Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] 15, ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: June 30, 2010
OR
[ ] 15, TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 333-162469
Stone Harbor Investments, Inc.
(Exact name of registrant as specified in its charter)
Nevada 27-0374885
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
7985 113th Street, Suite 220
Seminole, FL 33772
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: (775) 887-8853
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [x]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. Yes [ ] No [x]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act during the preceding 12 months (or such shorter period that the
registrant was required to file such reports), and (2) has been subject
to such filing requirements for at least the last 90 days.
Yes [ ] No [x]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained hereof, and will not be
contained, nor will be contained, to the best of registrant's knowledge,
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in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.
Yes [ ] No [x]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of "large accelerated filer,"
"accelerated file" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [x] No [ ]
The aggregate market value of voting stock held by non-affiliates on
June 30, 2010 was approximately $0.00.
Number of shares outstanding of the Registrant's Common Stock at October
25, 2010: 78,276,000 shares Of Common Stock, par value $.00001 per share
No documents are incorporated into the text by reference.
3
Stone Harbor Investments, Inc.
Form 10-K
For the Fiscal Year Ended June 30, 2010
Table of Contents
Part I
ITEM 1. BUSINESS 4
ITEM 1A. RISK FACTORS 9
ITEM 1B. UNRESOLVED STAFF COMMENTS 9
ITEM 2. PROPERTIES 9
ITEM 3. LEGAL PROCEEDINGS 10
ITEM 4. (REMOVED AND RESERVED) 10
Part II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS 11
ITEM 6. SELECTED FINANCIAL DATA 12
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 12
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK 16
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 16
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 28
ITEM 9A. CONTROLS AND PROCEDURES 28
ITEM 9B. OTHER INFORMATION 29
Part III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, CONTROL
PERSONS AND CORPORATE GOVERANCE; COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT 30
ITEM 11. EXECUTIVE COMPENSATION 31
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDERS MATTERS 32
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE 33
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 35
Part IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 35
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PART I
ITEM 1 BUSINESS
Overview
--------
We were incorporated in the State of Nevada on May 14, 2009. We offer
internet and web-related services to small businesses including website
development and design, marketing analysis and general business services
including business planning and accounting support functions for
internet start-up companies. We intend to provide affordable Internet
and business related services to small businesses that are looking to
expand their existing marketing efforts to reach a larger audience via
the World Wide Web. Our future will depend on our ability to bring our
services to the market place, which requires careful planning of
providing a service that meets customer standards without incurring
unnecessary cost and expense. Our operation results can also be
affected by our ability to introduce new services or to adjust pricing
to try to gain a competitive advantage. Our website is located at
www.stoneharborweb.com
The demand for web development and marketing services in the small
business market continues to grow. The majority of e-commerce service
providers focus on servicing large and medium-sized corporations. We
intend to develop a business network to try to reduce steep project
costs and allow us to offer web development services at competitive
prices. We hope to accomplish this by aligning ourselves with other
service providers to package an affordable, turn-key internet and
business services offering. There can be no assurance we will be able to
provide our services at lowers costs than other service providers or
that we will be able to align ourselves with other service providers to
bundle services as a turn-key offering. The development of our services
will require the commitment of substantial resources. If additional
capital is not available on acceptable terms, we may not be able to
implement our business development plans or continue our business
operations.
Objectives
----------
1. Offering high-end web and ancillary services to small businesses in
a way that they can understand and afford.
2. Building a strong residual income through secondary subscription-
based services tailored for small business (marketing, consulting and
accounting services).
3. Establishing strategic partnerships with Internet Service Providers
and consulting companies to support small business website and e-
commerce projects (including graphic design, website hosting, technical
support, marketing analysis and accounting services) and leveraging
these relationships to create an affordable client offering.
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Mission
-------
Provide affordable, accessible, and streamlined web and business
services to growing companies.
We are developing an offering of many different types of web
services (web and e-commerce development, marketing and business
consulting) that are tailored to fit the needs and resources of small
companies.
Services
--------
We intend to offer turn-key, full-service Internet solutions for small
businesses. We focus mainly on the web, offering the following as their
primary website services:
- Design and development
- Marketing and analysis
- E-commerce development
We also intend to offer the following ancillary business services:
- Accounting services
- Business planning
- Marketing and operational consulting
Our future will depend on our ability to bring our services to the
market place, which requires careful planning of providing a service
that meets customer standards without incurring unnecessary cost and
expense. Our operation results can also be affected by our ability to
introduce new services or to adjust pricing to try to gain a competitive
advantage. There can be no assurance we will be able to implement our
services.
Website Design and Development: The service that will be offered to
small businesses is modeled after the service that larger web
development firms offer Fortune 1000 companies in the sense that it is
completely customized and unique to each individual client.
Website Marketing and Analysis: After we build the website for the
client, or a new client introduces their pre-existing site, we analyze
and test the website based on an established set of standards that
account for the website's aesthetic value, scalability, functionality,
ease-of-use, and main customer base. After an analysis has been made, we
then explore and present to the client a detailed list of the most
efficient internet marketing tools and methods available to them within
the constraints of their budget. This type of service is pertinent given
the fact that a very large percentage of clients are on a tight budget
and can only afford to take advantage of marketing efforts that are
targeted directly at their desired demographic.
E-Commerce Development: Based on the growth of on-line buying habits
we offer e-commerce solutions from E-Bay store fronts to database
development and deployment. These are customized based on the client's
products and customer base needs.
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Ancillary Business Services - Accounting, Business Planning, Marketing
and Operational Consulting: These services are offered for two reasons.
The first reason is because they are ongoing services that can be used
to establish and maintain a strong residual income. The second reason
for offering these services is to allow for packaging together other
service providers to expand our range of small business services and
lock-in long term client relationships.
Fulfillment
-----------
For the website design, development, marketing, analysis, and
maintenance we intend to contract with industry professionals to handle
our clients' needs. For the website hosting services we will seek to
form alliances with industry leaders to provide top-rate, reliable
hosting solutions. Forming alliances will allow for flexibility in
important hosting features, customizability, and driving down
costs. These benefits are crucial to preserving the integrity of our
company as being a 'full-service internet solutions provider' for small
businesses. The ancillary business services are primarily fulfilled in-
house.
