Attached files
file | filename |
---|---|
EX-5.1 - LEGAL OPINION OF WILLIAMS LAW GROUP, P.A. - Hermes Jets, Inc. | ex51.htm |
EX-23.1 - CONSENT OF STARK WINTER SCHENKEIN & CO., LLP - Hermes Jets, Inc. | ex231.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 1
FORM
S-1/A
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
Hermes
Jets, Inc.
(Exact
name of registrant in our charter)
Nevada
|
3721
|
26-3670551
|
||
(State
or other jurisdiction of
incorporation
or organization)
|
(Primary
Standard
Industrial
Classification
Code
Number)
|
(I.R.S.
Employer
Identification
Number)
|
2533
North Carson Street, Suite 4621
Carson
City, NV 89706
|
89706
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone: +1/775/887-4560
CORPORATE
ADMINISTRATIVE SERVICES, INC.
1955
Baring Blvd.,
Sparks,
NV 89434
+
1/775/358-1412
[Name,
address and telephone number of Agent for Service]
Approximate
date of commencement of proposed sale to the public: As soon
as practicable from time to time after this Registration Statement
becomes effective.
If any of
the Securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, as
amended, 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 of 1933, please check the following box and list
the Securities Act of 1933 registration 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 of 1933, check the following box and list the Securities Act of
1933 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 of 1933, check the following box and list the Securities Act of
1933 registration statement number of the earlier effective registration
statement for the same offering.
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box.
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 our Selling Stockholders [3]
|
492,300 | $ | 1.00 | $ | 492,300 | $ | 35.10 | |||||||||
TOTAL
|
492,300 | $ | 492,300 | $ | 492,300 | $ | 35.10 |
(1)
Estimated in accordance with Rule 457(a) 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 .0000713 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.
We hereby
amend this registration statement on such date or dates as may be necessary to
delay our effective date until we will file a further amendment which
specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until
this Registration Statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a) may determine.
-1-
PROSPECTUS
HERMES
JETS, INC.
492,300
Shares of Common Stock
Selling
shareholders are offering up to 492,300 shares of common stock. The selling
shareholders will offer their shares at $1.00 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 proceeds from the sale of
shares from the selling shareholders.
Prior to
this offering, there has been no market for our securities. Our common stock is
not listed on any national securities exchange, the NASDAQ stock market or the
Over the Counter Bulletin Board. There is no assurance that our securities will
ever become qualified for quotation on the OTC Bulletin Board. There is no
assurance that the selling shareholders will sell their shares or that a market
for our shares will develop even if our shares are quoted on the OTC Bulletin
Board.
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 6.
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 April 13,
2010.
-2-
TABLE OF
CONTENTS
4 | |
6 | |
12 | |
12 | |
12 | |
12 | |
13 | |
15 | |
16 | |
16 | |
17 | |
18 | |
19 | |
19 | |
19 | |
24 | |
25 | |
27 | |
27 | |
27 | |
29 | |
30 | |
31 |
-3-
SUMMARY INFORMATION
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.
Organization
Hermes
Jets, Inc. is a Nevada corporation formed on September 11, 2008.
Our U.S.
address is 2533 North Carson Street, Suite 4621, Carson City, NV 89706; Phone:
+1/775/887-4560, Fax: +1/775/883-2384.
Business
Our major
business activity is the global brokerage of executive aircraft to corporations,
institutions and wealthy private individuals. We will act as an air charter
broker for business and private jets by connecting travelers with executive
aircraft that are independently owned and operated by third party companies or
individuals.
We intend
to provide our customers with convenient, comfortable and safe business and
private jet travel by matching customers’ flight requirements with independent
aviation aircraft operators.
Since our
inception, we have been involved in significant continuous organizational
activities to implement our business plan and build up our business by, among
other activities:
·
|
Developing
and implementing a web-based booking and charter tool that allows
interested clients to submit travel inquiries, ask for airplane
availability and request related price
quotes.
|
·
|
Building
up our international network with potential airplane operators, travel
agencies and suppliers of add-on services such as catering services,
concierge and ground transportation
services.
|
During
the next few months we intend to complete our online supplier database which
will present the profiles of our contracted operators, airplanes and
flight-staff including pilots and flight attendants.
Hermes
Jets will not own or operate the aircraft, manage pilots, or own supporting
operator infrastructure, like operations and maintenance facilities. We will
leave the flying entirely to operators who specialize in air travel and are
required to be compliant with the requirements of national and international
aviation regulations for aircraft maintenance, aircrew training and aircraft
operations. Our core competence will be the interconnection of flight capacity
with individual travel needs and the efficient delivery of the related travel
services.
As of
today, we have not yet entered into any broker agreements with clients or
generated any revenue. In order to do so, costs of $150,000 to $200,000 to
finance our early operational work that includes completion of our web-based
brokerage platform and resource database, the set-up of our first local customer
relationship office and the engagement of operational staff in the fields of
marketing and sales and supplier management. We anticipate that we
will generate operational revenue within the next three to six
months.
As of
December 31, 2009 our total assets approximated $66,691 and we had a net loss of
$72,143 for the year then ended. For the next twelve months, we expect cash
needs of up to $200,000 to finance the further set-up of our business and
IT-infrastructure, the start of our early operational work and to cover our
ongoing working capital needs in order to commence operations. At
April 1, we had $17,684 in cash. At our current monthly burn rate of
approximately $5,000, we have sufficient cash to continue operations for 3
months.In order to cover our cash needs, we are considering raising additional
funds in the form of equity capital, mezzanine financing and/or senior loans
through private placements, loan applications or any other alternative approach.
As of today, we have not yet decided on any action to be taken during the
upcoming months. The preparation of further detailed financing concepts and
solutions will be part of our upcoming operational work. In the
interim, our principal shareholder Agromerkur AG has orally agreed to loan on a
non-interest bearing demand basis funds to maintain operations at the current
level for nine months thereafter. If he fails to do so and we do not
secure funds from other sources, we may be forced to suspend or terminate
operations.
There is
substantial doubt about our ability to continue as a going concern over the next
twelve months.
We
maintain a website at www.hermesjets.com. Nothing on that website is part of
this Prospectus.
-4-
The
Offering
As of the
date of this prospectus, we had 5,004,200 shares of common stock issued and
outstanding.
Selling
shareholders are offering up to 492,300 shares of common stock. The selling
shareholders will offer their shares at $1.00 per share until our shares are
quoted on the OTC Bulletin Board and thereafter at prevailing market prices or
privately negotiated prices.
There is
no assurance that our securities will ever become qualified for quotation on the
OTC Bulletin Board. There is no assurance that the selling shareholders will
sell their shares or that a market for our shares will develop even if our
shares are quoted on the OTC Bulletin Board. 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.
Our
shares will be "penny stocks" as that term is generally defined in the
Securities Exchange Act of 1934. 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. 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. Therefore, our shareholders will, in all likelihood, find it
difficult to sell their securities.
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.
Statement of Operations Data
For
the year ended December 31, 2009
|
For
the year ended December 31, 2008
|
For
the period September 11, 2008 (inception) to December 31,
2009
|
||||||||||
Revenue
from operations
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Total
costs and expenses
|
72,143
|
20,755
|
92,898
|
|||||||||
Interest
income
|
-
|
-
|
-
|
|||||||||
Net
loss
|
(72,143)
|
(20,755)
|
(92,898)
|
|||||||||
Net
loss per common share outstanding
|
$
|
(0.02)
|
$
|
(0.02)
|
||||||||
Weighted
average shares outstanding
|
4,667,159
|
1,281,250
|
-
|
-5-
Balance Sheet
Data
As
of
December
31,
2009
|
As
of
December
31, 2008
|
|||||||
Current
assets
|
$
|
66,691
|
$
|
-
|
||||
Working
capital
|
$
|
(36,742)
|
$
|
(20,755)
|
||||
Total
assets
|
$
|
66,691
|
$
|
-
|
||||
Total
liabilities
|
$
|
29,949
|
$
|
20,755
|
||||
Total
stockholder’s equity (deficit)
|
$
|
36,742
|
$
|
(20,755)
|
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.
Our lack of generating
revenues from operations makes it difficult for us to evaluate our future
business prospects and to make decisions based on
those estimates of our future performance.
Although
we have taken significant steps to develop our business plan since our
inception, as of the date of this registration statement, we have not generated
any revenues. Our business plan is still speculative and unproven. There is no
assurance that we will be successful in executing our business plan or that even
if we successfully implement our business plan, we will ever generate revenues
or profits, which makes it difficult to evaluate our business. As a consequence,
it is difficult, if not impossible, to forecast our future results based upon
our historical data. Because of the uncertainties related to our lack of
historical operations, we may be hindered in our ability to anticipate and
timely adapt to increases or decreases in sales, revenues or expenses. If we
make poor budgetary decisions as a result of unreliable historical data, we may
never generate revenues or become profitable or incur losses, which may result
in a decline in our stock price.
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.
Our lack
of revenues raise substantial doubt about our ability to continue as a going
concern. The financial statements do not include adjustments that might result
from the outcome of this uncertainty and if we are unable to generate
significant revenue or secure financing we may be required to cease or curtail
our operations.
We will need additional
financing to execute our business plan and fund operations, which additional
financing may not be available, in which case our ability to implement our
business plan will be impaired.
For the
next twelve months, we expect cash needs of up to $200,000 to finance the
further set-up of our business and IT-infrastructure, the start of our early
operational work and to cover our ongoing working capital needs in order to
commence operations. At April 1, we had $17,684 in cash. At our
current monthly burn rate of approximately $5,000, we have sufficient cash to
continue operations for 3 months.In order to cover our cash needs, we are
considering raising additional funds in the form of equity capital, mezzanine
financing and/or senior loans through private placements, loan applications or
any other alternative approach. In the interim, our principal shareholder
Agromerkur AG has orally agreed to loan on a non-interest bearing demand basis
funds to maintain operations at the current level for nine months
thereafter. If he fails to do so and we do not secure funds from other
sources, we may be forced to suspend or terminate operations. Our
ultimate success will depend upon our ability to raise additional capital. There
can be no assurance that additional funds will be available when needed from any
source or, if available, will be available on terms that are acceptable to
us.
Our
ability to obtain needed financing may be impaired by such factors as the
capital markets, both generally and specifically in the aviation industry, and
the fact that we are not profitable, which could impact the availability or cost
of future financings. If the amount of capital we are able to raise from
financing activities, together with our revenues from operations, is not
sufficient to satisfy our capital needs, even to the extent that we reduce our
operations accordingly, we may be required to cease
operations.
-6-
Additional financing we
obtain to execute our business plan and fund operations may be dilutive to
existing stockholders, which could reduce the value of your
investment.
Our
ultimate success may depend upon our ability to raise additional capital. We may
be required to pursue sources of additional capital through various means,
including joint venture projects and debt or equity financings. Also, the terms
of securities we may issue in future capital transactions may be more favorable
for our new investors. Newly issued securities may include preferences, superior
voting rights, the issuance of warrants or other derivative securities, and the
issuances of incentive awards under equity employee incentive plans, which may
have additional dilutive effects. Further, we may incur substantial costs in
pursuing future capital and/or financing, including investment banking fees,
legal fees, accounting fees, printing and distribution expenses and other costs.
We may also be required to recognize non-cash expenses in connection with
certain securities we may issue, such as convertible notes and warrants, which
will adversely impact our financial condition and could reduce the value of your
investment.
Because we need to complete
the development of additional activities such as the development of the
web-based brokerage platform, acquire flight capacity and start marketing and
sales activity before we can commence profitable operations, if we do not
complete these activities we may not be able to generate revenues and you may
lose your entire investment.
In order
to commence active operations, we need to complete the development of the
web-based brokerage platform, acquire flight capacity and start marketing and
sales activity according to our business plan schedule. if we do not
complete these activities we may not be able to generate revenues and you may
lose your entire investment.
If we are unable to provide
a satisfactory customer experience, our reputation would be harmed and we could
lose customers.
