Attached files
file | filename |
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EX-3.2 - Ameri Metro, Inc. | v205150_ex3-2.htm |
EX-3.1 - Ameri Metro, Inc. | v205150_ex3-1.htm |
EX-10.1 - Ameri Metro, Inc. | v205150_ex10-1.htm |
EX-10.2 - Ameri Metro, Inc. | v205150_ex10-2.htm |
EX-23.1 - Ameri Metro, Inc. | v205150_ex23-1.htm |
EX-10.3 - Ameri Metro, Inc. | v205150_ex10-3.htm |
As filed with the Securities and Exchange
Commissionon Registration
No.
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT UNDER
THE
SECURITIES ACT OF 1933
AMERI
METRO, INC.
(Exact
name of registrant as specified in its charter)
Delaware
|
485112
|
27-2672330
|
||
State
or other jurisdiction
|
Primary
Standard Industrial
|
(I.R.S.
Employer
|
||
incorporation
or organization
|
Classification
Code Number)
|
Identification
Number)
|
P.O. Box
125
Windsor
Commons, Suite 3137A
Red Lion,
Pennsylvania 17356
Tel:
(717) 246-3876
(Address,
including zip code, and telephone number, including area code
of
registrant’s principal executive offices)
Shah Mathias
P.O. Box
163
30 Center
Court
Red Lion,
Pennsylvania 17356
Tel:
(717) 434-0668
(Name,
address, including zip code, and telephone number,
including
area code, of agent for service)
with copy
to
Cassidy
& Associates
215
Apolena Avenue
Newport
Beach, California 92662
(310)
709-4338 (310) 943-3829(fax)
Approximate
Date of Commencement
of proposed sale to the
public: As soon as practicable after the effective date of
this Registration Statement.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933,
check the following box. x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, 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 pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act
registration 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 definitions “large accelerated filer,”“accelerated file,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
Large
accelerated filer
|
¨
|
Accelerated
filed
|
¨
|
|||
Non-accelerated
filed
|
¨
|
Smaller
reporting company
|
x
|
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 Commission acting pursuant to said
section 8(a), may determine.
CALCULATION
OF REGISTRATION FEE
Proposed
|
Proposed
|
|||||||||||||
Amount
|
Maximum
|
Maximum
|
Amount of | |||||||||||
Title
of Each Class of
|
to
be
|
Offering
Price
|
Aggregate
|
Registration | ||||||||||
Securities
to be Registered
|
Registered
|
Per
Unit
|
Offering
Price
|
Fee | ||||||||||
Common
Stock
|
500,000
shares
|
$ | 20.00 | $ |
10,000,000
|
$ |
713.00
|
(1) There
is no current market for the securities and the price at which the Shares are
being offered has beenarbitrarily determined by the Company and used for
the purpose of computing the amount of theregistration fee in
accordance with Rule 457 under the Securities Act of 1933, as
amended.
(2) $
[ ] paid by electronic transfer.
The
information contained in this prospectus is not complete and may be changed. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission and these securities may not be sold until
that registration statement becomes effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
PROSPECTUS
|
Subject
to Completion, Dated ______, 201_
|
AMERI
METRO, INC.
Up
to 500,000 shares of
Common
Stock offered by the Company at $20.00 per share
This
prospectus relates to the offer and sale of up to a maximum of 500,000 shares of
common stock of Ameri Metro, Inc., (the “Shares”), a Delaware corporation
(the “Company”), par value $0.0001 per share, to be offered from time to
time by the Company at a price of $20.00 per share.
There is
no minimum number of Shares that must be sold by the Company before the offering
can be closed and/or monies raised thereby utilized. The Company plans to
utilize funds as they are invested during the offering period. The maximum
number of Shares that can be sold pursuant to the terms of this offering is
500,000. Funds received by the Company will be immediately available to
the Company for use by it.
The
offering will terminate twenty-four (24) months from the date of this prospectus
unless earlier fully subscribed or terminated by
the Company. The Company intends to maintain the current status
and accuracy of this prospectus and to sell the Shares for a period of up
to two (2) years, unless earlier completely sold, pursuant to Rule 415 of the
General Rules and Regulations of the Securities and Exchange Commission.
All costs incurred in the registration of the Shares are being borne by
the Company.
Prior to
this offering, there has been no public market for the Company’s common stock.
No assurances can be given that a public market will develop
following completion of this offering or that, if a market does develop, it will
be sustained. The offering price for the Shares has been arbitrarily
determined by the Company and does not necessarily bear any direct relationship
to the assets, operations, book or other established criteria of value of
the Company. The Shares will become tradable on the effective
date of the registration statement of which this prospectus is a
part.
All or
some Shares may be sold by the officers and directors of the Company including
Shah Mathias, its chief executive officer, Naresh Mirchandani, its chief
financial officer and Shahjahan Mathias, its senior vice president.
None of these officers or employees will receive any commission or
compensation for the sale of the Shares. The Company has no current
arrangements nor has it entered into any agreements with any underwriters,
broker-dealers or selling agents for the sale of the Shares. If the
Company can locate and enter into any such arrangement(s), the Shares will be
sold through such licensed underwriter(s), broker-dealer(s) and/or selling
agent(s).
Assumed
Price
|
Placement
|
Proceeds
|
|||||||
To Public
|
Agent discount (1)
|
to the Company
|
|||||||
Per
Common Stock Share
|
$
20.00 per share
|
$
1.50 per share
|
$
18.50 per share
|
(1)
Assumes an underwriters’ discount or commission of 7.5%. The Company does not
know if it will enter any arrangement with any underwriter or other
placement agent but if such arrangement is entered into, the Company expects it
will pay customary commission amounts.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
These
securities involve a high degree of risk. See “RISK FACTORS” contained in this
prospectus beginning on page 7.
Ameri
Metro, Inc.
P.O. Box
125
Windsor
Commons, Suite 3137A
Red Lion,
Pennsylvania 17356
Prospectus
dated __________________, 201_
2
TABLE
OF CONTENTS
Prospectus
Summary
|
4
|
Risk
Factors
|
6
|
Forward
Looking Statement
|
13
|
Use
of Proceeds
|
13
|
Determination
of Offering Price
|
14
|
Dividend
Policy
|
14
|
Dilution
|
14
|
Plan
of Distribution
|
14
|
Description
of Securities
|
15
|
Plan
of Operation
|
16
|
The
Business
|
17
|
The
Company
|
18
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
24
|
Management
|
25
|
Executive
Compensation
|
28
|
Security
Ownership of Certain Beneficial Owners and Management
|
29
|
Certain
Relationships and Related Transactions
|
29
|
Shares
Eligible for Future Sales
|
29
|
Legal
Matters
|
29
|
Experts
|
29
|
Disclosure
of Commission Position of Indemnification for Securities Act
Liabilities
|
30
|
Financial
Statements
|
|
|
|
Part
II
|
31
|
Other
Expenses of Issuance and Distribution
|
31
|
Indemnification
of directors and Officers
|
31
|
Recent
Sales of Unregistered Securities
|
31
|
Exhibits
|
31
|
Undertakings
|
32
|
Signatures
|
34
|
_________________
Until
[_______________], 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.
3
PROSPECTUS
SUMMARY
This summary highlights some
information from this prospectus, and it may not contain all the
information important to making an investment decision. A potential
investor should read the following summary together with the more detailed
information regarding the Company and the common stock being sold in this
offering, including “Risk Factors” and the financial statements and related
notes, included elsewhere in this prospectus.
The
Company
The
Business
The Company believes that the United
States suffers from an overburdened transportation infrastructure and that a
fundamental overhaul of the national transportation structure is
needed. The Company anticipates that it will be able to assist in
this “fundamental overhaul” by providing both the hands-on expertise and
investment resources to establish an intermodal grid comprised of transportation
and support services extending to urban and outlying areas alike. The Company
will largely focus on projects related to high speed rail, but will also
concentrate its efforts on other transportation projects that improve
transportation infrastructure.
The Company intends to prepare a
feasibility study and locate contractors and manufacturers that would complete
the work and will provide cost estimates. Because high-speed rail travel is
already in-place in much of Europe and Asia, the Company anticipates working
with European companies to furnish the high-speed equipment, such as locomotives
and passenger cars.
The Company will put the proposed
contracts together with the supporting feasibility study, appraisals,
cost/benefit analysis, TEMS study, transportation history and other data to
create a complete regional project proposal. The Company will then
present such project proposals to the municipalities (state or local) as a
complete and finished project. The Company anticipates that upon approval, the
local municipality will effectuate a bond offering for the funding of the
high-speed rail project.