There can be no assurance we will be able to provide our services at
lower costs than other service providers or that we will be able to
align ourselves with other service providers to bundle services as a
turn-key offering. The development of our services will require the
commitment of substantial resources. If additional capital is not
available on acceptable terms, we may not be able to implement our
business development plans or continue our business operations.
Technology
----------
We operate in a Windows(r) environment with an office equipped with
current software and hardware tools available to meet our project
requirements. Within the next year, we will be investing in additional
tools that will extend our capabilities in handling various types of
program files (i.e. Macintosh computers, large capacity data storage,
and high-end image scanners). We also plan to purchase licensing
agreements with our major software vendors to allow for automatic
upgrades in new software tools. There can be no assurance we will have
the capital to acquire or lease the necessary hardware or software to
support our business requirements.
Market Analysis Summary
-----------------------
We will initially focus almost exclusively on small companies looking to
develop an internet presence for the first time. We market our services
to small business owners as a "step-by-step" process, initially starting
out with a small, simple website, then gradually improving and adding to
the site and their entire online marketing efforts.
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Although we plan to bring on clients who simply need an online presence
and nothing more, the most important and sought after clients will be
those business owners who are ready to implement a larger percentage of
their company onto the internet. This type of client will traditionally
need one of the following services:
- E-commerce/shopping cart
- Database driven websites
- Dynamic content and website features
- Aggressive online website marketing
- General business consulting and accounting
Market Needs
------------
The need for small business internet services has existed for several
years. Small businesses and start-up businesses alike are migrating onto
the web at an astonishing rate and making their online presence a higher
priority than in earlier years. We recognize the need for custom, high-
end, dynamic services designed exclusively for small businesses. At this
point, the majority of our competitors are offering services tailored
around big business, to small business owners, or they are offering the
exact opposite, one-dimensional, "cookie cutter" type services.
While small businesses have now recognized the need for having a
presence on the internet, many do not know where to start, how much it
will cost, or even how it will benefit their company. It has been our
experience by talking to small business owners that the decision to take
advantage of the web is not a matter of 'if' but a matter of 'when.'
Market Trends
-------------
An important market trend right now is the one toward aggressive online
and website marketing. Although many small businesses are still waiting
to gain an internet presence, those who already have are beginning to
look for more options along the lines of improving their existing
efforts. We believe that in the upcoming years, small companies
especially, will start to look for more ways to increase the traffic to
their websites.
Another important trend is the overall merging of daily business
operations with the internet and web. Just as the majority of large
companies have already started to use the web to handle interoffice
tasks, we believe that many smaller companies will begin to realize the
time and money saving advantages to this strategy.
Marketing Strategy
------------------
Our initial focus for our marketing and sales efforts are on the Tampa
Bay area and the west coast of Florida, eventually expanding outside of
the immediate area. We market our self as an internet and business
services organization devoted to offering high-end services to small
businesses exclusively. Target customers are owners of small or home-
based companies looking to implement their business plans onto the
8
web. We sell value, service, and quality. We attempt to convince
business owners to look past all of the hype surrounding the internet
and see why having a website and an e-commerce solution is money well
spent. There can be no assurance that we will be able to implement our
business development plans and that we will be successful in attracting
clients.
Competition
-----------
We believe that we have a valuable competitive edge over our local
competitors based on the fact that we have streamlined our services for
the small business market. However, the internet service provider and
website development business is highly competitive. Other competitors
in our market have been in business for significantly longer than our
business, and they have an established customer base and referral
network. Many competitors may have substantially greater financial
resources than us. We compete for clients with many entities,
including, among others, publicly traded companies, international and
regional consulting firms and small local firms. In addition, certain
competitors may be willing to accept lower fees based on their overhead
structure. As a result, we may have difficulty attracting new clients
and may be forced to lower our fees to complete effectively, which
negatively impacts our plan of operations.
Marketing Programs
------------------
Our target client is part of a very specific demographic, for this
reason, we market and promote our services in a direct and specifically
targeted manner using the following media channels:
- Print ads
- Email blasts
- Direct mail
- Educational Seminars
- Local area commerce groups
There can be no assurance that we will be able to implement our business
development plans and that we will be successful in attracting clients.
Pricing Strategy
----------------
For most small business owners, cost, both residual and one-time are
huge influences on the decisions they make regarding everyday operations
of their company. Even though we offer customized services and pricing
is based on an hourly fee, to make it easier and less confusing for the
clients, we have established a packaged pricing system:
- Budget Domain Website Package ($599.00): For simple, information
based websites. Popular with companies who just need to gain an internet
presence.
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- Mid-Level Website Package ($999.00): Information based websites
with a large amount of content. Popular with companies that have a large
services/products list and/or want to implement more of their business
into the web.
- Catalog Website Package ($1,499.00): Usually reserved for product-
oriented websites that are e-commerce enabled. Popular with companies
that have a desire to market heavily on the internet or sell their
products/services directly from the web.
- Website Hosting (from $25.00 to $45.00 per month): Depending on
the type and size of the website, the price for hosting can vary
greatly. The average cost of hosting for most clients is $35 per month.
- Website Maintenance ($45.00 per hour): We charge a set fee of
$45.00 per hour billed in 15 minute increments. If a client feels as
though they will need their website updated or maintained on a regular
basis, packages are available at a discount rate.
- Ancillary Business Services ($45 per hour): We charge a set fee of
$45.00 per hour billed in 15 minute increments. We also offer set
services on a monthly subscription customized to the client's business.
Certain competitors may be willing to accept lower fees based on their
overhead structure. As a result, we may have difficulty attracting new
clients and may be forced to lower our fees to compete effectively,
which negatively impacts our plan of operations.
Employees
---------
As of October 25, 2010, we have 2 part-time employees, and plan to
employ more qualified employees in the near future.
ITEM 1A. RISK FACTORS
Not applicable for a small reporting company.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None
ITEM 2. PROPERTIES
Our principal executive office is located at 7985 113th Street, Suite
220, Seminole, FL 33772, and our telephone number is (727) 641-
1357. Office space is provided by our president and sole director at no
charge.
