Attached files
As Filed With the Securities and Exchange Commission on December 2,
2010
Registration
No. 333-______
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1/A-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
KAMA RESOURCES INC.
(Exact name of registrant as specified in its charter))
Nevada 6199 N/A
(State or other jurisdiction (Primary Standard Industrial (IRS Employer
of organization) Classification Code) Identification #)
Suite 1707-B, 17th Floor, CTS Center
219 Zhong Shan Wu Road
Guangzhou, China 510030
Tel. 8613808821282
Fax. 862083332588
(Address, including zip code, and telephone number,
including area code, of registrants principal executive offices)
American Corporate Register Inc.
711 S Carson Street Ste 6
Carson City, Nevada 89701
(619) 275-1040
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
with a copy to:
Fusion Business Group Inc.
2498 West 41 Avenue #232
Vancouver, British Columbia, Canada, V6M 2A7
Tel: (604) 269-6622 Fax: (604) 269-6623
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after the effective date of this Registration
Statement.
If any of the securities being registered on the Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933 check the following box: [X]
1
If this Form is filed to register additional common stock for an
offering under Rule 462(b) of the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering.
If this Form is a post-effective amendment filed under Rule 462(c)
of the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed under Rule 462(d)
of the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer,"
"accelerated filer" 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]
(Do not check if smaller reporting company)
CALCULATION OF REGISTRATION FEE
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Securities to be Amount To Be Offering Price Aggregate
be Registered Registered Per Share Offering Price Fee [1]
---------------------------------------------------------------------------
Common Stock: 2,000,000 0.01 $20,000 $1.43
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[1] Estimated solely for purposes of calculating the registration
fee under Rule 457.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF
1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT
TO SAID SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
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KAMA RESOURCES INC.
2,000,000 SHARES OF COMMON STOCK
1,000,000 MINIMUM 2,000,000 MAXIMUM
to be sold by the registrant as issuer and by Mr. Dayong Sun
This is the initial public offering of common stock of Kama
Resources Inc. and no public market currently exists for these
shares. Kama Resources Inc. is offering for sale up to 2,000,000
shares of our common stock on a "self-written", best efforts basis
at a fixed price of $0.01 per share for the duration of the offering.
We are offering a minimum of 1,000,000 up to a maximum of 2,000,000
of our common stock. In the event that 1,000,000 shares are not
sold within 270 days, all money received by us will be promptly
returned to you without interest or deduction of any kind. Our
minimum offering of 1,000,000 shares will raise $10,000 in new
capital, a net proceed of $5,000. Our maximum offering of 2,000,000
shares will raise $20,000 in new capital, a net proceed of $15,000.
The sales price to the public is fixed at $0.01 per share for the
duration of the offering. We intend to contact an authorized OTCBB
market maker for sponsorship of our securities on the OTCBB upon
effectiveness of this registration statement. However, there is no
guarantee our common stock will be accepted for quotation on the OTC
Bulletin Board.
Our shares are of common stock and are not traded anywhere.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS"
STARTING AT
PAGE 7.
Price to Expenses Proceeds to Us
Public
Per Share - $0.01 $0.005 $0.005
Maximum
Per Share - $0.01 $0.0025 $0.0075
Maximum
Minimum $10,000 $5,000 $5,000
Maximum $20,000 $5,000 $15,000
To operate for the next twelve months, the business must receive
a minimum of $5,000 in net proceeds from the sale of common shares.
The new capital of $5,000 will be used to build our website. In
addition, the money will be used to promote our business through
marketing and advertising activities. If we receive the maximum
funding for $15,000 in net proceeds, we will increase our marketing
and advertising spending. Please see page 11, use of proceeds
for additional information.
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The opportunity to move forward with our business is contingent upon
the sales of common
shares. To implement our business plan, the sales of our common
shares must reach the minimum of 1,000,000 shares. Without
sufficient funding, which is a minimum of $5,000 in net proceeds,
we will be unable to continue our business; therefore, we may cease
operations.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Dealer Prospectus Delivery Obligation
Until (insert date {90 days from effective date}), 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.
The date of this prospectus is December 2, 2010.
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TABLE OF CONTENTS
Page No.
Summary of Prospectus 5
Risk Factors 8
Use of Proceeds 13
Determination of Offering Price 14
Dilution of the Price You Pay for Your Shares 14
Plan of Distribution; Terms of the Offering 16
Management's Discussion and Analysis of Financial 20
Condition and Results of Operations
Business 23
Management 25
Executive Compensation 27
Principal Shareholders 28
Description of Securities 29
Certain Transactions 30
Litigation 30
Experts 31
Legal Matters 31
Financial Statements 32
SUMMARY OF PROSPECTUS
OUR BUSINESS
Kama Resources Inc. was incorporated in the state of Nevada on
October 19, 2009. Kama intends
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to develop and become a servicer for non-traditional automobile
finance loans for car dealerships. Kama will specialize in
mitigating loan losses and maximizing total dollars collected for
holders of non-traditional automobile loan portfolios. Essentially,
our service will aid the customer in finding the best, and/or lowest
price loan tailored to their specific financial circumstances. The
initial region we plan to market our service in will be Changchun,
Jilin, China.
We currently have not advanced beyond the business plan state since
our inception until the date of this filing. We plan to raise
initial seed financing through the sale of our common shares as
described in this offering. The initial seed financing will be put
towards designing and writing software, and paying for costs related
to registering the Company's common stock for public sale. We
anticipate that in order for us to begin commercialization of our
website and software, we will need to raise additional capital.
Currently, we estimate that a minimum of $5,000, in net proceeds,
must be raised to sustain operations over the next twelve months.
We expect that this funding will allow for us to initiate the
marketing and development of our business. We currently do not
have any specific plans to raise funds and the funds being obtained
through this offering will not be sufficient enough resources to
develop our software. Please see the Management's Discussion and
Analysis on Page 18 for more information
We do not intend to open any new stores; enter in to any new type of
business; or, purchase other assets in the next twelve month period
following the date of this prospectus. From inception until the date
of filing, we have had no material operating activities. Our current
cash balance is $1, 240. We anticipate that our current cash
balance will not satisfy our current cash needs for the following
twelve month period. We are applying to become a public reporting
company in order to raise initial seed financing for the Company's
operations and to make the
Company a more attractive investment candidate for prospective
investors.
If this offering raises the minimum of $5,000 or the maximum of
$15,000 in net proceeds, we expect that the capital investment of
those amounts will allow for us to begin basic operations for the
next twelve months. With the minimum of $5,000 the company will
initiate development of our business website to establish presence
in the marketplace. Next, the money received will support our
marketing initiatives to penetrate the auto loan finance sector; If
we are able to acquire the maximum of $15,000, we will raise our
expenditures on marketing activities to build our brand more
effectively.
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THE OFFERING
Following is a brief summary of this offering:
Securities being offered by A minimum of 1,000,000 and a
the Company maximum of 2,000,000 shares of
common stock, par value $0.001
Offering price per share $0.01
Offering period Our shares are being offered
for a period not to exceed 270
days.
Net proceeds to us Approximately $15,000 assuming
the maximum number of shares
are sold.
Approximately 5,000 assuming
the minimum number of shares
are sold.
Number of shares outstanding 3,000,000
before the offering
Number of shares outstanding 5,000,000
after the maximum amount of
shares are sold
Number of shares outstanding 4,000,000
after the minimum amount of
shares are sold
SELECTED FINANCIAL DATA
The following financial information summarizes the more complete
historical financial information at the end of this prospectus.
Balance Sheet
As of October 31, As of January 31,
2009 2010
(Audited) (Unaudited)
Total Assets $ 2,743 $ 1,240
Total Liabilities $ 0 $ 0
Stockholders' $ 0 $ 0
Deficit
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Income Statement
For the Three Months October 19 ,2009
Ended January 31, (Inception) to
2010 January 31, 2010
Revenue $0 $0
Total Expenses $ 1,503 $ 1,760
Net Loss $ 1,503 $ 1,760
RISK FACTORS
PLEASE CONSIDER THE FOLLOWING RISK FACTORS BEFORE DECIDING TO INVEST
IN OUR COMMON STOCK .
RISKS ASSOCIATED WITH KAMA RESOURCES INC.
BECAUSE OUR AUDITORS HAVE ISSUED A GOING CONCERN OPINION, THESE IS
SUBSTANTIAL UNCERTAINTY THAT WE WILL CONTINUE OPERATIONS IN WHICH
CASE YOU COULD LOSE YOUR INVESTMENT.
Our auditors have issued a going concern opinion. This means that we
may not be able to achieve our objectives and may have to suspend or
cease operations.
Our auditors have issued a going concern opinion as at October 31,
2009. This means that there is substantial doubt that we can
continue as an ongoing business without additional financing and/or
generating profits. If we are unable to do so, we will have to cease
operations and you will lose your investment.
Because all of our assets and our officers and directors are located
outside of the United States of America, it may be difficult for an
investor to enforce within the United States any judgments obtained
against us or any of our officers and directors.