A
critical component of our strategy is providing a high-quality customer
experience. Accordingly, the effective performance, reliability and availability
of our website and network infrastructure, particularly our web-based brokerage
platform are critical to our reputation and our ability to attract and retain
customers. Any material disruption or slowdown in our customer support services
resulting from telephone or Internet failures, power or service outages, natural
disasters, labor disputes or other events could make it difficult or impossible
to provide adequate customer support. In addition, the future volume of customer
inquiries may exceed our present system capacities. If this occurs, we could
experience delays in responding to customer inquiries and addressing customer
concerns. Our current level of customer support may also fail to meet the
expectations of our customers. Failure to provide satisfactory levels of
customer service may harm our reputation, causing potential loss of existing
customers and difficulty in acquiring new customers.
Our profitability depends on our ability to obtain suitable charter aircraft.
Our
growth strategy depends on our having an adequate supply of available charter
flights for our customers, by partnering or securing relationships with
operators of suitable charter aircraft. Any condition that would deny, limit or
delay our ability to provide on-demand charter flights through our brokerage
services, including a limited supply of available charter aircraft flights, will
constrain our ability to grow. If we cannot partner with or secure relationships
with operators of private charter aircraft, we will not be able to achieve
economies of scale and may never become profitable.
The charter aircraft
brokerage industry is extremely competitive and such competition could reduce
our ability to generate revenues.
We
compete with first class and business class services of national and regional
airlines, fractional aircraft ownership operators, and other charter aircraft
brokers and, particularly on shorter routes, ground transportation. Our
competitors have been in business far longer than we have and they may have
significantly greater financial stability, access to capital markets and name
recognition. Unanticipated shortfalls in expected revenues due to price
competition or inadequate supply of private charter flights would negatively
impact our financial results and harm our business. There is no assurance that
we will be able to successfully compete in this industry.
Due to the international
nature of our business, political or economic changes or other factors could
harm our future revenue, costs and expenses and financial
condition.
Our sales
outside the United States will make up 100% of our net revenue in Europe and
particularly Eastern Europe. Our future revenue, gross margin, expenses and
financial condition could suffer due to a variety of international factors,
including:
|
ongoing
instability or changes in a country's or region's economic or political
conditions, including inflation, recession, interest rate fluctuations and
actual or anticipated military or political
conflicts;
|
|
longer
accounts receivable cycles and financial instability among
customers;
|
-7-
|
trade
regulations and procedures and actions affecting production, pricing and
marketing of products;
|
|
changes
in the regulatory or legal
environment;
|
|
differing
technology standards or customer
requirements;
|
|
import,
export or other business licensing requirements or requirements relating
to making foreign direct investments, which could affect our ability to
obtain favorable terms for components or lead to penalties or
restrictions;
|
|
difficulties
associated with repatriating cash generated or held abroad in a
tax-efficient manner and changes in tax laws;
and
|
|
fluctuations
in freight costs and disruptions in the transportation and shipping
infrastructure at important geographic points of exit and entry for our
products and shipments.
|
The
factors described above also could disrupt charter business as we will depend
upon suppliers of charter services in these areas.
Due to
the likelihood that all of our sales will be from countries outside
of the United States, in Europe and Eastern Europe, currencies in these areas
can have an impact on our results (expressed in U.S. dollars). Currency
variations also contribute to variations in sales and services in impacted
jurisdictions. Accordingly, fluctuations in foreign currency rates could have a
material impact on our revenue growth in future periods. In addition, currency
variations can adversely affect margins on sales of our services in countries
outside of the United States and margins on sales of services that include
services obtained from suppliers located outside of the United
States.
We may not be able to effectively control and manage our growth which could reduce our ability to generate revenues.
Our
strategy envisions a period of potentially rapid growth. We currently maintain
nominal administrative and personnel capacity due to the startup nature of our
business, and our expected growth may impose a significant burden on our future
planned administrative and operational resources. The growth of our business may
require significant investments of capital and increased demands on our
management, workforce and facilities. We will be required to substantially
expand our administrative and operational resources and attract, train, manage
and retain qualified management and other personnel. Failure to do so or satisfy
such increased demands would interrupt or would have a material adverse effect
on our business and results of operations.
As a new entrant to the
airline charter business, we will be subject to an increased risk that we may be
negatively affected by changing economic conditions which could reduce our
ability to generate revenues.
The
airline charter business in general is subject to a risk in that the purchase of
private charter jet flight time is likely considered a luxury item to consumers,
especially compared to the costs associated with commercial air travel. As a new
entrant to the jet charter business, this risk is increased in that we must
develop our business in a market that may be adversely affected by changing
economic conditions. As a result, a general downturn in economic,
business and financial conditions, including recession, inflation and higher
interest rates, could have an adverse effect on consumers’ spending habits and
could cause them to travel less frequently and, to the extent they travel, to
travel using commercial air carriers or other means considered to be more
economical than via a privately chartered jet.
The commercial aircraft
industry is subject to extensive government regulation, which can result in
increased costs, delays, limits on its operating flexibility and competitive
disadvantages which could reduce our ability to generate
revenues.
While we
do not own, operate or maintain any aircraft, commercial aircraft operators are
subject to extensive regulatory requirements. Many of these requirements result
in significant costs that may adversely affect our business and financial
results. For example, the Federal Aviation Administration (FAA) from time to
time issues directives and other regulations relating to the maintenance and
operation of aircraft, and compliance with those requirements drives significant
expenditures. If we are unable to pass those costs on to the customers, it would
negatively impact our profit margin.
Moreover,
additional laws, regulations, taxes and airport rates and charges have been
enacted from time to time that have significantly increased the costs of
commercial aircraft operations, reduced the demand for air travel or restricted
the way operators can conduct their business. For example, the Aviation and
Transportation Security Act, which became law in 2001, mandates the
federalization of certain airport security procedures and imposes additional
security requirements on airlines. Similar laws or regulations or other
governmental actions in the future may similarly adversely affect our business
and financial results.
-8-
Our
results of operations may also be affected by changes in law and future actions
taken by governmental agencies having jurisdiction over aircraft operators,
including:
·
|
changes
in the law which affect the services that can be offered by aircraft
operators in particular markets and at particular
airports;
|
·
|
restrictions
on competitive practices (for example court orders, or agency regulations
or orders, that would curtail an aircraft operator’s ability to respond to
a competitor);
|
·
|
the
adoption of regulations that impact customer service standards (for
example, new passenger security standards);
or
|
·
|
the
adoption of more restrictive locally-imposed noise
restrictions.
|
Although we do not own or
operate any of the aircraft we broker, we may still be sued by customers in the
event of an accident, which could place a substantial financial burden upon us
which could reduce our ability to generate revenues.
Our
business exposes us to potential liability risks that are inherent in the flying
of aircraft. Although we do not own or operate any of the aircraft that we
provide to our customers, we can provide no assure that potential claims will
not be asserted against us in the event of an accident involving such aircraft.
A successful liability claim or series of claims brought against us could have a
material adverse effect on our business, financial condition and results of
operations.
Generally,
we are covered by the insurance policies of the aircraft’s operator but there
can be no assurance that such operator is sufficiently insured to satisfy all
claims. We currently are considering purchasing additional supplemental
insurance. There can be no assurance that we will be able to maintain adequate
insurance on acceptable terms, if at all, or that such insurance will provide
adequate coverage against our potential liabilities. Claims or losses in excess
of our insurance coverage could have a material adverse effect on our business,
financial condition and results of operations.
Current laws and regulations
allow sales of private charter aircraft services to foreign customers and
private charter flights to numerous foreign locations. If these laws and
regulations are changed to restrict sales to foreign customers or flights to
foreign locations, we may lose potential customers, which would limit our growth
potential.
Our
revenue and profitability will be based in part on sales of private charter
flight time to foreign customers and flights to foreign locations, which is
allowed under current federal laws and regulations. Modification of such
statutes and regulations could pose a significant risk to our business
operations by reducing the pool of potential customers by regulating,
restricting or prohibiting sales of private chartered flight time to foreign
persons or by restricting or prohibiting flights to certain foreign
locations.
Because insiders control our
activities, they may cause us to act in a manner that is most beneficial to them
and not to outside shareholders, which could cause us not to take actions that
outside investors might view favorably.
Our
executive officers, directors, and holders of 5% or more of our outstanding
common stock beneficially own approximately 69.94% of our outstanding common
stock. As a result, they effectively control all matters requiring director and
stockholder approval, including the election of directors, the approval of
significant corporate transactions, such as mergers and related party
transaction. These insiders also have the ability to delay or perhaps even
block, by their ownership of our stock, an unsolicited tender offer. This
concentration of ownership could have the effect of delaying, deterring or
preventing a change in control of our company that you might view
favorably.
Our management decisions are
made by CEO/CFO, Hans Wadsack, and our executive vice presidents Zbynek Brzon
and Caroline Hermann, if we lose their services, our revenues may be
reduced.
The
success of our business is dependent upon the expertise of CEO, Hans Wadsack,
and our executive vice presidents Zbynek Brzon and Caroline Hermann. Because
CEO/CFO Hans Wadsack and our executive vice presidents Zbynek Brzon and Caroline
Hermann are essential to our operations, you must rely on their management
decisions. Mr. Wadsack will continue to control our business affairs after this
filing. We have not obtained any key man life insurance relating to CEO, Hans
Wadsack, and our executive vice presidents Zbynek Brzon and Caroline Hermann. If
we lose their services, we may not be able to hire and retain other management
with comparable experience. As a result, the loss of Mr. Wadsack’s services
could reduce our revenues. We have no employment agreements with or key person
insurance on any member of management.
-9-
The persons responsible for
managing our business will devote less than full time to our business, which may
impede our ability to implement our business plan.
None of
our management devotes full time to their duties to our business, as
follows:
Name
|
Percentage
of Time
Currently
Devoted to
Our
Business
|
Hans
Wadsack
|
20%
|
Zbynek
Brzon
|
30%
|
Caroline
Hermann
|
30%
|
As a
result, our management may not currently be able to devote the time necessary to
our business to assure successful implementation of our business
plan.
Our
stock is currently considered a penny stock . If our stock
trades below $5.00 per share, and is quoted on the OTC Bulletin Board, our stock
will be considered a "penny stock" which can reduce its
liquidity.
Our stock is currently considered a penny stock. The
price per share in this offering is $1.00 per share which is less than the price
at which our stock will be considered a penny stock. If the
trading price of our common stock is less than $5.00 per share, our common stock
will be considered a "penny stock," and trading in our common stock will be
subject to the requirements of Rule 15g-9 under the Securities Exchange Act of
1934. Under this rule, broker/dealers who recommend low-priced securities to
persons other than established customers and accredited investors must satisfy
special sales practice requirements. The broker/dealer must make an
individualized written suitability determination for the purchaser and receive
the purchaser's written consent prior to the transaction.
SEC regulations also require additional disclosure in connection with any trades involving a "penny stock," including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and its associated risks. These requirements severely limit the liquidity of securities in the secondary market because few broker or dealers are likely to undertake these compliance activities. In addition to the applicability of the penny stock rules, other risks associated with trading in penny stocks could also be price fluctuations and the lack of a liquid market.
This prospectus permits
selling security holders to resell their shares. If they do so, the market price
for our shares may fall and purchasers of our shares may be unable to resell
them.
This
prospectus includes 492,300 shares being offered by existing stockholders. To
the extent that these shares are sold into the market for our shares, if
developed, there may be an oversupply of shares and an undersupply of
purchasers. If this occurs the market price for our shares may decline
significantly and investors may be unable to sell their shares at a profit, or
at all.
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
business.
The
management team, including CEO/CFO, Hans Wadsack, and our executive vice
presidents Zbynek Brzon and Caroline Hermann is responsible for our operations
and reporting. 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.
Although we believe that we
currently have adequate internal control over financial reporting, we are
exposed to increased expenses from recent legislation requiring companies to
evaluate internal control over financial reporting.
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 December 31 in the
fiscal year after the fiscal year in which this registration statement is
declared effective. Stark Winter Schenkein & Co., LLP, our independent
registered public accounting firm, will be required to attest to the
effectiveness of our internal control over financial reporting beginning that
year as well. 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.
-10-
The offering price of $1.00
per share has been arbitrarily set by our board of directors and accordingly
does not indicate the actual value of our business.