10
ITEM 3. LEGAL PROCEEDINGS.
From time to time, we may become involved in various lawsuits and legal
proceedings, which arise, in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result
in these or other matters may arise from time to time that may harm our
business. We are currently not aware of any such legal proceedings or
claims that we believe will have a material adverse effect on our
business, financial condition or operating results.
ITEM 4. (REMOVED AND RESERVED)
11
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
a) Market Information. There is presently little to no public market
for our shares of common stock. Our common stock is quoted on the OTCBB
under the trading symbol SHBV.OB. However, we can provide no assurance
that our shares of common stock will remain quoted on the OTCBB or, if
quoted, that a public market will materialize.
b) At October 25, 2010, there were approximately 43 holders of record
of the registrant's common stock.
c) Holders of the registrant's common stock are entitled to receive
dividends. The payment and amount of future dividends is at the
discretion of our board of directors. No dividends have ever been
paid, and the registrant does not anticipate that dividends will be paid
on its common stock in the foreseeable future.
d) No securities are authorized for issuance by the registrant under
equity compensation plans.
e) Performance graph. Not applicable.
f) Sale of unregistered securities.
During the year ended June 30, 2010, the registrant issued common stock
as follows:
In July, 2009, we issued an aggregate of 75,000 shares of our common
stock to Anslow & Jaclin, LLP, as compensation for legal services
rendered. These securities were issued pursuant to the exemption
provided under Section 4(2) of the Securities Act. These shares of our
common stock qualified for exemption since the issuance shares by us did
not involve a public offering. The offering was not a "public offering"
as defined in Section 4(2) due to the insubstantial number of persons
involved in the deal, size of the offering, manner of the offering and
number of shares offered. We did not undertake an offering in which
we sold a high number of shares to a high number of investors. In
addition, the shareholder had the necessary investment intent as
required by Section 4(2) since she agreed to and received share
certificates bearing a legend stating that such shares are restricted
pursuant to Rule 144 of the Securities Act. This restriction ensures
that these shares would not be immediately redistributed into the market
and therefore not be part of a "public offering." Based on an analysis
of the above factors, we have met the requirements to qualify for
exemption under Section 4(2) of the Securities Act for this
transaction.
In December 2009, we completed a Regulation D Rule 506 offering in which
we sold 18,201,000 shares of common stock to 41 investors, at a price
per share of $0.0033 for an aggregate offering price of $60,670.
12
Item 5(b) Use of Proceeds. Not applicable.
Item 5(c) Purchases of Equity Securities by the issuers and
affiliated purchasers. None.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable for a smaller reporting company.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following plan of operation provides information which management
believes is relevant to an assessment and understanding of our results
of operations and financial condition. The discussion should be read
along with our financial statements and notes thereto. This section
includes a number of forward-looking statements that reflect our current
views with respect to future events and financial performance. Forward-
looking statements are often identified by words like believe, expect,
estimate, anticipate, intend, project and similar expressions, or words
which, by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements. These forward-
looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from our predictions.
Trends and Uncertainties
------------------------
We offer internet and web-related services to small businesses including
website development and design, marketing analysis and general business
services including business planning and accounting support functions
for internet start-up companies. We intend to provide affordable
Internet and business related services to small businesses that are
looking to expand their existing marketing efforts to reach a larger
audience via the World Wide Web. Our future will depend on our ability
to bring our services to the market place, which requires careful
planning of providing a service that meets customer standards without
incurring unnecessary cost and expense. Our operation results can also
be affected by our ability to introduce new services or to adjust
pricing to try to gain a competitive advantage. Our website is located
at www.stoneharborweb.com
The demand for web development and marketing services in the small
business market continues to grow. The majority of e-commerce service
providers focus on servicing large and medium-sized corporations. We
intend to develop a business network to try to reduce steep project
costs and allow us to offer web development services at competitive
prices. We hope to accomplish this by aligning ourselves with other
service providers to package an affordable, turn-key internet and
business services offering. There can be no assurance we will be able to
provide our services at lower costs than other service providers or that
we will be able to align ourselves with other service providers to
bundle services as a turn-key offering. The development of our services
13
will require the commitment of substantial resources. If additional
capital is not available on acceptable terms, we may not be able to
implement our business development plans or continue our business
operations.
Limited Operating History. We have generated no independent financial
history and have not previously demonstrated that we will be able to
expand our business through an increased investment in marketing
activities. We cannot guarantee that the expansion efforts described in
this Registration Statement will be successful. The business is subject
to risks inherent in growing an enterprise, including limited capital
resources and possible rejection of our services offering and/or sales
methods.
Future financing may not be available to us on acceptable terms. If
financing is not available on satisfactory terms, we may be unable to
continue expanding our operations. Equity financing will result in a
dilution to existing shareholders.
Results of Operations
---------------------
For the year ended June 30, 2010, we did not receive any revenue.
Expenses for the year ended totaled $73,429 resulting in a loss from
operations of $73,429. Expenses for the year ended June 30, 2010
consisted of payments to officer of $5,500, consulting and professional
fees of $59,081 and general and administrative expenses of $8,848.
For the period from May 14, 2009 (inception), to June 30, 2009, we had
no revenue. Expenses for the period totaled $25,350 resulting in a loss
from operations of $25,350. Expenses for the period consisted of
payments to officer of $10,000, consulting and professional fees of
$14,000 and general and administrative expenses of $1,350.
Plan of Operation
-----------------
We have begun limited operations, and we require outside capital to
implement our business model.
1. We have begun to implement our business plan by target
marketing our web and ancillary services to small businesses by
networking with professionals in the business community such as
attorneys and accountants to establish our referral source network.
2. All business functions are coordinated and managed by the
founder of the registrant and consultants to the founder, including
other service providers, who assisted us in the preparation of our
recently effective S-1A registration statement (Effective date May 6,
2010 - the registrant's SEC filings can be found on the www.sec.gov
website), and who helped to package our business services solutions for
small business website and e-commerce projects.
14
3. To support our limited marketing efforts we have begun to develop
marketing materials and a public relations and advertising program by
promoting our website, www.StoneHarborWeb.com, at local business
events. To expand our marketing efforts we are actively seeking
additional financing on favorable terms to more quickly promote our
business model to a larger audience, but there is no assurance we will
be able to secure such financing.
