior to any transaction in a penny stock, of a disclosure schedule prepared by
the SEC relating to the penny stock market. Disclosure is also required to be
made about sales commissions payable to both the broker-dealer and the
registered representative and current quotations for the securities. Finally,
monthly statements are required to be sent disclosing recent price information
for the penny stock held in the account and information on the limited market in
penny stock.
13
Our
common stock will not initially qualify for exemption from the Penny Stock Rule.
In any event, even if our common stock were exempt from the Penny Stock Rule, we
would remain subject to Section 15(b)(6) of the Exchange Act, which gives the
SEC the authority to restrict any person from participating in a distribution of
penny stock, if the SEC finds that such a restriction would be in the public
interest.
Sales of our common stock
under Rule 144 could reduce the price of our stock.
There are
493,960 shares of our common stock held by non- affiliates and 20,000000 shares
held by affiliates Rule 144 of the Securities Act of 1933 defines as restricted
securities. 392,000 shares of our common stock held by non-affiliates are
currently eligible for resale or are being registered in this offering, however
affiliates will still be subject to the resale restrictions of Rule 144.
In general, persons holding restricted securities, including affiliates, must
hold their shares for a period of at least six months, may not sell more than
one percent of the total issued and outstanding shares in any 90-day period, and
must resell the shares in an unsolicited brokerage transaction at the market
price. The availability for sale of substantial amounts of common stock
under Rule 144 could reduce prevailing market prices for our
securities.
Although we will be a
mandatory reporting company under Section 15(d) of the Securites Act of 1933
until and through fiscal year end July 31, 2009, if we do not file a
Registration Statement on Form 8-A to become a mandatory reporting company under
Section 12(g) of the Securities Exchange Act of 1934, we will continue as a
voluntary reporting company and will not be subject to the proxy statement or
other information requirements of the 1934 Act, our securities can no longer be
quoted on the OTC Bulletin Board, and our officers, directors and 10%
stockholders will not be required to submit reports to the SEC on their stock
ownership and stock trading activity, all of which could reduce the value of
your investment and the amount of publicly available information about
us.
As a
result of this offering as required under Section 15(d) of the Securities
Exchange Act of 1934, we will file periodic reports with the Securities and
Exchange Commission through July 31, 2010, including a Form 10-K for the year
ended July 31, 2010, assuming this registration statement is declared effective
before that date. At or prior to July 31, 2010, we intend voluntarily to
file a registration statement on Form 8-A which will subject us to all of the
reporting requirements of the 1934 Act. This will require us to file quarterly
and annual reports with the SEC and will also subject us to the proxy rules of
the SEC. In addition, our officers, directors and 10% stockholders will be
required to submit reports to the SEC on their stock ownership and stock trading
activity. We are not required under Section 12(g) or otherwise to become a
mandatory 1934 Act filer unless we have more than 500 shareholders and total
assets of more than $10 million on July 31, 2010. If we do not file a
registration statement on Form 8-A at or prior to July 31, 2010, we will
continue as a voluntary reporting company and will not be subject to the proxy
statement or other information requirements of the 1934 Act, our securities can
no longer be quoted on the OTC Bulletin Board, and our officers, directors and
10% stockholders will not be required to submit reports to the SEC on their
stock ownership and stock trading activity.
USE
OF PROCEEDS
Not
applicable. We will not receive any proceeds from the sale of shares
offered by the selling shareholders.
14
DETERMINATION
OF OFFERING PRICE
The
offering price has been arbitrarily determined and does not bear any
relationship to our assets, results of operations, or book value, or to any
other generally accepted criteria of valuation. Prior to this offering, there
has been no market for our securities. In order to assure that selling
shareholders will offer their shares at $.10 per share until our shares are
quoted on the OTC Bulletin Board, we will notified our shareholders and our
Transfer Agent that no sales will be allowed prior to the date our shares are
quoted on the OTC Bulletin Board without proof of the selling
price.
DILUTION
Not
applicable. We are not offering any shares in this registration statement. All
shares are being registered on behalf of our selling shareholders.
SELLING
SHAREHOLDERS
The
selling shareholders named below are selling the securities. The table
assumes that all of the securities will be sold in this offering. However, any
or all of the securities listed below may be retained by any of the selling
shareholders, and therefore, no accurate forecast can be made as to the number
of securities that will be held by the selling shareholders upon termination of
this offering. Between July 2009 and October 2009, we sold 392,000 shares
to 4 U.S. and 39 non-U.S. investors at a price of $.10 per share for aggregate
consideration of $39,200. We relied upon Section 4(2) of the Securities
Act of 1933 for sales to U.S. investors and upon Regulation S for sales to
non-U.S. investors. We believe that the selling shareholders listed in the
table have sole voting and investment powers with respect to the securities
indicated. We will not receive any proceeds from the sale of the
securities by the selling shareholders. No selling shareholders are
broker-dealers or affiliates of broker-dealers.
15
Selling
Shareholder
|
Shares
to
be
offered
by
the
Selling
Stockholders
|
Percentage
owned
before
Offering
|
Amount
owned
after
the
offering,
assuming
all
shares
sold
[1]
|
Percentage
owned
after
the
offering,
assuming
all
shares
sold
[1]
|
Relationship
to
us
|
||||||||||
EFTHYMIA
KARANASIOU
|
8000
|
*
|
0
|
0
|
|||||||||||
ELEFTHERIOS
PERIFANOS
|
8000
|
*
|
0
|
0
|
|||||||||||
ANTONIOS
KAKANIARIS
|
8000
|
*
|
0
|
0
|
|||||||||||
KONSTANTINOS
STEIROS
|
8000
|
*
|
0
|
0
|
|||||||||||
FROIXOS
POLENAKIS
|
8000
|
*
|
0
|
0
|
|||||||||||
VASILIKI
ARONI
|
8000
|
*
|
0
|
0
|
|||||||||||
NIKOLAOS
DIMITROPOULOS
|
8000
|
*
|
0
|
0
|
|||||||||||
IOANNA
KORNAROU
|
8000
|
*
|
0
|
0
|
|||||||||||
ANASTASIOS
LAZAROU
|
8000
|
*
|
0
|
0
|
|||||||||||
FOTEINI
MAGKOUSAKI
|
8000
|
*
|
0
|
0
|
|||||||||||
ATHANASIOS
BANOUSIS
|
8000
|
*
|
0
|
0
|
|||||||||||
KONSTANTINOS
STEFOS
|
8000
|
*
|
0
|
0
|
|||||||||||
ANDREAS
KAMOUDIS
|
8000
|
*
|
0
|
0
|
|||||||||||
NEKTARIOS
MATZARIOTIS
|
8000
|
*
|
0
|
0
|
|||||||||||
MAGDALINI
GKOUFA
|
8000
|
*
|
0
|
0
|
|||||||||||
ELEFTHERIOS
VOUGIOUKAS
|
8000
|
*
|
0
|
0
|
|||||||||||
CHARALAMPOS
SPANTIDEAS
|
8000
|
*
|
0
|
0
|
|||||||||||
PARASKEVI
KOMI
|
8000
|
*
|
0
|
0
|
|||||||||||
GEORGIOS
GEORGOPOULOS
|
8000
|
*
|
0
|
0
|
|||||||||||
GEORGIOS
STYLIANOU
|
8000
|
*
|
0
|
0
|
|||||||||||
IOANNA
SEVASTI
|
8000
|
*
|
0
|
0
|
|||||||||||
ARGYRIOS
PSATHAS
|
8000
|
*
|
0
|
0
|
|||||||||||
STAMATIOS
KARRAS
|
8000
|
*
|
0
|
0
|
|||||||||||
NIKODIMOS
VOUDOURIS
|
8000
|
*
|
0
|
0
|
|||||||||||
EMMANOUIL
ASLANIS
|
8000
|
*
|
0
|
0
|
|||||||||||
ATHANASIOS
PAPOUTSIS
|
8000
|
*
|
0
|
0
|
|||||||||||
DIMITRIOS
CHARAKIDAS
|
8000
|
*
|
0
|
0
|
|||||||||||
PETROS
GANTZIAS
|
8000
|
*
|
0
|
0
|
|||||||||||
MICHAIL
VALSAMIDIS
|
8000
|
*
|
0
|
0
|
|||||||||||
SUSAN
BOCABAL
|
8000
|
*
|
0
|
0
|
|||||||||||
DIMITRIOS
PANAGOPOULOS
|
8000
|
*
|
0
|
0
|
|||||||||||
ATHINA
LONGINIDOU
|
8000
|
*
|
0
|
0
|
|||||||||||
GEORGIA
PANTELI
|
8000
|
*
|
0
|
0
|
|||||||||||
DIMITRIOS
MITOS
|
8000
|
*
|
0
|
0
|
|||||||||||
SOTIRIOS
KAPSOGEORGIS
|
8000
|
*
|
0
|
0
|
|||||||||||
SOTIRIOS
KARVOUNIS
|
8000
|
*
|
0
|
0
|
|||||||||||
NIKOLAOS
MICHAILIDIS
|
8000
|
*
|
0
|
0
|
|||||||||||
MARIA
KAMPOUROPOULOU
|
8000
|
*
|
0
|
0
|
|||||||||||
MARK R.