All of our assets are located outside of the United States and we do
not currently maintain a permanent place of business within the
United States. In addition, our director and officer are a national
and/or resident of other countries other than the United States, and
all or a substantial portion of such persons assets are located
outside of the United States. As a result it may be difficult for an
investor to effect service process or enforce within the United
States and judgments contained against us or our officers or
directors, including judgments predicated upon the civil liability
provisions of the securities law of the United States or any state
thereof. In addition, there is uncertainty as to whether the courts
of Canada and other jurisdictions would recognize or enforce
judgments of United States courts obtained against us or our
directors and officer predicated upon the civil liability provisions
of the securities law of the United States or
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any state there, or be competent to hear original actions brought in
Canada or other jurisdictions against us or our officers and
director predicated upon the securities law of the United States or
any state thereof.
Because we have only one officer and director who are responsible
for our managerial and organizational structure, in the future,
there may not be effective disclosure and accounting controls to
comply with applicable laws and regulations which could result in
fines, penalties or assessments against us.
We have only one officer and director. He is responsible for our
managerial and organizational structure which will include
preparation of disclosures and accounting controls under the
Sarbanes Oxley Act of 2002. When these controls are implemented,
they would be responsible for the administration of the controls.
Should they not have sufficient experience, they may be incapable of
creating and implementing the controls which may cause us to be
subject to sanctions and fines by the SEC which ultimately could
cause you to lose your investment.
Because our sole executive officer will be devoting limited time to
our operations, our operations could be sporadic which may result in
periodic interruptions or suspensions of operations and a lack of
revenues which may cause to cease operations.
Dayong Sun, our sole executive officer will only be devoting limited
time to our operations. Mr. Sun will be devoting approximately
twenty hours a weeks to our operation. Because Mr. Sun will be
devoting limited time to our operations, our operations may be
sporadic and occur at times which are convenient to Mr. Sun. As a
result, operations may be periodically interrupted or suspended
which could result in lack of revenues and a possible cessation of
operations.
Because we do not maintain any insurance, if a judgment is rendered
against us, we may have to cease operations.
We do not maintain insurance and do not intend to maintain insurance
in the future. Because we do not have any insurance, if we are made
a party to a lawsuit, we may not have the sufficient funds to defend
the litigation. In the event that we do not defend the litigation or
a judgment is rendered against us, we may have to cease operations.
Because we have not generated revenues since our inception, the
business must secure the minimum investment through sales of common
shares to sustain operations for the next twelve months and maintain
the status of going concern.
We currently have limited working capital to sustain or move forward
with our business activities. In the event that we receive the
minimum investment of $10,000 with net proceeds of $5,000, our
company will hold a total of $6,240 in cash and cash equivalent. If
sales of common shares reach the maximum offering of 2,000,000
shares, we will receive $20,000 with net proceeds of $15,000. With
$15,000 of fresh capital, our company will hold a total of $16,240
in cash and cash equivalent to sustain for the next twelve months.
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We Lack an operating history and have losses that we expect to
continue into the future. There is no assurance our future
operations will result in profitable revenues. If we cannot
generate sufficient revenues to operate profitably, we will cease
operations and you will lose your investment.
We were incorporated on October 19, 2009 and we have not started our
proposed business operations or realized any revenues. We have no
operating history upon which an evaluation of our future success or
failure can be made. Our net loss since inception is $1,760 for
filing fees and general office expenses. Our ability to achieve and
maintain profitability and positive cash flow is dependent upon:
* completion of this offering;
* our ability to attract customers who will buy our service
from us; and,
* our ability to generate revenues through the sale of our
service.
Based upon current plans, we expect to incur operating losses in
future periods since we will be incurring expenses and not
generating revenues. We cannot guarantee that we will be successful
in generating revenues in the future. Failure to generate revenues
will cause you to lose your investment.
If we do not attract customers, we will not make a profit which
ultimately will result in a cessation of operations.
We have no customers. We have not identified any customers and we
cannot
guarantee we will ever have any customers. Even if we obtain
customers, there is no guarantee that we will generate a profit. If
we cannot generate a profit, we will have to suspend or cease
operations.
We are solely dependent upon the funds to be raised in this offering
to start our business, the proceeds of which may be insufficient to
achieve revenues. If we need additional funds and are unable to
raise them we will have to terminate our operations.
We have not yet started our business. We need the proceeds from this
offering to start our operations. If the maximum of $20,000 is
raised, this amount will enable us, after paying the expenses of
this offering, to operate for one year. If we need additional funds
and are unable to raise the money, we will have to cease operations.
If we do not make a profit, we may have to suspend or cease operations.
Since we are small and do not have much capital, we must limit
marketing our services. The sale of goods is how we will initially
generate revenues. Because we will be limiting our marketing
activities, we may not be able to attract enough customers to
operate profitably. If we cannot operate profitably, we may have to
suspend or cease operations.
10
Because our sole officer and director will only be devoting limited
time to our operations, our operations may be sporadic which may
result in periodic interruptions or suspensions of operations. This
activity could prevent us from attracting customers and result in a
lack of revenues that may cause us to suspend or cease operations.
Our sole officer and director, Mr. Dayong Sun, will only be devoting
limited time to our operations. Mr. Dayong Sun, our president and
sole director will be devoting approximately 20 hours per week of
his working time to our operations. Because our sole officer and
director will only be devoting limited time to our operations, our
operations may be sporadic and occur at times which are convenient
to him. As a result, operations may be periodically interrupted or
suspended which could result in a lack of revenues and a possible
cessation of operations.
Because we have only one officer and director who has no formal
training in financial accounting and management, who is responsible
for our managerial and organizational structure, in the future,
there may not be effective disclosure and accounting controls to
comply with applicable laws and regulations which could result in
fines, penalties and assessments against us.
Should he not have sufficient experience, he may be incapable of
creating and implementing the controls which may cause us to be
subject to sanctions and fines by the SEC which ultimately could
cause you to lose your investment. However, because of the small
size of our expected operations, we believe that he will be able to
monitor the controls she will have created and will be accurate in
assembling and providing information to investors.
Because our sole officer and director does not have prior experience
in financial accounting and the preparation of reports under the
securities exchange act of 1934, we may have to hire individuals
which could result in an expense we are unable to pay.
If we need the additional experienced personnel and we do not hire
them, we could fail in our plan of operations and have to suspend
operations or cease operations entirely and you could lose your
investment.
Because we do not have an escrow or trust account for your
subscription, if we file for bankruptcy protection or are forced
into bankruptcy, or a creditor obtains a judgment against us and
attaches the subscription, you will lose your investment.
Your funds will not be placed in an escrow or trust account.
Accordingly, if we file for bankruptcy protection or a petition for
involuntary bankruptcy is filed by creditors against us, your funds
will become part of the bankruptcy estate and administered according
to bankruptcy laws. If a creditor sues us and obtains a judgment
against us, the creditor could garnish the bank account and take
possession of the subscriptions. As such, if the minimum conditions
of this offering are not satisfied, it is possible that a creditor
could attach your subscription which could preclude or delay the
return of money to you. If that happens, you will lose your
investment and your funds will be used to pay creditors.
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Because our sole officer and director who is also our sole promoter,
will own 89% of our total outstanding common stock, he will retain
control of us and will be able to decide who will be directors and
you may not be able to elect any directors which could decrease the
price and marketability of our shares.
Even if we sell all 2,000,000 shares of common stock in this
offering, Mr. Dayong Sun will own 60% of the total outstanding
common stock. As a result, after completion of this offering,
regardless of the number of shares we sell, Mr. Dayong Sun will be
able to elect all of our directors and control our operations, which
could decrease the price and marketability of our shares.
Because there is no public trading market for our common stock, you
may not be able to resell your stock.
There is currently no public trading market for our common stock.
Therefore there is no central place, such as stock exchange or
electronic trading system, to resell your shares. If you want to
resell your shares, you will have to locate a buyer and negotiate
your own sale.
Because the sec imposes additional sales practice requirements on
brokers who deal in our shares that are penny stocks, some brokers
may be unwilling to trade them. This means that you may have
difficulty reselling your shares and this may cause the price of our
shares to decline.
Our shares would be classified as penny stocks and are covered by
Section 15(g)of the Securities Exchange Act of 1934 and the rules
promulgated there under which impose additional sales practice
requirements on brokers/dealers who sell our securities in this
offering or in the aftermarket. For sales of our securities, the
broker/dealer must make a special suitability determination and
receive from you a written agreement prior to making a sale for you.
Because of the imposition of the foregoing additional sales
practices, it is possible that brokers will not want to make a
market in our shares. This could prevent you from reselling your
shares and may cause the price of our shares to decline.
Finra sales practice requirements may limit a stockholder's ability
to buy and sell our stock.
The FINRA has adopted rules that require that in recommending an
investment to a customer, a broker-dealer must have reasonable
grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to
their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's
financial status, tax status, investment objectives and other
information. Under interpretations of these rules, FINRA believes
that there is a high probability that speculative low priced
securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may have the effect
of reducing the level of trading activity and liquidity of our
common stock. Further, many brokers charge higher transactional fees
for penny stock transactions. As a result, fewer broker-dealers may
be willing to make a market in our
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common stock, which may limit your ability to buy and sell our stock
and
USE OF PROCEEDS
Our offering is being made in a direct public offering, without any
involvement of underwriters or broker-dealers, 1,000,000 common
shares (half), 2,000,000 common shares (total) basis. The table
below sets forth the use of proceeds if 1,000,000 or 2,000,000
common shares of the offering are sold.