4. We have begun to have discussions with prospective clients
regarding our service offering. Our plan of operations includes
attendance at networking opportunities within the business community and
among professionals. The marketing expenses for the next twelve months
are estimated to cost $25,000. The majority shareholder has committed
to cover any cash shortfalls of the registrant, although there is no
written agreement or guarantee. If we are unable to satisfy our cash
requirements we may be unable to proceed with our plan of operations.
5. Over the next 12 months after the initiation of our marketing
campaign, we believe that we will have identified suitable clients to
manage their web development and general business services needs and
begin to generate revenues from our marketing approach. This refers to
the minimum amount of time that will be required to generate revenues
based on meetings with perspective clients in our local market. Once a
prospective client is identified we specify their requirements and
negotiate a contract. To date we have not entered into any contracts or
agreements. There can be no assurance that we will be able to identify
suitable prospective clients for our services or be able to negotiate
contracts on favorable terms.
Management believes that the actions presently being taken to obtain
additional funding and implementing our strategic plans provide the
opportunity for us to continue as a going concern.
Liquidity and Capital Resources
-------------------------------
As of June 30 2010, we had $1,743 in cash.
Based upon the above, we do not have enough cash to support our daily
operations while we are attempting to commence operations and produce
revenues. We estimate we will need an additional $35,000 to implement
our business plans over the next twelve months. We will need to spend
$10,000 to pay accounts payable and accrued expenses associated with our
registration statement. The majority shareholder has committed to cover
any of our cash shortfalls, although there is no written agreement or
guarantee. If we are unable to satisfy our cash requirements we may be
unable to proceed with our plan of operations. In addition, we
anticipate we will need $25,000 to cover marketing and operational
expenses to achieve revenues. We estimate we will commence generating
sales revenues over the next 12 months after initiating our marketing
campaign. During this time we believe that we will have identified
suitable clients to manage their web development and general business
services needs. This refers to the minimum amount of time that we
estimate will be required to generate revenues. We may also be unable
to successfully implement our business plan to generate revenues, as
indicated elsewhere in this filing.
15
To cover the additional cash requirements, we may sell additional shares
of stock or we will require shareholder loans to cover any
shortfall. However, if we are unable to satisfy our cash requirements
we may be unable to proceed with this Offering and our plan of
operations.
We do not anticipate the purchase or sale of any significant equipment.
We also do not expect any significant additions to the number of
employees.
The foregoing represents our best estimate of our cash needs based on
current planning and business conditions. In the event we are not
successful in reaching our initial revenue targets, additional funds may
be required, and we may not be able to proceed with our business plan
for the development and marketing of our core services. Should this
occur, we would suspend or cease operations.
We anticipate that depending on market conditions and our plan of
operations, we may incur operating losses in the foreseeable future.
Therefore, our auditors have raised substantial doubt about our ability
to continue as a going concern.
Investing Activities. For the year ended June 30, 2010 and the period
from inception to June 30, 2009, we did not pursue any investing
activities.
Financing Activities. For the year ended June 30, 2010, we received
loans from shareholders of $3,300 and sold common stock for cash of
$20,870. As a result, we had net cash provided by financing activities
of $24,170 for the year ended June 30, 2010. For the period from
inception through June 30, 2009, we sold common stock for cash of
$40,000 resulting in net cash provided by financing activities of
$40,000.
Our ability to continue as a going concern is dependent on our ability
to raise additional capital and implement our business plan. The
financial statements do not include any adjustments that might be
necessary if we are unable to continue as a going concern.
We are still pursuing this plan but to date we have not been able to
raise additional funds through either debt or equity offerings. Without
this additional cash, we have been unable to pursue our plan of
operations and commence generating revenue. We believe that we may not
e able to raise the necessary funds to continue to pursue our business
operations. As a result of the foregoing, we have recently begun to
explore our options regarding the development of a new business plan and
direction. We are currently engaged in the discussions with a company
regarding the possibility of a reverse triangular merger involving our
company. At this stage, no definitive terms have been agreed to, and
neither party is currently bound to proceed with the merger.
Off-Balance Sheet Arrangements
------------------------------
We have no off-balance sheet arrangements
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Stone Harbor Investments, Inc.
Index to the Financial Statements
As of June 30, 2010 and 2009 and
For the Years Ended June 30, 2010 and 2009
Report of Independent Registered Public Accounting Firm 17
Financial Statements of Stone Harbor Investments, Inc.:
Balance Sheets as of June 30, 2010 and 2009 18
Statements of Operations for the Years
Ended June 30, 2010 and 2009 19
Statements of Stockholders' Equity (Deficit) For
the Years Ended June 30, 2010 and 2009 20
Statements of Cash Flows For the Years Ended
June 30, 2010 and 2009 22
Notes to Financial Statements 23
17
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Stone Harbor Investments, Inc.
We have audited the accompanying balance sheets of Stone Harbor
Investments, Inc. (a development stage company) as of June 30, 2010 and
2009 and the related statement of operations, changes in shareholders'
equity, and cash flows for the period from inception (May 14, 2009) to
June 30, 2010 and 2009. Stone Harbor Investment, Inc.'s management is
responsible for these financial statements. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Stone Harbor
Investments, Inc. as of June 30, 2010 and 2009 and the results of its
operations and its cash flows for the years then ended 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 1 to
the financial statements, the Company has incurred losses and had an
accumulated deficit as of June 30, 2010. These conditions raise
substantial doubt about the Company's ability to continue as a going
concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/ BRIMMER, BUREK & KEELAN LLP
Brimmer, Burek & Keelan LLP
Tampa, Florida
October 25, 2010
18
Stone Harbor Investments, Inc.
(A Development Stage Company)
Balance Sheets
ASSETS
-------
June 30, June 30,
2010 2009
---------- ----------
(Audited) (Audited)
CURRENT ASSETS
Cash $ 1,743 $ 14,650
---------- ----------
Total Current Assets 1,743 14,650
---------- ----------
TOTAL ASSETS $ 1,743 $ 14,650
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued expenses 36,102 -
Loans from shareholders 3,300 -
---------- ----------
Total Liabilities 39,402 -
---------- ----------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.00001 par value,
20,000,000 shares authorized, 0 shares
issued and outstanding.