CAHAN
|
8000
|
*
|
0
|
0
|
|||||||||||
ROBERT
HOLMBERG
|
20000
|
*
|
0
|
0
|
|||||||||||
DIMITRIOS
SINNIS
|
20000
|
*
|
0
|
0
|
|||||||||||
THOMAS MC
SWEENEY
|
20000
|
*
|
0
|
0
|
|||||||||||
JOANNE
CARLIN
|
20000
|
*
|
0
|
0
|
|||||||||||
TOTAL
|
392000
|
0
|
16
*
Represents ownership of less than one percent
Blue Sky
The
holders of our shares of common stock and persons who desire to purchase them in
any trading market that might develop in the future should be aware that there
may be significant state law restrictions upon the ability of investors to
resell our shares. Accordingly, even if we are successful in having the Shares
available for trading on the OTCBB, investors should consider any secondary
market for the Company's securities to be a limited one. We intend to seek
coverage and publication of information regarding the company in an accepted
publication which permits a "manual exemption." This manual exemption permits a
security to be distributed in a particular state without being registered if the
company issuing the security has a listing for that security in a securities
manual recognized by the state. However, it is not enough for the security to be
listed in a recognized manual. The listing entry must contain (1) the names of
issuers, officers, and directors, (2) an issuer's balance sheet, and (3) a
profit and loss statement for either the fiscal year preceding the balance sheet
or for the most recent fiscal year of operations. We may not be able to
secure a listing containing all of this information. Furthermore, the
manual exemption is a non issuer exemption restricted to secondary trading
transactions, making it unavailable for issuers selling newly issued securities.
Most of the accepted manuals are those published in Standard and Poor's, Moody's
Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and
many states expressly recognize these manuals. A smaller number of states
declare that they “recognize securities manuals” but do not specify the
recognized manuals. The following states do not have any provisions and
therefore do not expressly recognize the manual exemption: Alabama, Georgia,
Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and
Wisconsin.
PLAN
OF DISTRIBUTION
Our
common stock is currently not quoted on any market. No market may ever
develop for our common stock, or if developed, may not be sustained in the
future. Accordingly, our shares should be considered totally illiquid,
which inhibits investors’ ability to resell their shares.
Selling
shareholders are offering up to 392,000 shares of common stock. The
selling shareholders will offer their shares at $.10 per share until our shares
are quoted on the OTC Bulletin Board and thereafter at prevailing market prices
or privately negotiated prices. We will not receive any proceeds of the
sale of these securities. We will pay all expenses of registering the
securities.
17
The
securities offered by this prospectus will be sold by the selling shareholders
without underwriters and without commissions. The distribution of the
securities by the selling shareholders may be effected in one or more
transactions that may take place in the over-the-counter market or privately
negotiated transactions.
The
selling shareholders may pledge all or a portion of the securities owned as
collateral for margin accounts or in loan transactions, and the securities may
be resold pursuant to the terms of such pledges, margin accounts or loan
transactions. Upon default by such selling shareholders, the pledge in such loan
transaction would have the same rights of sale as the selling shareholders under
this prospectus. The selling shareholders may also enter into exchange traded
listed option transactions, which require the delivery of the securities listed
under this prospectus. After our securities are qualified for quotation on the
OTC Bulletin Board, the selling shareholders may also transfer securities owned
in other ways not involving market makers or established trading markets,
including directly by gift, distribution, or other transfer without
consideration, and upon any such transfer the transferee would have the same
rights of sale as such selling shareholders under this prospectus.
In
addition to the above, each of the selling shareholders will be affected by the
applicable provisions of the Securities Exchange Act of 1934, including, without
limitation, Regulation M, which may limit the timing of purchases and sales of
any of the securities by the selling shareholders or any such other
person. We have instructed our selling shareholders that they many not
purchase any of our securities while they are selling shares under this
registration statement.
Upon this
registration statement being declared effective, the selling shareholders may
offer and sell their shares from time to time until all of the shares registered
are sold; however, this offering may not extend beyond two years from the
initial effective date of this registration statement.
There can
be no assurances that the selling shareholders will sell any or all of the
securities. In various states, the securities may not be sold unless these
securities have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and is complied
with.
All of
the foregoing may affect the marketability of our securities. Pursuant to oral
promises we made to the selling shareholders, we will pay all the fees and
expenses incident to the registration of the securities.
Should
any substantial change occur regarding the status or other matters concerning
the selling shareholders or us, we will file a post-effective amendment
disclosing such matters.
OTC Bulletin Board
Considerations
To be
quoted on the OTC Bulletin Board, a market maker must file an application on our
behalf in order to make a market for our common stock. We have engaged in
preliminary discussions with a FINRA Market Maker to file our application on
Form 211 with FINRA, but as of the date of this prospectus, no filing has been
made. Based upon our counsel’s prior experience, we anticipate that after
this registration statement is declared effective, it will take approximately 2
– 8 weeks for FINRA to issue a trading symbol.
18
The OTC
Bulletin Board is separate and distinct from the NASDAQ stock market.
NASDAQ has no business relationship with issuers of securities quoted on the OTC
Bulletin Board. The SEC’s order handling rules, which apply to
NASDAQ-listed securities, do not apply to securities quoted on the OTC Bulletin
Board.
Although
the NASDAQ stock market has rigorous listing standards to ensure the high
quality of our issuers, and can delist issuers for not meeting those standards,
the OTC Bulletin Board has no listing standards. Rather, it is the market
maker who chooses to quote a security on the system, files the application, and
is obligated to comply with keeping information about the issuer in our
files. FINRA cannot deny an application by a market maker to quote the
stock of a company. The only requirement for inclusion in the bulletin
board is that the issuer be current in our reporting requirements with the
SEC.
Although
we anticipate listing on the OTC Bulletin board will increase liquidity for our
stock, investors may have greater difficulty in getting orders filled because it
is anticipated that if our stock trades on a public market, it initially will
trade on the OTC Bulletin Board rather than on NASDAQ. Investors’ orders
may be filled at a price much different than expected when an order is
placed. Trading activity in general is not conducted as efficiently and
effectively as with NASDAQ-listed securities.
Investors
must contact a broker-dealer to trade OTC Bulletin Board securities.
Investors do not have direct access to the bulletin board
service. For bulletin board securities, there only has to be one
market maker.
Bulletin
board transactions are conducted almost entirely manually. Because
there are no automated systems for negotiating trades on the bulletin board,
they are conducted via telephone. In times of heavy market volume,
the limitations of this process may result in a significant increase in the time
it takes to execute investor orders. Therefore, when investors place
market orders - an order to buy or sell a specific number of shares at the
current market price - it is possible for the price of a stock to go up or down
significantly during the lapse of time between placing a market order and
getting execution.
Because
bulletin board stocks are usually not followed by analysts, there may be lower
trading volume than for NASDAQ-listed securities.
LEGAL
PROCEEDINGS
There are
no pending or threatened lawsuits against us.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The board
of directors elects our executive officers annually. A majority vote
of the directors who are in office is required to fill
vacancies. Each director shall be elected for the term of one year,
and until his or her successor is elected and qualified, or until his earlier
resignation or removal. Our directors and executive officers are as
follows:
Name
|
Age
|
Position
|
||
Spiros
Sinnis
|
35
|
President
and Director
|
||
Vasileios
Mavrogiannis
|
37
|
Treasurer
and Director
|
||
Panagiotis
Drakopoulos
|
37
|
Secretary
and
Director
|
19
Spiros
Sinnis joined us as President and Director upon formation. From
November 2008 to July 2009 he was Business Development Manager of Dynamic
Investments Ltd., a business consulting firm. From July 2007 to
November 2008, he was Chief Marketing Officer, Lifecycle Investments, a Life
Settlement company. From July 1998 to July 2007, he was President of
Sinnis Consulting consulting European Institutions on investments.
Vasileios
Mavrogiannis joined us as Treasurer and Director upon
formation. Since June 2006, he has been Director and Vice-President
of Dynamic Investments Ltd., a business consulting firm. Prior to
June 2006, he was unemployed.
Panagiotis
Drakopoulos joined us as Secretary and Director upon
formation. Since June 2006, he has been
Director and President of Dynamic Investments Ltd., a business consulting
firm. From June 2006 to July 2009 he was also Director of Sea Star
Shipping SA, involved in the management of ships. Prior to June 2006,
he was unemployed.
Family
Relationships
None.
Legal
Proceedings
No
officer, director, promoter or significant employee has been involved in the
last five years in any of the following:
|
¨
|
Any
bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that
time;
|
|
¨
|
Any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses);
|
|
¨
|
Being
subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities;
and
|
|
¨
|
Being
found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not
been reversed, suspended, or
vacated.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following tables set forth the ownership, as of the date of this prospectus, of
our common stock by each person known by us to be the beneficial owner of more
than 5% of our outstanding common stock, our directors, and our executive
officers and directors as a group. To the best of our knowledge, the
persons named have sole voting and investment power with respect to such shares,
except as otherwise noted. There are not any pending or anticipated
arrangements that may cause a change in control.
20
The
information presented below regarding beneficial ownership of our voting
securities has been presented in accordance with the rules of the Securities and
Exchange Commission and is not necessarily indicative of ownership for any other
purpose. Under these rules, a person is deemed to be a “ beneficial owner" of a
security if that person has or shares the power to vote or direct the voting of
the security or the power to dispose or direct the disposition of the security.
A person is deemed to own beneficially any security as to which such person has
the right to acquire sole or shared voting or investment power within 60 days
through the conversion or exercise of any convertible security, warrant, option
or other right. More than one person may be deemed to be a beneficial owner of
the same securities. The percentage of beneficial ownership by any person as of
a particular date is calculated by dividing the number of shares beneficially
owned by such person, which includes the number of shares as to which such
person has the right to acquire voting or investment power within 60 days, by
the sum of the number of shares outstanding as of such date plus the number of
shares as to which such person has the right to acquire voting or investment
power within 60 days. Consequently, the denominator used for calculating such
percentage may be different for each beneficial owner. Except as otherwise
indicated below and under applicable community property laws, we believe that
the beneficial owners of our common stock listed below have sole voting and
investment power with respect to the shares shown. The business
address of the shareholders is 4709 West Golf Rd., Suite 425, Skokie, Illinois,
60076.