The Company anticipates that the
municipalities will be favorably receptive to the proposed high-speed rail
project for many reasons. Political pressure is increasing to find alternate
transportation systems as the price of gas and environmental risk of drilling
and using petroleum products rises. Highway usage is increasing dramatically
with the corresponding increasing maintenance costs and congestion. The project
will be presented as a total package thereby providing the municipalities with
the complete overview and relieving it of the time and costs involved in
studying the proposal, seeking pricing information and projecting results. In
addition, the Company believes that it will be able to effect economies of scale
by purchasing new and renovating existing equipment and facilities on an
integrated regional basis rather than in fractured individual areas or
small municipalities.
The Company intends that the projects
will be financed by bonds or indentures offered by sponsored or affiliated
non-profit organizations of the applicable local or municipal government or
agency. Such non-profit entities may also be affiliates or companies
related to the Company.
History
and Development of the Company
The Company is a start-up
developmental-stage company designed to be engaged primarily in high-speed
rail for passenger and freight transportation and related transportation
projects. The Company was recently incorporated and has completed its business
plan, met with experts and consultants, organized its governing documents
and appointed and elected officers and directors. The Company was
incorporated in the State of Delaware on April 13, 2010.
The Company is designed as a
multi-faceted development company committed to bringing innovative design and
independent financing to the construction of high-speed rail for passenger and
freight transportation and related projects nationwide. The Company
anticipates that it will, directly or through subsidiaries, develop plans, and
then coordinate and supervise the financing, construction and development of
such transportation projects by bringing together the resources, plans,
financing, approvals and technology needed to implement the high-speed rail
services.
The Company has no revenue producing
operations to date. The Company intends to develop numerous projects as
opportunities are presented primarily in the transportation or
transportation-related fields. The Company believes that the need, demand and
usage of alternative transportation such as high speed rail are increasingly
important as the United States adopts policies to attempt to reduce its
dependency on fossil fuels, particularly the automobile. The Company intends to
develop and prepare the designs and concepts for feasible and profitable
regional high-speed rail projects utilizing existing and new railbeds, stations,
and equipment. The Company will prepare the complete project package including
appraisals and estimates and will obtain contracts for the development of
the railbeds and purchase of the equipment. The Company will present the
complete project, working as project supervisor and coordinator, to
municipalities and regional government agencies. In addition to high speed
rail projects, the Company will also develop other selected
transportation-related projects that promote efficient and improved
transportation structures or plans.
4
Funding for individual projects of
the Company will occur from bond offerings organized through various non-profit
entities and organizations sponsored or affiliated with municipal and government
agencies. Certain of these non-profit entities or organizations may
themselves be affiliated with, or related to, the Company and assist, or work in
conjunction with, the Company in securing contracts and funds to develop
projects.
Risks
and Uncertainties facing the Company
As a development stage
company, the Company has no operating history and has continuously
experienced losses since its inception. The Company’s
independent auditors have issued a report questioning the Company’s ability
to continue as a going concern. That is, the Company needs to
create a source of revenue or locate additional financing in order to continue
its developmental plans. As a development stage company, management
of the Company has no prior experience in building and selling projects similar
to that planned by the Company and in marketing and distributing such projects
on a broad scale.
One of the biggest challenges facing
the Company is the ability to raise adequate capital to develop and execute
project opportunities in the transportation sector.
The Company believes that the continued
high price of oil and gas coupled with the environmental concerns raised by
offshore drilling and other oil and gas exploration and drilling projects and
the federal policy of seeking alternatives to the country's dependence on the
automobile and petroleum products will dramatically increase the need for
and use of high-speed rail systems linking major regional hubs.
Due to financial constraints, the
Company has to date conducted limited operations. If the Company were
unable to develop strong and reliable sources of funding for project
opportunities, it is unlikely that the Company could develop its operations
to return revenue sufficient to further develop its business
plan. Moreover, the above assumes that the Company’s efforts are met
with customer satisfaction in the marketplace and exhibit steady adoption of its
solutions amongst the potential base of customers, neither of which are
currently known or guaranteed.
Trading
Market
Currently, there is no trading market
for the securities of the Company. The Company intends to
initially apply for admission to quotation of its securities on the OTC
Bulletin Board as soon as possible which may be while this offering is
still in process. There can be no assurance that the Company will qualify
for quotation of its securities on the OTC Bulletin Board. See “RISK
FACTORS” and “DESCRIPTION OF SECURITIES”.
The
Offering
There is no minimum of Shares that must
be sold by the Company before the offering can close or the Company can
otherwise use funds raised in the offering. The Company may also have
additional closings from time to time during the offering period. The
maximum number of Shares that can be sold pursuant to the terms of this
offering is 500,000. The offering will terminate twenty-four (24)
months from the date of this prospectus unless earlier fully
subscribed or terminated by the Company.
Common
stock outstanding before the offering
|
10,257,500(1)
|
Maximum
number of shares of common stock offered by the Company
|
500,000
|
Common
stock outstanding after the offering if maximum number
sold
|
10,757,500(2)
|
Offering
Price
|
$20.00 per share |
Proceeds
to the Company
|
$9,250,000(2) (3) |
(1) Based
on number of shares outstanding as of the date of this prospectus.
(2)
Assumes the sale of the maximum number of Shares.
(3) The
Company will offer the Shares directly without payment to any officer or
director of any commission or compensation for sale of the Shares. The
Company will also attempt to locate broker-dealers or selling agents to
participate in the sale of the Shares. In such cases, the
Company will pay customary selling commissions and expenses of such sales
which would reduce the proceeds to the Company.
5
Any and all funds received at any time
in the offering will be immediately available to the Company. There
is no fixed amount or number of Shares that must be reached or sold before any
closing or use of any funds can occur.
In the future, following the completion
of this offering, the Company intends to raise up to $490,000,000 through the
sale of 24,500,000 Shares as part of separate offering pursuant to a
registration statement that the Company intends to file at such
time.
Summary
Financial Information
The statements of operations data for
the period from April 13, 2010 (date of inception) to July 31, 2010 and the
balance sheet data at July 31, 2010 are derived from the Company’s audited
condensed financial statements and related notes thereto included elsewhere
in this prospectus.
Period
ended July 31,
|
||||
2010
|
||||
Statement
of operations data
|
||||
Revenue
|
$ | 0 | ||
Net
loss
|
$ | (90,920 | ) | |
Net
loss per share, basic and diluted
|
(0.02 | ) | ||
Weighted
average number of shares
|
||||
outstanding,
weighted and diluted
|
5,454,545 |
July
31,
|
||||
2010
|
||||
Balance
sheet data
|
||||
Cash
and cash equivalents
|
$ | 21 | ||
Other
assets
|
$ | 1,494,077 | ||
Total
assets
|
$ | 1,494,098 | ||
Total
liabilities
|
$ | 1,584,018 | ||
Total
stockholders’ deficiency
|
$ | (89,920 | ) |
RISK
FACTORS
A
purchase of any Shares is an investment in the Company’s common stock and
involves a high degree of risk. Investors should consider carefully
the following information about these risks, together with the
other information contained in this prospectus, before the purchase of the
Shares. If any of the following risks actually occur, the business,
financial condition or results of operations of the Company would likely suffer.
In this case, the market price of the common stock could decline, and
investors may lose all or part of the money they paid to buy
the Shares.
The
Company's independent auditors have issued a report questioning the Company's
ability to continue as a going concern.
The report of the Company's independent
auditors contained in the Company's financial statements for the period
ended July 31, 2010 includes a paragraph that explains that the Company has
experienced recurring losses and has a stockholders' deficiency at July 31,
2010. These matters raise substantial doubt regarding the Company's
ability to continue as a going concern.
The
Company must raise sufficient capital in order to develop and expand its
business plan and generate revenues.
Without the influx of capital from this
offering or other sources, the Company will be unable to develop or expand it
business plan or generate revenues.
6
The
Company has no operations and its business plan lays out the conceptual
operations of the Company which have not yet been implemented and face
significant obstacles.