1,000,000 2,000,000
Gross proceeds $ 10,000 $ 20,000
Offering expenses $ 5,000 $ 5,000
Net proceeds $ 5,000 $ 15,000
The net proceeds will be
used as follows:
Website development $ 3,000 $ 3,000
Marketing an $ 1,000 $ 7,000
advertising
Audit, accounting $ 1,000 $ 5,000
and filing fees
TOTAL $ 5,000 $ 15,000
Total offering expenses of $5,000 to be paid from the proceeds of
the offering are for legal fees and auditing fees related to this
offering. No other expenses
of the offering will be paid from the proceeds.
Dayong Sun, our sole officer and director, determined that the
$5,000 in net proceeds would allow us to sustain operations for
twelve months, including filing reports with the Securities and
Exchange Commission as well as the business activities contemplated
by our business plan. The proceeds from the offering will allow us
to operate for twelve months. During this time, we will locate
capital, meet with banks, private investors, and attempt to grow our
business plan. Then, we plan on packaging this information into
company brochures for marketing purposes to various auto
dealerships. Should this prove to be successful, we will then
assemble a sales force to visit car dealers, trade shows, and be
presented at booths in malls and other places of interest.
After the completion of this offering, we intend to initiate the
development of our website "WWW.KAMARESOURCES.CN" We intend to hire
an outside web designer to assist us in designing and building our
website. We have budgeted $3,000 to build our website, as well
as maintenance for the next twelve months.
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Concurrently, we will roll out our marketing and advertising
activities to promote our company and increase traffic for our
website. In the best case scenario, in which we secure $20,000, a
net proceed of $15,000, we will budget $7,000 towards marketing and
advertising for the next twelve months. In the months ahead, we
will advertise in local newspapers, magazines, city billboards, etc.
We also intend to design and develop our corporate brochure which
will advertise our services, our prices and will be delivered to all
automobile dealers in the area.
We estimate our auditing and accounting fees to be $5,000 during the
next twelve months.
DETERMINATION OF OFFERING PRICE
The price of the shares we are offering was arbitrarily determined
in order for us to raise $20,000 in this offering. The offering
price bears no relationship to our assets, earnings, book value or
other criteria of value. Among the factors we considered were:
* our lack of operating history;
* the proceeds to be raised by the offering;
* the amount of capital to be contributed by purchasers in
this offering in proportion to the amount of stock to be retained
by our existing stockholder; and
* our relative cash requirements.
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
Dilution represents the difference between the offering price and
the net tangible book value per share immediately after completion
of this offering. Net tangible book value is the amount that results
from subtracting total liabilities and intangible assets from total
assets. Dilution arises mainly as a result of our arbitrary
determination of the offering price of our shares being offered.
Dilution of the value of our shares you purchase is also a result of
the lower book value of our shares held by our existing stockholders.
As of October 31, 2009, the net tangible book value of our shares of
common stock was a deficit of ($257) or approximately ($0.001) per
share based upon 3,000,000 shares outstanding.
IF 100% OF THE SHARES ARE SOLD:
Upon completion of this offering, in the event all of our shares are
sold, the net tangible book value of the 5,000,000 shares to be
outstanding will be $23,000 or approximately $0.0046 per share. The
net tangible book value of our shares held by our existing
stockholder will be increased by $0.0036 per share without any
additional investment on their part. You will incur an immediate
dilution from $0.01 per share to $0.0046 per share
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After completion of this offering, if 2,000,000 shares are sold, you
will own 40% of the total number of outstanding shares for which
you will have made a cash investment of $20,000, or $0.01 per share.
Our existing stockholders will own 60% of the total number of
outstanding shares for which they have made cash contributions
totaling $3,000.00 or approximately $0.001 per share.
IF 62.5% OF THE SHARES ARE SOLD:
Upon completion of this offering, in the event 62.5% of the shares
are sold, the net tangible book value of the 4,250,000 shares then
outstanding will be $15,500, or approximately $0.00365 per share.
The net tangible book value of our shares held by our existing
stockholders will be increased by $0.00265 per share without any
additional investment on their part. You will incur an immediate
dilution from $0.01 per share to $0.00365 per share.
After completion of this offering, if 1,250,000 shares are sold, you
will own approximately 29% of the total number of outstanding shares
for which you will have made a cash investment of $12,500, or $0.01
per share. Our existing stockholders will own approximately 70% of
the total number of outstanding shares for which they have made cash
contributions totaling $3,000.00 or
approximately $0.001 per share.
IF 1,000,000 SHARES ARE SOLD:
Upon completion of this offering, in the event 50% of shares are
sold, the net tangible book value of the 3,000,000 shares to be
outstanding will be $13,000, or approximately $0.00325 per share.
The net tangible book value of the shares held by our existing
stockholders will be increased by $0.00225 per share without any
additional investment on their part. You will incur an immediate
dilution from $0.01 per share to $0.00325 per share.
After completion of this offering, if 1,000,000 shares are sold, you
will own approximately 25% of the total number of outstanding shares
for which you will have made a cash investment of $10,000, or $0.01
per share. Our existing stockholders will own approximately 75% of
the total number of outstanding shares for which they have made cash
contributions totaling $3,000.00 or
approximately $0.001 per share.
The following table compares the differences of your investment in
our shares with the investment of our existing stockholders.
EXISTING STOCKHOLDERS IF ALL OF THE SHARES ARE SOLD:
Price per share $ 0.001
Net tangible book value per share before offering $ 0.001
Potential gain to existing shareholders $ 15,000
Net tangible book value per share after offering $ 0.0046
15
Increase to present stockholders in net tangible book
value per share after offering $ 0.0036
Capital contributions $ 3,000
Number of shares outstanding before the offering 3,000,000
Number of shares after offering assuming the sale of the maximum
number of shares 5,000,000
Percentage of ownership after offering 60%
PURCHASERS OF SHARES IN THIS OFFERING IF ALL SHARES SOLD
Price per share $ 0.01
Dilution per share $ 0.0046
Capital contributions $ 20,000
Number of shares after offering held by public investors 2,000,000
Percentage of capital contributions by existing shareholders 13.04%
Percentage of capital contributions by new investors 86.96%
Percentage of ownership after offering 40%
PURCHASERS OF SHARES IN THIS OFFERING IF 62.5% OF SHARES SOLD
Price per share $ 0.01
Dilution per share $ 0.00365
Capital contributions $ 12,500
Number of shares after offering held by public investors 1,250,000
Percentage of capital contributions by existing shareholders 19.355%
Percentage of capital contributions by new investors 80.645%
Percentage of ownership after offering 29%
PURCHASERS OF SHARES IN THIS OFFERING IF 50% OF SHARES SOLD
Price per share $ 0.01
Dilution per share $ 0.00325
Capital contributions $ 10,000
Percentage of capital contributions by existing shareholders 23.08%
Percentage of capital contributions by new investors 76.92%
Number of shares after offering held by public investors 1,000,000
Percentage of ownership after offering 25%
PLAN OF DISTRIBUTION; TERMS OF THE OFFERING
We are offering up to 2,000,000 shares of common stock on a
self-underwritten basis, 1,000,000 shares minimum, 2,000,000 shares
maximum. The offering price is $0.01 per share. Funds from this
offering will be placed in a separate bank account at US Bank, 2385
North Oxnard Blvd,
16
Oxnard, CA,93036. The bank's telephone number is (805) 604-2200. The
funds will be maintained in a separate bank until we receive a
minimum of $10,000 at which time we will remove those funds and use
the same as set forth in the Use of Proceeds section of this
Prospectus. This account is not an escrow, trust or similar account.
Your subscription will only be deposited in a separate bank account
under our name. As a result, if we are sued for any reason and a
judgment is rendered against us, your subscription could be seized
in a garnishment proceeding and you could lose your investment, even
if we fail to raise the minimum amount in this offering. As a
result, there is no assurance that your funds will be returned to
you if the minimum offering is not reached. Any funds received by us
thereafter will immediately used by us. If we do not receive the
minimum amount of $10,000 within 270 days of the effective date of
our registration statement, all funds will be promptly returned to
you without a deduction of any kind. During the 270 day period, no
funds will be returned to you. You will only receive a refund of
your subscription if we do not raise a minimum of $10,000 within the
270 day period referred to above. There are no finders involved in
our distribution. Officers, directors, affiliates or anyone involved
in marketing our shares will not be allowed to purchase shares in
the offering. You will not have the right to withdraw your funds
during the offering. You will only have the right to have your funds
returned if we do not raise the minimum amount of the offering or if
there is a material change in the terms of the offering. The
following are material changes that would entitle you to a refund of
your money:
* an extension of the offering period beyond 270 days;
* a change in the offering price;
* a change in the minimum sales requirement;
* a change to allow sales to affiliates in order to meet the
minimum sales requirement; or
* a change in the amount of proceeds necessary to release
the funds held in the separate bank account.
If any of the above material changes occur, a new offering may be
made by means of a post-effective amendment.