Name
|
Number of Shares of Common Stock
|
Percentage
|
||||
Spiros
Sinnis
|
6,666,667
|
32.53%
|
||||
Vasileios
Mavrogiannis
|
6,666,666
|
32.53%
|
||||
Panagiotis
Drakopoulos
|
6,666,667
|
32.53%
|
||||
All
officers and directors as a group [3 persons]
|
20,000,000
|
97.6%
|
This
table is based upon information derived from our stock records. Unless otherwise
indicated in the footnotes to this table and subject to community property laws
where applicable, each of the shareholders named in this table has sole or
shared voting and investment power with respect to the shares indicated as
beneficially owned. Except as set forth above, applicable percentages are based
upon 20,493,960 shares of common stock outstanding as of October 9,
2009.
DESCRIPTION
OF SECURITIES
The
following description as a summary of the material terms of the provisions of
our Articles of Incorporation and Bylaws is qualified in our
entirety. The Articles of Incorporation and Bylaws have been filed as
exhibits to the registration statement of which this prospectus is a
part.
Common
Stock
We are
authorized to issue 200,000,000 shares of common stock with $0.001 par value per
share. As of the date of this registration statement, there were 20,493,960
shares of common stock issued and outstanding held by 49 shareholders of the
record.
21
Each
share of common stock entitles the holder to one vote, either in person or by
proxy, at meetings of shareholders. The holders are not permitted to vote their
shares cumulatively. Accordingly, the shareholders of our common stock who hold,
in the aggregate, more than fifty percent of the total voting rights can elect
all of our directors and, in such event, the holders of the remaining minority
shares will not be able to elect any of such directors. The vote of the holders
of a majority of the issued and outstanding shares of common stock entitled to
vote thereon is sufficient to authorize, affirm, ratify or consent to such act
or action, except as otherwise provided by law.
Holders
of common stock are entitled to receive ratably such dividends, if any, as may
be declared by the Board of Directors out of funds legally available. We have
not paid any dividends since our inception, and we presently anticipate that all
earnings, if any, will be retained for development of our business. Any future
disposition of dividends will be at the discretion of our Board of Directors and
will depend upon, among other things, our future earnings, operating and
financial condition, capital requirements, and other factors.
Holders
of our common stock have no preemptive rights or other subscription rights,
conversion rights, redemption or sinking fund provisions. Upon our liquidation,
dissolution or winding up, the holders of our common stock will be entitled to
share ratably in the net assets legally available for distribution to
shareholders after the payment of all of our debts and other liabilities. There
are not any provisions in our Articles of Incorporation or our Bylaws that would
prevent or delay change in our control.
Preferred
Stock
The
Company is authorized to issue 100,000,000 shares of preferred stock in series
as fixed by the Directors with $0.001 par value per share. As of the date of
this Prospectus, there are no preferred shares outstanding.
Preferred
stock may be issued in series with preferences and designations as the Board of
Directors may from time to time determine. The board may, without shareholders
approval, issue preferred stock with voting, dividend, liquidation and
conversion rights that could dilute the voting strength of our common
shareholders and may assist management in impeding an unfriendly takeover or
attempted changes in control. There are no restrictions on our ability to
repurchase or reclaim our preferred shares while there is any arrearage in the
payment of dividends on our preferred stock.
INTEREST
OF NAMED EXPERTS
Our
balance sheet as of July 31, 2009 and the related statements of operations,
changes in stockholders' deficit, and cash flows for the period from July 21,
2009 (inception) through July 31, 2009 were audited by M&K CPAS, PLLC, as
experts in accounting and auditing, to the extent and for the periods set forth
in our report and are incorporated herein in reliance upon such report given
upon the authority of said firm as experts in auditing and
accounting.
The
legality of the shares offered under this registration statement is being passed
upon by Williams Law Group, P.A., Tampa, Florida. Michael T. Williams,
principal of Williams Law Group, P.A., owns 90,000 shares of our common
stock. Two affiliates of Williams Law Group, P.A. own an aggregate of
11,960 additional shares.
22
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
LIABILITIES
Our
Bylaws, subject to the provisions of Nevada, contain provisions which allow the
corporation to indemnify any person against liabilities and other expenses
incurred as the result of defending or administering any pending or anticipated
legal issue in connection with service to us if it is determined that person
acted in good faith and in a manner which he reasonably believed was in the best
interest of the corporation. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to our
directors, officers and controlling persons, we have been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
DESCRIPTION
OF BUSINESS
Organization
Prime
Estates & Developments, Inc. is a Nevada corporation formed on July 21,
2009.
Our
principal office is located at 4709 West Golf Rd., Suite 425, Skokie, Illinois,
60076. Telephone: 224-489-2392.
Business
We intend
to acquire and operate commercial real estate and real estate related in Greece,
Bulgaria, Romania and the United States. We intend to focus on acquiring
commercial properties with such as those requiring development, redevelopment or
repositioning, those located in markets and submarkets with what we believe to
be high growth potential and those available from sellers who are distressed or
face time-sensitive deadlines.
In
addition, given current economic circumstances in the real estate industry, our
investment strategy may also include investments in real estate-related assets
that we believe present opportunities for significant current income. Such
investments may also have what we believe to be opportunities for capital gain,
whether as a result of a discount purchase or related equity
participations.
We may
acquire a wide variety of commercial properties, including office, industrial,
retail, hospitality, recreation and leisure, single-tenant, multifamily and
other real properties. These properties may be existing, income-producing
properties, newly constructed properties or properties under development or
construction and may include multifamily properties purchased for conversion
into condominiums and single-tenant properties that may be converted for
multifamily use.
Assuming
we raise sufficient funding, our investment strategy is designed to provide
investors with a diversified portfolio of real estate
assets. Although we have reviewed the real estate markets in the
countries in which we intend to acquire properties, we have no contract,
agreement or commitment to acquire any property as of the date of this
Prospectus.
23
Locating
Properties
Our process is built on a disciplined,
bottom-up investment process that seeks to manage risk through careful research
and analysis of both the geographic sector and individual
properties. The process combines a bottom-up, fundamental analysis of
overall market conditions (which drives the process) with
top-down analysis. The team’s industry analysis traditionally begins
with an evaluation of their respective industries, and assess trends that may
affect performance in the context of a certain macroeconomic
backdrop. We evaluate properties within their sectors, emphasizing
consistent cash flow, management quality and strong collateral
coverage.
Purchase
Procedures
Once we
have located a property that we may want to purchase, we will ascertain whether
the owner is willing to sell the property. We then negotiate a purchase price
and ask the following questions of the prospective seller and/or obtain answers
from third parties:
When does
the owner want to sell and close? Favorable conditions we look for regarding
this factor are:
|
o
|
The
seller is willing and able to sell within a six-month
period.
|
|
o
|
Typically,
the timing and motivation of sellers to enter into contract to sell may
include several factors such as: estate planning, gifts to family, age,
health and other personal factors.
|
How much
will the owner sell for? Favorable conditions we will look for regarding this
factor are:
|
o
|
The
price is below market value. We determine market value through appraisals
and comparable sales reports in the
area.
|
|
o
|
With
respect to price, we would also consider value trends, such as historical
yearly increases in property values
|
Are there
any defects on the title? Favorable conditions we will look for regarding this
factor are:
|
o
|
No
liens and/or encumbrances.
|
|
o
|
The
buyer is able to deliver a clean title within the time we would like to
close.
|
Does the
landowner have title insurance on the property? Favorable conditions we will
look for regarding this factor are:
|
o
|
The
landowner has title insurance on the
property.
|
|
o
|
The
landowner is able to secure title insurance on the
property.
|
|
o
|
We
would be able to obtain title insurance on the purchased
property.
|
We will
obtain the following documents from the seller during our due diligence on the
property:
|
·
|
General
maps;
|
|
·
|
Environmental
reports
|
|
·
|
Copies
of existing zoning maps and
regulations;
|
|
·
|
Conduct
land inspection procedures;
|
|
·
|
Proposed
zoning regulations;
|
|
·
|
Deeds;
|
|
·
|
Title
insurance; and
|
|
·
|
Tax
bills.
|
24
We then
verify the accuracy of these documents and determine how the information
contained in the documents impacts the property that we are considering to
purchase.
Financing
Procedures
We will
attempt to obtain financing from local banks doing business within the area
where we are attempting to purchase property. Our officers may
personally guarantee debt; however, there are no assurances that our officers,
or we, will be in a financial position to do so. We do not have any written
agreements now or in the past with our officers obligating them to guarantee
repayment of future debt or any of our other obligations. Our officers are not
otherwise under any legal obligation to provide us with capital. We hope to
leverage the property with a financial institution or private lender so that
funds are available for additional purchases, based on using the property as
collateral.
The
procedures for obtaining our financing are as follows:
|
1.
|
File
loan application.
|
|
2.
|
Credit
checks, property appraisal done.
|
|
3.
|
Loan
documents drafted.
|
|
4.
|
Down
payment made that is typically approximately 10 to 20% of the appraised
value.
|
|
5.
|
Institution
lends funds for the balance, less certain transaction fees that are
typically between approximately 2 to
3%.
|
|
6.
|
A
lien is then filed with the appropriate recorder’s
office.
|
There are
no assurances that our financing procedures will be adequate to secure the funds
needed to sustain our operations.
Distribution
We have
no distribution agreements in place with anyone. We plan to sell the properties
we acquire primarily through direct selling efforts involving established real
estate brokers and property managers and corporations that may have a need for
residential and/or commercial real estate. We plan to contract with real estate
brokers, sub-contractors and other agents to assist in us on a
project-by-project basis.