The Company has a business plan which
sets out its conceptual design to plan and develop regional
high-speed passenger, freight railroad systems or other transportation
developments. However, the Company has not implemented any of the steps
required to implement such a plan or plans and as a start-up conceptual
company has only to date designed its business plan. In addition to the
need to raise or obtain capital for the implementation of its business plan, the
Company will face significant other obstacles in planning and effecting
regional high-speed railroads. The Company has no contracts or other
arrangements or understandings with any municipality or area for such a railroad
project nor does it have any contracts with suppliers, developers,
designers or others that will be needed to assist the Company to develop
a working project plan. As the Company develops its plan for a
regional high-speed railroad, it may be required to obtain governmental and
environmental approvals and possibly be subject to approval by local or state
voting propositions, referendums or state legislatures. In addition, the
Company may not be able to obtain the land on which such railroads are
proposed and may have to seek government condemnation of such land, which may
not be possible. These and other unforeseen obstacles may present
significant obstacles to the ability of the Company to implement
its business plan.
No assurance of commercial
feasibility.
Even if the Company’s plans and
projects are successfully initiated, there can be no assurance that such plans
and projects will have any commercial success or advantage. Also,
there is no assurance that the Company’s initiatives will perform as intended in
the marketplace.
The Company is a development-stage
company with no operating history of its own and as such any prospective investor cannot assess the Company’s profitability or performance.
Because the Company is a
development-stage company with no operating history, it is impossible for
an investor to assess the performance of the Company or to determine
whether the Company will meet its projected business plan. The
Company has limited financial results upon which an investor may judge its
potential. As a company emerging from the development-stage, the Company
may in the future experience under-capitalization, shortages, setbacks and many
of the problems, delays and expenses encountered by any early stage
business. An investor will be required to make an investment decision
based solely on the Company management’s history and its projected
operations in light of the risks, expenses and uncertainties that may be
encountered by engaging in the Company’s industry.
The Company has no revenues to
date.
The Company has generated no revenues
to date. Most of the time of the Company’s management, and most of the
Company’s limited resources have been spent in developing its initial
plans, researching additional projects, contacting potential partners, exploring
marketing contacts, establishing manufacturing sources, preparing our business
plan and model, selecting professional advisors and consultants and seeking
capital for the Company.
The
Company is a development-stage company and has little experience in its proposed
area of operations.
The Company is a development-stage
company and as such has little experience in its intended area of operations.
Such lack of experience may result in the Company experiencing
difficulty in adequately designing or building any project, thereby causing the
project to function improperly or provide inadequate utility for which it is
intended. If the Company’s projects consistently function improperly
or perform below expectations, the Company will likely be unable to market and
sell many of its projects. In addition, the Company’s lack of
experience may result, in spite of the successful performance and operability of
any products, in difficultly in actually consummating sales to end
customers. The Company intends to build strong relationships
with partners, such as distributors and retailers, who can help market and
deliver the Company’s projects. To date, the Company has built a
relationship with Alabama Toll Facilities, Inc. and other non-profit groups,
government agencies and boards.
Reliance
on third party agreements and relationships is necessary for development of the
Company's business.
The Company will rely heavily on third
parties to help plan, secure and execute transportation
projects. Until the Company can develop its own brand equity and
consumer awareness, the Company will be substantially dependent on these third
parties.
The
Company will require additional capital in order to execute its business plan
and expects to incur additional expenses and may ultimately never be
profitable.
The Company is a development-stage
company, has limited operations and is relying on this offering to finance
its development and operations. As of July 31, 2010, the Company had
accumulated losses of $90,920. The Company will require additional
capital in order to execute its current business plan, and as a result, the
Company may not be able to successfully implement its business model. The
Company estimates it will likely require approximately at least $1,000,000
to begin its initial development of basic sales and marketing and will need up
to the maximum offering amount of $10,000,000 to execute its business
plan as herein described. If the Company raises an amount less that
the projected amount, it will not be able to develop all aspects of its business
plan as preferred and it will instead have to develop such plan in a more
incremental manner. In addition, although this offering will provide
the Company with cash for its working capital, the company will need to begin
generating revenue to achieve and maintain profitability. To become
profitable, the Company must successfully commercialize its projects, a process
that involves many factors that are beyond the Company’s control, including the
type of competition that the Company may encounter. Ultimately, in spite of the
Company’s best or reasonable efforts, the Company may never actually generate
revenues or become profitable.
7
The
Company is a development stage company and has a correspondingly small financial
and accounting organization. Being a public company may strain the
Company's resources, divert management’s attention and affect its ability
to attract and retain qualified directors.
The Company is a development stage
company, with a finance and accounting organization that has been geared
toward its operations as a small privately owned company. However,
the rigorous demands of being a public reporting company will require a
larger finance and accounting group. As a public company, the Company will
be subject to the reporting requirements of the Securities Exchange Act of
1934. The requirements of these laws and the rules and regulations
promulgated thereunder entail significant accounting, legal and financial
compliance costs, and have made, and will continue to make, some activities
more difficult, time-consuming or costly and may place significant strain
on the Company's personnel, systems and resources.
The Securities Exchange Act requires,
among other things, that the Company maintain effective disclosure controls
and procedures and internal control over financial reporting. In order to
establish the requisite disclosure controls and procedures and internal control
over financial reporting, significant resources and management
oversight are required. As a result, management’s attention may be
diverted from other business concerns, which could have a material adverse
effect on the Company's business, financial condition and results of
operations.
These rules and regulations may also
make it difficult and expensive for the Company to obtain director
and officer liability insurance. If the Company is unable to obtain
adequate director and officer insurance, its ability to recruit and retain
qualified officers and directors, especially those directors who may be deemed
independent, will be significantly curtailed.
If
the Company is unable to generate sufficient cash from operations, it may find
it necessary to curtail development and operational
activities.
The Company has an extensive business
plan hinged on its ability to market, distribute and sell its projects. If
the Company is unable to market, distribute or sell its projects, then it would
not be able to proceed with its business plan or possibly to develop operations
at all.
The
Company may need subsequent financing.
Although the Company anticipates that
upon realization and completion of the full amount of this Offering, the Company
may be able to internally generate sufficient profits to continue the expansion
plans of the Company, there cannot be any assurance that this can be
accomplished. Consequently, the Company may determine a need to
obtain additional financing which could cause additional dilution to investors
participating in this offering.
Municipalities,
government agencies and other non-profit boards or groups may be unable to
develop bond offerings that are sufficient to fund the high-speed
rail project plans or other projects presented by the Company to such
municipalities, agencies or groups.
If the Company is able to complete one
or more regional high-speed rail project plans or other transportation projects
and present such plans or projects to the respective regional government
agency or agencies, or non-profit board or group, whether state(s), local or
regional, there is no assurance that such agency will adopt the plan or if
adopted whether it will be able to have effected a bond issuance sufficient to
raise funds to implement the project plan. However, the Company
believes that the use of its development structure (in conjunction with its
related parties and affiliated non-profit corporation) can assist these various
agencies in more successfully raising funds to implement projects.
The
development of high speed rail and other innovative transportation projects
is uncertain and the profitability of such projects remains
unclear.
The Company believes that it is a
relative pioneer in developing the next generation of rail transportation and
innovative transportation in the United States, e.g. high speed rail. As
such, there are few, if any, examples of developed high-speed rail or other
projects that can be used either as developmental models or commercial
viability models. For example, although high-speed rail projects may be
successful in other countries, there is no assurance that such method of
transportation will be successful in the United States which historically
maintains an automobile-centered transportation system.
8
The
Company’s founder beneficially owns and will continue to own a majority of
the Company’s common stock and, as a result, can exercise control over
shareholder and corporate actions.
Mr. Shah Mathias, the founder and chief
executive officer of the Company, is currently the beneficial
owner of approximately 97% of the Company’s outstanding common stock,
and assuming sale of all the Shares, will own 93% of the Company's then
outstanding common stock upon closing of the offering. As such, he will be
able to exert significant influence and potential control over matters requiring
approval by shareholders, including the election of directors and approval of
significant corporate transactions. This concentration of ownership
may also have the effect of delaying or preventing a change in
control, which in turn could have a material adverse effect on the market
price of the Company’s common stock or prevent shareholders from realizing
a premium over the market price for their Shares.
The
Company depends on its CEO to manage its business effectively.
The Company's future success is
dependent in large part upon its ability to understand and develop
the business plan and to attract and retain highly skilled managerial,
sales and marketing personnel. In particular, due to the relatively early
stage of the Company's business, its future success is highly dependent on its
CEO and founder, Shah Mathias, to provide the necessary experience and
background to execute the Company's business plan. The loss of his
services could impede, particularly initially as the Company builds a
record and reputation, its ability to develop its objectives, particularly
in its ability to develop a successful strategy to conceptualize, market and
develop projects, and as such, would negatively impact the Company's
possible development.