We will sell the shares in this offering through Dayong Sun, our
sole officer and director. He will not receive a commission from the
sale of any shares. He will not register as a broker-dealer under
section 15 of the Securities Exchange Act of 1934 in reliance upon
Rule 3a4-1. Rule 3a4-1 sets forth those conditions under which a
person associated with an issuer may participate in the offering of
the issuer's securities and not be deemed to be a broker/dealer. The
conditions are that:
1. The person is not statutorily disqualified, as that term is
defined in Section 3(a)(39) of the Act, at the time of his
participation; and,
2. The person is not compensated in connection with his
participation by the payment of commissions or other remuneration
based either directly or indirectly on transactions in securities;
17
3. The person is not at the time of their participation, an
associated person of a broker/dealer; and,
4. The person meets the conditions of Paragraph (a)(4)(ii) of
Rule 3a4-1 of the Exchange Act, in that He (A) primarily performs,
or is intended primarily to perform at the end of the offering,
substantial duties for or on behalf of the Issuer otherwise than in
connection with transactions in securities; and (B) is not a broker
or dealer, or an associated person of a broker or dealer, within
the preceding twelve months; and (C) does not participate in selling
and offering of securities for any Issuer more than once every
twelve months other than in reliance on Paragraphs (a)(4)(i) or
(a)(4)(iii).
Dayong Sun is not statutorily disqualified, is not being
compensated, and is not associated with a broker/dealer. He is and
will continue to be our sole officer and director at the end of the
offering and has not been during the last twelve months and is
currently not a broker/dealer or associated with a broker/dealer. He
will not participate in selling and offering securities for any
issuer more than once every twelve months.
Only after our registration statement is declared effective by the
SEC, do we intend to advertise, through tombstones, and hold
investment meetings in various states where the offering will be
registered. We will not utilize the Internet to advertise our
offering. Dayong Sun will also distribute the prospectus to
potential investors at meetings, to business associates and to his
friends and relatives who are interested in a possible investment in
the offering. No shares
purchased in this offering will be subject to any kind of lock-up
agreement.
Management and affiliates thereof will not purchase shares in this
offering to reach the minimum. We intend to sell our shares outside
of the United States.
SECTION 15(g) OF THE EXCHANGE ACT - PENNY STOCK RULES
The SEC has adopted rules that regulate broker-dealer practices in
connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges
or quoted on the OTC Bulletin Board system, provided that current
price and volume information with respect to transactions
in such securities is provided by the exchange or system).
The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from those rules,
deliver a standardized risk disclosure document prepared by the SEC,
which:
* contains a description of the nature and level of risk in
the market for penny stocks in both public offerings and secondary
trading;
* contains a description of the broker's or dealer's duties
to the customer and of the rights and remedies available to the
customer with respect to a violation to such duties or other
requirements;
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* contains a brief, clear, narrative description of a
dealer market, including "BID" and "ASK" prices for penny stocks and
the significance of the spread between the bid and ask price;
* contains a toll-free telephone number for inquiries on
disciplinary actions;
* defines significant terms in the disclosure document or in
the conduct of trading penny stocks; and
* contains such other information and is in such form
(including language, type, size, and format) as the SEC shall
require by rule or regulation.
The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer:
* with bid and offer quotations for the penny stock;
* the compensation of the broker-dealer and its salesperson
in the transaction;
* the number of shares to which such bid and ask prices
apply, or this comparable information relating to the depth and
liquidity of the market for such stock; and
* monthly account statements showing the market value of
each penny stock held in the customer's account.
In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from those rules;
the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive
the purchaser's written acknowledgment of the receipt of a risk
disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability
statement. These disclosure requirements will have the effect of
reducing the trading activity in the secondary market for our
securities because it will be subject to these penny stock rules.
Therefore, security holders may have difficulty selling those
securities.
REGULATION M
Our sole officer and director, who will sell the shares, is aware
that he is required to comply with the provisions of Regulation M,
promulgated under the Securities and Exchange Act of 1934, as
amended. With certain exceptions, Regulation M precludes officers
and/or directors, sales agents, any broker-dealers or other person
who participate in the distribution of shares in this offering from
bidding for or purchasing, or attempting to induce any person to bid
for or purchase any security which is the subject of the
distribution until the entire distribution is complete.
OFFERING PERIOD AND EXPIRATION DATE
This offering will start on the date that this registration
statement is declared effective by the SEC and continue for a period
of 270 days, or sooner if the offering is completed or otherwise
terminated by us.
We will not accept any money until this registration statement is
declared effective by the SEC.
19
PROCEDURES FOR SUBSCRIBING
We will not accept any money until this registration statement is
declared effective by the SEC. Once the registration statement is
declared effective by the SEC, if you decide to subscribe for any
shares in this offering, you must:
1. Execute and deliver a subscription agreement, a copy of
which is included with the prospectus; and
2. Deliver a check, wire transfer, bank draft, money order or
cash to us for acceptance or rejection.
All checks for subscriptions must be made payable to "KAMA RESOURCES
INC.".
RIGHT TO REJECT SUBSCRIPTIONS
We have the right to accept or reject subscriptions in whole or in
part, for any reason or for no reason. All monies from rejected
subscriptions will be returned immediately by us to the subscriber,
without interest or deductions. Subscriptions for securities will be
accepted or rejected within 48 hours after we receive them.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
This section of the prospectus 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, which apply only as
of the date of this prospectus. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual
results to differ materially from historical results or our
predictions.
We are a development stage corporation and have not started
operations and have not yet generated or realized any revenues.
Our auditors have issued a going concern opinion. This means that
our auditors believe there is substantial doubt that we can continue
as an on-going business for the next twelve months unless we obtain
additional capital to pay our bills. This is because we have not
generated any revenues and no revenues are anticipated until we
complete the development of our website and begin
implementing and marketing our dealerships to our target markets.
Accordingly, we must raise cash from sources other than operations.
Our only other source for cash at this time is investments by others
in our company. We must raise cash to implement our project and
begin our operations. Whether we raise the minimum or maximum amount
of money in this offering, any amount raised will last twelve
months. The difference between the minimum and maximum
20
amount relates to the website development; marketing and
advertising; equipment and office furniture; and hiring one
employee. In each case, if we raise the maximum amount, we will
devote more funds to the same in order to enhance the quality of the
website and promote our business plan to potential customers. We
will not begin operations until we raise money from this offering.
We have only one officer and director. He is responsible for our
managerial and organizational structure which will include
preparation of disclosure and accounting controls under the Sarbanes
Oxley Act of 2002. When these controls are implemented, he will be
responsible for the administration of the controls. Should He not
have sufficient experience, He may be incapable of creating and
implementing the controls which may cause us to be subject to
sanctions and fines by the SEC which ultimately could cause you to
lose your investment.
PLAN OF OPERATION
Dayong Sun, our sole officer and director, has determined that we
must raise the minimum amount of $10,000 with net proceeds of $5,000
to satisfy our cash requirements during the next twelve months.
We will not be conducting any product research or development. We do
not expect to purchase any significant equipment. Further we do not
expect significant changes in the number of employees.
Upon completion of our public offering, our goal is to commence our
operations.
We intend to accomplish the foregoing through the following milestones:
1. Complete our public offering. We believe that we will
raise sufficient capital to begin our operations, and we believe
that this could take up to 270 days from the date the Securities and
Exchange Commission declares our offering effective. We will not
begin operations until we
have closed this offering. We intend to concentrate all of our
efforts on raising as much capital as we can during this period.
2. After completion of the offering, we will immediately
begin to develop our website. We believe that our website can be
fully operational within 180 days. We also intend to design and
develop our "Kama Resources Corporate Brochures" which will
advertise our service and our prices. In the beginning of our
business operations we plan to advertise our business on the local
billboards.
3. After our website is established, we intend to begin to
market our business to potential customers and investors through our
website, our brochures, billboard advertisement and by personal
contacts through Dayong Sun, our president. We will also design a
brochure and deliver it to the mailboxes of the residents in the
area of the city of Changchun.
If we cannot generate sufficient revenues to continue operations, we
will suspend or cease operations. If we cease operations, we do not
know what we will do and we do not have any plans to do anything else.
21
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to
base an evaluation of our performance. We are still in the
development stage and have not yet generated any revenues.
We cannot guarantee we will be successful in our business
operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited
capital resources and possible cost overruns.
In addition to this offering, we are seeking equity financing in
order to obtain the capital required to implement our business plan.
We have no assurance that future financing will be available to us
on acceptable terms. If financing is not available to us on
satisfactory terms, we may be unable to continue, develop or expand
our operations. Equity financing could result in additional dilution
to our existing shareholders.
RESULTS OF OPERATIONS
FROM INCEPTION ON OCTOBER 19, 2009 TO OCTOBER 30, 2009
During this period we incorporated the company, and hired an auditor
for the preparation of this registration statement. We also prepared
an internal business plan. We have not yet started our proposed
business operations and will not do so until we have completed this
offering. We expect to begin operations within 120 days after we
complete this offering.
Since inception, we have issued 3,000,000 shares of common stock to
our sole officer and director.
LIQUIDITY AND CAPITAL RESOURCES
To meet our need for cash we are attempting to raise money from this
offering. We believe that we will be able to raise enough money
through this offering to begin operations but we cannot guarantee
that once we begin operations we will stay in business after
operations have commenced. If we are unable to successfully attract
customers to utilize our service, we may use up the proceeds from
this offering and will need to find alternative sources, like a
second public offering, a private placement of securities, or loans
from our officers or others in order for us to continue our
operations. At present, we have not made any arrangements to raise
additional capital, other than through this offering.
Our sole officer and director, Dayong Sun, has determined that we
will need to sell 1,000,000 shares and raise the minimum amount of
$10,000, which will amount to $5,000 in net proceeds from the
offering to conduct our business for twelve months from the date of
filing. Currently the Company has $1,240 in cash reserves and
therefore cannot sustain any period of
22
operations without raising capital from this offering or from loans
from our sole officer and director.