Competitive Business
Conditions
We face
significant competition both in acquiring properties, repositioning properties
and in attracting renters. Our market area is highly competitive, and we will
face direct competition from a significant number of real estate investors, many
with a local, state-wide or regional presence and, in some cases, a national
presence. Many of these investors are significantly larger and have greater
financial resources than we do. We have significantly less capital, assets,
revenues, employees and other resources than our local, regional and/or national
and international competition.
We will
compete based upon the following factors: We intend to blend
best-in-class, sell-side fundamental research with an established quantitative
construction process. The team’s systematic approach strives to add excess
return while targeting volatility and tracking error to help control
risk. The quantitative approach efficiently processes large volumes
of information, analyzes complex interactions and removes behavioral biases from
investment decisions. The research is provided by analysts that are selected by
the team based on their quality of research, demonstrated record of
success, breadth and consistency of coverage.
25
Intellectual
Property
At
present, we do not have any patents, trademarks, licenses, franchises,
concessions, and royalty agreements, labor contracts or other proprietary
interests.
Government and Environmental
Regulation
Governmental
zoning and land use regulations may exist or be promulgated that could have the
effect of restricting or curtailing certain uses of our real estate. Such
regulations could adversely affect the value of any of our properties affected
by such regulations. In recent years real estate values have also sometimes been
adversely affected by the presence of hazardous substances or toxic waste on,
under or in the environs of the property. A substance (or the amount of a
substance) may be considered safe at the time the property is purchased but
later classified by law as hazardous. Owners of properties have been liable for
substantial expenses to remedy chemical contamination of soil and groundwater at
their properties even if the contamination predated their ownership.
Although we intend to exercise reasonable efforts to assure that no
properties are acquired that give rise to such liabilities, chemical
contamination cannot always be detected through readily available means, and the
possibility of such liability cannot be excluded.
Under
various foreign, federal, state and local laws, ordinances and regulations, we
may be required to investigate and clean up certain hazardous or toxic
substances released on or in properties we own or operate, and also may be
required to pay other costs relating to hazardous or toxic substances. This
liability may be imposed without regard to whether we knew about the release of
these types of substances or were responsible for their release. The presence of
contamination or the failure to remediate property contaminations at any of our
properties may adversely affect our ability to sell or lease the properties or
to borrow using the properties as collateral. The costs or liabilities could
exceed the value of the affected real estate. we have not been
notified by any governmental authority, however, of any non-compliance,
liability or other claim in connection with any of our properties,
and we are not aware of any other environmental condition with
respect to any of our properties that management believes would have a material
adverse effect on our business, assets or results of operations taken as a
whole.
Although we
will attempt to determine the environmental condition of each property as part
of our due diligence, we cannot be certain that this investigation will reveal
all conditions that may impose an obligation on us to mitigate the environmental
condition. If we were subject to environmental liability, which could be imposed
based on our ownership of its property, such liability could adversely affect
the value of your investment.
Research And
Development
We have
spent no funds on research and development.
Employees
Presently,
we have no employees other than management. We have no employment agreements
with any of our management.
26
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The
following discussion of our financial condition and results of operations should
be read in conjunction with our financial statements and the related notes, and
other financial information included in this Form S-1.
Overview
Information
we provide in this Prospectus or statements made by our directors, officers or
employees may constitute "forward-looking" statements and may be subject to
numerous risks and uncertainties. Any statements made in this Prospectus,
including any statements incorporated herein by reference, that are not
statements of historical fact are forward-looking statements (including, but not
limited to, statements concerning the characteristics and growth of our market
and customers, our objectives and plans for future operations and products and
our liquidity and capital resources). Such forward-looking statements are based
on current expectations and are subject to uncertainties and other factors,
which may involve known and unknown risks that could cause actual results of
operations to differ materially from those projected or implied. Further,
certain forward-looking statements are based upon assumptions about future
events, which may not prove to be accurate. Risks and uncertainties inherent in
forward-looking statements include, but are not limited to:
|
·
|
increased
competitive pressures from existing competitors and new
entrants;
|
|
·
|
increases
in interest rates or our cost of borrowing or a default under any material
debt agreements;
|
|
·
|
deterioration
in general or regional economic
conditions;
|
|
·
|
adverse
state or federal legislation or regulation that increases the costs of
compliance, or adverse findings by a regulator with respect to existing
operations;
|
|
·
|
risks
inherent in the real estate market;
|
|
·
|
inability
to achieve future sales levels or other operating
results;
|
|
·
|
the
unavailability of funds for capital expenditures;
and
|
The
forward-looking information set forth herein is as of the date of the prospectus
and we undertake no duty to update this information. Should events occur
subsequent to the date of this prospectus that make it necessary to update the
forward-looking information contained in this Prospectus, the updated
forward-looking information will be filed with the SEC in a Quarterly Report on
Form 10-Q, as an earnings or other release included as an exhibit to a Form 8-K
or as an amendment to this registration statement, each of which will be
available at the SEC's website at http://www.sec.gov/. More information about
potential factors that could affect our business and financial results is
included in the section entitled "Risk Factors" beginning on page 8 of this
Prospectus.
27
Overview and
Outlook
Prime
Estates & Development, Inc. was incorporated in Nevada on July 21, 2009. We
intend to acquire and operate commercial real estate and real estate related
assets on an opportunistic basis. In particular, we plan to focus
specifically on acquiring commercial properties with significant possibilities
for short-term capital appreciation, such as those requiring development,
redevelopment or repositioning, those located in markets and submarkets with
high growth potential and those available from sellers who are distressed or
face time-sensitive deadlines.
In
addition, given economic circumstances as of the date of this prospectus, our
opportunistic investment strategy may also include investments in real
estate-related assets that present opportunities for higher current
income. Such investments may also have capital gain characteristics,
whether as a result of a discount purchase or related equity
participations.
Our
management and board have extensive experience investing in numerous types of
properties. We urge you to read the biographies of our management and
board in the section entitled “Directors, Executive Officers, Promoters And
Control Persons” on page 20.
We may
acquire a wide variety of commercial properties, including office, industrial,
retail, hospitality, recreation and leisure, single-tenant, multifamily and
other real properties. These properties may be existing, income-producing
properties, newly constructed properties or properties under development or
construction and may include multifamily properties purchased for conversion
into condominiums and single-tenant properties that may be converted for
multifamily use.
Further,
we may invest in real estate-related securities, including securities issued by
other real estate companies, either for investment or in change of control
transactions completed on a negotiated basis or otherwise. We expect
to make our investments in or in respect of real estate assets located in the
United States and other countries based on our view of existing market
conditions. Our investment strategy is designed to provide investors with a
diversified portfolio of real estate assets.
We plan
to own substantially all of our assets and conduct our operations through Prime
Estates & Development.
Investment
goals
|
·
|
Investment
portfolio diversification
|
|
·
|
Capital
appreciation
|
|
·
|
A
short-term holding period
|
Strategy
and target markets
We intend
to acquire properties that can be enhanced, repositioned, developed, or
redeveloped, and that are believed to have significant probability to increase
in value over the holding period.
We intend
to be opportunistic in our investments, which may include commercial properties
such as, but not limited to, office, industrial, retail, hospitality, recreation
and leisure, single-tenant, multifamily, and other real estate properties, which
can be operating, newly constructed or under development or
construction. We intend to acquire assets in markets and
submarkets with high-growth potential and those available from sellers who are
distressed or face time-sensitive deadlines.
28
Holding
period
We intend
to hold and operate properties through a lifecycle of three years to six years
primarily to capitalize on the potential for capital appreciation.
Plan of
Operation
We plan
to be completely operational by the fourth quarter of 2010 or first quarter of
2011. Our activities currently consist of locating and furnishing
office space, website creation, and establishing cooperation agreements with
real estate agents to establish the flow of real estate
opportunities. We expect these activities to cost approximately
$50,000 to $70,000 before we close our first real estate deal. We have not
completed any closings that would result in revuenue to date and there can be no
assurances that any future closings will result in revenue.
Liquidity and Capital
Resources
We have
no assets, no equity and negative working capital in the Company. We
are currently seeking financing for our operations and for capital to acquire
real estate assets. There is no guarantee that we will raise
this capital, nor is there any guarantee that the real estate acquisitions, if
any, will generate positive cash flows from operations.
DESCRIPTION
OF PROPERTY
Our
office is located at the following address:
|
·
|
Address:
City/State/Zip 4709 West Golf Rd., Suite 425, Skokie, Illinois,
60076.
|
|
·
|
Number
of Square Feet: Minimal
|
|
·
|
Name
of Landlord: Lifecycle Investments,
LLC
|
|
·
|
Term
of Lease: One year
|
|
·
|
Monthly
Rental: $0
|
The
property is adequate for our current needs. Lifecycle Investments,
LLC is an affiliate of our president.
Investment
Policies
We intend
to acquire and operate commercial real estate and real estate related in Greece,
Bulgaria, Romania and the United States. We intend to focus on acquiring
commercial properties with such as those requiring development, redevelopment or
repositioning, those located in markets and submarkets with what we believe to
be high growth potential and those available from sellers who are distressed or
face time-sensitive deadlines.
We may
acquire a wide variety of commercial properties, including office, industrial,
retail, hospitality, recreation and leisure, single-tenant, multifamily and
other real properties. These properties may be existing, income-producing
properties, newly constructed properties or properties under development or
construction and may include multifamily properties purchased for conversion
into condominiums and single-tenant properties that may be converted for
multifamily use.
29
Properties
can be purchased and operated with cash or financing. There are no
limitations on the number or amount of mortgages which may be placed on any one
piece of property.
It is our
policy to acquire real estate primarily for possible capital gain as well as for
income.
We have
established networking relationships in the areas in which we intend to acquire
properties from whom we get information on properties that will be coming on the
market.