The
offering price of $1.00 per share is not based upon earnings or operating
history, does not reflect the actual value, and bears no relation to our
earnings, assets, book value, net worth or any other recognized criteria of
value. No independent investment banking firm has been retained to assist in
determining the offering price for the shares. Accordingly, the offering price
should not be regarded as an indication of any future market price of our
stock.
Sales of our common stock
under Rule 144 could reduce the price of our stock.
As of
April 13, 2010 , there were 1,504,200 shares
of our common stock held by non-affiliates, 392,300 of which are being
registered hereunder, and 3,500,000 shares of our common stock held by
affiliates, all of which are restricted as per Rule 144 of the Securities Act of
1933 defines as restricted securities, 100,000 of which are being registered
hereunder. All shares being registered hereunder are available for resale as of
the date of effectiveness of this registration statement. Of the shares not
being registered hereunder, all of the non-restricted shares held by
non-affiliates as well as the restricted securities held by affiliates, subject
to the limitations on amounts and manner of sale in Rule 144, could be available
for sale in a public market, if developed, beginning 90 days after the date of
this prospectus. The availability for sale of substantial amounts of common
stock under Rule 144 could reduce prevailing market prices for our
securities.
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.
Because we do not have an
audit or compensation committee, shareholders will have to rely on the entire
board of directors, no members of which are 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. None of the members of the board
of directors are independent directors under the definition set forth in the
listing standards of the NASDAQ Stock Market, Inc. 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.
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 reporting company and will not be subject to the proxy statement,
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.
-11-
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 December 31, 2010, including a Form 10-K for the
year ended December 31, 2010, assuming this registration statement is declared
effective before that date. At or prior to December 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 December
31, 2010. If we do not file a registration statement on Form 8-A at
or prior to December 31, 2010, we will continue as a 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.
SPECIAL
INFORMATION REGARDING FORWARD LOOKING
STATEMENTS
Some of
the statements in this prospectus are “forward-looking statements.” These
forward-looking statements involve certain known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by these forward-looking statements. These
factors include, among others, the factors set forth above under “Risk Factors.”
The words “believe,” “expect,” “anticipate,” “intend,” “plan,” and similar
expressions identify forward-looking statements. We caution you not to place
undue reliance on these forward-looking statements. However, the Private
Securities Litigation Reform Act of 1995 is not available to us as a
non-reporting issuer. Further, Section 27A(b)(1)(C) of the Securities Act and
Section 21E(b)(1)(C) provide that the safe harbor for forward looking statements
does not apply to statements made by companies such as ours that issue penny
stock. Further, Section 27A(b)(2)(D) of the Securities Act and Section
21E(b)(2)(D) of the Securities Exchange Act expressly state that the safe harbor
for forward looking statements does not apply to statements made in connection
with an initial public offering. As this is considered our initial public offering, these safe
harbor provisions do not apply.
USE
OF PROCEEDS
We will
not receive any proceeds from the sale of shares offered by the selling
shareholders.
DETERMINATION
OF OFFERING PRICE
Our
management has determined the offering price for the selling shareholders'
shares. The price of the shares we are offering was arbitrarily
determined based upon the prior offering price in our private
placement. We have no agreement, written or oral, with our selling
shareholders about this price. Based upon oral conversations with our
selling shareholders, we believe that none of our selling shareholders disagree
with this price. The offering price bears no relationship whatsoever
to our assets, earnings, book value or other criteria of value. The factors
considered were:
·
|
our
lack of operating revenues
|
·
|
the
price at which we have sold our stock in offerings not registered under
the Securities Act of 1933
|
·
|
what
we consider to be our growth
potential
|
·
|
the
price we believe a purchaser is willing to pay for our
stock
|
The
offering price 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.
Not
applicable. We are not offering any shares in this registration statement. All
shares are being registered on behalf of our selling shareholders.
-12-
SELLING
SECURITY HOLDERS
The
selling security holders 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
security holders, and therefore, no accurate forecast can be made as to the
number of securities that will be held by the selling security holders upon
termination of this offering. These selling security holders acquired their
shares by purchase exempt from registration under Regulation S of the 1933 Act
and in the case of one service provider under Section 4(2) of the 1933 Act in
exempt transactions as follows: In November 2008 our founder
subscribed to 3,500,000 shares of common stock for cash of
$10,500 paid in 2009($0.003 per share). From January 12, 2009 through
March 13, 2009, 14 investors purchased 1,474,900 shares of common stock for
$89,840 ($0.01 to $0.08 per share). During March and April 2009, 17
investors purchased 3,300 shares of common stock for $3,300 ($1.00 per share)
and during such time we issued an additional 26,000 to two service providers for
legal and consulting services valued at approximately $26,000 ($1.00 per share).
We relied upon Section 4(2) of the Securities Act of 1933, as amended for the
above issuances to US citizens or residents.
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.
|
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.
We
believe that the selling security holders 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 security
holders. None of our selling security holders is or is affiliated with a
broker-dealer. All selling security holders may be deemed
underwriters.
-13-
Name
of Shareholders
|
Directors
/ Voting Power
|
Total
Shares Owned
|
Shares
Registered
|
Remaining
Shares if Sold [1]
|
%
Before Offering
|
%
After Offering
|
Material
Transactions with Selling Shareholder in past 3 years (incl. nature of
services provided and dates provided)
|
Hans
Wadsack Agromerkur AG [2] [3]
|
(Director)
|
3,501,000
|
101,000
|
3,400,000
|
69.951%
|
67.9%
|
Major
Shareholder / Beneficial Owner
|
Partner
Capital Investment Ltd.
|
Esther
N. Aguet (President)
|
228,500
|
50,000
|
178,500
|
4.566%
|
3.6%
|
-
|
Frostilos
Business Corp.
|
Dr.
Fabio Delco (Director)
|
217,800
|
50,000
|
167,800
|
4.352%
|
3.4%
|
-
|
Horst
Invest Corp.
|
Martin
Staeubli (Director)
|
207,600
|
40,000
|
167,600
|
4.149%
|
3.3%
|
-
|
Valentino
Marketing Ltd.
|
Severin
Knuesel (Director)
|
197,900
|
40,000
|
157,900
|
3.955%
|
3.2%
|
-
|
Una
Finance Ltd.
|
Katerina
Loannides (Director)
|
188,700
|
40,000
|
148,700
|
3.771%
|
3.0%
|
-
|
Nali
Finance Corp.
|
Irene
G. Spoerry (Director)
|
179,900
|
30,000
|
149,900
|
3.595%
|
3.0%
|
-
|
United
Equity Capital AG
|
Marc
Bodin (Director)
|
171,500
|
30,000
|
141,500
|
3.427%
|
2.8%
|
-
|
Michael
T. Williams
|
-
|
25,000
|
25,000
|
0
|
0.500%
|
0.0%
|
Attorney
since 9/2008 - ongoing
|
Celestial
Global Holding Inc.
|
Christine
Ping (Director)
|
20,000
|
20,000
|
0
|
0.400%
|
0.0%
|
-
|
Centrino
Management Co., Ltd.
|
Lorena
Cervantes (Director)
|
15,000
|
15,000
|
0
|
0.300%
|
0.0%
|
-
|
Green
Coast Partners Ltd.
|
Ricardo
Escalante (Director)
|
12,000
|
12,000
|
0
|
0.240%
|
0.0%
|
-
|
Feng
Shui International Co., Ltd.
|
Emely
Perez (Director)
|
10,000
|
10,000
|
0
|
0.200%
|
0.0%
|
-
|
Apus
Holdings Inc.
|
Paula
Jonch (Director)
|
10,000
|
10,000
|
0
|
0.200%
|
0.0%
|
-
|
Checkmate
Holdings Inc.
|
Paul
Jonch (Director)
|
8,000
|
8,000
|
0
|
0.160%
|
0.0%
|
-
|
La
Rumba S.A.
|
Christina
Chow (Director)
|
8,000
|
8,000
|
0
|
0.160%
|
0.0%
|
-
|
Jing
Yau Schmid-Huang
|
-
|
1,000
|
1,000
|
0
|
0.020%
|
0.0%
|
Art
designer since 03/2009 – ongoing
|
Katrin
Wadsack [3]
|
-
|
500
|
500
|
0
|
0.010%
|
0.0%
|
|
Lukas
Wadsack [3]
|
-
|
500
|
500
|
0
|
0.010%
|
0.0%
|
|
Hans
Wadsack [2] [3]
|
-
|
500
|
500
|
0
|
0.010%
|
0.0%
|
|
Hanny
Wadsack [2] [3]
|
-
|
500
|
500
|
0
|
0.010%
|
0.0%
|
|
Dirk
Schewe
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
-
|
Mathias
Drews
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
-
|
Thorsten
Foerster
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
-
|
Julia
Schroeder [4]
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
|
Marek
Schroeder [4]
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
-
|
Marisa
Schroeder [4]
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
|
Bennet
Schroeder [4]
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
|
Sven
Kriegbaum [5]
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
|
Leano
Docal [6]
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
|
Loris
Docal [6]
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
|
Birthe
Docal [6]
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
|
Marcos
Docal [6]
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
-
|
Jan
Kriegbaum [5]
|
-
|
100
|
100
|
0
|
0.002%
|
0.0%
|
|
Total
|
-
|
5,004,200
|
492,300
|
4,511,900
|
100.000%
|
90.2%
|
-
|
[1]
Assuming sale of all shares registered hereunder.
[2]
Includes 3,500,000 shares owned by Agromerkur AG of which he is director and
beneficial owner, and 500 shares each owned individually by both Hans Wadsack
and Hanny Wadsack, his wife. 100,000 shares are being registered for
resale by Agromerkur AG and 500 shares each owned individually by both Mr.
Wadsack and Hanny Wadsack are also being registered.
[3]
Independent, non-minor children of Hans and Hanny Wadsack not living with them
who each disclaim Hans or Hanny Wadsack’s beneficial ownership of these
shares.
[4] Marek
and Julia Schroeder are married and Marissa and Bennet Schroeder are their minor
children. Each are registering 100 shares for
resale.
[5] Sven
Kriegbaum and Jan Kriegbaum are brothers but disclaim beneficial ownership of
each other shares.
[6] Marcos
and Birthe Docal are married and Leano and Loris Docal are their minor
children. Each are registering 100 shares for
resale.
-14-
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 492,300 shares of common stock. The selling
shareholders will offer their shares at $1.00 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 proceeds from the sale of
shares from the selling shareholders.
The
securities offered by this prospectus will be sold by the selling shareholders.
Selling shareholders in this offering may be considered
underwriters . We are not aware of any underwriting arrangements
that have been entered into by the selling shareholders. 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, including
broker's transactions 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
over the counter 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 may 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 to this
registration statement 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 anticipate that after
this registration statement is declared effective, market makers will enter
“piggyback” quotes and our securities will thereafter trade on the OTC Bulletin
Board.
-15-
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 its 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 its 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 its 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
We are
not aware of any pending or threatened legal proceedings in which we are
involved.
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 successor is elected and
qualified, or until his earlier resignation or removal. Our directors and
executive officers are as follows:
Name
|
Age
|
Position
|
Hans
Wadsack
|
58
|
President
& CEO,
CFO/Treasurer,
Secretary, Director
|
Zbynek
Brzon
|
47
|
Executive
Vice President
|
Caroline
Hermann
|
35
|
Executive
Vice President
|
Mr.
Wadsack joined us upon formation in September 2008 as President & CEO,
CFO/Treasurer, Secretary and Director. From July 1987 to date, he has been
Director of Agromerkur AG (a Swiss Private Equity Corporation) in the business
of holding, acquisition and sale of participations in other companies; real
estate and property; private equity. From 1983 to date, he has been founder,
owner and principal of Wadsack & Co., a Swiss accounting and tax advisory
firm. He is a Certified Public Accountant in Switzerland. He attended CPA
College of the Swiss Fiduciary Chamber; Diploma as a certified CPA, achieved in
1982.
-16-
Mr. Brzon
joined us in November 2008 as Executive Vice President (Flight Operations,
Safety and Quality Management). From February 2005 to date, he has been
Commander A320 and Technical Flight Consultant for Air Berlin, a German Airline.