Government
regulation could negatively impact the business.
The Company’s projects may be
subject to government regulation in the jurisdictions in which they
operate. Due to the potential wide geographic scope of the Company’s
operations, the Company could be subject to regulation by political and
regulatory entities throughout the world. The Company may incur
increased costs necessary to comply with existing and newly adopted laws and
regulations or penalties for any failure to comply. The Company’s sales could be
adversely affected, directly or indirectly, by existing or future laws and
regulations relating to its products or industry.
For example, as rail tracks will cross
many differing municipal and state jurisdictions, the Company will be faced
with myriad regulations from these jurisdictions as well as the federal
government. The Company will need to comply with all government regulations
which the Company expects will relate to items such as local zoning codes, noise
regulations, track and crossing construction, maintenance and safety,
environmental impact on construction and usage, rights-of-way and other
matters. A failure to know the applicable regulations or to successfully abide
by such regulations, could negatively impact the Company with potential
fines, stoppages or other remedies.
As the Company is introducing a novel
concept and innovative plan to the marketplace, the Company is unaware of any
specific government regulation that could negatively affect its
business. However, because this industry niche is new and because
there is a component of risk of loss to persons and property, the Company
believes that there may ultimately be regulation affecting its projects on
both a state and federal level. It is impossible to predict what such
regulation would encompass, but any regulation would most likely be at
least include additional reporting requirements, potential project
specifications or requirements and possibly even regulation of additional
aspects of the industry.
There
has been no prior public market for the Company’s securities and the lack of
such a market may make resale of the stock difficult.
No prior public market has existed for
the Company’s securities and the Company cannot assure any investor that a
market will develop subsequent to this offering. An investor must be fully aware
of the long-term nature of an investment in the Company. The Company
intends to apply for quotation of its common stock on the OTC
Bulletin Board as soon as possible which may be while this offering is
still in process. However, the Company does not know if it will be
successful in such application, how long such application will take, or, that if
successful, that a market for the common stock will ever develop or
continue on the OTC Bulletin Board. If for any reason the common stock
is not listed on the OTC Bulletin Board or a public trading market does not
otherwise develop, investors in the offering may have difficulty selling
their common stock should they desire to do so. If the Company is not
successful in its application for quotation on the OTC Bulletin Board, it
will apply to have its securities quoted by the Pink OTC Markets, Inc.,
real-time quotation service for over-the-counter equities.
9
The
Company does not intend to pay dividends to its stockholders, so investors will
not receive any return on investment in the Company prior to selling their
interest in it.
The Company does not project paying
dividends but anticipates that it will retain future earnings for
funding the Company’s growth and development. Therefore, investors
should not expect the Company to pay dividends in the foreseeable future.
As a result, investors will not receive any return on their investment
prior to selling their Shares in the Company, if and when a market for such
Shares develops. Furthermore, even if a market for the
Company’s securities does develop, there is no guarantee that the market
price for the shares would be equal to or more than the initial per share
investment price paid by any investor. There is a possibility that the
Shares could lose all or a significant portion of their value from the
initial price paid in this offering.
The
Company’s stock may be considered a penny stock and any investment in the
Company’s stock will be considered a high-risk investment and subject to
restrictions on marketability.
If the Shares commence trading, the
trading price of the Company's common stock may be below $5.00 per Share.
If the price of the common stock is below such level, trading in its
common stock would be subject to the requirements of certain rules
promulgated under the Securities Exchange Act of 1934, as amended. These
rules require additional disclosure by broker-dealers in connection with
any trades generally involving any non-NASDAQ equity security that has a
market price of less than $5.00 per Share, subject to certain exceptions.
Such rules require the delivery, before any penny stock transaction,
of a disclosure schedule explaining the penny stock market and the risks
associated therewith, and impose various sales practice requirements on
broker-dealers who sell penny stocks to persons other than established
customers and accredited investors (generally institutions). For these
types of transactions, the broker-dealer must determine the suitability of
the penny stock for the purchaser and receive the purchaser’s written
consent to the transactions before sale. The additional burdens imposed
upon broker-dealers by such requirements may discourage broker-dealers from
effecting transactions in the Company’s common stock which could impact the
liquidity of the Company’s common stock.
The
Company may face significant competition from companies that serve its
industry.
The Company may face competition from
other companies that offer similar projects, ranging from local entities to
large multinational companies. Some of these potential competitors
may have longer operating histories, greater brand recognition, larger client
bases and significantly greater financial, technical and marketing resources
than the Company does. These advantages may enable such competitors
to respond more quickly to new or emerging technologies and changes in customer
preferences. These advantages may also allow them to engage in more
extensive research and development, undertake extensive far-reaching marketing
campaigns, adopt more aggressive pricing policies and make more attractive
offers to potential customers, employees and strategic partners. The Company
believes that its current and anticipated projects are, and will be,
sufficiently different from existing competition. However, few of these
organizations are using their projects in the configuration that the Company is
currently proposing. As a result, it is possible that potential
competitors may have or may rapidly acquire significant market
share. Increased competition may result in price reductions, reduced
gross margin and loss of market share. The Company may not be able to
compete successfully, and competitive pressures may adversely affect its
business, results of operations and financial condition.
The Company’s trade secret protection may be
inadequate.
The Company possesses certain
proprietary trade secrets and processes. The Company plans on attempting
to obtain additional trade secrets, trademarks and service
marks. However, there can be no assurance that the Company can obtain
effective protection against unauthorized duplication or the introduction of
substantially similar trade secrets or other intellectual property protection
adequately protects the Company.
No formal market survey has been
conducted.
No independent marketing survey has
been performed to determine the potential demand for the Company’s projects. The
Company has conducted only limited marketing reviews, which indicate that its
projects would potentially be marketable. However, no assurances can
be given that upon marketing, sufficient markets can be developed to sustain the
Company's operations on a continued basis.
The Company is subject to Obsolescence and
Technological Change.
The business of the Company is
susceptible to rapidly changing technology and the Company's project planning
and development process is subject to constant change. Although the
Company intends to continue to develop and improve its projects and capability,
there can be no assurance that funds for such expenditures will be available or
that the Company's competition will not develop similar or superior capabilities
or that the Company will be successful in its internal efforts. The
future success of the Company will depend in part on its ability to respond
effectively to rapidly changing technologies, industry standards and customer
requirements by adapting and improving the performance features and reliability
of its projects.
10
The Company may be subject to increasing
environmental and regulatory restrictions and developments, which may result in
increased costs, lower revenue and/or difficulty in conducting our
business.
Current, or future, environmental
regulations may affect the availability or cost of goods and services, such as
natural resources, which are necessary to operate the Company’s
business. Any violation of these laws could adversely affect the
Company and its business. The Company’s operations may necessitate
the use and handling of hazardous materials and, as a result, they may be
subject to various federal, state, local and foreign laws, regulations and
ordinances relating to the protection of the environment, including (without
limitation) those regulations governing discharges to air and water, handling
and disposal practices for solid and hazardous wastes, the cleanup of
contaminated sites and the maintenance of a safe work place. These
laws impose penalties, fines and other sanctions for noncompliance and liability
for response costs, property damages and personal injury resulting from past and
current spills, disposals or other releases of, or exposure to, hazardous
materials. The Company could incur substantial costs as a result of
noncompliance with or liability for cleanup or other costs or damages under
these laws. The Company may become subject to more stringent
environmental laws in the future. If more stringent environmental
laws are enacted in the future, these laws could have a material adverse effect
on the business, financial condition and results of operations of the
Company.
If the Company fails to successfully manage its development or market expansion,
its business and
financial condition may
suffer.
While the Company continues to develop
its projects and looks to expand into new markets, the success of
its project introduction depends on a number of factors, including, but not
limited to, its ability to anticipate and manage a variety of issues associated
with these projects and markets, such as (without limitation): difficulties
faced in market acceptance and quality problems or other defects in the early
stages of new project introduction that were not anticipated in the design of
those projects. Further, the Company needs to identify how any of its
potential markets into which is entering may have different characteristics from
the markets in which it currently exists and properly address these
differences. The business of the Company may suffer if it fails to
successfully anticipate and manage these issues associated with its project
development and market entry.
The time devoted by Company management may not be
full-time.