Our sole officer and director is willing to loan us money for our
operations until this offering has been completed or until the
offering period has expired. If we need additional capital and
cannot raise it we will either have to suspend operations until we
do raise the capital or cease operations entirely.Other than as
described in this paragraph, we have no other financing plans.
As of the date of this prospectus, we have yet to generate any
revenues from our business operations.
We issued 3,000,000 shares of common stock pursuant to an exemption
from registration contained in Regulation S of the General Rules and
Regulations promulgated under the Securities Act of 1933. This was
accounted for as a sale of common stock.
As of January 31, 2010, our total assets were $1,240 and our
total liabilities were $0.
BUSINESS
GENERAL
We were incorporated in the State of Nevada on October 19, 2009. We
have not started operations. We are developing a website
"WWW.KAMARESOURCES.CN" and also designing and developing our "Kama
Corporate Brochure" which will advertise our service, our prices and
would be delivered to all residents in the area. In the beginning of
our business operations, we plan to advertise our business on the
local billboards that will promote our business.
We have not yet generated any revenues and the only operations that
we have engaged in is the development of a business plan concept.
Our business office is located at Suite 1707-B, 17th Floor, CTS
Center, 219 Zhong Shan Wu Road, Guangzhou, China 510030. Our
telephone number is 8613808821282. This is the office of our
President, Dayong Sun.
We have no plans to change our planned business activities or to
combine with another business, and we are not aware of any events or
circumstances that might cause these plans to change. We have not
yet begun operations and will not begin operations until we have
completed this offering. Our plan of operation is forward looking
and there is no assurance that we will ever begin operations.
We have not conducted any market research into the likelihood of
success of our operations or the acceptance of our advisory services
by the public.
OUR STRATEGY
Our essential business is to provide tailored loans for customers
who are seeking to purchase
23
an automobile. We aim to provide customers with lowest price loans
that are most appropriate based on their financial circumstances.
Currently, we do not have any customers or any contracts for our
services. We also have not yet commenced any operations. Once we
have received our new capital through our offering, we will launch a
series of marketing activities. Our marketing campaigns are meant
to generate awareness for our company, and also, direct traffic to
our website. Our targets can navigate through our website and can
contact our director for more details regarding products
offered.
TARGET MARKET
We intend to target the city of Changchun, China. In our first year
of operation, we plan to target car buyers that seek alternative
loan services.
REGULATORY REQUIREMENTS
We might be required to obtain special licenses, or meet special
regulatory requirements before establishing our business, other than
a business license. If new government regulations, laws, or
licensing requirements are passed that would restrict or eliminate
delivery of any of our intended services, then our business may
suffer. For example, if we were required to obtain a government
issued license for the purpose of opening the business, then we may
not be able to qualify for such a license. If such a licensing
requirement existed, and we
were not able to qualify, then our business would suffer.
MARKETING
Initially, our services will be promoted by Dayong Sun. He will
discuss our services with his friends and business associates. We
also anticipate utilizing other marketing avenues in our attempt to
make our services known to the general public and attract potential
customers. These marketing activities will be designed to inform
potential customers about the benefits of using our services and may
include the following: development and distribution of marketing
literature; direct mail and email advertising; billboards
advertisement and, promotion of our web site.
REVENUE
We intend to generate revenues by selling our services. Therefore,
we will require substantial start-up capital in order to setup our
business and begin operations. Dayong Sun, our solee officer and
director, will be devoting approximately 20 hours a week of his time
to our operations. Mr. Sun is only able to devote this amount of
time due to his current employment situation at the Qiming
Information and Technology Co.
Once we begin operations Mr. Sun has agreed to commit more time than
the 20 hours per week Mr. Sun currently devotes. Because Dayong Sun
will only be devoting limited time to our operations, our operations
may be sporadic and occur at times which are convenient to Dayong
Sun. As a result, operations may be periodically interrupted or
suspended which could result in a
24
lack of revenues and a cessation of operations.
EMPLOYEES; IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES
We are a development stage company and currently have no
employees, other than our sole officer and director. We intend to
hire additional employees when theyare needed.
OFFICES
Our offices are currently located at Suite 1707-B, 17th Floor, CTS
Center, 219 Zhong Shan Wu Road, Guangzhou, China 510030. Our
telephone number is 8613808821282. As of this point in time, there
is no cost to our company for this office space nor is there any lease.
MANAGEMENT
OFFICERS AND DIRECTORS
Our sole director will serve until his successor is elected and
qualified. Our sole officer is elected by the board of directors to
a term of one year and serves until his successor is duly elected
and qualified, or until He is removed from office. Our board of
directors has no nominating, auditing or compensation committees.
The name, address, age and position of our sole officer and director
is set forth below:
Name and Address Age Positions
---------------- --- ---------
Dayong Sun 37 President, Chief Executive Officer,
Secretary,Treasurer,Chief Financial
Suite 1707-B, 17th Floor Officer, and the sole member of
CTS Center, 219 Zhong Shan the Board of Directors
Wu Road, Guangzhou, China
510030
The person named above has held his offices/positions since the
inception of our company and is expected to hold his
offices/positions until the next annual meeting of our stockholders.
BACKGROUND OF OUR SOLE OFFICER AND DIRECTOR
DAYONG SUN - PRESIDENT, CHIEF EXECUTIVE OFFICER, SECRETARY,
TREASURER, CHIEF FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER AND
OUR SOLE DIRECTOR.
25
Sun, Dayong
1986 1990 University of Jilin
2519 Jiefang rd. Changchun Jilin, China
Bachelor degree of mechanical and electronic engineering
1991 1994 Electronic engineer @ FAW Group (biggest car
manufactor in China, assembles Audi, VW, TOYOTA, Mazda)
No.2259 Dongfeng Street, Changchun, P.R.China
1995 1998 Changchun Computer College
369 Xueyuan st. Changchun Jilin
Diploma of programming
2000 2004 Qiming Information Technology Co.
A sub company of FAW Group. Develops software for cars.
Programmer
2004 - 2009 Project manager at Qiming Information and Technology Co.
Since October 19, 2009, Dayong Sun has been our President, Chief
Executive Officer, Secretary, Treasurer, Chief Financial Officer,
Principal Accounting Officer and sole member of our Board of
Directors. Since June 2004 Mr. Sun has been working as a programmer
at Qiming Information Technology Co. in Changchun, China. From
September 1986 until June 1990 Dayong Sun attended University of
Jilin, China at which time he received his Bachelor's Degree in
Mechanical and Electrical Engineering. Dayong Sun devotes
approximately 20 hours per week to our operations, and will devote
additional time as required. Dayong Sun is not an officer or
director of any other reporting company.
AUDIT COMMITTEE FINANCIAL EXPERT
The functions of the Audit Committee are currently carried out by
our Board of Directors. Our Board of Directors has determined that
we do not have an audit committee financial expert on our Board of
Directors carrying out the duties of the Audit Committee. The Board
of Directors has determined that the cost of hiring a financial
expert to act as a director and to be a member of the Audit
Committee or otherwise perform Audit Committee functions outweighs
the benefits
of having a financial expert on the Audit Committee.
CONFLICTS OF INTEREST
Dayong Sun devotes approximately 20 hours per week to our Company.
The only conflict that exists is Dayong Sun's devotion of time to
other projects. We have no provisions for handling conflicts of
interest should they arise in the future; however, Dayong Sun has
agreed not to engage in any business activity which conflicts with
our activities.
EXECUTIVE COMPENSATION
26
The following table sets forth the compensation paid by us from
inception on October 19, 2009, through October 31, 2009, for our
sole officer and director. This information includes the dollar
value of base salaries, bonus awards and number of stock options
granted, and certain other compensation, if any.
SUMMARY COMPENSATION TABLE
Name Year Salary Bonus Stock Option Non- Non- All Total
and $ $ Awards Awards Equity quali Other $
$ $ Incent fied Compen
Principal ive Deferr sation
Position Compen ed Comp $
Dayong sation ensation
Sun $ Earnings$
President,
Secretary/ 2009 0 0 0 0 0 0 0 0
Treasurer,
Director
We do not have any employment agreements with any of our officers.
We do not contemplate entering into any employment agreements until
such time as we begin to attain profitable operations.
The compensation discussed herein addresses all compensation awarded
to, earned by, or paid to our named executive officer.
There are no other stock option plans, retirement, pension, or
profit sharing plans for the benefit of our sole officer and
director other than as described herein.
LONG-TERM INCENTIVE PLAN AWARDS
We do not have any long-term incentive plans that provide
compensation intended to serve as incentive for performance.
COMPENSATION OF DIRECTORS
Our sole director does not receive any compensation for serving as a
member of the board of directors.