Common stock, $0.00001 par value, 250,000,000
shares authorized, 78,276,000 and
72,000,000 shares issued and outstanding,
respectively 783 720
Stock Subscription Receivable - (200)
Additional paid-in capital 60,337 39,480
Deficit accumulated during the development stage (98,779) (25,350)
---------- ----------
Total Stockholders' Equity (Deficit) (37,659) 14,650
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 1,743 $ 14,650
========== ==========
The accompanying notes are an integral
part of these financial statements.
19
STONE HARBOR INVESTMENTS, INC.
(A Development Stage Company)
Statements of Operations
From Inception through June 30, 2010
From Inception From Inception
on May 14, on May 14,
Year Ended 2009 Through 2009 Through
June 30, June 30, June 30,
2010 2009 2010
---------- ----------- -----------
OPERATING EXPENSES
General and
administrative $ 73,429 $ 25,350 $ 98,779
---------- ---------- ----------
Total Operating Expenses 73,429 25,350 98,779
---------- ---------- ----------
INCOME (LOSS) FROM
OPERATIONS (73,429) (25,350) (98,779)
---------- ---------- ----------
OTHER EXPENSES
Other income - - -
---------- ---------- ----------
INCOME (LOSS) BEFORE
INCOME TAXES (73,429) (25,350) (98,779)
Income tax expense - - -
---------- ---------- ----------
NET INCOME (LOSS) $ (73,429) $ (25,350) $ (98,779)
========== ========== ==========
BASIC INCOME (LOSS) PER
COMMON SHARE $ (0.001) $ (0.000) $ (0.001)
========== ========== ==========
BASIC WEIGHTED AVERAGE
NUMBER OF COMMON SHARES
OUTSTANDING 75,387,222 63,063,831 74,010,524
========== ========== ==========
DILUTED INCOME (LOSS) PER
COMMON SHARE $ (0.001) $ (0.000) $ (0.001)
========== ========== ==========
DILUTED WEIGHTED AVERAGE
NUMBER OF COMMON SHARES
OUTSTANDING 75,387,222 63,063,831 74,010,524
========== ========== ==========
The accompanying notes are an integral
part of these financial statements
20
STONE HARBOR INVESTMENTS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated Total
Preferred Stock Common Stock Stock Additional During the Stockholders'
--------------- ------------ Subscription Paid-In Development Equity
Shares Amount Shares Amount Receivable Capital Stage (Deficit)
------ ------ ------ ------ ---------- -------- ------------ ---------
Balance, May 14, 2009 - $ - - $ - $ - $ - $ - $ -
Issuance of common
stock for a
subscription
receivable at an
average price of
$.0000033 per share - - 60,000,000 600 - (400) - 200
Stock Subscriptions
Receivable - - - - (200) - - (200)
Issuance of common
stock in June 2009
for cash at an
average price of
$.00333 per share - - 12,000,000 120 - 39,880 - 40,000
Net Loss for the
period from inception
to June 30, 2009 - - - - - - (25,350) (25,350)
----- ---- ---------- ----- ------- -------- -------- --------
Balance, June 30,
2009 - $ - 72,000,000 $ 720 $ (200) $ 39,480 $(25,350) $ 14,650
===== ==== ========== ===== ======= ======== ======== ========
Issuance of common
stock in July in
exchange for
legal services
provided at an
average price of
$.00333 per share - - 75,000 1 - 249 - 250
Issuance of common
stock in August
for cash at an
average price of
$.00333 per share - - 201,000 2 - 668 - 670
Collection of stock
subscription
receivable on
September 24, 2009 - - - - 200 - - 200
Issuance of common
stock in December
2009 for cash at a
price of $.00333
per share - - 6,000,000 60 - 19,940 - 20,000
21
Net loss for the
period from July 1,
2009 to June 30, 2010 - - - - - - (73,429) (73,429)
----- ---- ---------- ----- ------- -------- -------- --------
Balance, June 30,
2010 - $ - 78,276,000 $ 783 $ - $ 60,337 $(98,779) $(37,659)
===== ==== ========== ===== ======= ======== ======== ========
The accompanying notes are an integral
part of these financial statements
22
STONE HARBOR INVESTMENTS, INC.
(A Development Stage Company)
Statements of Cash Flows
From Inception From Inception
on May 14, on May 14,
Year Ended 2009 Through 2009 Through
June 30, June 30, June 30,
2010 2009 2010
---------- ----------- -----------
OPERATING ACTIVITIES
Net loss $ (73,429) $ (25,350) $ (98,779)
Adjustments to reconcile net loss to
net cash used by operating activities:
Common stock issued for legal services 250 - 250
Increase in Accounts Payable and
accrued Expenses 36,102 - 36,102
---------- ---------- ----------
Net Cash Used in Operating
Activities (37,077) (25,350) (62,427)
---------- ----------
INVESTING ACTIVITIES
- - -
---------- ---------- ----------
Net Cash Used in Investing
Activities - - -
---------- ---------- ----------
FINANCING ACTIVITIES
Loans from shareholders 3,300 - 3,300
Common stock issued for cash 20,870 40,000 60,870
---------- ---------- ----------
Net Cash Provided by Financing
Activities 24,170 40,000 64,170
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH (12,907) 14,650 1,743
CASH AT BEGINNING OF PERIOD 14,650 - -
---------- ---------- ----------
CASH AT END OF PERIOD $ 1,743 $ 14,650 $ 1,743
========== ========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ - $ -
Income Taxes $ - $ -
The accompanying notes are an integral
part of these financial statements.
23
STONE HARBOR INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
From Inception Through June 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The financial statements presented are those of Stone Harbor
Investments, Inc. The Company was originally incorporated under the
laws of the state of Nevada on May 14, 2009. Stone Harbor Investments,
Inc. offers internet and web-related services to small businesses
including website development and design, marketing analysis, and
general business services including business planning and accounting
support functions for internet start-up companies. The Company provides
high-end, affordable Internet and business related services to small
businesses that are looking to expand their existing marketing efforts
to reach a larger audience via the World Wide Web. Management has
experience in marketing, commercial website development and business-to-
business.