It is anticipated that key officers
will devote themselves full-time to the business of the
Company. However, certain officers will devote only such time as is
necessary (which may be less than full-time) to fulfill his or her respective
duties as an officer of the Company.
The
Company may have conflicts of interest and have engaged in transactions with its
officers and directors and have entered into agreements or arrangements that
were not negotiated at arms’-length.
The Company has engaged, and may in the
future engage, in transactions with its officers, directors and principal
shareholders, or persons or entities affiliated with any of these
persons. These transactions may not have been on terms as favorable
to the Company as could have been obtained from non-affiliated
persons. While an effort has been made and will continue to be
made to obtain services from affiliated persons at rates as favorable as would
be charged by others, there will always be an inherent conflict of interest
between the interests of our Company and those of the officers, directors,
principal shareholders, and affiliates.
Projects have not completed
development.
The Company has not completed the
development of any projects, and further, it anticipates a continuing need to
develop additional projects. Although Company management feels that
it excels in design and development of projects, no assurance can be given that
the projects can be developed to implementation or that the projects will
achieve viable revenues as a result therefrom.
If the Company experiences
significant growth, this
may cause strains on its management and
employees.
If the Company experiences significant
growth in the future, this will expose the Company to increased competition,
greater overhead, marketing and support costs and other costs associated with
entry into new markets and solicitation of new customers. To manage
growth effectively, the Company will need to continue to improve and expand
operational, financial and management information systems and to expand, train,
motivate and manage its employees. Should the Company be unable to
manage growth effectively, the results of its operations could be adversely
affected.
The Company has a narrow project line, which results in a lack of
diversification.
While the Company intends to
commercialize additional projects, the underlying focus and efforts of the
Company is limited to that which is described herein. The Company does not
intend to investigate or commercialize other projects. The Company’s
focus on one narrow area of project development will impair its ability to
pursue other project or service offerings. Therefore, the Company will be
subject to the risks associated with a lack of diversification.
11
The
Company has no control over general economic conditions.
The financial success of the Company
may be sensitive to adverse changes in general economic conditions in the United
States and any foreign countries in which the Company may operate its business,
such (without limitation) as recession, inflation, unemployment, and interest
rates. Such changing conditions could reduce demand in the marketplace for
the Company’s projects. The Company’s management believes that the
niche projects that it markets and secular demand for innovative transportation
projects will insulate it from excessive reduced demand as a result of general
economic conditions. Nevertheless, the Company has no control over
these changes and its business could be adversely and severely affected as a
result of changes in general economic conditions.
The Company has authorized the issuance of preferred
stock with certain preferences.
The board of directors of the Company
is authorized to issue up to 20,000,000 shares of $0.0001 par value preferred
stock. The board of directors has the power to establish the dividend
rates, liquidation preferences, and voting rights of any series of preferred
stock, and these rights may be superior to the rights of holders of the
Shares. The board of directors may also establish redemption and
conversion terms and privileges with respect to any shares of preferred
stock. Any such preferences may operate to the detriment of the
rights of the holders of the Shares, and further, could be used by the board of
directors as a device to prevent a change in control of the Company. No
such preferred shares or preferences have been issued to date, but such shares
or preferences may be issued at a later time, subject to the sole discretion of
the board of directors.
It
is difficult to predict the Company’s financial performance, which may fluctuate
widely.
The Company has not yet generated
revenues and may never do so. If the Company does generate revenues,
its quarterly results of operations are likely to vary
significantly. A number of factors are likely to cause these
variations, some of which are outside of the Company’s control. Some
of these factors include (without limitation):
|
·
|
the
acceptance by the transportation and infrastructure industry of the
solutions that the Company offers;
|
|
·
|
the
amount and timing of capital expenditures and other costs relating to the
expansion of the Company;
|
|
·
|
the
introduction of competing projects and
solutions;
|
|
·
|
price
competition or changes in the industry;
and
|
|
·
|
technical
difficulties or economic conditions specific to the Company or its
business.
|
Executive
officers and directors of the Company will retain voting control after the
offering, which will allow them to exert substantial influence over major
corporate decisions.
The Company anticipates that its
executive officers and directors will, in the aggregate, beneficially own
approximately 30% of its issued and outstanding capital stock following the
completion of this offering, assuming the sale of all 500,000 Shares hereby
offered. Accordingly, the present shareholders, by virtue of their
percentage share ownership and certain procedures established by the Articles of
Incorporation and By-Laws of the Company for the election of its directors, may
effectively control the Board of Directors and the policies of the
Company. As a result, these shareholders will retain substantial
control over matters requiring approval by the Company’s shareholders, such as
(without limitation) the election of directors and approval of significant
corporate transactions. This concentration of ownership may also have
the effect of delaying or preventing a change in control.
The
Company does not maintain certain insurance, including errors and omissions and
indemnification insurance.
The Company has limited capital and,
therefore, does not currently have a policy of insurance against liabilities
arising out of the negligence of its officers and directors and/or deficiencies
in any of its business operations. Even assuming that the Company
obtained insurance, there is no assurance that such insurance coverage would be
adequate to satisfy any potential claims made against the Company, its officers
and directors, or its business operations or products. Any such
liability which might arise could be substantial and may exceed the assets of
the Company. The Articles of Incorporation and By-Laws of the Company
provide for indemnification of officers and directors to the fullest extent
permitted under Delaware law. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and
controlling persons, it is the opinion of the Securities and Exchange Commission
that such indemnification is against public policy, as expressed in the Act, and
is therefore, unenforceable.
12
Forward-Looking
Statements
This prospectus contains, in addition
to historical information, certain information, assumptions and discussions
that may constitute forward-looking statements. Such statements are subject to
certain risks and uncertainties which could cause actual results to differ
materially than those projected or anticipated. Actual results could differ
materially from those projected in the forward-looking statements. Although the
Company believes its assumptions underlying the forward-looking statements
are reasonable, the Company cannot assure an investor that the
forward-looking statements set out in this prospectus will prove to be accurate.
The Company’s businesses can be affected by, without limitation, such
things as natural disasters, economic trends, international strife or
upheavals, consumer demand patterns, labor relations, existing and new
competition, consolidation, and growth patterns within the industries in
which the Company competes and any deterioration in the economy may individually
or in combination impact future results.
USE
OF PROCEEDS
The
Company will receive proceeds from the sale of the Shares assuming the sale of
any Shares in the offering is concluded. The Company does not know how
many Shares may be sold or the aggregate amount of proceeds it may receive
from sales. The Company anticipates that it will use the proceeds from the
sale of any of the Shares as listed below. If less than the maximum number
of Shares offered is sold and less than the maximum proceeds are received,
the Company anticipates that the use of proceeds listed below will be
proportionately reduced where possible.
If
50,000
|
If
250,000
|
If
500,000
|
||||||||||
Shares
sold
|
Shares
sold
|
Shares
sold
|
||||||||||
($1,000,000)
|
($5,000,000)
|
($10,000,000)
|
||||||||||
Sales
and Marketing
|
$ | 250,000 | $ | 400,000 | $ | 600,000 | ||||||
Facilities
and Operations
|
$ | 50,000 | $ | 3,400,000 | $ | 7,000,000 | ||||||
General
and Administrative
|
$ | 650,000 | $ | 1,000,000 | $ | 1,600,000 | ||||||
Working
Capital
|
$ | 50,000 | $ | 200,000 | $ | 800,000 | ||||||
Total
|
$ | 1,000,000 | $ | 5,000,000 | $ | 10,000,000 |
(1) The
Company is seeking an underwriter, broker-dealer or selling agent to sell the
Shares. The Company has not entered into any arrangements with any
underwriter, broker-dealer or selling agent as of the date of this
prospectus.
(2) At
the time of this prospectus, the Company has not located a broker-dealer or
selling agent to sell the Shares. The Company does not know if and when it
will be able to locate such any such broker-dealer or selling agent. While
it is seeking a broker-dealer or selling agent to sell the Shares, the sale
of the Shares will be made by officers of Company before the Company can locate,
negotiate and finalize any arrangement with any underwriter. Officers will
not receive any commissions for any sales of the Shares.
Discussion
of Use of Proceeds Items
Sales,
Marketing and Partnerships: As part of the overall marketing strategy, the
Company plans to devote substantial resources to its sales and marketing
strategy, especially in order to attract licensing and partnership deals to
capitalize upon its projects. The Company believes that at this
present time, many government agencies and municipalities are not fully
aware of the benefits of the Company’s projects. This dearth of
awareness is, in the Company’s view, due to the lack of awareness and general
knowledge of the Company’s projects and plans. The Company
intends to showcase itself to the various government agencies and
municipalities and build awareness of the Company and its
projects. The Company also intends to use monies raised in the
Offering to secure various development rights from government agencies to
develop its projects.