We have
no present intention to invest in first or second mortgages, securities of
companies primarily engaged in real estate activities, or interests in real
estate investment trusts or real estate limited partnerships.
We
currently have no limitations on the percentage of assets which may be invested
in any one investment, or the type of securities or investments we may buy.
However, the board of directors in its discretion may set policies regarding the
percentage of assets which may be invested in any one investment, or type of
investment. The Company’s current policy is to evaluate each investment based on
its potential capital return to the Company.
We do not
plan to enter into the business of originating, servicing or warehousing
mortgages or deeds of trust.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
On the
date of our inception, we issued 20 million shares of our common stock to our
three officers and directors which were recorded at no value (offsetting
increases and decreases in Common Stock and Additional Paid in
Capital).
We
believe that all related party transactions were on terms at least as favorable
as we would have secured in arm’s-length transactions with third
parties. Except as set forth above, we have not entered into any
material transactions with any director, executive officer, and promoter,
beneficial owner of five percent or more of our common stock, or family members
of such persons.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market
Information
There is
no established public trading market for our securities and a regular trading
market may not develop, or if developed, may not be sustained. A
shareholder in all likelihood, therefore, will not be able to resell his or her
securities should he or she desire to do so when eligible for public
resales. Furthermore, it is unlikely that a lending institution will
accept our securities as pledged collateral for loans unless a regular trading
market develops. We have no plans, proposals, arrangements, or
understandings with any person with regard to the development of a trading
market in any of our securities.
Options, Warrants,
Convertible Securities
There are
no options, warrants or convertible securities outstanding.
30
Penny Stock
Considerations
Our
shares will be "penny stocks" as that term is generally defined in the
Securities Exchange Act of 1934 to mean equity securities with a price of less
than $5.00. Our shares thus will be subject to rules that impose
sales practice and disclosure requirements on broker-dealers who engage in
certain transactions involving a penny stock.
Under the
penny stock regulations, a broker-dealer selling a penny stock to anyone other
than an established customer must make a special suitability determination
regarding the purchaser and must receive the purchaser's written consent to the
transaction prior to the sale, unless the broker-dealer is otherwise
exempt. In addition, under the penny stock regulations the broker-dealer
is required to:
|
·
|
Deliver,
prior to any transaction involving a penny stock, a disclosure schedule
prepared by the Securities and Exchange Commissions relating to the penny
stock market, unless the broker-dealer or the transaction is otherwise
exempt;
|
|
·
|
Disclose
commissions payable to the broker-dealer and our registered
representatives and current bid and offer quotations for the
securities;
|
|
·
|
Send
monthly statements disclosing recent price information pertaining to the
penny stock held in a customer's account, the account's value and
information regarding the limited market in penny stocks;
and
|
|
·
|
Make
a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written agreement
to the transaction, prior to conducting any penny stock transaction in the
customer's account.
|
Because
of these regulations, broker-dealers may encounter difficulties in their attempt
to sell shares of our common stock, which may affect the ability of selling
shareholders or other holders to sell their shares in the secondary market and
have the effect of reducing the level of trading activity in the secondary
market. These additional sales practice and disclosure requirements
could impede the sale of our securities, if our securities become publicly
traded. In addition, the liquidity for our securities may be
decreased, with a corresponding decrease in the price of our
securities. Our shares in all probability will be subject to such
penny stock rules and our shareholders will, in all likelihood, find it
difficult to sell their securities.
OTC Bulletin Board
Qualification for Quotation
To have
our shares of common stock on the OTC Bulletin Board, a market maker must file
an application on our behalf in order to make a market for our common
stock. We have engaged in preliminary discussions with a FINRA Market
Maker to file our application on Form 211 with FINRA, but as of the date of this
prospectus, no filing has been made. Based upon our counsel’s prior
experience, we anticipate that after this registration statement is declared
effective, it will take approximately 2 – 8 weeks for FINRA to issue a trading
symbol.
Sales of our common stock
under Rule 144.
There are
493,960 shares of our common stock held by non- affiliates and 20,000,000 shares
held by affiliates Rule 144 of the Securities Act of 1933 defines as restricted
securities. 392,000 shares of our common stock held by non-affiliates are
currently eligible for resale or are being registered in this offering, however
affiliates will still be subject to the resale restrictions of Rule
144. In general, persons holding restricted securities, including
affiliates, must hold their shares for a period of at least six months, may not
sell more than one percent of the total issued and outstanding shares in any
90-day period, and must resell the shares in an unsolicited brokerage
transaction at the market price. The availability for sale of
substantial amounts of common stock under Rule 144 could reduce prevailing
market prices for our securities.
31
Holders
As of the
date of this registration statement, we had 49 shareholders of record
of our common stock.
Dividends
We have
not declared any cash dividends on our common stock since our inception and do
not anticipate paying such dividends in the foreseeable future. We
plan to retain any future earnings for use in our business. Any
decisions as to future payments of dividends will depend on our earnings and
financial position and such other facts, as the Board of Directors deems
relevant.
Reports to
Shareholders
As a
result of this offering as required under Section 15(d) of the Securities
Exchange Act of 1934, we will file periodic reports with the Securities and
Exchange Commission through July 31, 2010, including a Form 10-K for the year
ended July 31, 2010, assuming this registration statement is declared effective
before that date. At or prior to July 31, 2009, we intend voluntarily
to file a registration statement on Form 8-A which will subject us to all of the
reporting requirements of the 1934 Act. This will require us to file quarterly
and annual reports with the SEC and will also subject us to the proxy rules of
the SEC. In addition, our officers, directors and 10% stockholders will be
required to submit reports to the SEC on their stock ownership and stock trading
activity. We are not required under Section 12(g) or otherwise to
become a mandatory 1934 Act filer unless we have more than 500 shareholders and
total assets of more than $10 million on July 31, 2009. If we do not
file a registration statement on Form 8-A at or prior to July 31, 2009, we will
continue as a voluntary reporting company and will not be subject to the proxy
statement or other information requirements of the 1934 Act, our securities can
no longer be quoted on the OTC Bulletin Board, and our officers, directors and
10% stockholders will not be required to submit reports to the SEC on their
stock ownership and stock trading activity. We currently intend to
voluntarily send an annual report to shareholders containing audited financial
statements.
Where You Can Find
Additional Information
We have
filed with the Securities and Exchange Commission a registration statement on
Form S-1. For further information about us and the shares of common
stock to be sold in the offering, please refer to the registration statement and
the exhibits and schedules thereto. The registration statement and exhibits may
be inspected, without charge, and copies may be obtained at prescribed rates, at
the SEC's Public Reference Room at 100 F St., N.E., Washington, D.C.
20549. The public may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The
registration statement and other information filed with the SEC are also
available at the web site maintained by the SEC at
http://www.sec.gov.
32
EXECUTIVE
COMPENSATION
Employment
Arrangements
We have
no employment agreements or other compensation arrangements, written or oral,
with any executive officer.
Board of
Directors
We have
no compensation arrangements (such as fees for retainer, committee service,
service as chairman of the board or a committee, and meeting attendance) with
directors.
33
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
34
FINANCIAL
STATEMENTS
PRIME
ESTATES AND DEVELOPMENTS, INC.
FINANCIAL
STATEMENTS
FROM
INCEPTION (JULY 21, 2009) TO JULY 31, 2009
35
PRIME
ESTATES AND DEVELOPMENTS, INC.
INDEX
TO FINANCIAL STATEMENTS
Report
of Independent Registered Public Accounting Firm
|
F1
|
Balance
Sheet as of July 31, 2009
|
F2
|
Statement
of Operations for the Period from July 21, 2009 (Date of Inception) to
July 31, 2009
|
F3
|
Statement
of Cash Flows for the Period from July 21, 2009 (Date of Inception) to
July 31, 2009
|
F4
|
Statement
of Shareholders’ Deficit from July 21, 2009 (Date of Inception) to July
31, 2009
|
F5
|
Notes
to Financial Statements
|
F6
|
36
Report
Of Independent Registered Public Accounting Firm
To the
Board of Directors
Prime
Estates and Development, Inc.
(a
development stage enterprise)
We have
audited the accompanying balance sheet of Prime Estates and Developments, Inc.
(a development stage enterprise) as of July 31, 2009 and the related statements
of operations, changes in shareholders' deficit, and cash flows for the period
from July 21, 2009 (inception) through July 31, 2009. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We
conducted our audits in accordance with the 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. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 Prime Estates and Developments,
Inc. as of July 31, 2009, and the results of its operations, changes in
shareholders' deficit and cash flows for the period from July 21, 2009
(inception) through July 31, 2009 in conformity with accounting principles
generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has suffered losses from operations and has a net
capital deficiency, which raises substantial doubt about its ability to continue
as a going concern. Management's plans regarding those matters also are
described in Note 2. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/
M&K CPAS, PLLC
www.mkacpas.com
August 6,
2009
F1
PRIME
ESTATES AND DEVELOPMENTS, INC.
(A
DEVELOPMENT STAGE ENTERPRISE)
Balance
Sheet
July 31, 2009
|
||||
TOTAL
ASSETS
|
$ | - | ||
Accrued
expenses
|
4,600 | |||
TOTAL
LIABILITIES
|
$ | 4,600 | ||
SHAREHOLDERS'
EQUITY
|
||||
Preferred
stock, par value $0.001, authorized 100 million shares, none issued and
outstanding at July 31, 2009.
|
$ | - | ||
Common
stock, par value $0.001, authorized 200 million, 20 million issued and
outstanding at July 31, 2009
|
20,000 | |||
Additional
paid-in capital
|
(20,000 | ) | ||
Deficit
accumulated during the development stage
|
(4,600 | ) | ||
TOTAL
SHAREHOLDERS' DEFICIT
|
(4,600 | ) | ||
TOTAL
LIABILITIES AND SHAREHOLDERS' DEFICIT
|
$ | - |
See the
accompanying notes to the financial statements.