These financial statements have been prepared on a going concern basis,
which implies that the Company will continue to realize its assets and
discharge its liabilities in the normal course of business. For the year
ending June 30, 2010, the Company recognized no sales revenue and
incurred a net loss of $73,429, and had an accumulated deficit of
$98,779 as of June 30, 2010. The continuation of the Company as a going
concern is dependent upon the continued financial support from its
shareholders, the ability to raise equity or debt financing, and the
attainment of profitable operations from the Company's future business.
Additionally as part of its business plan, the Company is actively
seeking merger partners and strategic alliances in order to accelerate
its growth in the industry. These factors raise substantial doubt
regarding the Company's ability to continue as a going concern. These
financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary should the Company
be unable to continue as a going concern.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Dividends
The Company has not adopted any policy regarding payment of dividends.
No dividends have been paid during any of the periods shown.
Advertising Costs
The Company's policy regarding advertising is to expense advertising
when incurred. The Company had not incurred any advertising expense as
of June 30, 2010 or June 30, 2009, respectively.
24
STONE HARBOR INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
From Inception Through June 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid instruments purchased with a maturity of three months or
less to be cash equivalents to the extent the funds are not being held
for investment purposes. As at June 30, 2010 and June 30, 2009,
respectively, the Company had no cash equivalents.
Basic (Loss) per Common Share
Basic (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of
common shares during the period. Diluted earnings per share is
calculated by dividing the Company's net income available to common
shareholders by the diluted weighted average number of shares
outstanding during the year. The diluted weighted average number of
shares outstanding is the basic weighted number of shares adjusted for
any potentially dilutive debt or equity. There are no such common stock
equivalents outstanding as of June 30, 2010and June 30, 2009,
respectively.
From Inception From Inception
For the Year On May 14, 2009 On May 14, 2009
Ended June 30, Through June 30, Through June 30,
2010 2009 2010
-------------- --------------- ---------------
Net (Loss) Per Share - Basic
Net (Loss) $ (73,429) $ (25,350) $ (98,779)
Weighted Average Shares - Basic 75,387,222 63,063,831 74,010,524
----------- ----------- -----------
Net (Loss) Per Share - Basic $ (0.001) $ (0.000) $ (0.001)
=========== =========== ===========
Net (Loss) Per Share - Diluted
Net (Loss) $ (73,429) $ (25,350) $ (98,779)
Weighted Average Shares - Diluted 75,387,222 63,063,831 74,010,524
----------- ----------- -----------
Net (Loss) Per share - Diluted $ (0.001) $ (0.000) $ (0.001)
=========== =========== ===========
Income Taxes
The Company provides for income taxes under ASC 740 "Accounting for
Income Taxes". ASC 740 requires the use of an asset and liability
approach in accounting for income taxes. Deferred tax assets and
liabilities are recorded based on the differences between the financial
statement and tax bases of assets and liabilities and the tax rates in
effect when these differences are expected to reverse.
25
STONE HARBOR INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
From Inception Through June 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
ASC 740 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more
likely than not that some or all of the deferred tax assets will not be
realized.
Income Taxes (Continued)
The provision for income taxes differs from the amounts which would be
provided by applying the statutory federal income tax rate of 39% to the
net loss of $73,429 for the year ending June 30, 2010 before provision
for income taxes for the following reasons:
From
Inception On
For the Year May 14, 2009
Ended June 30, Through June
2010 30, 2009
------------- ------------
Income tax expense (benefit) at statutory rate $ (24,588) $ (9,885)
Valuation allowance 24,588 9,885
------------- ---------
Income tax expense $ - $ -
============= =========
Net deferred tax assets consist of the following components as of:
June 30, 2010 June 30, 2009
------------- -------------
NOL carryover $ 38,524 $ 9,885
Valuation allowance (38,524) (9,885)
------------- ---------
Income tax expense $ - $ -
============= =========
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances
that could indicate carrying amounts of long-lived assets may not be
recoverable. When such events or changes in circumstances are present,
the Company assesses the recoverability of long-lived assets by
determining whether the carrying value of such assets will be recovered
through undiscounted expected future cash flows. If the total of the
future cash flows is less than the carrying amount of those assets, the
Company recognizes an impairment loss based on the excess of the
carrying amount over the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or the fair value
less costs to sell.
Accounting Basis
The basis is accounting principles generally accepted in the United
States of America. The Company has adopted a June 30 fiscal year end.
26
STONE HARBOR INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
From Inception Through June 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Stock-based compensation
In July 2009, the Company issued 25,000 shares of stock in connection
with legal services associated with the Company's S-1 filing. The
shares were valued at $.01 per share. An additional 50,000 shares were
issued to reflect the Company's stock split effective January 5, 2010
(see footnote 5).
The Company records stock-based compensation in accordance with ASC 718
(formerly SFAS No. 123R "Share Based Payments"), using the fair value
method. All transactions in which goods or services are the
consideration received for the issuance of equity instruments are
accounted for based on the fair value of the consideration received or
the fair value of the equity instrument issued, whichever is more
reliably measurable. Equity instruments issued to employees and the cost
of the services received as consideration are measured and recognized
based on the fair value of the equity instruments issued.
Recent Accounting Pronouncements
The Company has evaluated all the recent accounting pronouncements and
believes that none of them will have a material effect on the company's
financial statements.
NOTE 2 - STOCKHOLDERS' EQUITY
COMMON STOCK
- In June 2009, we entered into a stock subscription agreement for
the sale of 12,000,000 shares of common stock at a price of $0.00333 per
share. The Company realized $40,000 from this subscription.
- In September 2009, the Company entered into various agreements for
the sale of 201,000 shares at a price of $0.00333 per share to 39
different investors. The Company realized $670 from these
subscriptions.
- In December 2009, the Company entered into an agreement for the
sale of 6,000,000 at a price of $0.00333 per share. The Company
realized $20,000 from this subscription.
The above issuances of stock reflect the effect of the Company's stock
split effective on January 5, 2010 (see footnote 5).