From January 2004 to January 2005, he was Commander F100 / Quality Manager for
Helvetia Express, a Swiss Airline, as well as Flight Instructor Line Training
for the Bulgarian Air Charter.
Ms.
Hermann joined us in November 2008 as Executive Vice President (Cabin Safety and
Marketing Management). Since April 2006 she has been a Freelance Cabin Crew
Manager on Airplanes of Gulfstream, Bombardier, Falcon, Citation, Embrear and
Dornier Aircraft for various clients. From January 2005 to March 2006, she was
Cabin Safety and Operations Manager of ExecuJet, a Swiss private airline. From
2004 to December 2005, she was Cabin Safety Manager of Sky Work, a Swiss
Aircharter Company, for Dornier 328 and Citation Fleet.
As of
April 13, 2010, our President serves about 20% of his time for our company. Both
Vice Presidents currently work about 30% for Hermes Jets, Inc. It is planned
that the Vice Presidents will increase their time spent during the upcoming
months and take over full employment positions by the third quarter of
2010.
Board
Committees
We
currently have no compensation committee or other board committee performing
equivalent functions. Currently, all members of our board of directors
participate in discussions concerning executive officer
compensation.
Legal
Proceedings
No
officer, director, or persons nominated for such positions, 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.
|
·
|
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.
|
Corporate
Governance
Our Board
of Directors has three directors and has not established Audit, Compensation,
and Nominating or Governance Committees as standing committees. The Board does
not have an executive committee or any committees performing a similar function.
We are not currently listed on a national securities exchange or in an
inter-dealer quotation system that has requirements that a majority of the board
of directors be independent. The Board has determined that no members of the
Board are “independent” under the definition set forth in the listing standards
of the NASDAQ Stock Market, Inc., which is the definition that the Board has
chosen to use for the purposes of the determining independence, as the OTCBB
does not provide such a definition. Therefore, none of our current Board members
are independent.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following tables set forth the ownership of our common stock by each person
known by us to be the beneficial owner of more than 5% of our outstanding voting
securities, our directors, our executive officers, 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.
-17-
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 for all
persons is 2533 North Carson Street, Suite 4621, Carson City, NV 89706,
USA.
Shareholders
|
#
of Shares
|
Percentage
|
||||||
Hans
Wadsack [1]
|
3,501,000 | 69.98 | % | |||||
Zbynek
Brzon
|
0 | 0.0 | % | |||||
Caroline
Hermann
|
0 | 0.0 | % | |||||
All
officers and directors as group [3 persons]
|
3,501,000 | 69.98 | % |
[1]
Includes 3,500,000 shares owned by Agromerkur AG of which he is director and
beneficial owner, and 500 shares each owned individually by both Hans Wadsack
and Hanny Wadsack, his wife.
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.
This
table is based upon information derived from our stock records. Applicable
percentages are based upon 5,004,200 shares of common stock outstanding as of
April 13, 2010 .
The
following description is a summary of the material terms of the provisions of
our articles of incorporation and bylaws. 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 have
100,000,000 authorized shares of common stock with $0.001 par value. As of
the date of this registration statement, there are 5,004,200 shares of common
stock issued and outstanding. All shares are equal to each other with respect to
liquidation and dividend rights. Holders of voting shares are entitled to one
vote for each share that they own at any shareholders' meeting. Holders of our
shares of common stock do not have cumulative voting rights.
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 the 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.
-18-
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. There are no conversion, preemptive or
other subscription rights or privileges with respect to any shares.
INTEREST
OF NAMED EXPERTS AND COUNSEL
Our
comparative balance sheets as of December 31, 2009 and 2008 and the related
statement of operations, stockholders’ deficit, and cash flows for the periods
then ended, were audited by Stark Winter Schenkein & Co., LLP, as experts in
accounting and auditing.
The
legality of the shares offered under this registration statement is being passed
upon by Williams Law Group, P.A., Tampa, FL. Michael T. Williams, principal of
Williams Law Group P.A., owns 25,000 shares of our common stock, of which 25,000
shares are being registered in this registration statement.
DISCLOSURE OF
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
LIABILITIES
Our
by-laws, subject to the provisions of Nevada Corporation Law, 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
Hermes
Jets, Inc. is a Nevada corporation formed on September 11, 2008.
General
Our major
business activity is the global brokerage of executive aircraft to corporations,
institutions and wealthy private individuals. We will act as an air charter
broker for business and private jets by connecting travelers with executive
aircraft that are independently owned and operated by third party companies or
individuals.
We intend
to provide our customers with convenient, comfortable and safe business and
private jet travel by matching customers’ flight requirements with independent
aviation aircraft operators.
Since our
inception, we have been involved in significant continuous operational
activities to implement our business plan and build up our business by, among
other activities:
·
|
Developing
and implementing a web-based booking and charter tool that allows
interested clients to submit travel inquiries, ask for airplane
availability and request related
quotes.
|
·
|
Building
up our international network with potential airplane operators, travel
agencies and suppliers of add-on services such as catering services,
concierge and ground, transportation
services.
|
During
the next few months we intend to complete our online supplier database which
will present the profiles of our contracted operators, airplanes and
flight-staff including pilots and flight attendants.
Hermes
Jets will not own or operate the aircraft, manage pilots, or own supporting
operator infrastructure, like operations and maintenance facilities. We will
leave the flying entirely to operators who specialize in air travel and are
required to be compliant with the requirements of national and international
aviation regulations for aircraft maintenance, aircrew training and aircraft
operations. Our core competence will be the interconnection of flight capacity
with individual travel needs and the efficient delivery of the related travel
services.
-19-
As of
today, we have not yet entered into any broker agreements with clients or
generated any revenue. In order to do so, we need to complete our supplier
database, finalize our web-based brokerage platform, acquire flight capacity and
start marketing and sales activity according to our business plan schedule. We
anticipate that we can complete these within the next three to six months, and
that $150,000 to $200,000 will be needed to finance this. We estimate that the
cost to maintain the IT and telecommunications infrastructure to support our
brokerage platform will be approximately $15,000 per year after it is
established. Yearly cost may increase depending on the further need for
extension and maintenance of the systems.There is substantial doubt about our
ability to continue as a going concern over the next twelve
months.
Brokerage
Services
Hermes
Jets will serve as a broker agent in obtaining air charter services for its
customers. The company will be a full service provider, offering on-demand
business and private travel services that will cover all aspects of an
individually customized air travel.
The
product portfolio of Hermes Jets will include the following
services:
Service
Field
|
Service
Components
|
Remarks
|
Charter
Management
|
Flight
Scheduling
Real-time
Flight Tracking
Personal
Travel Coordinator (single-point-of-contact)
Concierge
/ Helpdesk Services
|
-
|
Catering
Management
|
Customization
of Catering Concept
Coordination
of the Catering Suppliers
Monitoring
the Aircraft Stocking Procedure
|
Catering
concepts may vary from snacks & beverages to classic lunchboxes up to
extensive gourmet menus, depending on travelers’ specific requirements and
cultural background.
|
Ground
Transportation
|
Transportation
Scheduling
Coordination
of Door-to-Door Ground Transportation
Reservation
and Booking of Hotels, Meeting Facilities and Leisure
Locations
|
Including
the booking of different vehicles for individuals or groups; from rental
car to specialty vehicles.
|
Special
Requirements
|
Specialty
Food for Religious or Health Requirements
Customized
Aircraft Decoration
Board
and Ground Security
Other
Extraordinary Requirements
|
-
|
Other
Services
|
Third-party
services such as database management, administration services for
Fractional Aircraft Owners, etc.
|
-
|
Owner/Operator
Standards
Owners
and operators of aircraft that are considered suitable travel providers for us
are critical to providing our services. We have established several standards
for our portfolio of operators. Each operator must meet the following
standards:
·
|
They
must demonstrate that they have aircraft capacity, deliver high quality,
own top of the line aircraft and have highly skilled pilots and best in
class operational
capabilities.
|
·
|
Operators
must provide evidence that they are certified under Part 135 of the
Federal Aviation Administration (FAA) regulations and/or have the Air
Operator Certificate (AOC) under the European regulations EEC 3922/91, EU
OPS and are not black listed with the European Commission for Mobility
& Transportation under Regulation (EC) No
2111/2005.
|
·
|
They
must have the ability to reach hundreds of airports, beyond large
commercial airports.
|
As of
today, we are in communication with several potential third-party operators all
over Europe and are negotiating terms and conditions of such a potential
collaboration. Because we are still at the stage of developing our operational
business, no third-party operator agreement has been closed so
far.
-20-
Target
Markets
Hermes
Jets will focus on geographic markets that show ongoing increasing demand for
business and private aviation quality services due to the following market
conditions:
·
|
Long
distances between towns and
cities
|
·
|
Poor
public transportation
infrastructure
|
·
|
Absence
of state-of-the art air travel
services
|
·
|
Lack
of reliable, comfortable and cost-effective means of
transportations
|
·
|
Industries
with widely spread production
sites
|
Based
upon our market research and our management’s industry expertise, we are seeing
business opportunities in the Central and Eastern European Countries (CEE) and
(Commonwealth of Independent States; the regional organization of 12 countries
which are former Soviet Republics), the CIS Market
At a
first step, we will focus on those Central and Eastern European countries, which
are members of the European Union, have stable economic conditions and show an
emerging business aviation industry. This will include geographic target markets
such as Hungary, Czechoslovakia, Poland, Bulgaria, Serbia and
Croatia.
Future
target countries of interest are those CIS countries that show high
resource-related industry activity, such as oil, gas and mining, but also show
long distances between tows, company headquarters and production sites. This
will include in the future target markets such as Ukraine, Belarus, Kazakhstan
and Azerbaijan.
We
believe that the entire Central and Eastern European region, including the CIS
Region, still show strong growth potential for business and private aviation
services due to the long travel distances, their multi-cultural business
environment and the relatively strong focus on the resource-related industries
of oil, gas and minerals.
In the
future we will target a market for private jet service for successful, affluent
individuals and business travelers, with or marketing based upon a combination
of economics, post-September 11 inconveniences of modern air travel and the lack
of amenities associated with commercial airlines.
Marketing and
Sales
Hermes
Jets will market, advertise and distributes its services by utilizing classic
media, such as newspaper and weekly magazines as well as electronic media,
focusing on the Web, to build strong brand awareness and to support the direct
distribution through sales representatives.
Hermes
Jets plans to build up an international network of individuals, acting as
personal sales representatives, where each of them is responsible for a specific
geographic local market. Sales representatives will use their personal network
of corporate senior executives and wealthy private individuals to promote,
present and distribute Hermes Jets charter services. Sales representatives will
be backed with promotion material, such as hard-copy presentations, catalogues
and flyers, centrally designed and produced by Hermes
Jets.
The
remuneration model of sales representatives will be based on success-fee only,
which means that sales representative will be paid on commission only. Such
commission will be a to-be-determined certain percentage of the total invoice
amount which the Company bills to its end clients.
-21-
As of
today, our plans are aspirational in nature in that we have no contracts,
agreements or commitments with any sales agents. However, we are in
negotiations with several potential sales representatives in Bulgaria, the
Ukraine and Belarus. We plan to close the first sales-agent agreements by the
end of the third quarter of 2010. The extension of our network of sales
representatives is an ongoing process which will be actively supported during
the next 36 months. The successful set-up of a wide network of sales
representatives requires, first of all, extensive research and communication and
the production and delivery of the necessary promotion material, such as
hard-copy presentations, catalogues and flyers. We have budgeted a total
estimated cost of USD $20,000 to complete a basic network of independently
working sales representatives covering our major target markets by the end of
2010. This budget includes expenses for communication, travelling and legal
work.