27
INDEMNIFICATION
Under our Articles of Incorporation and Bylaws of the corporation,
we may indemnify an officer or director who is made a party to any
proceeding, including a lawsuit, because of his position, if He
acted in good faith and in a manner He reasonably believed to be in
our best interest. We may advance expenses incurred in defending a
proceeding. To the extent that the officer or director is successful
on the merits in a proceeding as to which He is to be indemnified,
we must indemnify his against all expenses incurred, including
attorney's fees. With respect to a derivative action, indemnity may
be made only for expenses actually and reasonably incurred in
defending the proceeding, and if the officer or director is judged
liable, only by a court order. The indemnification is intended to be
to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the
Securities Act of 1933, which may be permitted to directors or
officers under Nevada law, we are informed that, in the opinion of
the Securities and Exchange Commission, indemnification is against
public policy, as expressed in the Act and is, therefore,
unenforceable.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of the date of this prospectus,
the total number of shares owned beneficially by our directors,
officers and key employees, individually and as a group, and the
present owners of 5% or more of our total outstanding shares. The
table also reflects their ownership assuming the sale of all of the
shares in this offering. The stockholders listed below
have direct ownership of their shares and possesses sole voting and
dispositive power with respect to the shares.
Name and Number of Shares of Percentage of
Number of Shares Percentage of Ownership
Address of Before the Offering Ownership Before
After Offering After the Offering Assuming
Beneficial Owner the Offering
Assuming all of the all of the Shares are Sold
Shares are Sold
Dayong Sun 3,000,000 100%
5,000,000 60%
Room 1707-B, 219
Zhong shan Wu Road
Guangzhou, China
510030
[1] The person named above may be deemed to be a "parent" and
"promoter" of our company, within the meaning of such terms under
the Securities Act of 1933, as amended, by virtue of his direct
stock holdings. Dayong Sun is the only "promoter" of our company.
FUTURE SALES BY EXISTING STOCKHOLDERS
28
A total of 3,000,000 shares of common stock were issued to our sole
officer and director, all of which are restricted securities, as
defined in Rule 144 of the General Rules and Regulations promulgated
under the Securities Act of 1933. Under Rule 144, since Dayong Sun
is an affiliate as defined in that rule, the shares can be publicly
sold, subject to volume restrictions and restrictions on the manner
of sale, commencing one year after their acquisition.
Shares purchased in this offering, which will be immediately
resalable, and sales of all of our other shares after applicable
restrictions expire, could have a depressive effect on the market
price, if any, of our common stock and the shares we are offering.
There is no public trading market for our common stock. There are no
outstanding options or warrants to purchase, or securities
convertible into, our common stock. There is one holder of record
for our common stock. The record holder is our sole officer and
director and He owns 3,000,000 restricted shares of our common stock.
DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized capital stock consists of 75,000,000 shares of common
stock, par value $0.001 per share. The holders of our common stock:
* have equal ratable rights to dividends from funds legally
available if and when declared by our board of directors;
* are entitled to share ratably in all of our assets
available for distribution to holders of common stock upon
liquidation, dissolution or winding up of our affairs;
* do not have preemptive, subscription or conversion rights
and there are no redemption or sinking fund provisions or rights; and
* are entitled to one non-cumulative vote per share on all
matters on which stockholders may vote.
All shares of common stock now outstanding are fully paid and
non-assessable and all shares of common stock that are the subject
of
this offering, when issued,will be fully paid for and
non-assessable.
We refer you to our Articles of Incorporation, Bylaws and the
applicable
statutes of the State of Nevada for a more complete description of
the
rights and liabilities of holders of our securities.
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting
rights, which means that the holders of more than 50% of the
outstanding shares, voting for the election of directors, can elect
all of the directors to be elected, if they so choose, and, in that
event, the holders of the remaining shares will not be able to elect
any of our directors. After this offering is completed,
29
assuming the sale of all of our shares of common stock, present
stockholders will own approximately 50% of our outstanding shares.
CASH DIVIDENDS
As of the date of this prospectus, we have not paid any cash
dividends to stockholders. The declaration of any future cash
dividend will be at the discretion of our board of directors and
will depend upon our earnings, if any, our capital requirements and
financial position and our general economic condition. It is our
intention not to pay any cash dividends in the foreseeable future,
but rather to reinvest earnings, if any, in our business operations.
PREFERRED STOCK
We do not have a class of preferred stock.
ANTI-TAKEOVER PROVISIONS
There are no Nevada anti-takeover provisions that may have the
affect of delaying or preventing a change in control.
REPORTS
After we complete this offering, we will not be required to furnish
you with an annual report. Further, we will not voluntarily send you
an annual report. We will be required to file reports with the SEC
under section 15(d) of the Securities Act and the reports will be
filed electronically. The reports we will be required to file are
Forms 10-K, 10-Q, and 8-K. You may read copies of any materials we
file with the SEC at the SEC's Public Reference Room at 100 F
Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain
information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site
that will contain copies of the reports we file electronically. The
address for the Internet site is www.sec.gov.
STOCK TRANSFER AGENT
We have not yet selected a stock transfer agent.
CERTAIN TRANSACTIONS
In October 2009, we issued a total of 3,000,000 shares of restricted
common stock to Dayong Sun, our sole officer and director. These
shares represent 100% of our issued and outstanding shares. This
represents the complete interest of our sole current shareholder
prior to any future issuance of stock under this registration
statement.
LITIGATION
30
We are not a party to any pending litigation and none is
contemplated or threatened.
EXPERTS
Our financial statements for the period from inception to October
31, 2009, included in this prospectus have been audited by Kenne
Ruan CPA, PLLC, 40 Hemlock Hollow Road, Woodbridge, CT, USA, 06525
telephone: 203-824-0441 as set forth in their report included in
this prospectus. Their report is given upon their authority as
experts in accounting and auditing.
LEGAL MATTERS
We have no legal counsel at this time.
FINANCIAL STATEMENTS
Our fiscal year end is October 31. We will provide audited financial
statements to our stockholders on an annual basis; the statements
will be prepared by Kenne Ruan CPA, PLLC 40 Hemlock Hollow Road,
Woodbridge, CT, USA, 06525 telephone: 203-824-0441.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Kama Resources Inc.
(A Development Stage Company)
We have reviwed the accompanying balance sheet of Kama Resources
Inc.(A development stage company) as of July 31, 2010 and
the related statements of income, stockholders' equity and
comprehensive
income and cash flows for the nine months ended July 31, 2010.
These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with the standards of the
Public Company Accounting Oversight Board (United States). A review
of interim financial information consists principally of applying
anaylystical procedures and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in
scope than an audit conducted in accordance with standards of the
Public Company Accounting Oversight Board (United States), the
objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express
such an opinion.
31
Based on our review, we are not aware of any material modifications
that should be make to the accompanying interim financial statements
for them to be in conformity with accounting principles generally
accepted in the United States of America.
/s/Kenne Ruan, CPA, P.C.
Woodbridge, Connecticut
November 24, 2010
FINANCIAL STATEMENTS
Kama Resources Ltd.
(A Development Stage Company)
F-1
Kama Resources Inc.
(A Development Stage Company)
Balance Sheet
As of October 31, 2009
32
October 31,
2009
Assets
Current Assets - Cash and Cash Equivalent $2,743
Website Development Costs -
TOTAL ASSETS $2,743
Liabilities
Current Liabilities -
Accounts Payable and Accrued Liabilities- Related -
Party
Shareholder Loan -
TOTAL CURRENT LIABILITIES -
Stockholders' Equity - Common Stock
Authorized:75,000,000 common shares at
$0.001 par value
Issued and Outstanding:3,000,000 common 3,000
shares at $0.001 at par value
(Deficit) accumulated during the development $(257)
stage
TOTAL STOCKHOLDERS' EQUITY $2,743
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,743
The accompanying notes are an integral part of these financial
statements.
F-2
Kama Resources Inc.
(A Development Stage Company)
Statement of Operations
For the Period From October 19, 2009 (Inception) Through October 31,
2009
33
For the Period From
October 19, 2009
(Inception) Through
October 31, 2009
Revenues -
General and Administrative Expenses
Filing Fees $194
Bank Charges $63
Operating Loss $(257)
Net (loss) for the period $(257)
Net (loss) per share - Basic and $-
Diluted
Weighted Average Shares Outstanding - 3,000,000
Basic and Diluted
The accompanying notes are an integral part of these financial
statements.
Kama Resources Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Period from October 19, 2009 (inception) Through October 31,
2009
For the Period from
October 19, 2009
(Inception) Through
October 31, 2009
Cash Flow from Operating Activities
Net loss for the Period $(257)
Imputed interest on related party -
transactions
Changes in non-cash working capital items
Accounts payable and accrued -
liabilities
Net Cash Flow Used in Operating (257)
Activities
Financing Activities
Share Capital Contribution $3,000
Shareholder Loan -
Net Cash Flow Provided by Financing $3,000
Activities
Net Change in Cash $2,743
Cash, Beginning of Period -
Cash, End of Period $2,743
34
The accompanying notes are an integral part of these financial
statements.
F-4
Kama Resources Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Deficit
For the Period from October 16, 2009 (inception) Through October 31,
2009
Common Additional Deficit Total
Stock Amount Paid-in AccumulatedStockholders'
Shares Capital Equity
During
the
Developmental
Stage
Common
Stock 3,000,000 $3,000 $3,000
issued
for cash
at $0.001
per
share,
October
31, 2009
Net Loss
for the (257) (257)
Year End
October
31, 2009
Balance,
as at 3,000,000 $3,000 - (257) $2,743
October
31, 2009
The accompanying notes are an integral part of these financial
statements.
F-5
Kama Resources Inc.