Facilities
and Operations: The Company plans to build and open a new facility as
its new corporate headquarters. With additional funding, the Company
will also build a manufacturing and production plant and purchase equipment for
the same. In addition, with additional financing, the Company will
use its resources to procure raw materials for its projects. The
Company will also purchase two automobiles for use in the operation of its
business.
General
and Administrative: The Company plans to hire substantial personnel
to help staff for its growth. In addition, the Company plans to
expend significant resources for obtaining insurance. The Company
also anticipates significant costs associated with professional fees for legal,
tax and accounting advisors.
Working
Capital: The Company plans to maintain working capital in order to
address its short-term liquidity and cash flow needs.
13
DETERMINATION
OF OFFERING PRICE
There is no public market for the
Company’s common stock and the price at which the Shares are being offered
has been arbitrarily determined by the Company based on the Company’s belief in
its internal projections, anticipated growth and market potential.
This price does not necessarily bear any direct relationship to the
assets, operations, book or other established criteria of value of the
Company but represents solely the opinion of management that the Company
will develop all or a portion of its business plan and will develop a market
value. Although a development-stage company, since April 2010, the Company
has spent considerable time and effort in developing its projects. The
Company believes that its development and the projects intended to be
offered by the Company perform particularly well regardless of any economic
recession because the products provide immediate and critical benefits.
The Company has based its $20.00 per Share offering price on what it
views as the potential future value of its projects and the anticipated
growth of the Company.
DIVIDEND
POLICY
The Company does not anticipate that it
will declare dividends in the foreseeable future but rather intends to use
any future earnings for the development of its business.
DILUTION
Purchasers of the Shares may experience
immediate dilution in the value of their shares of common stock. Purchasers
in this offering will pay $20.00 per Share but immediately after purchase the
value of those Shares will be reduced. Dilution represents the
difference between the initial public offering price per share paid by
purchasers and the net tangible book value per share immediately after
completion of the offering. Net tangible book value per share is the
net tangible assets of the Company (total assets less total liabilities less
intangible assets), divided by the number of shares of common stock
outstanding.
In the future, following the completion
of this offering, the Company intends to raise up to $490,000,000 through the
sale of 24,500,000 Shares as part of separate offering pursuant to a
registration statement that the Company intends to file at such
time.
PLAN
OF DISTRIBUTION
As of the date of this prospectus, the
Company has not entered into any arrangements with any underwriter,
broker-dealer or selling agent for the sale of the Shares. The
Company intends to attempt to locate an underwriter or broker-dealer or selling
agent to sell the Shares. Some Shares may be sold by certain officers
and directors of the Company, none of whom will receive any commission or
compensation for the sale of the Shares. The Company has no arrangements
nor has entered into any agreement with any underwriters, broker-dealer or
selling agents for the sale of the Shares. The executive officers of the
Company will be offering the Shares for sale without commission or payment. The
offering will be presented by the Company primarily through mail,
telephone, electronic transmission and direct meetings in those states in
which it has registered the Shares.
There is no minimum of any Shares that
must be sold by the Company before the offering can be closed or the funds can
be utilized. The Company, at its sole discretion, may have additional
closings thereafter from time to time during the offering period. The
maximum number of Shares that can be sold pursuant to the terms of this offering
is 500,000.
The Company intends to maintain the
currency and accuracy of this prospectus and to sell the Shares for
a period of up to two (2) years, unless earlier completely sold, pursuant
to Rule 415 of the General Rules and Regulations of the Securities and
Exchange Commission.
Pursuant to the provisions of Rule
3a4-1 of the Securities Exchange Act of 1934, none of the officers
offering the Shares is considered to be a broker of such securities as (i)
no officer is subject to any statutory disqualification, (ii) no officer is
nor will be compensated by commissions for sales of the securities,
(iii) no officer is associated with a broker or dealer, (iv) all
officers are primarily employed on behalf of the Company in substantial duties
and (v) no officer participates in offering and selling securities more
than once every 12 months.
The offering will terminate 24 months
following the date of this prospectus unless earlier closed.
In the future, following the completion
of this offering, the Company intends to raise up to $490,000,000 through the
sale of 24,500,000 Shares as part of separate offering pursuant to a
registration statement that the Company intends to file at such
time.
Resales
of the Securities under State Securities Laws
The National Securities Market
Improvement Act of 1996 ("NSMIA") limits the authority of states to
impose restrictions upon resales of securities made pursuant to Sections
4(1) and 4(3) of the Securities Act of companies which file reports under
Sections 13 or 15(d) of the Securities Exchange Act. Resales of the Shares
in the secondary market will be made pursuant to Section 4(1) of the
Securities Act (sales other than by an issuer, underwriter or
broker).
14
DESCRIPTION
OF SECURITIES
Capitalization
The Company is authorized to issue
100,000,000 shares of common stock, par value $0.0001, of which 10,257,500
shares were outstanding as of the date of the registration statement, of
which this prospectus is a part. The company is also authorized to
issue 20,000,000 share of preferred stock, par value $0.0001, of which no shares
were outstanding as of the date of the registration statement, of which this
prospectus is a part.
Common
Stock
The Company is registering up to
500,000 shares of its common stock for sale to the public at a price of $20.00
per Share.
Holders of shares of common stock are
entitled to one vote for each share on all matters to be voted on by the
stockholders. Holders of common stock do not have cumulative voting
rights. In addition to any vote required by law, the consent of at
least a majority of the holders of the then-outstanding shares of common stock
is required to (i) redeem, purchase or otherwise acquire any share of common
stock, (ii) increase or decrease (other than by redemption or conversion) the
total number of authorized shares of common stock; or (iii) amend the Articles
of Incorporation of the Company if such amendment would change any of the
rights, preferences or privileges of the common stock.
Subject to preferences that may be
applicable to any outstanding shares of preferred stock, the holders of common
stock are entitled to share ratably in dividends, if any, as may be declared
from time to time by the board of directors in its discretion from funds legally
available therefor. In the event of a liquidation, dissolution or winding
up, subject to the rights of the shares of preferred stock, the holders of
common stock are entitled to share pro rata all assets remaining after payment
in full of all liabilities.
Holders of common stock have no
preemptive rights to purchase the Company’s common stock. There are no
conversion or redemption rights or sinking fund provisions with respect to the
common stock. The Company may issue additional shares of common stock which
could dilute its current shareholder's share value.
Preferred
Stock
Shares of preferred stock may be issued
from time to time in one or more series as may be determined by the board of
directors. The voting powers and preferences, the relative rights of
each series, and the qualifications, limitations, and restrictions on such
preferred stock shall be established by the board of directors, except that no
holder of preferred stock shall have preemptive rights.
Admission
to Quotation on the OTC Bulletin Board
If the Company meets the
qualifications, it intends to apply for quotation of its securities on the OTC
Bulletin Board. The OTC Bulletin Board differs from national and
regional stock exchanges in that it (1) is not situated in a single
location but operates through communication of bids, offers and confirmations
between broker-dealers and (2) securities admitted to quotation are offered
by one or more broker-dealers rather than the "specialist" common to
stock exchanges. To qualify for quotation on the OTC Bulletin Board,
an equity security must have one registered broker-dealer, known as the
market maker, willing to list bid or sale quotations and to sponsor the company
listing.
Penny
Stock Regulation
Penny stocks generally are equity
securities with a price of less than $5.00 per share other than
securities registered on national securities exchanges or listed on the
Nasdaq Stock Market, provided that current price and volume information
with respect to transactions in such securities are provided by the exchange or
system. The penny stock rules impose additional sales practice requirements
on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with assets in
excess of $1,000,000 or annual income exceeding $200,000, or $300,000
together with their spouse). For transactions covered by these rules,
the broker-dealer must make a special suitability determination for the
purchase of such securities and have received the purchaser's written
consent to the transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the rules require the
delivery, prior to the transaction, of a disclosure schedule prescribed
by the SEC relating to the penny stock market. The broker-dealer also must
disclose the commissions payable to both the broker-dealer and the
registered representative and current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price information on the
limited market in penny stocks. Because of these penny stock rules,
broker-dealers may be restricted in their ability to sell the Company’s common
stock. The foregoing required penny stock restrictions will not apply to
the Company’s common stock if such stock reaches and maintains a
market price of $5.00 per share or greater.