F2
PRIME
ESTATES AND DEVELOPMENTS, INC.
(A
DEVELOPMENT STAGE ENTERPRISE)
Statement
of Operations
FROM
INCEPTION (JULY 21, 2009) TO JULY 31, 2009
From
Inception
(7/21/09) to
7/31/09
|
||||
Revenues
|
$ | - | ||
General
and administrative expenses
|
4,600 | |||
Net
operating loss
|
(4,600 | ) | ||
NET
LOSS
|
$ | (4,600 | ) | |
Weighted
average shares outstanding
|
20,000,000 | |||
Basic
and fully diluted loss per share
|
$ | - |
See the
accompanying notes to the financial statements.
F3
PRIME
ESTATES AND DEVELOPMENTS, INC.
(A
DEVELOPMENT STAGE ENTERPRISE)
Statement
of Cash Flows
FROM
INCEPTION (JULY 21, 2009) TO JULY 31, 2009
From Inception
(7/21/09) to 7/31/09
|
||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||
Net
Loss
|
$ | (4,600 | ) | |
Adjustments
to reconcile net income to net cash provided or used in
operations
|
||||
Changes
in operating assets and liabilities:
|
||||
Accrued
expenses
|
4,600 | |||
Net
cash provided/(used) by operating activities
|
- | |||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||
Net
cash provided/(used) by investing activities
|
- | |||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||
Net
cash provided/(used) by financing activities
|
- | |||
NET
INCREASE/(DECREASE) IN CASH
|
- | |||
Cash
at beginning of period
|
- | |||
Cash
at end of period
|
$ | - | ||
SUPPLEMENTAL
DISCLOSURES
|
||||
Cash
paid for interest
|
$ | - | ||
Cash
paid for income taxes
|
$ | - |
See the
accompanying notes to the financial statements.
F4
PRIME
ESTATES AND DEVELOPMENTS, INC.
(A
DEVELOPMENT STAGE ENTERPRISE)
Statement
of Shareholders’ Deficit
FROM
INCEPTION (JULY 21, 2009) TO JULY 31, 2009
Common
Stock, par value
$0.001
|
Additional
|
Deficit
Accumulated
During
the Development
|
Total
Shareholders'
|
|||||||||||||||||
Shares
|
Amount
|
Paid
In Capital
|
Stage
|
Deficit
|
||||||||||||||||
Balances
at inception
|
- | $ |
-
|
$ |
-
|
$ |
-
|
$ | - | |||||||||||
Founders'
shares
|
20,000,000 | 20,000 | (20,000 | ) | - | - | ||||||||||||||
Net
loss
|
(4,600 | ) | (4,600 | ) | ||||||||||||||||
Balances,
07/31/09
|
20,000,000 | $ | 20,000 | $ | (20,000 | ) | $ | - | $ | (4,600 | ) |
See the
accompanying notes to the financial statements.
F5
PRIME
ESTATES AND DEVELOPMENTS, INC.
(A
DEVELOPMENT STAGE ENTERPRISE)
Notes
to Financial Statements
NOTE 1
–NATURE OF BUSINESS & ACCOUTNING POLICIES
Prime
Estates and Developments, Inc. (“Prime Estates”, “The Company”, “we”, or “us”)
was incorporated in the State of Nevada on July 21, 2009 for the purpose of
acquiring and operating commercial real estate and real estate related
assets. On the date of its inception, the Company issued 20 million
shares of its common stock to three founders which were recorded at no value
(offsetting increases and decreases in Common Stock and Additional Paid in
Capital).
Other
than the founding of the Company, there has been no financial activity except
the accrual of costs associated with this report.
Summary
of Significant Accounting Policies
Basis of Financial Statement
Presentation - The accompanying financial statements have been prepared
in accordance with principles generally accepted in the United States of
America.
Use of Estimates - The
preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Cash and Cash
Equivalents
For
purposes of the statement of cash flows, the Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents. As of July 31, 2009, there were no cash
equivalents.
Development
Stage Enterprise
The
Company complies with Statement of Financial Accounting Standard (“SFAS”) No. 7
and the Securities and Exchange Commission Exchange Act 7 for its
characterization of the Company as development stage.
Revenue
Recognition
We plan
to recognize revenues from real estate sales under the full accrual method which
requires that revenues be recognized when the sale is consummated; when the
initial and continuing investments by the buyer in the property are sufficient;
All the risks and rewards of ownership reside with buyer; There is no continuing
duty or involvement by the seller post-sale (after closing); and, There is no
future subordination of any buyer receivable (seller financing cases). The
Company may also earn rental income and management fees. The fees are
recognized as they are earned.
F6
Impairment of Long-Lived
Assets
Long-lived
assets are reviewed for impairment in accordance with SFAS No. 144, "Accounting
for the Impairment or Disposal of Long- lived Assets". Under SFAS No. 144,
long-lived assets are tested for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable. An
impairment charge is recognized or the amount, if any, which the carrying value
of the asset exceeds the fair value.
Fair
Value of Financial Instruments
Financial
instruments, including cash, receivables, accounts payable, and notes payable
are carried at amounts which reasonably approximate their fair value due to the
short-term nature of these amounts or due to variable rates of interest which
are consistent with market rates. No adjustments have been made in
the current period.
Income Taxes
The
Company accounts for income taxes under the Financial Accounting Standards Board
of Financial Accounting Standard No. 109, "Accounting for Income Taxes"
("Statement 109"). Under Statement 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax basis. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment
date. There was no current or deferred income tax expense or benefits for the
periods ending July 31, 2009.
Basic and Diluted Net Loss Per Common
Share
Basic and
diluted net loss per share calculations are calculated on the basis of the
weighted average number of common shares outstanding during the year. The per
share amounts include the dilutive effect of common stock equivalents in years
with net income. Basic and diluted loss per share is the same due to the lack of
potential common stock equivalents.
Stock Based
Compensation
The
Company accounts for stock-based employee compensation arrangements using the
fair value method in accordance with the provisions of Statement of Financial
Accounting Standards no.123(R) or SFAS No. 123(R), Share-Based Payments, and
Staff Accounting Bulletin No. 107, or SAB 107, Share-Based
Payments. The company accounts for the stock options issued to
non-employees in accordance with the provisions of Statement of Financial
Accounting Standards No. 123, or SFAS No. 123, Accounting for Stock-Based
Compensation, and Emerging Issues Task Force No. 96-18, Accounting for Equity
Instruments with Variable Terms That Are Issued for Consideration other Than
Employee Services under FASB Statement No. 123.
The
Company did not grant any stock options or warrants during the period ended July
31, 2009.
F7
Recent
Accounting Pronouncements
In
September 2006, the FASB issued Statement of Financial Accounting Standards
No. 157 (SFAS 157), “Fair Value Measurements,” which defines fair value,
establishes guidelines for measuring fair value and expands disclosures
regarding fair value measurements. SFAS 157 does not require any new fair value
measurements but rather eliminates inconsistencies in guidance found in various
prior accounting pronouncements. SFAS 157 is effective for fiscal years
beginning after November 15, 2007. In February 2008, the FASB issued
FASB Staff Position (FSP) 157-2, “Effective Date of FASB Statement
No. 157,” which defers the effective date of Statement 157 for nonfinancial
assets and nonfinancial liabilities, except for items that are recognized or
disclosed at fair value in an entity’s financial statements on a recurring basis
(at least annually), to fiscal years beginning after November 15, 2008, and
interim periods within those fiscal years. Earlier adoption is permitted,
provided the company has not yet issued financial statements, including for
interim periods, for that fiscal year.
The
company adopted those provisions of SFAS 157 that were unaffected by the delay
in 2008. Such adoption has not had a material effect on our consolidated
statement of financial position, results of operations or cash
flows.
SFAS
No. 157 clarifies that fair value is an exit price, representing the amount
that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants. As such, fair value is a
market-based measurement that should be determined based on assumptions that
market participants would use in pricing an asset or liability. As a basis for
considering such assumptions, SFAS No. 157 established a three-tier fair
value hierarchy, which prioritizes the inputs used in measuring fair value as
follows.
|
·
|
Level
1. Observable inputs such as quoted market prices in active
markets.
|
|
·
|
Level
2. Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly:,
and
|
|
·
|
Level
3. Unobservable inputs in which there is little or no market data, which
require the reporting entity to develop its own
assumptions.
|
The
Company had no assets or liabilities that were measured and recognized at fair
value on a non-recurring basis as of July 31, 2009, and as such, had no assets
or liabilities that fell into the tiers described above.
In
February 2007, the FASB issued Statement No. 159, “The Fair Value
Option for Financial Assets and Financial Liabilities, including an Amendment of
SFAS No. 115”. SFAS 159 permits entities an option to choose to measure
many financial instruments and certain other items at fair value that are not
currently required to be measured at fair value. The objective of this Statement
is to reduce both complexity in accounting for financial instruments and the
volatility in earnings caused by measuring related assets and liabilities using
different measurement techniques. The fair value measurement provisions are
elective and can be applied to individual financial instruments. A business
entity shall report unrealized gains and losses on items for which the fair
value options have been elected in earnings at each subsequent reporting date.
For the period ended July 31, 2009 there were no applicable items on which the
fair value option was elected.
In
March 2008, the FASB issued SFAS No. 161, “Disclosures about
Derivative Instruments and Hedging Activities—an amendment of FASB Statement
No. 133”. SFAS 161 changes the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows. The Statement is effective for financial
statements issued for fiscal years and interim periods beginning after
November 15, 2008. The adoption of SFAS 161 has not had a material impact
on the Company’s results from operations or financial position.