Sales
activity will be supported by advertising, tradeshows and ongoing public
relations. The Company’s communication strategy foresees the following
communication mix:
Advertising
Channel
|
Media
Product
|
Targets
|
Print
Media
|
Daily
newspaper
|
Local
daily newspaper targeting readers with main interest in business
topics
|
Weekly
news magazines
|
Local
weekly news magazines targeting readers with main interest in business
topics
|
|
Industry-related
publications
|
Regular
aviation news magazines
|
|
Other
non-industry publications
|
Management
magazines
Traveler
magazines
Holiday
catalogues
Fashion
/ leisure magazines
|
|
Electronic
Media
|
Radio
|
Radio
Spots
Expert
Interviews with Senior Managers of HJ
|
Internet
/ Web
|
Online
advertising
Web
site linking programs
Search
engines listing
|
|
Email
|
Regular
Newsletter
News
alerts
|
|
Events
|
Industry-related
events
|
Aviation
tradeshows
|
Other
events
|
Sponsoring
and co-sponsoring of general public
events
|
As of
today, we have not entered into any arrangements with publications and/or trade
shows listed in our communication mix schedule. It is planned to start with the
media-based marketing and advertising work as soon as the brokerage platform is
fully working and the first sales agents are under contract, which is expected
by the end of the third quarter of 2010. The selection of specific media
products will depend on the related geographic markets, where we will start our
promotion and sales activities.
We see
the continuing public relation work as a key factor for the successful
implementation of broad brand awareness and therefore plan to invest an average
of at least 5 percent of our regular annual revenues in advertising and public
relations.
Government
Regulation
Hermes
Jets, Inc. will act as a pure charter broker, which means that the company does
not own or operate aircrafts, manage pilots or maintain flight operator
infrastructure.
As a
service provider with focus on brokering third-party owned business jets but
without any type of self-managed flight operation, the company does not fall
under the US American Federal Aviation Regulations (FAR) of the Federal Aviation
Administration (FAA) or the European regulations for Air Operator Certificate
(AOC) of the European Aviation Safety Agency (EASA) and therefore does not need
any specific approval and/or certificate from the government or any
international and/or national aviation regulation
board.
We leave
the flying entirely to operators who specialize in air travel and have the
necessary certifications and licenses to operate aircraft and provide air
transportation services. These operators must certify to us that they are
compliant with the minimum requirements of Part 119 and 135 of the Federal
Aviation Regulations (FAR) for aircraft maintenance, aircrew training and
aircraft operations and/or have the Air Operator Certificate (AOC) under the
European regulations EEC 3922/91, EU OPS and furthermore are not black listed
with the European Commission for Mobility & Transportation under Regulation
(EC) No 2111/2005.
Thus,
although we do not own, operate or maintain any aircraft, commercial aircraft
operators are subject to extensive regulatory requirements, many of these
requirements result in significant costs that may adversely affect our business
and financial results. For example, the Federal Aviation Administration (FAA) or
the European Aviation Safety Agency (EASA) from time to time issues directives
and other regulations relating to the maintenance and operation of aircraft, and
compliance with those requirements drives significant expenditures. If we are
unable to pass those costs incurred by our suppliers on to the customers, it
would negatively impact our profit margin.
-22-
Moreover,
additional laws, regulations, taxes and airport rates and charges have been
enacted from time to time that have significantly increased the costs of
commercial aircraft operations, reduced the demand for air travel or restricted
the way operators can conduct their business. For example, the Aviation and
Transportation Security Act, which became law in 2001, mandates the
federalization of certain airport security procedures and imposes additional
security requirements on airlines. Similar domestic or
foreign laws or regulations or other governmental actions in the future
may similarly adversely affect our business and financial
results.
Our
results of operations may also be affected by changes in law and future actions
taken by governmental agencies having jurisdiction over aircraft operators,
including:
·
|
Changes
in the law which affect the services that can be offered by aircraft
operators in particular markets and at particular
airports;
|
·
|
Restrictions
on competitive practices (for example court orders, or agency regulations
or orders, that would curtail an aircraft operator’s ability to respond to
a competitor);
|
·
|
The
adoption of regulations that impact customer service standards (for
example, new passenger security standards);
or
|
·
|
The
adoption of more restrictive locally-imposed noise
restrictions.
|
Competition
The
private aviation is highly competitive with a large and varied number of
participants, including aircraft owner/operators, membership programs, charter
providers and fractional programs. The sub-segment of business jet brokerage
consist of a large number of service providers that vary in the range of
services they provide, the scope of their target markets and the amount of
flight capacity they are able to offer. Most of the smaller business jet
brokerage firms concentrate on a limited geographical market and have limited
flight capacity under contract. On the other hand some of our competitors are
significantly better capitalized than we are and have been in business for a
greater period of time.
Although
the market for business jet brokerage is highly competitive, we still see some
important chances to successfully compete against the existing market
participants. Therefore, we will concentrate on geographical markets where we
believe based upon management’s experience, the existing business jet brokerage
firms show a poor level of service quality and transparency compared to that
which we intend to offer.
In the
field of service quality, we intend to compete on the basis of speed, range,
quality and consistency of our services. Our experience shows that corporate
executives and/or private travelers, who wish to benefit from individual flight
services, require high flexibility and fast processing when ordering customized
air transportation services. Only those business jet brokers that dispose of
large databases with jet owners, pilots, cabin crews and other service providers
as well as the necessary IT infrastructure to track and coordinate the different
capacities, will be able to meet the requirements for flexibility and fast
processing. To meet these requirements and successfully compete against other
market participants, we will focus on the development of the necessary IT
infrastructure and platforms and the implementation of efficient handling
procedures.
In the
field of transparency, we recognized a certain lack of transparency in many of
our competitors operations. We will therefore provide a sophisticated
information system to our clients to ensure the highest standards of price
comparison and safety. It is planned to build up an extensive database, which
provides detailed profiles of:
·
|
Aircrafts
(with focus on Jet Aircraft and VLJ – Very Light
Jets)
|
·
|
Pilots
(including resumes on pilot education and further
training)
|
·
|
Cabin
Staff
|
·
|
Catering
Provider
|
Further,
our database will when completed feature communication and ranking tools
(similar to hotel-ranking sites) where travelers can directly communicate to
each other and share their experience.
As of
today, we have completed about 75% of the programming work of our web-based
brokerage platform and successfully tested and implemented the booking tool.
Currently we are completing the programming work for several sub-databases,
which will provide detailed profile information on airplanes, pilots and cabin
staff, additional service providers such as catering, ground transportation and
accommodation. Parallel to the ongoing programming work we are in the process of
compiling the related data and to fill the sub-databases. We expect to complete
the full first version by the end of the third quarter of 2010 but will still
continue adding additional features and data upon further needs and user
inputs.
-23-
Until
today, we have spent about $10,000 for the first basic version of our web-based
brokerage platform and expect to invest another $10,000 up to the completion and
release of the first version providing all sub-databases and communication
tools.
The
further development of our entire IT-infrastructure will be an ongoing process
which must be managed in accordance to the ongoing development of our business
activity and sales volumes. Such further development not only concerns the
front-end brokerage platform but also to the necessary set-up of additional
servers and interfaces which will be required to host, process and manage the
entire flow of information and data. As of today, we are not able to estimate in
detail the total amount of the required investment to build up and maintain the
entire IT-infrastructure as foreseen in our business plan, since such investment
directly relates to the ongoing development of our business volume.
Nevertheless, we are calculating average investments of$ 30,000 to $50,000 per
year to continuously develop our IT-infrastructure.
We
believe that none of our competitors offer a comparable database platform on the
market as of today which we believe will give us competitive advantages in
comparison to our competitors.
Intellectual
Properties
We
currently have no intellectual properties.
Research and
Development
We have
no research and development expenses.
Environmental
Matters
We do not
anticipate incurring any costs or other effects of compliance with
international, federal, state and local environmental laws.
Employees
We have
three part time employees, all members of management.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Cautionary
Statement
The
following discussion and analysis of the financial condition and results of our
operations should be read in conjunction with our financial statements and the
notes thereto which appear elsewhere in this Prospectus. The results shown
herein are not necessarily indicative of the results to be expected for any
future periods.
This
discussion contains forward-looking statements, based on current expectations.
All statements regarding future events, our future financial performance and
operating results, our business strategy and our financing plans are
forward-looking statements and involve risks and uncertainties. In many cases,
you can identify forward-looking statements by terminology, such as "may,"
"will," "should," "expects," "intends," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential" or "continue," or the negative of such
terms and other comparable terminology. Those statements appear in a number of
places in this Form S-1 and in other places, particularly,
Management's Discussion and Analysis of Financial Condition and Results of
Operations, and include statements regarding the intent, belief or current
expectations of the Corporation, its directors or its officers with respect to,
among other things: (i) the Corporation's liquidity and capital resources; (ii)
its financing opportunities and plans and (iii) its future performance and
operating results. Investors and prospective investors are cautioned that any
such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ materially
from those projected in the forward-looking statements as a result of various
factors. The factors that might cause such differences include, among others:
(i) any material inability of the Corporation to successfully identify,
consummate and integrate the acquisition of finance receivables at reasonable
and anticipated costs, (ii) any material inability of the Corporation to
successfully develop its products; (iii) any adverse effect or limitations
caused by governmental regulations; (iv) any adverse effect on the Corporation's
continued positive cash flow and ability to obtain acceptable financing in
connection with its growth plans; (v) any increased competition in business;
(vi) any inability of the Corporation to successfully conduct its business in
new markets; and (vii) other risks including those identified in the
Corporation's filings with the SEC. These statements are only predictions. Known
and unknown risks, uncertainties and other factors could cause our actual
results and the timing of events to differ materially from those projected in
any forward-looking statements. In evaluating these statements, you should
specifically consider various factors, including, but not limited to, those set
forth under "Summary Information and Risk Factors" and elsewhere in this
Prospectus.
-24-
General
discussion
The
following discussion and analysis should be read in conjunction with the balance
sheet as of December 31, 2009 and 2008 ,and the financial
statements for the year ended December 31, 2009 and the period inception
(Septemeber 11,2008) to December 31,2008, included with this Form S-1. We
are a development stage entity incorporated in the State of Nevada. We intend on
operating in the business of brokering private and business jest by connecting
travelers with executive aircrafts that are independently owned and operated by
third parties. Readers are referred to the cautionary statement, which addresses
forward-looking statements made by us.
Overview
We will
act as a broker for business and private jets by connecting travelers with
executive aircraft that are independently owned and operated by third party
companies or individuals. Our major business activity is the global brokerage of
executive aircraft to corporations, institutions and wealthy private
individuals.
We intend
to provide our customers with convenient, comfortable and safe business and
private jet travel by matching customers’ flight requirements with independent
aviation aircraft operators.
Hermes
Jets will not own or operate the aircraft, manage pilots, or own supporting
operator infrastructure, like operations and maintenance facilities. We will
leave the flying entirely to operators who specialize in air travel and are
required to be compliant with the requirements of national and international
aviation regulations for aircraft maintenance, aircrew training and aircraft
operations. Our core competence will be the interconnection of flight capacity
with individual travel needs and the efficient delivery of the related travel
services.
Plan of
Operations
Our
future business plan has the following milestones, timeframes and related cost
estimated:
Events
|
Actions
|
Time
from securing additional funding
|
Total
Cost Estimated
|
Development
of the web-based brokerage platform
|
Design,
development and programming of a web-based private and business jet
brokerage platform. The platform shall include a database for aircraft
profiles (text and pictures) of offered private and business jets; charter
and booking tools; payment tools; member areas and many
more.
|
6
months; first programming work already completed
|
$20,000
– to be outsourced to an integrated web and database
firm
|
Research,
evaluation and contracting of independent aircraft owners and
operators
|
Research,
evaluation and approaching of individuals (private owners) companies and
other charter brokers who are looking for additional brokerage
services
|
6
months / constantly ongoing; research has already
started
|
$30,000
– to be done by management and specialized research
firms
|
Development
of partnership / brokerage agreements
|
1
month at the first stage; afterwards continuously
|
$15,000
– to be done by law firm
|
|
Building-up
the brokerage data base
|
Compiling
of aircraft and service profiles; feeding the data base with basic
information, technical details as well as pictures of each offered
aircraft and crew member.
|
5
months at the first stage; afterwards continuously
|
$20,000
– to be done by employees and data compiler
|
Development
of the marketing and sales plan
|
Writing
of a detailed marketing and sales plan, elaborating strategic and
operational distribution and sales measures including financial budgets
and cash flow forecasts.
|
3
weeks
|
None
– to be done by the marketing & sales
management
|
Set-up
of the operations and support center
|
Evaluation
of appropriate office location and space; acquisition of the required IT
and telecommunication infrastructure.
|
1
month
|
None
– to be done by the management
|
Building
of the sales, operations and client support team
|
Recruitment
of the staff for sales, operations and client
support.
|
1
to 3 months
|
$5,000
to $10,000 – mainly for employment agencies and job
advertisings
|
Establishment
of local sales / representative offices in each target
country
|
Building
of local sales representatives and client relationship manager in the
major target countries. Research, evaluation and assessment of potential
individuals and/or companies.
|
1
to 6 months
|
$20,000
– mainly travelling and communication cost as well as legal
fees
|
Customer
acquisition
|
Acquisition
of corporate and individual clients through various marketing and sales
activities such as advertising, promotion, direct mails, direct calls,
presentations, etc.
|
Ongoing
process
|
$100,000
|
For the
year period from September 11, 2008 (Inception) to, we did not generate any
revenues and incurred a loss of approximately ($20,755). During such period our
expenses primarily related to preparation and implementation of our planned
principal operations. Such expenses consisted substantially of consulting fees
of approximately $ 14,680 and director fees of $ 2,500. We also incurred
organizational expenses of $ 3,575, for the period from Inception to December
31, 2008.