(A Development Stage Company)
Notes to the Financial Statements
For the Period from October 19, 2009 (Inception) to October 31, 2009
NOTE 1 Nature and Continuance of Operations
The Company is a development stage company, which was
incorporated on October 19, 2009. Operations started on that Date.
These financial statements have been prepared on a going concern
basis. The company has accumulated a deficit of $ 257.00 since its
inception and has yet to achieve profitable operations and further
losses are anticipated in the development of its business, raising
substantial doubt about the Company's ability to continue as a going
concern. Its ability to continue as a going concern is dependent
upon the ability of the Company to generate profitable operations in
the future and/or to obtain the necessary financing to meet its
obligations and repay its liabilities arising from normal business
operations when they come due. Management plans to continue to
provide for its working capital needs by seeking loans from its
shareholders. These financial statements do not include any
adjustments to the recoverability and classification of assets, or
the amount and classification of liabilities that may be necessary
should the Company be unable to continue as a going concern.
The Company's year-end is October 31.
NOTE 2 - Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the
United States of America. Because a precise determination of many
assets and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates, which have been made using careful
judgment. Actual results may vary from these estimates.
The financial statements have, in management's opinion, been
properly prepared within the framework of the significant accounting
policies summarized below:
Development Stage Company
The Company complies with Statement of Financial Accounting Standard
"ASC 915" and the Securities and Exchange Commission Exchange
Act 7 for its characterization of the Company as development stage.
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.
Use of Estimates and Assumptions
36
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
Foreign Currency Translation
The Company is located and operating outside of the United States of
America. It maintains its accounting records in U.S. Dollars, as
follows:
At the transaction date, each asset, liability, revenue, and expense
is translated into U.S. dollars by the use of exchange rates in
effect at that date. At the period end, monetary assets and
liabilities are re-measured by using the exchange rate in effect at
that date. The resulting foreign exchange gains and losses are
included in operations.
The Company's currency exposure is insignificant and immaterial and
we do not use derivative instruments to reduce its potential
exposure to foreign currency risk.
Financial Instruments
The carrying value of the Company's financial instruments
approximates their fair value because of the short maturity of these
instruments.
Income Taxes
The Company uses the assets and liability method of accounting for
income taxes in accordance with ASC 740 "Accounting for Income
Taxes". Under this method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary
differences between the financial statements carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled.
Basic Income (Loss) Per Share Basic income (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 October 31, 2009.
Basic and Diluted Net Loss Per Share
In accordance with FASB 740, "Earnings Per Share', the basic net
loss per common share is computed by dividing net loss available to
common stockholders by the weighted average number of common shares
outstanding. Diluted net loss per common share is computed similar
to basic net loss per common share except that the denominator is
increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been
issued and if the additional common shares were dilutive. As at
October 31 2009, diluted net loss per share is equivalent to basic
net loss per share.
37
Stock Based Compensation
The Company did not grant any stock options during the period ended
October 31, 2009.
The Company uses the modified prospective method of accounting for
stock-based compensation. Under this transition method, stock
compensation expense includes
compensation expense for all stock-based compensation awards granted
on or after January 1, 2006, based on the estimated grant-date fair
value.
Comprehensive Income
The Company adopted Statement of Accounting Standards Codificationd
No. 220 (ASC 220), Reporting Comprehensive Income, which establishes
standards for reporting and display of comprehensive income, its
components and accumulated balances. The Company is disclosing this
information on its Statement of Stockholders' Equity. Comprehensive
income comprises equity except those resulting from investments by
owners and distributions to owners.
The Company has no elements of "other comprehensive income" during
the period ended October 31, 2009.
New Accounting Standards
Management does not believe that any recently issued, but not yet
effective accounting standards if currently adopted could have a
material effect on the accompanying financial statements.
Accounting Basis
The Company uses the accrual basis of accounting and accounting
principles generally accepted in the United States of America
("GAAP" accounting). The Company has adopted a October 31 fiscal
year end.
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 incurred advertising expense of $0
during the period from October 19, 2009 through October 31, 2009.
Revenue Recognition
The company recognizes revenue when products are fully delivered or
services have been provided and collection is reasonably assured.
Recent Accounting Pronouncements
38
In May 2009, the FASB issued SFAS 165 (ASC 855-10) entitled
"Subsequent Events". Companies are now required to disclose the date
through which subsequent events have been evaluated by management.
Public entities (as defined) must conduct the evaluation as of the
date the financial statements are issued, and provide
disclosure that such date was used for this evaluation. SFAS 165
(ASC 855-10)provides that financial statements are considered
"issued" when they are widely distributed for general use and
reliance in a form and format that complies withGAAP. SFAS 165 (ASC
855-10) is effective for interim and annual periods ending after
June 15, 2009 and must be applied prospectively.
In June 2009, the FASB issued SFAS 168, The FASB
Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles. ("SFAS 168" or ASC 105-10) SFAS
168 (ASC 105-10) establishes the Codification as the sole source of
authoritative accounting principles recognized by the FASB to be
applied by all nongovernmental entities in the preparation of
financial statements in conformity with GAAP. SFAS 168 (ASC
105-10) was prospectively effective for financial statements
issued for fiscal years ending on or after September 15, 2009 and
interim periods within those fiscal years. The adoption of SFAS
168 (ASC 105-10) on July 1, 2009 did not impact the Company's
results of operations or financial condition. The Codification
did not change GAAP, however, it did change the way GAAP is
organized and presented.
As a result, these changes impact how companies reference
GAAP in their financial statements and in their significant
accounting policies. The Company implemented the Codification in
this Report by providing references to the Codification topics
alongside references to the corresponding standards.
With the exception of the pronouncements noted above, no other
accounting standards or interpretations issued or recently adopted
are expected to have a material impact on the company's financial
position, operations or cash flows.
NOTE 3- Capital Stock
On October 18, 2009, the Company issued 3,000,000 common shares at
$0.001 per share to the sole director of the Company for the total
proceeds of $3,000.
F-6
Kama Resources Inc.
(A Development Stage Company)
Balance Sheet
As October 31, 2009 and July 31, 2010
39
July 31, April January October
2010 30, 2010 31, 2010 31, 2009
(Unaudite (Unaudite (Unaudite
d) d) d)
Assets
Currents Assets $1,240 $1,240 $1,240 $2,743
- Cash and Cash
Equivalents
Website - - - -
Development Costs
TOTAL ASSETS $1,240 $1,240 $1,240 $2,743
Liabilities - - - -
Current Liabilities - - - -
Accounts Payable - - - -
and Accrued
Liabilities - Related
Party
Shareholder Loan - - - -
TOTAL CURRENT - - - -
LIABILITIES
Stockholders' Equity
- Common Stock
Authorized:75,000,000
common shares at
$0.001 par value
Issued and 3,000 3,000 3,000 3,000
Outstanding:
3,000,000 common
shares at $0.001 par
value
Deficit $(1,760) $(1,760) $(1,760) $(257)
Accumulated during
the Development Stage
TOTAL STOCKHOLDERS' $1,240 $1,240 $1,240 $2,743
EQUITY
TOTAL LIABILITIES AND $1,240 $1,240 $1,240 $2,743
STOCKHOLDERS' EQUITY
The accompanying notes are an integral part of these financial
statements.
F-7
40
Kama Resources Inc.
(A Development Stage Company)
Statement of Operations
For the Period from October 19, 2009 (Inception)
to July 31, 2010
Three Three Three Cumulative
Months to Months to Months Results
July 31, April 30, to From
2010 2010 January Inception
(Unaudited)(Unaudited)31, 2010 (October
(Unaudite 19, 2009)
d) to January
31, 2010
(Unaudited)
General and
Administrative
Expenses
Filing Fees - - - $194
Bank Charges - - $3 $66
Professional Fees - - $1,500 $1,500
Operating Loss - - $(1,503) $(1,760)
Net (loss) for the - - $(1,503) $(1,760)
period
Net (loss) per - - - -
share - Basic and
Diluted
Weighted Average 3,000,000 3,000,000 3,000,000 3,000,000
Shares Outstanding
- Basic and Diluted
The accompanying notes are an integral part of these financial
statements.
41
Kama Resources Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Period from October 19, 2009 (Inception)
to July 31, 2010
Three Three Three Cumulative
Months Months Months Results
to July to April to From
31, 2010 30, 2010 January Inception
(Unaudite (Unaudite 31, 2010 (October
d) d) (Unaudite 19, 2009)
d) to January
31, 2010
(Unaudited)
Cash Flow from
Operating Activities
Net loss for the - - $(1,503) $(1,760)
Period
Imputed interest on - - - -
related party
transactions
Changes in non-cash
working capital items
Accounts payable and - - - -
accrued liabilities
Net Cash Flow Used in - - $(1,503) $(1,760)
Operating Activities
Financing Activities
Share Capital - - - $3,000
Contribution
Shareholder Loan - - -
-
Net Cash Flow - - - $3,000
Provided by Financing
Activities
Net Change in Cash - - $(1,503) $1,240
Cash, Beginning of $1,240 $1,240 $2,743 -
Period
Cash, End of Period $1,240 $1,240 $1,240 $1,240
The accompanying notes are an integral part of these financial
statements.