F8
In
May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally
Accepted Accounting Principles” (SFAS 162). This statement identifies the
sources of accounting principles and the framework for selecting the principles
used in the preparation of financial statements of nongovernmental entities that
are presented in accordance with GAAP. With the issuance of this statement, the
FASB concluded that the GAAP hierarchy should be directed toward the entity and
not its auditor, and reside in the accounting literature established by the FASB
as opposed to the American Institute of Certified Public Accountants (AICPA)
Statement on Auditing Standards No. 69, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.” The effective date of
this statement is November 15, 2008. The adoption of SFAS 162 has not had a
material impact on the Company’s results from operations or financial
position.
In
May 2008, the FASB issued SFAS No. 163, “Accounting for Financial
Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60.”
Diversity exists in practice in accounting for financial guarantee insurance
contracts by insurance enterprises under FASB Statement No. 60, Accounting
and Reporting by Insurance Enterprises. This results in inconsistencies in the
recognition and measurement of claim liabilities. This Statement requires that
an insurance enterprise recognize a claim liability prior to an event of default
(insured event) when there is evidence that credit deterioration has occurred in
an insured financial obligation. This Statement requires expanded disclosures
about financial guarantee insurance contracts. The accounting and disclosure
requirements of effective for financial statements issued for fiscal years and
interim periods beginning after December 15, 2008, the Statement will
improve the quality of information provided to users of financial
statements.. The adoption of
FASB 163 has not had a material impact on the Company’s results from operations
or financial position.
In
June 2008, the FASB issued FASB Staff Position (FSP) Emerging Issues Task
Force (EITF) No. 03-6-1, “Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities.” Under the FSP,
unvested share-based payment awards that contain rights to receive
non-forfeitable dividends (whether paid or unpaid) are participating securities,
and should be included in the two-class method of computing EPS. The FSP is
effective for fiscal years beginning after December 15, 2008, and interim
periods within those years, and has not had a material impact on the Company’s
results from operations or financial position.
In
December 2008, the Financial Accounting Standards Board (“FASB”) issued
FASB Staff Position (“FSP”) FASB Interpretation (“FIN”) 48-3, Effective Date of FASB
Interpretation No. 48 for Certain Nonpublic
Enterprises. FSP FIN 48-3 permits an entity within its scope
to defer the effective date of FIN 48, Accounting for Uncertainty in
Income Taxes , to its annual financial statements for fiscal years
beginning after December 15, 2008. The Company has elected to defer the
application of FIN 48 for the year ended December 31, 2008. The Company
evaluates its uncertain tax positions using the provisions of SFAS
No. 5, Accounting for
Contingencies . Accordingly, a loss contingency is recognized when it is
probable that a liability has been incurred as of the date of the financial
statements and the amount of the loss can be reasonably estimated. The amount
recognized is subject to estimate and management judgment with respect to the
likely outcome of each uncertain tax position. The amount that is ultimately
sustained for an individual uncertain tax position or for all uncertain tax
positions in the aggregate could differ from the amount recognized. The adoption
of this pronoucment has not had a material impact on the Company’s
results from operations or financial position.
F9
NOTE 2 –
GOING CONCERN
These
financial statements have been prepared on a going concern basis, which implies
Prime Estates will continue to meet its obligations and continue its operations
for the next fiscal year. Realization value may be substantially
different from carrying values as shown and these financial statements do not
include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should
Prime Estates be unable to continue as a going concern.
The
Company had incurred losses and has a working capital deficit as of July 31,
2009, these factors among others raise substantial doubt about the Company’s
ability to continue as a going concern.
The
Company intends to acquire and operate commercial real estate but will require
capital to do so. There is no guarantee that we will be able to raise
the capital necessary to make our acquisitions or if, upon acquiring properties,
we will be able to generate positive cash flows from
operations. These factors among the others metioned above raise
substantial doubt regarding Price Estates’ ability to continue as a going
concern.
NOTE
3 – CAPITAL STRUCTURE
Common
Stock
The
Company is authorized to issue 200 million common shares and has issued 20
million as of July 31, 2009 to the founding members.
Preferred
Stock
The
Company is authorized to issue 100 million shares of preferred stock which has
preferential liquidation rights over common stock and is
non-voting. As of July 31, 2009, no shares have been
issued.
Potentially
Dilutive Securities
No
options, warrants or other potentially dilutive securities have been issued as
of July 31, 2009.
NOTE
4 – INCOME TAXES
The
Company has tax losses which may be applied against future taxable income. The
potential tax benefits arising from these loss carryforwards expire beginning in
2029 and are offset by a valuation allowance due to the uncertainty of
profitable operations in the future. The net operating loss carryforward was
$4,600 at July 31, 2009. The significant components of the deferred tax asset as
of July 31, 2009 are as follows:
Net
operating loss carryforwards
|
$ | 1,610 | ||
Valuation
allowance
|
(1,610 | ) | ||
Net
deferred tax asset
|
$ | - |
F10
NOTE 5-
SUBESEQUENT EVENTS
Between
July 2009 and October 2009, we sold 392,000 shares to 4 U.S. and 39 non-U.S.
investors at a price of $.10 per share for aggregate consideration of
$39,200. During that period, we issued 101,960 shares to our attorney
which we valued at $.10 per share based upon contemporaneous cash sales for
aggregate consideration of $10,196.
F11
PROSPECTUS
PRIME
ESTATES & DEVELOPMENTS, INC.
Dated
_____________, 2009
Selling
shareholders are offering up to 392,000 shares of common stock. The
selling shareholders will offer their shares at $.10 per share until our shares
are quoted on the OTC Bulletin Board and thereafter at prevailing
market prices or privately negotiated prices.
Our
common stock is not now listed on any national securities exchange, the NASDAQ
stock market or the OTC Bulletin Board.
Dealer Prospectus Delivery
Obligation
Until
_________ (90 days from the date of this prospectus) all dealers that effect
transactions in these securities, whether or not participating in this offering,
may be required to deliver a prospectus. This is in addition to the dealers'
obligation to deliver a prospectus when acting as underwriters and with respect
to their unsold allotments or subscriptions.
37
Part
II-INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION
OF OFFICERS AND DIRECTORS
Our
Articles of Incorporation and By-laws, subject to the provisions of Nevada law,
contain provisions that allow the corporation to indemnify any person under
certain circumstances.
Nevada
law provides the following:
17-16-851. Authority
to indemnify.
(a)
Except as otherwise provided in this section, a corporation may indemnify an
individual who is a party to a proceeding because he is a director against
liability incurred in the proceeding if:
(i)
He conducted himself in good faith; and
(ii)
He reasonably believed that his conduct was in or at least Not opposed to the
corporation's best interests; and
(iii)
In the case of any criminal proceeding, he had no reasonable cause to believe
his conduct was unlawful; or
(iv)
He engaged in conduct for which broader indemnification has been made
permissible or obligatory under a provision of the articles of incorporation, as
authorized by W.S. 17-16-202(b)(v).
(b)
A director's conduct with respect to an employee benefit plan for a purpose he
reasonably believed to be in the interests of the participants in and
beneficiaries of the plan is conduct that satisfies the requirement of paragraph
(a)(ii) of this section.
(c)
The termination of a proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent is not, of itself,
determinative that the director did not meet the standard of conduct described
in this section.
(d) Unless
ordered by a court under W.S. 17-16-854(a)(iii) a corporation may not indemnify
a director under this section:
(i)
In connection with a proceeding by or in the right of the corporation, except
for reasonable expenses incurred in connection with the proceeding if it is
determined that the director has met the standard of conduct under subsection
(a) of this section; or
(ii)
In connection with any proceeding with respect to conduct for which he was
adjudged liable on the basis that he received a financial benefit to which he
was not entitled.
(e)
Repealed By Laws 1997, ch. 190,ss.3.
17-16-852. Mandatory
indemnification.
38
A
corporation shall indemnify a director who was wholly successful, on the merits
or otherwise, in the defense of any proceeding to which he was a party because
he was a director of the corporation against reasonable expenses incurred by him
in connection with the proceeding.
17-16-853. Advance
for expenses.
(a)
A corporation may, before final disposition of a proceeding, advance funds to
pay for or reimburse the reasonable expenses incurred by a director who is a
party to a proceeding because he is a director if he delivers to the
corporation:
(i)
A written affirmation of his good faith belief that he has met the standard of
conduct described in W.S. 17-16-851 or that the proceeding involves conduct for
which liability has been eliminated under a provision of the articles of
incorporation as authorized by W.S. 17-16-202(b)(iv); and
(ii)
His written undertaking to repay any funds if he is not entitled to
mandatory indemnification under W.S. 17-16-852 and it is ultimately determined
that he has not met the standard of conduct described in W.S.
17-16-851.
(iii)
Repealed By Laws 1997, ch. 190,ss.3.
(b)
The undertaking required by paragraph (a)(ii) of this section shall be an
unlimited general obligation of the director but need not be secured and may be
accepted without reference to the financial ability of the director to make
repayment.
(c)
Authorizations under this section shall be made:
(i)
By the board of directors:
(A)
If there are two (2) or more disinterested directors, by a majority vote of all
the disinterested directors (a majority of whom shall for such purpose
constitute a quorum) or by a majority of the members of a committee of two (2)
or more disinterested directors appointed by such a vote; or
(B) If
there are fewer than two (2) disinterested directors, by the vote necessary for
action by the board in accordance with W.S. 17-16-824(c), in which authorization
directors who do not qualify as disinterested directors
may
participate; or
(ii)
By the shareholders, but shares owned by or voted under the control of a
director who at the time does not qualify as a disinterested director may not be
voted on the authorization.
17-16-854. Court-ordered
indemnification and advance for expenses.