-25-
For the
year ended December 31, 2009, we did not generate any revenues and incurred
a loss of approximately ($ 72,143). During the year, our expenses primarily
related to the preparation and implementation of our planned principal
operations. Such expenses consisted substantially of consulting fees of
approximately $ 32,881(of which $ 26,000 were paid through the issuance of our
common stock), director fees of $ 2,665, accounting fees of $ 16,417, marketing
fees of $ 6,286 and other professional fees of $ 5,553. We also incurred
organizational expenses of $ 1,377 for the year ended December 31, 2009 and
other expenses of approximately $ 6,964.
Our
results of operations for the year ended December 31, 2009 and the period from
Inception to December 31, 2008 are not necessarily indicative of the results
that may occur for any future period. We expect to expand our business and
client base, which will result in increasing expenses as we develop and build
our operations.
Liquidity and Capital
Resources
During
the period from Inception to December 31, 2008, we did not have any cash flows
from operating activities. The use of cash resulted primarily from an increase
in related party payable of approximately $3,575 and increases in accounts
payable and accrued liabilities of approximately $17,180.
We did
not have cash flows provided by financing activities for the period
from Inception to December 31, 2008. At December 31, 2008 we did not
have any cash on hand.
During
the year ended December 31, 2009, we used cash flow from operating activities of
approximately $36,949. The use of cash resulted primarily from increases in
related party payable of approximately $1,378 and change in accounts
payable and accrued liabilities of approximately $7,816 as well as the issuance
of common stock for services in the amount of $ 26,000.
Cash flows provided by financing activities for the year ended December 31, 2009 approximated $ 103,640.and were generated through sales of our common stock.
At
December 31, 2009 we had $66,691 in cash on hand.
For the
next twelve months, we expect cash needs of up to $200,000 to finance the
further set-up of our business and IT-infrastructure, the start of our early
operational work and to cover our ongoing working capital needs in order to
commence operations. At April 1, 2010, we had $17,684 in cash. At our
current monthly burn rate of approximately $5,000, we have sufficient cash to
continue operations for 3 months.In order to cover our cash needs, we are
considering raising additional funds in the form of equity capital, mezzanine
financing and/or senior loans through private placements, loan applications or
any other alternative approach. As of today, we have not yet decided on any
action to be taken during the upcoming months. The preparation of further
detailed financing concepts and solutions will be part of our upcoming
operational work. In the interim, our principal shareholder
Agromerkur AG has orally agreed to loan on a non-interest bearing demand basis
funds to maintain operations at the current level for nine months
thereafter. If he fails to do so and we do not secure funds from other
sources, we may be forced to suspend or terminate
operations.
Going
Concern
We have
incurred net losses and losses from operations and we expect that we will
continue to have negative cash flows as we implement our business plan. There
can be no assurance that our continuing efforts to execute our business plan
will be successful and that we will be able to continue as a going concern. The
accompanying consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America,
which contemplate our continuation as a going concern.
We
currently do not have sufficient cash to sustain us for the next twelve months
and we will require additional financing in order to execute our operating plan
and continue as a going concern. To meet our cash needs, we expect to raise
capital through a public placement offering. In the event that this financing
does not materialize, we may be unable to implement our current plans for
expansion, pay our obligations as they become due or continue as a going
concern, any of which circumstances would have a material adverse effect on our
business, prospects, financial condition and results of operations.
Limited operating
history
As a
result of our limited operating history, we have limited meaningful historical
financial data upon which to predict future operating results. Accordingly, we
do not believe that you should rely on our current operating results to predict
our future performance. You must consider our prospects in light of the risks,
expenses and difficulties encountered by companies in new and rapidly evolving
markets. We may not be successful in addressing these risks and difficulties.
Revenues and operating results generally will depend on the volume of, timing of
and ability to complete transactions, which are difficult to forecast. In
addition, there can be no assurance that we will be able to accurately predict
our net revenue. We may be unable to adjust spending in a timely manner to
compensate for any unexpected revenue shortfall or other unanticipated changes
in our industry. Any failure by us to accurately make predictions could have a
material adverse effect on our business, results of operations and financial
condition.
-26-
Critical Accounting
Policies
Our
critical accounting policies, including the assumptions and judgments underlying
them, are disclosed in the Notes to the Financial Statements. We have
consistently applied these policies in all material respects. We do not believe
that our operations to date have involved uncertainty of accounting treatment,
subjective judgment, or estimates, to any significant
degree.
DESCRIPTION
OF PROPERTY
We lease
the following property:
·
|
Address:
2533 N. Carson Street, Suite 4621, Carson City, NV 89706,
USA
|
·
|
Number
of Square Feet: 70
|
·
|
Name
of Landlord: Laughlin Associates,
Inc.
|
·
|
Term
of Lease: Annual payment in advance
|
·
|
Monthly
Rental: $170
|
·
|
Adequate
for current needs: It is adequate for the current situation of starting
and setting up the operational business. But it is not adequate in the mid
and long term. Actually, management is evaluating several possible
locationsto have the company’s headquarter and operations center in the
future.
|
We have
no policy with respect to investments in real estate development or interests in
real estate, and no policy with respect to investments in real estate mortgages.
Further, we have no policy with respect to investments in securities of or
interests in persons primarily engaged in real estate activities.
TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN
CONTROL PERSONS
As of
December 31, 2008, we recorded a stock subscription receivable of $10,500 from
our sole shareholder, Agromerkur, AG. The subscription was received on February
24, 2009.
During
the period September 11, 2008 (date of inception) to December 31 , 2009 we accrued $ 4,953 for organizational expenses paid by United Equity
Capital AG, a shareholder, on behalf of the Company.
The
amounts and terms of the above transactions may not necessarily be indicative of
the amounts and terms that would have been incurred had comparable transactions
been entered into with independent third parties.
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 he 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.
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 or accredited investor must make a special
suitability determination regarding the purchaser and must receive the
purchaser's written consent to the transaction prior to the sale. Generally, an
individual with a net worth in excess of $1,000,000 or annual income exceeding
$200,000 individually or $300,000 together with his or her spouse is considered
an accredited investor. In addition, under the penny stock regulations the
broker-dealer is required to:
-27-
·
|
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 not engaged in any discussions with a FINRA Market Maker to file our
application on Form 211 with FINRA.
Holders
As of the
date of this registration statement, we had 35 holders 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 December 31, 2010, including a Form 10-K for the
year ended December 31, 2010, assuming this registration statement is declared
effective before that date. At or prior to December 31, 2010, we
intend to voluntarily 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 December
31, 2010. If we do not file a registration statement on Form 8-A at
or prior to December 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.
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.
-28-
EXECUTIVE
COMPENSATION
Summary Compensation
Table
The table
below summarizes all compensation awarded to, earned by, or paid to our
Principal Executive Officer, our two most highly compensated executive officers
other than our PEO who occupied such position at the end of our latest fiscal
year, and up to two additional executive officers who would have been included
in the table below except for the fact that they were not executive officers at
the end of our latest fiscal year, by us, or by any third party where the
purpose of a transaction was to furnish compensation, for all services rendered
in all capacities to us for the fiscal years ended December 31, 2008 and
2009.
Summary Equity Awards
Table
Name
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Non
qualified deferred compensation
|
Director's
Fees
|
Consulting
Fees
|
Total
|
Hans
Wadsack
Cheif Executive Officer
|
2009
2008
|
-
-
|
-
-
|
-
-
|
-
-
|
-
-
|
2,665[1]
2,679[1]
|
7,881
-
|
10,546
2,679
|
Zbynek
Brzon
Executive
Vice President
|
2009
2008
|
-
-
|
-
-
|
-
-
|
-
-
|
-
-
|
2,500
-
|
-
-
|
2,500
-
|
Caroline
Hermann
Executive
Vice President
|
2009
2008
|
-
-
|
-
-
|
-
-
|
-
-
|
-
-
|
2,500
-
|
-
-
|
2,500
-
|
[1]
Director fee paid to Wadsack Trust Ltd.
The
following table sets forth certain information for our executive officers
concerning unexercised options, stock that has not vested, and equity incentive
plan awards as of December 31, 2008 and 2009..
Outstanding Equity Awards at
Fiscal Year-End December 31, 2009 and
2008
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Equity
Incentive Plan Awards:
Number
of Securities Underlying Unexercised Unearned Options (#)
|
Option
Exercise Price ($)
|
Option
Expiration Date
|
Number
of Shares or Units of Stock That Have Not Vested (#)
|
Market
Value of Shares or Units of Stock That Have Not Vested ($)
|
Equity
Incentive Plan Awards:
Number
Of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
|
Incentive
Plan Awards:
Market
or Payout Value of Unearned Shares, Units or Other Rights that have not
Vested ($)
|
Hans
Wadsack
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Zbynek
Brzon
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Caroline
Hermann
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Narrative disclosure to
summary compensation and option tables
We do not have a compensation arrangement with CEO Hans
Wadsack, although we have orally agreed that he may
charge us management and consulting fees according to his work at a rate of $340
per hour.
Our
executive vice presidents, Zbynek Brzon and Caroline Hermann, will invoice us
for their services as needed at rates of $100 per hour.
At no
time during the last fiscal year with respect to any person listed in the Table
above was there:
·
|
any
outstanding option or other equity-based award repriced or otherwise
materially modified (such as by extension of exercise periods, the change
of vesting or forfeiture conditions, the change or elimination of
applicable performance criteria, or the change of the bases upon which
returns are determined;
|
·
|
any
waiver or modification of any specified performance target, goal or
condition to payout with respect to any amount included in non-stock
incentive plan compensation or
payouts;
|
-29-
·
|
any
option or equity grant;
|
·
|
any
non-equity incentive plan award made to a named executive
officer;
|
·
|
any
nonqualified deferred compensation plans including nonqualified defined
contribution plans; or
|
·
|
any
payment for any item to be included under All Other Compensation in the
Summary Compensation Table.
|
Board of
Directors
Director
Compensation
Name
|
Year
ended
|
Fees
earned or paid in cash
($)
|
Stock
awards ($)
|
Option
awards ($)
|
Non-equity
incentive plan compensation
($)
|
Nonqualified
deferred compensation earnings ($)
|
All
other compensation ($)
|
Total
($)
|
Hans
Wadsack
|
2009
|
2,665
|
0
|
0
|
0
|
0
|
0
|
2,665
|
|
2008
|
2,679
|
0
|
0
|
0
|
0
|
0
|
2,758
|
Narrative
to Director Compensation Table
Mr.
Wadsack charges us an annual director’s fee of approximately $2, 795 . Furthermore, he charges us out-of-pocket expenses if
they occur.
Mr.
Michael Williams charges us an annual director’s fee of approximately
$2,500.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
HERMES JETS,
INC.
(A Development Stage
Enterprise)
Financial
Statements
as
of and for the Year Ended December 31, 2009,
as
of December 31, 2008 and
for
the Period from September 11, 2008 (Inception) to December 31,
2008
and
Cumulative for the Period from September 11, 2008 (Inception) to December 31,
2009
-31-
HERMES JETS,
INC.