15
Dividends
The Company has not paid any dividends
to date. The Company intends to employ all available funds for the
growth and development of its business, and accordingly, does not intend to
declare or pay any dividends in the foreseeable future.
PLAN
OF OPERATION
Business
Plan
The Company anticipates that its
project proposals will reflect a fundamental change in the manner in
which passenger rail service will be provided. The high-speed rail plan to
be presented by the Company will likely utilize existing rail rights-of-way
to connect several metropolitan areas and states serving expanding populations.
The major elements of the plan would include:
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Use
of existing rail rights-of-way to connect rural, small urban and major
metropolitan areas;
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·
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Operation
of a "hub-and-spoke" passenger rail system providing service to and
through one or more major hubs to locations throughout the United
States;
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Introduction
of modern trail equipment operating at speeds up to 250
mph;
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Provision
of multi-modal connections to improve system
access;
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·
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Improvement
in reliability and on-time
performance;
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Development
or expansion of a feeder bus system linking outlying areas to railroad
stations;
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Acquiring
new train equipment including trainsets including
spares;
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Track
improvement, including replacement and upgrades, additional sidings,
signal and communications systems, and grade-crossing
improvements;
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Construction
or improvement of railroad grade crossings and passenger
stations.
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The Company will prepare the
feasibility study and locate contractors and manufacturers to complete and
work and provide cost estimates. Because high-speed rail travel is already
in-place in much of Europe and Asia, the Company anticipates working with
European companies to furnish the high-speed equipment, such as locomotives and
passenger cars. The Company believes that as high-speed rail projects
develop in the United States, certain of these European and Asian companies
may establish manufacturing plants in the United States.
The Company will put the proposed
contracts together with the supporting feasibility study,
appraisals, cost/benefit analysis, TEMS study, transportation history and
other data to create a complete regional project proposal. The Company will
then present such project proposals to the municipalities (state or local) as a
complete and finished project. The Company anticipates that upon approval,
the local municipality will effectuate a bond offering for the funding of
the high-speed rail project.
The Company anticipates that the
municipalities will be favorably receptive to the proposed high-speed
rail project for many reasons. Political pressure is increasing to find
alternate transportation systems as the price of gas and environmental risk
of drilling and using petroleum products rises. Highway usage is increasing
dramatically with the corresponding increasing maintenance costs and
congestion. The project will be presented as a total package
thereby providing the municipalities with the complete overview and
relieving it of the time and costs involved in studying the proposal,
seeking pricing information and projecting results. In addition, the Company
believes that it will be able to effect economies of scale by purchasing
new and renovating existing equipment and facilities on an integrated
regional basis rather than in fractured individual areas or small
municipalities.
The projects will be financed by bonds
or indentures offered by sponsored or affiliated non-profit organizations of the
applicable local or municipal government or agency. Such non-profit
entities may also be affiliates or companies related to the
Company.
Upon adoption of the proposed
high-speed rail project and floating of the financing bond, the Company
will act as the project manager and will oversee the entire project
including not only the development but the continued operations of the
high-speed rail project. The Company will also serve as the main central point
for coordination of and between the municipalities, contractors, and
operators of the project and, once established, the rail
system.
16
For the foreseeable future, the Company
intends to reinvest most of its profits from project development into technology
and project development to discover, design and build novel and innovative
projects.
Potential
Revenue
The Company’s primary source of
revenues in the near term will be unpredictable at the moment.
THE
BUSINESS
The
Business: High Speed Rail and Transportation Infrastructure
The business of high speed rail and
transportation infrastructure development is a complex undertaking that
requires substantial resources. The Company intends to use its
innovation, planning and dedication to these projects to readily conceptualize,
design, develop and consummate successful transportation infrastructure
projects.
The
Market
A recent study by the Urban Land
Institute and Ernst & Young concluded that the United States suffers from
relatively low investment in virtually all aspects of transportation
infrastructure – including airports, public transit, railway systems, roads and
bridges – all of which is contributing to an “emerging
crisis.”
In its analysis of the compelling need
to revitalize America’s transportation infrastructure, a recent transportation
conference recommended that “Public private partnerships need to
emerge from the laboratory of pilot programs to play a much larger role as a
core element of America’s transport investment
strategy.” Organizations, such as
the Company, are accordingly poised to play a significant role in the
redevelopment and improvement of the nation’s transportation
infrastructure.
The same transportation conference also
noted that, “Lacking a coherent vision for our transportation future and
chronically short of resources, we defer new investments, fail to plan, and
allow existing systems to fall into disrepair. This shortsightedness and
underinvestment—at the planning level and on our nation’s roads, rails, airports
and waterways—costs the country dearly. It compromises our productivity and
ability to compete internationally; transportation users pay for the system’s
inefficiencies in lost time, money and safety. Rural areas are cut off from
economic opportunities and even urbanites suffer from inadequate public
transportation options. Meanwhile, transportation-related pollution exacts a
heavy toll on our environment and public health.”
A recent transportation conference
report is equally as insistent on the need for private sector funding. In
“Recommendation 8: Connecting the Dots,” the co-chairs wrote: “Resolving the
controversy over private equity contributions to the transport system is
essential to meet the nation’s pressing transportation challenges, as is
recognizing the appropriate role of public-private partnerships (PPPs) in taking
on those challenges.” They added, “PPPs need to emerge from the laboratory
of pilot programs to play a much larger role as a core element of America’s
transport investment strategy.”
The Company believes that most experts
in the transportation field now agree that public-private cooperation is vital.
Says Dale Ann Reiss, global director of real estate at Ernst & Young,
"One thing that is crystal clear is that the private sector is going to play an
increasingly important role in the effective and efficient development of
infrastructure … Public-private partnerships are here to stay and may well be
the only viable way for governments to reach their infrastructure
development goals."
The Company believes that the
transportation infrastructure crisis facing America is two-fold. In the first
instance, the existing infrastructure lacks modernity and has rendered the same
incapable of meeting the nation’s transportation needs. In the second
instance, the funding to address this problem is currently beyond the reach of
the federal, state, regional, and municipal governments.
To resolve this crisis will require a
massive infusion of capital. The National Surface Transportation Infrastructure
Financing Commission, in its 2009 report Paying Our Way estimates the
total shortfall between what is required and what is available, at all levels of
government, just for maintaining the current system range from $134
billion to $194 billion per year for the period 2008 to 2035. If the goal is to
improve existing transportation systems, the shortfall is even larger: $189–$262
billion per year over the same time period.
The main problem is that the funds to
either maintain or improve existing transportation systems are simply not
available from traditional sources. Taxpayers at all levels of
government are loath to support any tax increases for infrastructure
projects. Exacerbating the crisis further, Transportation Secretary Ray
LaHood had notified the recalcitrant governors that federal money earmarked for
high-speed rail will be withheld unless used for that specific
purpose.
17
Entry
of the Company into the Market
The Company takes a comprehensive,
intermodal approach to resolving the nation’s transportation crisis. And it
proposes doing so without the necessity of the government increasing taxes at
any level, or in any manner. In short, the Company suggests replacing pubic
financing with private funding.
The primary competitive barrier most
companies face in attempting to impact the nation’s infrastructure crisis is
that they approach the overall problem in disparate segments. For
example, one provider proposes building railroad cars, while another proposes
laying tracks. A third is interested in depots, while a fourth focuses on
accommodations. None bring a comprehensive plan for full-funding to the
mix. On the other hand, the Company takes an intermodal approach to
providing seamless service with a scale of economy. Specifically, the Company’s
paradigm anticipates a fundamental change in the manner in which passenger rail
service will be provided. The high-speed rail plan will utilize existing rail
rights-of-way to connect several metropolitan areas and states serving expanding
populations.
The Company is also forging joint
ventures with other industries related to the transportation industry. For
example, it is currently finalizing an arrangement with a major manufacturer of
certain materials used in the construction of highways and other transportation
systems. The discussions contemplate a two-fold transaction by which the Company
would initially buy the manufacturing plant and then subsequently purchase the
remaining non-cash assets of the company.
Competition
The Company does not believe it will
face significant competition from other companies that are developing
high speed rail passenger and freight transportation systems as this
industry is not well developed in the United States. The Company will,
however, face competition in the allocation of monetary resources from
governmental agencies, at the local, regional, state and federal levels.