(a)
A director who is a party to a proceeding because he is a director may apply for
indemnification or an advance for expenses to the court conducting the
proceeding or to another court of competent jurisdiction. After
receipt of an application and after giving any notice it considers necessary,
the court shall:
(i)
Order indemnification if the court determines that the director is entitled to
mandatory indemnification under W.S. 17-16-852;
39
(ii)
Order indemnification or advance for expenses if the court determines that the
director is entitled to indemnification or advance for expenses pursuant to a
provision authorized by W.S. 17-16-858(a); or
(iii)
Order indemnification or advance for expenses if the court determines, in view
of all the relevant circumstances, that it is fair and reasonable:
(A)
To indemnify the director; or
(B)
To advance expenses to the director, even if he has not met the standard of
conduct set forth in W.S. 17-16-851(a), failed to comply with W.S. 17-16-853 or
was adjudged liable in a proceeding referred to in
W.S. 17-16-851(d)(i) or (ii), but if he was adjudged so liable his
indemnification shall be limited to reasonable expenses incurred in connection
with the proceeding.
(b)
If the court determines that the director is entitled to indemnification under
paragraph (a)(i) of this section or to indemnification or advance for expenses
under paragraph (a)(ii) of this section, it shall also order the corporation to
pay the director's reasonable expenses incurred in connection with obtaining
court-ordered indemnification or advance for expenses. If the court determines
that the director is entitled to indemnification or advance for expenses under
paragraph (a)(iii) of this section, it may also order the corporation to pay the
director's reasonable expenses to obtain court-ordered indemnification or
advance for expenses.
17-16-855. Determination
and authorization of indemnification.
(a)
A corporation may not indemnify a director under W.S. 17-16-851 unless
authorized for a specific proceeding after a determination has been made that
indemnification of the director is permissible because he has met the standard
of conduct set forth in W.S. 17-16-851.
(b)
The determination shall be made:
(i)
If there are two (2) or more disinterested directors, by the board of directors
by majority vote of all the disinterested directors (a majority of whom shall
for such purpose constitute a quorum), or by a majority of the members of a
committee of two (2) or more disinterested directors appointed by such a
vote;
(ii)
Repealed By Laws 1997, ch. 190,ss.3.
(iii)
By special legal counsel:
(A) Selected
in the manner prescribed in paragraph (i) of this subsection; or
(B)
If there are fewer than two (2) disinterested directors, selected by the board
of directors (in which selection directors who do not qualify as disinterested
directors may participate); or
(iv)
By the shareholders, but shares owned by or voted under the control of a
director who at the time does not qualify as a disinterested director may not be
voted on the determination.
40
(c) Authorization
of indemnification shall be made in the same manner as the determination that
indemnification is permissible, except that if there are fewer than
two (2) disinterested directors, authorization of indemnification shall be made
by those entitled under paragraph (b)(iii) of this section to select special
legal counsel.
17-16-856. Officers.
(a) A
corporation may indemnify and advance expenses under this subarticle to an
officer of the corporation who is a party to a proceeding because he is an
officer of the corporation:
(i)
To the same extent as a director; and
(ii)
If he is an officer but not a director, to such further extent as may be
provided by the articles of incorporation, the bylaws, a resolution of the board
of directors or contract, except for:
(A)
Liability in connection with a proceeding by or in the right of the corporation
other than for reasonable expenses incurred in connection with the proceeding;
or
(B)
Liability arising out of conduct that constitutes:
(I)
Receipt by him of a financial benefit to which he is not entitled;
(II)
An intentional infliction of harm on the corporation or the shareholders;
or
(III)
An intentional violation of criminal law.
(iii)
A corporation may also indemnify and advance expenses to a Current or former
officer, employee or agent who is not a director to the Extent, consistent with
public policy that may be provided by its articles of incorporation, bylaws,
general or specific action of its board of directors or contract.
(b)
The provisions of paragraph (a)(ii) of this section shall apply to an officer
who is also a director if the basis on which he is made a party to the
proceeding is an act or omission solely as an officer.
(c)
An officer of a corporation who is not a director is entitled to mandatory
indemnification under W.S. 17-16-852, and may apply to a court under W.S.
17-16-854 for indemnification or an advance for expenses, in each case to the
same extent to which a director may be entitled to indemnification or advance
for expenses under those provisions.
With
regard to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933, as amended,
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or
paid by a director, officer or controlling person of the Corporation 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, we will, unless in the opinion of our counsel the matter has been
settled by a controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by us is against
public policy as expressed in the Securities Act of 1933, as amended, and will
be governed by the final adjudication of such case.
41
OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION
The
following table is an itemization of all expenses, without consideration to
future contingencies, incurred or expected to be incurred by us in connection
with the issuance and distribution of the securities being offered by this
prospectus. Items marked with an asterisk (*) represent estimated expenses. We
have agreed to pay all the costs and expenses of this offering. Selling security
holders will pay no offering expenses.
ITEM
|
AMOUNT
|
|||
SEC
Registration Fee*
|
$
|
4
|
||
Legal
Fees and Expenses
|
36,000
|
|||
Accounting
Fees and Expenses*
|
24,000
|
|||
Total*
|
$
|
60,004
|
*
Estimated Figure
RECENT
SALES OF UNREGISTERED SECURITIES
On the
date of our inception, we issued 20 million shares of our common stock to our
three officers and directors which were recorded at no value (offsetting
increases and decreases in Common Stock and Additional Paid in
Capital).
Between
July 2009 and October 2009, we sold 392,000 shares to 4 U.S. and 39 non-U.S.
investors at a price of $.10 per share for aggregate consideration of
$39,200. During that period, we issued 101,960 shares to our attorney
which we valued at $.10 per share based upon contemporaneous cash sales for
aggregate consideration of $10,196.
We
believed that Section 4(2) of the Securities Act of 1933 was available
because:
¨
|
None
of these issuances involved underwriters, underwriting discounts or
commissions.
|
|
¨
|
Restrictive
legends were and will be placed on all certificates issued as described
above.
|
¨
|
The
distribution did not involve general solicitation or
advertising.
|
|
¨
|
The
distributions were made only to investors who were sophisticated enough to
evaluate the risks of the
investment.
|
We relied
upon Regulation S of the Securities Act of 1933, as amended for the above
issuances to non US citizens or residents.
We
believed that Regulation S was available because:
¨
|
None
of these issuances involved underwriters, underwriting discounts or
commissions;
|
|
¨
|
We
placed Regulation S required restrictive legends on all certificates
issued;
|
¨
|
No
offers or sales of stock under the Regulation S offering were made to
persons in the United States;
|
|
¨
|
No
direct selling efforts of the Regulation S offering were made in the
United States.
|
42
In
connection with the above transactions, although some of the investors may have
also been accredited, we provided the following to all investors:
¨
|
Access
to all our books and records.
|
|
¨
|
Access
to all material contracts and documents relating to our
operations.
|
¨
|
The
opportunity to obtain any additional information, to the extent we
possessed such information, necessary to verify the accuracy of the
information to which the investors were given
access.
|
Prospective
investors were invited to review at our offices at any reasonable hour, after
reasonable advance notice, any materials available to us concerning our
business. Prospective Investors were also invited to visit our
offices.
EXHIBITS
Item
3
3.1
|
Articles
of Incorporation of Prime Estates & Developments,
Inc.
|
3.2
|
Bylaws
of Prime Estates & Developments,
Inc.
|
Item
4
1.
|
Form
of common stock Certificate of the Prime Estates & Developments, Inc.
(1)
|
Item
5
1.
|
Legal
Opinion of Williams Law Group,
P.A. *
|
Item
23
1.
|
Consent
of by M&K CPAS, PLLC
|
|
2.
|
Consent
of Williams Law Group, P.A. (included in Exhibit
5.1)
|
All other
Exhibits called for by Rule 601 of Regulation SK are not applicable to this
filing.
(1)
Information pertaining to our common stock is contained in our Articles of
Incorporation and Bylaws.
UNDERTAKINGS
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:
|
43
i.
|
To
include any prospectus required by section
10(a)(3) of the Securities Act of
1933;
|
ii.
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth 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 volume and price
represent no more than 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement.
|
iii.
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement;
|
2.
|
That,
for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
|
3.
|
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
|
4.
|
That,
for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such
purchaser:
|
i.
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
|
ii.
|
Any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
iii.
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
|
iv.
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
|
44
5. That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser: Each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to our directors, officers and controlling persons, we have been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of the
corporation 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, we will, unless in the opinion of our counsel the
matter has been settled by a controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by us is
against public policy as expressed in the Securities Act of 1933, as amended,
and will be governed by the final adjudication of such case.
SIGNATURES
Pursuant
to the requirements of the Securities Act, the Registrant has duly caused this
Registration Statement to be signed on our behalf by the undersigned, thereunto
duly authorized, in Skokie, Illinois on October 19, 2009.
Prime Estates &
Developments, Inc.
Name
|
Date
|
Signature
|
||||
By:
|
Spiros
Sinnis,
President
and CEO
|
October
19, 2009
|
/s/ Spiros
Sinnis
President
and CEO
|
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the date
indicated.
SIGNATURE
|
NAME
|
TITLE
|
DATE
|
|||
/s/
Spiros Sinnis
|
Spiros
Sinnis
|
Principal
Executive, Officer and Director
|
October
19, 2009
|
|||
/s/
Vasileios Mavrogiannis
|
Vasileios
Mavrogiannis
|
Director
and Treasurer/CFO, Principal Financial Officer, and Principal Accounting
Officer
|
October
19, 2009
|
|||
/s/
Panagiotis Drakopoulos
|
Panagiotis
Drakopoulos
|
Secretary
and Director
|
October
19, 2009
|
45