(A Development Stage
Enterprise)
TABLE OF
CONTENTS
33
|
||
34
|
||
35
|
||
36
|
||
37
|
||
38
|
-32-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the
Stockholder and Board of Directors of Hermes Jets, Inc.:
We have
audited the accompanying balance sheets of Hermes Jets, Inc. (the “Company”), a
development stage enterprise, as of December 31, 2009 and 2008 and the related
statements of operations, stockholders’ equity (deficit) and cash flows for the
year ended December 31, 2009, the period from September 11, 2008 (Inception) to
December 31, 2008 and cumulative from September 11, 2008 (Inception) to December
31, 2009. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no
such opinion. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of December 31, 2009
and 2008, and the results of its operations and cash flows for the year ended
December 31, 2009, the period from September 11, 2008 (Inception) to December
31, 2008, and Cumulative from September 11, 2008 (Inception) to December 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 A to the
financial statements, the Company is in the development stage, has suffered
losses from operations and will require a significant amount of capital to
proceed with its business plan. These factors raise substantial doubt about the
Company’s ability to continue as a going concern. Management’s plans
in regard to these matters are also described in Note A. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Stark
Winter Schenkein & Co., LLP
April 13,
2010
Denver,
Colorado
-33-
HERMES JETS,
INC.
(A Development Stage
Enterprise)
December
31, 2009
|
December
31, 2008
|
|||||||
ASSETS
|
||||||||
Cash
|
$ | 66,691 | $ | - | ||||
|
||||||||
$ | 66,691 | $ | - | |||||
|
||||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable and accrued liabilities
|
$ | 24,996 | $ | 17,180 | ||||
Due
to related party
|
4,953 | 3,575 | ||||||
Total
current liabilities
|
29,949 | 20,755 | ||||||
STOCKHOLDERS’
EQUITY (DEFICIT):
|
||||||||
Common
stock, $0.001 par value, 100,000,000 shares
authorized;
5,004,200
(2009) and none (2008) shares issued and
outstanding
|
5,004 | - | ||||||
Additional
paid-in capital
|
124,636 | - | ||||||
Common
stock subscribed (0 and 3,500,000 shares)
|
- | 10,500 | ||||||
Common
stock subscription receivable
|
- | (10,500 | ) | |||||
Deficit
accumulated during the development stage
|
(92,898 | ) | (20,755 | ) | ||||
Total
stockholders’ equity (deficit)
|
36,742 | (20,755 | ) | |||||
$ | 66,691 | $ | - |
See
notes to financial statements.
-34-
HERMES JETS,
INC.
(A Development Stage
Enterprise)
STATEMENTS
OF OPERATIONS
For
the Year Eended December 31, 2009
|
For
the Period from September 11, 2008 (Inception) to December 31,
2008
|
Cumulative
For the Period from September 11, 2008 (Inception) to December 31,
2009
|
||||||||||
REVENUES
|
$ | - | $ | - | $ | - | ||||||
OPERATING
EXPENSES:
|
||||||||||||
Selling,
general and administrative expenses
|
72,143 | 20,755 | 92,898 | |||||||||
Total
operating expenses
|
72,143 | 20,755 | 92,898 | |||||||||
NET
LOSS
|
(72,143 | ) | (20,755 | ) | (92,898 | ) | ||||||
NET
LOSS PER SHARE:
|
||||||||||||
Net
loss per common share (basic and diluted):
|
$ | (.02 | ) | $ | (.02 | ) | ||||||
Weighted
average number of common shares outstanding (basic and
diluted)
|
4,667,159 | 1,281,250 |
See
notes to financial statements.
-35-
HERMES JETS,
INC.
(A Development Stage
Enterprise)
STATEMENT
OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR
THE PERIOD FROM SEPTEMBER 11, 2008 (INCEPTION) TO DECEMBER 31,
2009
Common
Stock
|
Additional
Paid-in
|
Common
Stock
|
Common
Stock Subscriptions
|
Deficit
Accumulated During the Development
|
||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Subscribed
|
Receivable
|
Stage
|
Total
|
||||||||||||||||||||||
Balances,
September 11, 2008 (Inception)
|
- | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||
Founders
Shares at $.003
|
3,500,000 | - | - | 10,500 | (10,500 | ) | - | - | ||||||||||||||||||||
Net
loss
|
- | - | - | - | - | (20,755 | ) | (20,755 | ) | |||||||||||||||||||
Balances,
December 31, 2008
|
3,500,000 | - | - | 10,500 | (10,500 | ) | (20,755 | ) | (20,755 | ) | ||||||||||||||||||
Issuance
of Common Stock:
|
||||||||||||||||||||||||||||
Founders
Shares issued
|
3,500 | 7,000 | (10,500 | ) | 10,500 | - | 10,500 | |||||||||||||||||||||
For
cash at $0.01 per share
|
83,000 | 83 | 747 | - | - | - | 830 | |||||||||||||||||||||
For
cash at $0.04 per share
|
171,500 | 172 | 6,689 | - | - | - | 6,861 | |||||||||||||||||||||
For
cash at $0.06 per share
|
774,100 | 774 | 45,671 | - | - | - | 46,445 | |||||||||||||||||||||
For
cash at $0.08 per share
|
446,300 | 446 | 35,258 | - | - | - | 35,704 | |||||||||||||||||||||
For
cash at $1.00 per share
|
3,300 | 3 | 3,297 | - | - | - | 3,300 | |||||||||||||||||||||
For
consulting services at $1.00 per share
|
26,000 | 26 | 25,974 | - | - | - | 26,000 | |||||||||||||||||||||
Net
loss
|
- | - | - | - | - | (72,143 | ) | (72,143 | ) | |||||||||||||||||||
Balances,
December 31, 2009
|
5,004,200 | $ | 5,004 | $ | 124,636 | $ | - | $ | - | $ | (92,898 | ) | $ | 36,742 | ||||||||||||||
See
notes to financial statements.
-36-
HERMES JETS,
INC.
(A Development Stage
Enterprise)
STATEMENTS OF CASH FLOWS
For
the Year Ended December 31, 2009
|
For
the Period from September 11, 2008 (Inception) to December 31,
2008
|
Cumulative
from September 11, 2008 (Inception) to December 31,
2009
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
loss
|
$ | (72,143 | ) | $ | (20,755 | ) | $ | (92,898 | ) | |||
Issuances
of common stock for consulting services
|
26,000 | - | 26,000 | |||||||||
Changes
in assets and liabilities, net:
|
||||||||||||
Accounts
payable and accrued liabilities
|
7,816 | 17,180 | 24,996 | |||||||||
Due
to related party
|
1,378 | 3,575 | 4,953 | |||||||||
NET
CASH USED IN OPERATING ACTIVITIES
|
(36,949 | ) | - | (36,949 | ) | |||||||
NET
CASH USED IN INVESTING ACTIVITIES
|
- | - | - | |||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds
from issuance of common stock
|
103,640 | - | 103,640 | |||||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
103,640 | - | 103,640 | |||||||||
NET
INCREASE IN CASH
|
66,691 | - | 66,691 | |||||||||
CASH,
BEGINNING OF PERIOD
|
- | - | - | |||||||||
CASH,
END OF PERIOD
|
$ | 66,691 | $ | - | $ | 66,691 | ||||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||||
Cash
paid during the period for interest
|
$ | - | $ | - | $ | - | ||||||
Cash
paid during the period for taxes
|
$ | - | $ | - | $ | - | ||||||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
|
||||||||||||
Stock
subscription for common stock subscribed
|
$ | - | $ | 10,500 | $ | 10,500 | ||||||
See
notes to financial statements.
-37-
NOTE
A – FORMATION, BACKGROUND AND OPERATIONS OF THE
COMPANY
Business
Hermes
Jets, Inc. (the “Company”) was incorporated under the laws of the state of
Nevada on September 11, 2008 (“Inception”). The primary business of
the Company will be to act as a global broker for business and private jets, by
connecting travelers (corporations, institutions and wealthy private
individuals) with executive aircraft which are independently owned and operated
by third party companies or individuals. The Company will not own or
operate the aircraft, manage pilots, or own supporting operator infrastructure,
like operations and maintenance facilities. Such activities will be
conducted by operators who specialize in air travel and the Company will act
only as a broker for such services.
Going
Concern
The
accompanying financial statements have been prepared on a going concern basis
which contemplates the realization of assets and liquidation of liabilities in
the ordinary course of business.
The
Company has incurred net losses and losses from operations since inception, and
expects that it will continue to have negative cash flows as management
implements their business plan. There can be no assurance that the
continuing efforts to execute their business plan will be successful and that
the Company will be able to continue as a going concern. The financial
statements have been prepared in conformity with accounting principles generally
accepted in the United States of America, which contemplate our continuation as
a going concern.
The
Company currently does not have sufficient cash to sustain itself for the next
twelve months, and will require additional financing in order to execute its
operating plan and continue as a going concern. To meet its cash
needs, management expects to raise capital through a private placement offering.
In the event that this financing does not materialize, the Company may be unable
to implement its current plans for expansion, pay its obligations as they become
due or continue as a going concern, any of which circumstances would have a
material adverse effect on the Company’s business, prospects, financial
condition and results of operations.
The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
NOTE
B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of
Accounting
The
financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America. Because the
Company has not generated significant revenues, it is considered to be in the
development stage as defined in FASB Accounting Standards Codification (ASC)
915, “Development Stage Entities”. Accordingly, some of the Company’s accounting
policies and procedures have not yet been fully established but the following
accounting policies reflect those policies it expects to implement as its
business operations develop.
Effective
July 1, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification™ (“Codification”) which became the
single source of authoritative US GAAP. The Codification did not create any new
GAAP standards but incorporated existing accounting and reporting standards into
a new topical structure with a new referencing system to identify authoritative
accounting standards, replacing the prior references to Statement of Financial
Accounting Standards (“SFAS”), Emerging Issues Task Force (“EITF”), FASB Staff
Position (“FSP”), etc. Authoritative standards included in the Codification are
designated by their Accounting Standards Codification (“ASC”) topical reference,
and new standards will be designated as Accounting Standards Updates (“ASU”),
with a year and assigned sequence number. References to prior standards have
been updated to reflect the new referencing system.
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Actual results could
differ from those estimates. Changes in facts and circumstances may
result in revised estimates, which are recorded in the period in which they
become known.
-38-
Revenue
Recognition
The
Company’s revenue recognition policy is consistent with the criteria set forth
in Staff Accounting Bulletin 104 – Revenue Recognition in Financial Statements
(“SAB 104”) for determining when revenue is realized or realizable and
earned. In accordance with the requirements of SAB 104 we recognize
revenue when (1) persuasive evidence of an arrangement exists; (2) delivery of
our services has occurred; (3) our price to our customer is fixed or
determinable; and (4) collectibility of the sales price is reasonably
assured.
Accounts Receivable and
Allowance for Doubtful Accounts
Accounts
receivable are determined to be past due if payment is not made in accordance
with the terms of the Company’s contracts, and receivables are written off when
they are determined to be uncollectible. Management evaluates the allowance for
doubtful accounts on a regular basis for adequacy. The level of the allowance
account and amounts related to bad debts is based upon management’s review of
the collectibility of the receivables in light of historical experience, adverse
situations that may affect the customers’ ability to pay, estimated value of any
underlying collateral and prevailing economic conditions. This evaluation is
inherently subjective as it requires estimates that are susceptible to
significant revision as more information becomes available.
Cash and Cash
Equivalents
The Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents.
Short-term
Investments
Short-term
investments are highly liquid investments with maturities between three months
and one year. At December 31, 2009 and 2008, there were no short-term
investments.
Property and
Equipment
Property
and equipment are stated at cost. Major additions are capitalized and minor
additions and maintenance and repairs, which do not extend the useful life of an
asset, are expensed as incurred. Depreciation and amortization are provided
using the straight-line method over the shorter of the lease term, if any, or
the assets' estimated useful lives. At December 31, 2009 and 2008, there was no
property or equipment.