42
Kama Resources Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Deficit
For the Period from October 19, 2009 (inception) Through July 31,
2010
Common Additional Deficit Total
Stock Amount Paid-in AccumulatedStockholders'
Shares Capital Equity
During
the
Developmental
Stage
Common
Stock 3,000,000 $3,000 $3,000
issued
for cash
at $0.001
per
share,
October
31, 2009
Net Loss
for the (257) (257)
Year End
October
31, 2009
Balance,
as at 3,000,000 $3,000 - (257) $2,743
October
31,
2009
Net Loss
for the $(1,503) $(1,503)
Period
October
19, 2009
to
January
31, 2010
(Unaudited)
Balance
as at $(1,760) $1,240
January
31, 2010
(Unaudited)
Net Loss - -
for the
Period
Ended
April 30,
2010
Balance 3,000,000 $3,000 - $(1,760) $1,240
as at
April 30,
2010
(Unaudited)
Net Loss
for the - -
Period
Ended
July 31,
2010
Balance 3,000,000 $3,000 - $(1,760) $1,240
as at
July 31,
2010
(Unaudited)
The accompanying notes are an integral part of these financial
statements.
43
Kama Resources Inc.
(A Development Stage Company)
Notes to the Financial Statements
For the Three Months Ended July 31, 2010
NOTE 1 Nature and Continuance of Operations
The Company is a development stage company, which was incorporated
on October 19, 2009. Operations started on the same date.
These financial statements have been prepared on a going concern
basis. The company has accumulated a deficit of $ 1760.00 since its
inception and has yet to achieve profitable operations and further
losses are anticipated in the development of its business, raising
substantial doubt about the Company's ability to continue as a going
concern. Its ability to continue as a going concern is dependent
upon the ability of the company to generate profitable operations in
the future and/or to obtain the necessary financing to meet its
obligations and repay its liabilities arising from normal business
operations when they come due. Management plans to continue to
provide for its working capital needs by seeking loans from its
shareholders. These financial statements do not include any
adjustments to the recoverability and classification of assets, or
the amount and classification of liabilities that may be necessary
should the Company be unable to continue as a going concern.
The Company's year-end is October 31.
NOTE 2 - Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the
United States of America and are presented in US dollars. Because a
precise determination of many assets and liabilities is dependent
upon future events, the preparation of financial statements for a
period necessarily involves the use of estimates, which have been
made using careful judgment. Actual results may vary from these
estimates.
The financial statements have, in management's opinion, been
properly prepared within the framework of the significant accounting
policies summarized below:
Development Stage Company
The Company complies with the FASB Accounting Standards Codification
ASC Topic 915 and the Securities and Exchange Commission Exchange
Act 7 for its characterization of the Company as development stage.
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
44
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.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Foreign Currency Translation
The Company's functional currency is the Canadian dollar and its
reporting currency is the U.S. dollar. It maintains its accounting
records in U.S. Dollars, as follows:
At the transaction date, each asset, liability, revenue, and expense
is translated into U.S. dollars by the use of exchange rates in
effect at that date. At the period end, monetary assets and
liabilities are re-measured by using the exchange rate in effect at
that date. The resulting foreign exchange gains and losses are
included in operations.
The Company's currency exposure is insignificant and immaterial and
we do not use derivative instruments to reduce its potential
exposure to foreign currency risk.
Financial Instruments
The carrying value of the Company's financial instruments
approximates their fair value because of the short maturity of these
instruments.
Income Taxes
The Company uses the assets and liability method of accounting for
income taxes in accordance with ASC 740 "Accounting for Income
Taxes". Under this method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary
differences between the financial statements carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled.
Basic Income (Loss) Per Share Basic income (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 July 31, 2010.
45
Basic and Diluted Net Loss Per Share
In accordance with FASB Topic 260, "Earnings Per Share', the basic net
loss per common share is computed by dividing net loss available to
common stockholders by the weighted average number of common
shares outstanding. Diluted net loss per common share is computed
similar to basic net loss per common share except that the
denominator is increased to include the number of additional common
shares that would have been outstanding if the potential common
shares had been issued and if the additional common shares were
dilutive. As at October 31, 2009, diluted net loss per share is
equivalent to basic net loss per share.
Stock Based Compensation
As of July 31, 2010, the company has not issued any stock-based
payments to its employees.
The Company uses the modified prospective method of accounting for
stock-based compensation. Under this transition method, stock
compensation expense includes compensation expense for all
stock-based compensation awards granted on or after July 21, 2010,
based on the estimated grant-date fair value.
Comprehensive Income
The Company adopted the FASB Accounting Standards Codification ASC
220, Reporting Comprehensive Income, which establishes
standards for reporting and display of comprehensive income, its
components and accumulated balances. The Company is disclosing this
information on its Statement of Stockholders' Equity. Comprehensive
income comprises equity except those resulting from investments by
owners and distributions to owners.
The Company has no elements of "other comprehensive income" during
the three months ended July 31, 2010.
New Accounting Standards
Management does not believe that any recently issued, but not yet
effective accounting standards if currently adopted could have a
material effect on the accompanying financial statements.
Accounting Basis
The Company uses the accrual basis of accounting and accounting
principles generally accepted in the United States of America
("GAAP" accounting). The company has adopted a October 31 fiscal
year end.
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 incurred advertising expense of $0
during the three months ended July 31, 2010.
46
Revenue Recognition
The company recognizes revenue when products are fully delivered
or services have been provided and collection is reasonably assured.
Recent Accounting Pronouncements
In May 2009, the FASB issued SFAS 165 (ASC 855-10) entitled
"Subsequent Events". Companies are now required to disclose the date
through which subsequent events have been evaluated by management.
Public entities (as defined) must conduct the evaluation as of the
date the financial statements are issued, and provide disclosure
that such date was used for this evaluation. SFAS 165 (ASC
855-10)provides that financial statements are considered "issued"
when they are widely distributed for general use and reliance in a
form and format that complies with GAAP. SFAS 165 (ASC 855-10) is
effective for interim and annual periods ending after June 15, 2009
and must be applied prospectively.
In June 2009, the FASB issued SFAS 168, the FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles. ("SFAS 168" or ASC 105-10) SFAS 168 (ASC
105-10) establishes the Codification as the sole source of
authoritative accounting principles recognized by the FASB to be
applied by all nongovernmental entities in the preparation of
financial statements in conformity with GAAP. SFAS 168 (ASC
105-10) was prospectively effective for financial statements issued
for fiscal years ending on or after September 15, 2009 and interim
periods within those fiscal years. The adoption of SFAS 168 (ASC
105-10) on July 1, 2009 did not impact the Company's results of
operations or financial condition. The Codification did not change
GAAP, however, it did change the way GAAP is organized and presented.
As a result, these changes impact how companies reference
GAAP in their financial statements and in their significant
accounting policies. The Company implemented the Codification in
this Report by providing references to the Codification topics
alongside references to the corresponding standards.
With the exception of the pronouncements noted above, no other
accounting standards or interpretations issued or recently adopted
are expected to have a material impact on the Company's financial
position, operations or cash flows.
NOTE 3- Capital Stock
On October 18, 2009, the Company issued 3,000,000 common shares at
$0.001 per share to the sole director of the Company for the total
proceeds of $3,000.
47
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering all of which are to be paid
by the registrant are as follows:
SEC Registration Fee $ 100
Printing Expenses 100
Accounting Fees and Expenses 2,000
Legal Fees and Expenses 1,000
Blue Sky Fees/Expenses 900
Transfer Agent Fees 900
-------
TOTAL $5,000
=======
RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the registrant has sold the following
securities
which were not registered under the Securities Act of 1933, as amended.
Name and Address Date Shares Consideration
---------------- ---- -------------
Dayong Sun October 19, 2009 3,000,000
Suite 1707-B, 219 Zhong
Shan Wu Road
Guangzhou, China, 510030
We issued the foregoing restricted shares of common stock to Dayong Sun
pursuant to Regulation S of the General Rules and Regulations
promulgated under the Securities Act of 1933. The sale of our shares
to Dayong Sun took place outside the United States of America and
Dayong
Sun is non-US persons as defined in Regulation S. Further, no
commissions
were paid to anyone in connection with the sale of our shares and
general
solicitation was not made to anyone.
II-1
EXHIBITS.
The following Exhibits are filed as part of this Registration
Statement:
48
Exhibit No. Document Description
----------- --------------------
3.1 Articles of Incorporation.
3.2 Bylaws.
4.1 Form of Share Certificate to be attached to the final S-1
5.1 Opinion of a law firm, regarding the legality of the
securities being registered to be attached to the
final S-1
23.1 Consent of Kenne Ruan, Certified Public Accountant.
99.1 Subscription Agreement.
UNDERTAKINGS.
A. 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 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(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.
49
II-2
(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) Intentionally omitted.
(5) That, for the purpose of determining liability under the
Securities Act of 1933 to any purchaser:
(i) Intentionally omitted.
(ii) If the registrant is subject to Rule 430C, 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 made in a document incorporated or deemed
incorporated by reference into the registration statement or
prospectus
that is part of the registration
II-3
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.
(6) 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;
50
(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.
B. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
II-4
SIGNATURES
In accordance with the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-1 and
authorized this Prospectus on Form S-1 to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of
Changchun, People's Republic of China, on the 2nd day of December,
2010.
KAMA RESOURCES, INC.
BY: /s/ Dayong Sun
----------------------------------------------
Dayong Sun, President, Chief
Executive
Officer, Secretary, Treasurer,
Chief Financial
Officer, Principal Accounting
Officer and
sole member of the Board of
Directors.
5