NOTE 3 - STOCK SUBSCRIPTION RECEIVABLE
In May 2009, the Company issued to its founder 60,000,000 million shares
of its common stock for a price of $.0000033. Payment for the stock was
received on September 9, 2009.
The above issuances of stock reflect the effect of the Company's stock
split effective on January 5, 2010 (see footnote 5).
27
STONE HARBOR INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
From Inception Through June 30, 2010
NOTE 4 - RELATED PARTY TRANSACTION
Consulting Services - Related Party
The Company's founder and majority shareholder provides various
consulting services to the Company for which he is compensated.
Consultant fees paid were $5,500 for the year ending June 30, 2010 and
$10,000 for the period from inception June 30, 2009.
Note Payable - Related Party
On June 24, 2010, the Company received $3,300 as a loan from the
Company's founder and majority shareholder for operating expenses. The
note has no definitive payment terms and bears no interest. The Company
will pay the balance off when it has the available funds.
NOTE 5 - STOCK SPLIT
The Company's board of directors authorized a three-for-one stock split
effective on January 5, 2010. Each shareholder of record on January 5,
2010 received two additional shares of common stock for each share held
on that date. All share and related information presented in these
financial statements and accompanying footnotes have been adjusted to
reflect the increased number of shares resulting from this action.
NOTE 6 - SUBSEQUENT EVENTS
Management evaluated all activity and concluded that no subsequent
events have occurred that would require recognition in the Financial
Statements or disclosure in the Notes to the Financial Statements.
28
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures:
Our chief executive officer and chief financial officer who are
responsible for all financial and accounting matters during this
reporting period have concluded that the disclosure controls and
procedures were effective as of June 30, 2010. These controls are meant
to ensure that information required to be disclosed by the issuer in the
reports that it files or submits under the Act is recorded, processed,
summarized and reported, within the time periods specified in the
Commission's rules and forms and to ensure that information required to
be disclosed by an issuer in the reports that it files or submits under
the Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or
persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
Management's Annual Report on Internal Control over Financial Reporting:
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Our internal control over
financial reporting is the process designed by and under the supervision
of our chief executive officer and chief financial officer, or the
persons performing similar functions, to provide reasonable assurance
regarding the reliability of our financial reporting and the preparation
of our financial statements for external reporting in accordance with
accounting principles generally accepted in the United States of
America. These officers have evaluated the effectiveness of our
internal control over financial reporting using the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in Internal Control over Financial Reporting - Guidance for
Smaller Public Companies.
Our chief executive officer and chief financial officer have assessed
the effectiveness of our internal control over financial reporting as of
June 30, 2010, and concluded that it was effective.
This annual report does not include an attestation report of the
registrant's registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject
to attestation by the registrant's registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission
that permit the registrant to provide only management's report in this
annual report.
29
Evaluation of Changes in Internal Control over Financial Reporting:
Our chief executive officer and chief financial officer have evaluated
changes in our internal controls over financial reporting that occurred
during the year ended June 30, 2010. Based on that evaluation, our
chief executive officer and chief financial officer, or those persons
performing similar functions, did not identify any change in our
internal control over financial reporting that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.
Important Considerations:
The effectiveness of our disclosure controls and procedures and our
internal control over financial reporting is subject to various inherent
limitations, including cost limitations, judgments used in decision
making, assumptions about the likelihood of future events, the soundness
of our systems, the possibility of human error, and the risk of fraud.
Moreover, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate
because of changes in conditions and the risk that the degree of
compliance with policies or procedures may deteriorate over time.
Because of these limitations, there can be no assurance that any system
of disclosure controls and procedures or internal control over financial
reporting will be successful in preventing all errors or fraud or in
making all material information known in a timely manner to the
appropriate levels of management.
ITEM 9B. OTHER INFORMATION
None.
30
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth the name and age of our officers and
director as of October 25, 2010. Our Executive officer is elected
annually by our Board of Director. Our executive officers hold their
office until they resign, or are removed by the Board or his successor
is elected and qualified.
Name Age Position
---- --- --------
Michael Toups 44 President, Chief Executive Officer, Chief
Financial Officer, Treasurer and Director
Thomas Collentine 52 Secretary, Vice President
Set forth below is a brief description of the background and business
experience of our executive officers and directors for the past five
years.
Mr. Toups is an accounting and corporate finance executive with over 20
years of experience in senior management with specialties in business
strategy, M&A and international trade. He has middle-market corporate
finance experience across a variety of industries as both principal and
advisor and has served in roles as the COO, CFO, and director of
private and publicly traded companies. Mr. Toups expertise includes
PCAOB audits, SEC reporting and Sarbanes-Oxley compliance. He is also
well-versed in Chinese business practices and has directed strategic
business planning for Asia-based companies for over 12 years. Most
recently Mr. Toups has served as the CFO for Longwei Petroleum
Investment Holding Limited since June 2010 and the CFO for China
Bilingual Technology and Education Group, Inc. since October 2010. Mr.
Toups has previously served as Director of Asia Investment Banking,
Midtown Partners & Co. from December 2007 to July 2010 and as the CFO
and Director of Nork Lighting, a China-based manufacturer and the
largest retailer of high-end residential lighting products in China
from December 2007 to July 2010. From January 2001 to December 2007,
he served as president and owner of Peak Crown, a personal services
company for the import of products from Asia and business consulting
services. Mr. Toups holds an MBA in Finance from the
University of Notre Dame and a BBA in Finance from Texas Christian
University.
Mr. Toups is an officer in two public companies, Longwei Petroleum
Investment Holding Limited and China Bilingual Technology and Education
Group, Inc. He is not a director of any public companies.
Michael Toups, our president and sole director, may be deemed a promoter
as defined in Rule 405 under the Securities Act of 1933.
Thomas Collentine has over 25 years of general business and sales
experience in the electronics and high-tech marketplace. Mr. Collentine
has established distribution channels and independent representative
networks throughout the US and internationally. He has managed key
31
customer relationships such as Cisco, Lucent and Motorola on global
contract manufacturing and corporate pricing programs with major
electronics suppliers. Most recently Mr. Collentine was involved in
starting-up a global management and marketing company working with
corporations looking to streamline their manufacturing and business
processes. Mr. Collentine has also operated his own professional
services company since 2008, Thomas Engineered Components, in which he
has worked with numerous off-shore manufacturing groups that have set up
under an operating umbrella in China, Japan and South Korea. Mr.