Long-Lived
Assets
In
accordance with FASB ASC 360-10-40, “Property, Plant and Equipment, Impairment
of and Disposal of Long-Lived Assets” (ASC 360-10-40), the Company evaluates the
recoverability of long-lived assets and the related estimated remaining lives
when events or circumstances lead management to believe that the carrying value
of an asset may not be recoverable. At December 31, 2009 and 2008, there were no
long-lived assets.
Advertising
Costs
Advertising
expenses, for which there was none during the year ended December 31, 2009 and
the period September 11, 2009 (inception) to December 31, 2008, are expensed as
incurred. During the year ended December 31, 2009, the Company incurred
marketing costs of $6,286 for services relating to its corporate design and
website.
Net Loss Per
Share
Net loss
per share is computed in accordance with FASB ASC 260-10-55 “Earnings Per Share”
and SEC Staff Accounting Bulletin No. 98 ("SAB 98"). Under the
provisions of FASB ASC 260 and SAB 98, basic net loss per share is computed by
dividing the net loss available to common stockholders for the period by the
weighted average number of common shares outstanding during the
periods. Diluted net loss per share is computed by dividing the
net loss for the period by the number of common and common equivalent shares
outstanding during the period. Basic and diluted loss per share is
identical in the accompanying statements of operations.
-39-
Income
Taxes
Income
taxes are computed in accordance with FASB ASC 740-10-05 "Accounting for Income
Taxes" ("ASC
740"). Under ASC 740, deferred taxes are recognized for the tax
consequences of temporary differences by applying enacted statutory rates
applicable to future years to differences between the tax bases of assets and
liabilities and their financial statement carrying amounts. Also, the
effect on deferred taxes of a change in tax rates is recognized in the income
statement in the period that includes the enactment date. At December
31, 2009 and 2008, there were no temporary differences between financial and
taxable reporting.
ASC 740
prescribes a recognition threshold and a measurement attribute for the financial
statement recognition and measurement of tax positions taken or expected to be
taken in a tax return. For those benefits to be recognized, ASC 740 requires
that a tax position must be more-likely-than-not to be sustained upon
examination by taxing authorities. The amount recognized is measured as the
largest amount of benefit that is greater than 50 percent likely of being
realized upon ultimate settlement.
Financial Instruments and
Concentrations of Credit Risk
Financial
instruments, as defined in FASB ASC 825-10-50, “Disclosures of Financial
Instruments,” consist of cash, evidence of ownership in an entity and contracts
that both (1) impose on one entity a contractual obligation to deliver cash or
another financial instrument to a second entity, or to exchange other financial
instruments on potentially unfavorable terms with the second entity, and (2)
conveys to that second entity a contractual right (a) to receive cash or another
financial instrument from the first entity or (b) to exchange other financial
instruments on potentially favorable terms with the first entity. Accordingly,
the Company’s financial instruments consist primarily of cash and cash
equivalents, short-term investment(s), accounts receivable, accounts payable and
accrued liabilities. The carrying values of our cash and cash
equivalents, receivables and accounts payable and accrued and other liabilities
approximate their respective fair values due to their short-term
nature.
Financial
instruments that may potentially subject us to significant concentrations of
credit risk, consist primarily of cash and cash equivalents and accounts
receivable. The Company has not experienced any losses in such
accounts.
Foreign Currency
Translation
The
functional currency for the Company’s financial statements is the United States
Dollar. Due to the Company’s anticipated foreign operations, certain
transactions may be completed in Euros or Swiss Francs. Gains or
losses resulting form foreign currency transactions will be included in foreign
exchange gains (losses) in the statements of operations.
Fair Value
Measurements
FASB ASC
820-10-05, “Fair Value Measurements and Disclosures” (“ASC 820”) defines
fair value, establishes a methodology for measuring fair value, and expands the
required disclosure for fair value measurements. FASB ASC 825-10-05, “The Fair
Value Option for Financial Instruments” (“ASC 825”) permits entities to choose
to measure many financial instruments and certain other items at fair
value.
At
December 31, 2009 and 2008, the Company did not have any items to be measured at
fair value.
-40-
Recently Issued Accounting
Pronouncements
The
following pronouncements have become effective during the period covered by
these financial statements or will become effective after the end of the period
covered by these financial statements:
Pronouncement
|
Issued
|
Title
|
ASC
805
|
December
2007
|
Business
Combinations
|
ASC
810
|
December
2007
|
Non-controlling
Interests in Consolidated Financial Statements—an amendment to ARB No.
51
|
ASC
815
|
March
2008
|
Disclosures
about Derivative Instruments and Hedging Activities—an amendment to FASB
Statement No. 133
|
ASC
944
|
May
2008
|
Accounting
for Financial Guarantee Insurance Contracts—an interpretation of FASB
Statement No. 60
|
ASC
855
|
May
2009
|
Subsequent
Events
|
ASC
105
|
June
2009
|
The FASB Accounting Standards
Codification and
the Hierarchy of Generally Accepted Accounting Principles—a replacement of
FASB Statement No. 162
|
ASC
480
|
August
2009
|
Accounting
for Redeemable Equity Instruments – Amendment to section
480-10-S99
|
ASC
820
|
August
2009
|
Fair
Value Measurements and Disclosures – Measuring Liabilities at Fair
Value
|
ASC
260
|
September
2009
|
Earnings
per Share – Amendments to Section 260-10-S99
|
ASC
323
ASC
505
|
September
2009
|
Accounting
for Investments – Equity Method and Joint Ventures and Accounting for
Equity-Based Payments to Non-Employees – Amendments to Sections 323-10-S99
and 505-50-S99
|
ASC
820
|
September
2009
|
Investments
in Certain Entities that Calculate Net Asset Value per Share (or Its
Equivalent)
|
ASC
605
|
October
2009
|
Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements – a
consensus of the FASB Emerging Issues Task Force
|
ASC
470
|
October
2009
|
Accounting
for Own-Share Lending Arrangements in Contemplation of Convertible Debt
Issuance or Other Financing – a consensus of the FASB Emerging Issues Task
Force
|
ASC
860
|
December
2009
|
Transfers
and Servicing (Topic 860): Accounting for Transfers of Financial
Assets
|
ASC
505
|
January
2010
|
Accounting
for Distributions to Shareholders with Components of Stock and Cash – a
consensus of the FASB Emerging Issues Task Force
|
ASC
810
|
January
2010
|
Consolidation
(Topic 810): Accounting and Reporting for Decreases in Ownership of a
Subsidiary – a Scope Clarification
|
ASC
718
|
January
2010
|
Compensation
– Stock Compensation (Topic 718): Escrowed Share Arrangements and the
Presumption of Compensation
|
ASC
820
|
January
2010
|
Fair
Value Measurements and Disclosures (Topic 820): Improving Disclosures
about Fair Value Measurements
|
ASC
855
|
February
2010
|
Subsequent
Events (Topic 855): Amendments to Certain Recognition and Disclosure
Requirements
|
ASC
810
|
February
2010
|
Consolidation
(Topic 810): Amendments for Certain Investment
Funds
|
ASC
815
|
March
2010
|
Derivatives
and Hedging (Topic 815): Scope Exception Related to Embedded Credit
Derivatives
|
Management
does not anticipate that the new accounting pronouncements listed above will
have a material impact on the Company’s financial
statements.
NOTE
C –EQUITY
The
Company is authorized to issue 100,000,000 shares of common stock at $0.001 par
value each share. In November 2008, the Company’s founder subscribed
to 3,500,000 shares of common stock for an initial cash contribution of $10,500
paid in 2009 ($0.003 per share). From January 12, 2009 through March
13, 2009, fourteen investors purchased 1,474,900 shares of common stock for
$89,840 ($0.01 to $0.08 per share). During March and April 2009,
seventeen investors purchased 3,300 shares of common stock for $3,300 ($1.00 per
share) and during such time the Company issued an additional 26,000 shares to
two service providers for legal and consulting services valued at approximately
$26,000 ($1.00 per share).
-41-
NOTE
D –RELATED PARTY TRANSACTIONS
During
the year ended December 31, 2009, the period from September 11, 2008 (Inception)
to December 31, 2008, and the period from September 11, 2008 (Inception) to
December 31, 2009, the Company incurred $1,378, $3,575 and $4,953, respectively,
for organizational expenses paid by a related party. These amounts
were unpaid as of December 31, 2009 and compose the amounts under “due to
related party” in the balance sheet.
During
the year ended December 31, 2009, the period from September 11, 2008 (Inception)
to December 31, 2008, and the period from September 11, 2008 (Inception) to
December 31, 2009 , the Company incurred director’s and consulting fees of
$10,546 (in the aggregate), $5,180 and $15,726, respectively, from related
parties. Total liabilities to these related parties, which are
included in “accounts payable and accrued liabilities” in the balance sheets,
amounted to $13,226 and $5,180 as of December 31, 2009 and 2008,
respectively.
NOTE
E – SUBSEQUENT EVENTS
On
January 26, 2010, the Company offered up to 492,300 shares of common
stock. The selling shareholders offered their shares at $1.00 per
share until the shares are quoted on the OTC Bulletin Board and thereafter at
prevailing market prices or privately negotiated prices.
The
Company has evaluated all events subsequent to such date through, the date of
issuance of these financial statements were available to be issued, and has
determined that there are no other subsequent events that require
disclosure.
HERMES
JETS, INC.
Dated
April 13, 2010
Selling
shareholders are offering up to 492,300 shares of common stock. The selling
shareholders will offer their shares at $1.00 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
July 12, 2010 (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.
-42-
Part
II-INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION
OF OFFICERS AND DIRECTORS
Pursuant
to Section 607.0850 of the Nevada Statutes, the Registrant has the power to
indemnify any person made a party to any lawsuit by reason of being a director
or officer of the Registrant, or serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Our
By-laws provide that the Registrant shall indemnify its directors and officers
to the fullest extent permitted by Nevada law.
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.
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 our Corporation 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*
|
$ | 28 | ||
Legal
Fees and Expenses
|
40,000 | |||
Accounting
Fees and Expenses*
|
25,000 | |||
Miscellaneous*
|
10,000 | |||
Total*
|
$ | 75,028 |
*
Estimated Figure
RECENT
SALES OF UNREGISTERED SECURITIES
Security
holders acquired their shares by purchase exempt from registration under
Regulation S of the 1933 Act and in the case of one service provider under
Section 4(2) of the 1933 Act in exempt transactions as follows: In November 2008
our founder subscribed to 3,500,000 shares of common stock for an initial cash
contribution of $10,500 paid in 2009 ($0.003 per share). From January 12, 2009
through March 13, 2009, 14 investors purchased 1,474,900 shares of common stock
for $89,840 ($0.01 to $0.08 per share).During March and April 2009, 17 investors
purchased 3,300 shares of common stock for $3,300 ($1.00 per share) and during
such time we issued an additional 26,000 to two service providers for legal and
consulting services valued at approximately $26,000 ($1.00 per
share).
We relied
upon Section 4(2) of the Securities Act of 1933, as amended for the above
issuances to US citizens or residents.
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.
|
-43-
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.
|
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
1.
|
Articles
of Incorporation of Hermes Jets, Inc.
|
|
2.
|
By-laws
of Hermes Jets, Inc.
|
Item
4
1.
|
Form
of common stock Certificate of the Hermes Jets, Inc.
[1]
|
Item
5
Item
23
1.
|
||
2.
|
Consent
of Williams Law Group, P.A. (included in Exhibit
5.1) *
|
*filed
herewith
All other
Exhibits called for by Rule 601 of Regulation S-1or SK are not applicable to
this filing.
(1)
Information pertaining to our common stock is contained in our Articles of
Incorporation and By-Laws.
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:
|
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.
|
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.
-45-
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in Zug, Switzerland on April 13,
2010 .
Hermes
Jets, Inc.
|
Name
|
Date
|
Signature
|
||||
By: Hans
Wadsack, President
|
April
13, 2010
|
/s/
Hans Wadsack
|
In
accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated:
SIGNATURE
|
NAME
|
TITLE
|
DATE
|
|||
/s/
Hans Wadsack
|
Hans
Wadsack
|
Director,
Principal Executive Officer, Principal Financial Officer and Principal
Accounting Officer
|
April
13, 2010
|
-46-