Collentine's strength is in helping companies build relationships to
create value for their company. From 2008 to the present he has served
as principle of Thomas Engineered Components. From 2007 - 2001 he was a
senior sales representative for Anko Products. From 2000 - 1982 he
served as a sales representative for some of the largest electronic
connector manufacturers in the world, including AESP, Molex, Time
Electronics and Ssub-sem.
Mr. Collentine is not an officer or director of any public companies.
Involvement in Certain Legal Proceedings
----------------------------------------
To the best of our knowledge, during the past ten years, none of the
following occurred with respect to our director or executive officers of
the registrant: (1) 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; (2) any conviction in a criminal proceeding or being subject to a
pending criminal proceeding (excluding traffic violations and other
minor offenses); (3) being subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of any
competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; and (4) being found by a
court of competent jurisdiction (in a civil action), the SEC or the
commodities futures trading commission to have violated a federal or
state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
Term of Office
--------------
Our directors are appointed for a one-year term to hold office until the
next annual general meeting of our shareholders or until removed from
office in accordance with our bylaws. Our officers are appointed by our
board of directors and hold office until removed by the board.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth, for the last three fiscal years, with
respect to the individuals serving as our executive officers:
32
SUMMARY COMPENSATION TABLE
Non-
Non-Equity Qualified
Incentive Deferred
Stock Option Plan Compensation All Other
Salary Bonus Awards Awards Compensation Earnings Compensation Totals
Year ($) ($) ($) ($) ($) ($) ($) ($)
---- ------ ----- ------ ------ ------------ ----------- ------------ ------
Michael Toups,
President, Chief
Executive Officer,
Chief Financial Officer,2010
Treasurer and Director 2009 - - - - - - 15,000 15,000
Dave Dreslin, Former 2010
President** 2009 - - - - - - 26,800 26,800
**Dreslin Financial Services was paid $26,800 in accounting and
consulting fees related to the registrant's audit and registration
statement filing. David Dreslin is the sole shareholder of Dreslin
Financial Services.
Option Grants Table. There were no individual grants of stock options to
purchase our common stock made to the executive officers named in the
Summary Compensation Table through June 30, 2010.
Aggregated Option Exercises and Fiscal Year-End Option Value Table.
There were no stock options exercised during period ending June 30, 2010
by the executive officers named in the Summary Compensation Table.
Long-Term Incentive Plan Awards Table. There were no awards made to a
named executive officers in the last completed fiscal year under any
LTIP
Compensation of Directors
-------------------------
Directors are permitted to receive fixed fees and other compensation for
their services as directors. The Board of Directors has the authority to
fix the compensation of directors. No amounts have been paid to, or
accrued to, directors in such capacity.
Employment Agreements
---------------------
Currently, we do not have an employment agreement in place with our sole
officer and director.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS.
The following table provides the names and addresses of each person
known to us to own more than 5% of our outstanding shares of common
stock as of October 25, 2010 and by the officers and directors,
individually and as a group. Except as otherwise indicated, all shares
are owned directly and the shareholders listed possess sole voting and
investment power with respect to the shares shown.
33
Number of
Shares
Beneficially Percent of
Owned Class
------------ ----------
Michael Toups (1)
7985 113th Street
Suite 211
Seminole, Florida 33772 60,009,000 76.7%
Entrust of Tampa Bay FBO Edward Mass
13191 Starkey Rd.
Suite 9
Largo, FL 33773 12,000,000 15.3%
Entrust of Tampa Bay FBO Van Nguyen
13191 Starkey Rd
Suite 9
Largo, FL 33773 6,000,000 7.7%
Thomas Collentine
3111 78th Ave. East
Sarasota, FL34243 3,000 0.0%
All Executive Officers and
Directors as a group(2) 78,012,000 99.7%
(1) Michael Toups - Includes shares owned through family members: Leslie
Toups - wife, Christopher Toups - son, David Toups - brother.
(2) Based on 78,276,000 shares of common stock outstanding as
of October 25, 2010. Includes persons owning more than 5% of the
outstanding shares of common stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE.
We were incorporated in the State of Nevada in May 2009 and 60,000,000
shares of common stock were issued to Michael Toups for consideration of
$200.
Our President and sole Director, Michael Toups, provides office space
for the registrant at no charge.
Dreslin Financial Services was paid $26,800 in accounting and consulting
fees related to the registrant's audit and registration statement
filing. Dave Dreslin our former President is the sole owner of Dreslin
Financial Services.
34
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees
----------
We incurred fees of $14,372 and $5,560 for fiscal year 2010 and 2009,
respectively from Brimmer, Burek & Keelan LLP. Such fees include
professional services from the audit of the financial statements
included in this Form 10-K and for services that are normally provided
by the principal accountant in connection with regulatory filings or
engagements.
Tax Fees
--------
We did not incur any tax fees for tax compliance or other tax services
from Brimmer, Burek & Keelan LLP in fiscal years 2010 and 2009.
All Other Fees
--------------
We did not incur any other fees from Brimmer, Burek & Keelan LLP during
fiscal 2010 and 2009.
We intend to continue using Brimmer, Burek & Keelan LLP solely for audit
and audit-related services, tax consultation and tax compliance
services.
35
Part IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a)(1) List of Financial statements included in Part II hereof
Balance Sheets, June 30, 2010
Statements of Operations for the years ended June 30, 2010 and 2009
Statements of Stockholders' Equity for the years ended June 30, 2010
and 2009
Statements of Cash Flows for the years ended June 30, 2010 and 2009
Notes to the Financial Statements
(a)(2) List of Financial Statement schedules included in Part IV hereof:
None
(a)(3) Exhibits
The following of exhibits are filed with this report:
(31) 302 certifications
(32) 906 certifications
36
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, on
October 25, 2010
Stone Harbor Investments, Inc.
/s/Michael Toups
------------------------------------
By: Michael Toups, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
/s/Michael Toups Principal Executive Officer October 25, 2010
------------------------ Principal Financial Officer
Michael Toups Principal Accounting Officer
and Director