The Company believes that government agencies will strongly endorse
its proposed plan for high-speed regional rail systems, but believes that,
given the economic environment, there may be few or no funds available for
such development.
Nevertheless, it appears that
significant competition generally exists in the industry, from private
organizations or government agencies and entities. On the heels of
the Department of Transportation’s recent request for high-speed rail proposals,
its Federal Railroad Administration received 132 applications from 32 states
totaling $8.8 billion. That was more than three times the $2.4 billion
available. During the first round of awards in the fall of 2009, applicants
submitted more than $55 billion in project proposals. That was nearly six times
the initial $8 billion available from the American Recovery and Reinvestment
Act. So overwhelming has the response been that Transportation Secretary
LaHood observed at the time, that, “Demand for high-speed rail dollars is
intense and it demonstrates just how important this historic initiative is.
States understand that high-speed rail represents a unique opportunity to create
jobs, revitalize our manufacturing base, spur economic development and provide
people with an environmentally friendly transportation option.”
THE
COMPANY
Background
and Current Operations
The Company is a development stage
company and has no operating history and has experienced losses since its
inception. The Company’s independent auditors have issued a report
questioning the Company’s ability to continue as a going concern. The
Company intends to focus on high-speed rail for passenger and freight
transportation and related and ancillary transportation businesses. The Company
anticipates that it will provide various services for high-speed rail
throughout the United States. The Company intends to secure manufacturing
and technologies together with ancillary land development projects, sale of
goods and services to government, civilian and commercial end
users.
The Company has not received revenue
from any operations. Since its incorporation, the Company has developed its
business plan, appointed officers and directors, engaged initial project
consultants and entered into negotiations and contracts for related and
ancillary business. The Company is a development-stage company in
the process of developing proposals for the high-speed rail service. The
Company believes that the need, demand and usage of alternative
transportation such as high speed rail are increasingly important as the United
States adopts policies to attempt to reduce its dependency on fossil fuels,
particularly the automobile.
18
As one of the initial steps in
implementing the Company's business plan of developing high-speed
passenger and freight rail lines, on May 11, 2010, the Company engaged
Transportation Economics & Management Systems, Inc. ("TEMS"), an
independent company with expertise in public transportation and high speed rail
service, to provide the Company with a basis for prioritizing its options
by identifying the most effective high-speed rail corridors
and technologies for the Company to consider in its development of its
high-speed rail development projects. The TEMS team consists of four
renowned experts in high-speed rail technology and implementation
with experience in providing such similar analysis of high-speed rail
projects and related transportation systems to the Rocky Mountain Rail
Authority, the Southeastern Minnesota Rail Alliance, Maine Department of
Transportation, Florida Department of Transportation VIA Rail Canada,
Massachusetts Bay Transportation Authority and myriad others. Using its
extensive databases of the North American market for intercity high-speed rail,
and its detailed expertise on the character of high-speed rail technology,
TEMS will assess ten corridors for the Company and provide a qualitative
technology assessment that will specify the advantages and disadvantages of each
option. TEMS will rank the options and suggest the best combinations of
corridor and technology. TEMS has recommended the Midwest as an initial
target project area as the Midwest has several major urban hubs, has multi track
lines already in place and a existing basic railroad infrastructure as a
result of the City of Chicago developing as one of the largest railroad hubs
and crossroads in the United States.
Upon receipt of the recommendation from
TEMS, the Company will analyze the recommended initial project regions and
choose to develop, initially, the high-speed rail project for that region. The
Company will prepare the complete project package including appraisals and
estimates and will obtain contracts for the development of the railbeds and
purchase of the equipment. The Company will present the complete project,
working as project supervisor and coordinator, to municipalities and
regional government agencies. Funding for the project will occur from a
bond offering organized by nonprofit organizations or corporations, some or
many of which may be affiliated with or related to the Company.
Alabama
Toll Facilities, Inc.
On September 23, 2009, Penndel (as
defined below), a related company of the Company, entered into a written
agreement with Alabama Toll Facilities, Inc. (“ATFI”). ATFI is a
nonprofit corporation organized and existing under the laws of the State of
Alabama, and was organized for the purpose of construction of a project
consisting of the financing, construction and operation of a four lane toll
bridge and highway in the State of Alabama. Pursuant to such
agreement between Penndel and ATFI, Penndel was appointed as the agent and
representative of ATFI to perform all required tasks and actions to develop
and construct such project. Pursuant to this agreement, Penndel will
earn certain compensation and will be obligated to perform certain tasks in
furtherance of the project.
Certain other written agreements were
entered into between ATFI and Penndel on April 12, 2010 with respect to the
construction and services to be provided by Penndel with respect to the
project.
In December 2010, Penndel assigned all
of its written agreements with ATFI to Global (as defined below), a subsidiary
of the Company.
Alabama
Indenture Agreement
On December 1, 2010, ATFI entered into
a Master Trust Indenture (“Alabama Indenture”) agreement with HSRF Trustee,
which will serve as the trustee for a bond offering of $7,000,000,000 of ATFI
Revenue Bonds Series 2010. The Alabama Indenture indicates that the
developer for the project will be Global and that the financial advisor and
trust custodian(s) for the project will be Merrill Lynch, Pierce, Fenner &
Smith, Incorporated and ING Investment Management Co.
Hi
Speed Rail Facilities, Inc.
In 2010, the Company entered into
a written agreement with Hi Speed Rail Facilities, Inc. (“Hi
Speed”). Hi Speed is a nonprofit corporation organized for the
purpose of construction of projects consisting of the financing, construction
and operation of various high speed rail and related projects across the United
States. Pursuant to such agreement between the Company and Hi Speed,
the Company was appointed as the agent and representative of Hi Speed to perform
all required tasks and actions to develop and construct such
projects. Pursuant to this agreement, the Company will earn certain
compensation and will be obligated to perform certain tasks in furtherance of
the project.
Certain other written agreements were
entered into between Hi Speed and the Company during 2010 with respect to the
construction and services to be provided by the Company with respect to the
project.
Hi
Speed Indenture Agreement
On December 1, 2010, Hi
Speed entered into a Master Trust Indenture (“Hi Speed Indenture”)
agreement with HSRF Trustee, which will serve as the trustee for a bond offering
of $15,000,000,000 of HSRF Revenue Bonds Series 2010. The Hi Speed
Indenture indicates that the developer for the project will be the Company and
that the financial advisor and trust custodian(s) for the project will be
Merrill Lynch, Pierce, Fenner & Smith, Incorporated and ING Investment
Management Co.
19
Hi
Speed Rail Facilities Provider, Inc.
In 2010, the Company entered into
a written agreement with Hi Speed Rail Facilities Provider, Inc. (“Hi Speed
Provider”). Hi Speed Provider is a nonprofit corporation organized
for the purpose of construction of projects consisting of the financing,
construction and operation of various high speed rail and related projects
across the United States. Pursuant to such agreement between the
Company and Hi Speed Provider, the Company was appointed as the agent and
representative of Hi Speed Provider to perform all required tasks and
actions to develop and construct such projects. Pursuant to this
agreement, the Company will earn certain compensation and will be obligated to
perform certain tasks in furtherance of the project.
Certain other written agreements were
entered into between Hi Speed Provider and the Company during 2010 with
respect to the construction and services to be provided by the Company with
respect to the project.
Hi
Speed Indenture Agreement
In December 2010, Hi Speed Provider
entered into a Master Trust Indenture (“Hi Speed Indenture”) agreement with HSRF
Trustee, which will serve as the trustee for a bond offering of $15,000,000,000
of HSRF Revenue Bonds Series 2010. The Hi Speed Provider Indenture
indicates that the developer for the project will be the Company and that the
financial advisor and trust custodian(s) for the project will be Merrill Lynch,
Pierce, Fenner & Smith, Incorporated and ING Investment Management
Co.
Damar
TruckDeck
The Company also intends to develop
projects as opportunities are presented related or ancillary to the
transportation or transportation-related fields. The Company has
entered into a contract for the acquisition of the patents, rights, titles, and
business of Damar Corporation LLC, the inventor, developer and manufacturer of
Damar TruckDeck. (See www.damartruckdeck.com). The
Damar Corporation was incorporated in 2007 to develop, manufacture and market
the truck deck component invented and developed by its owner. The Damar
Corporation has filed a patent application covering its truck deck system.
The Damar TruckDeck is a flexible truck deck storage and organization system
that with an integrated frame allowing the cargo deck to be used as a
hauling surface. The system has many configurations to fit a wide variety of
uses (hunting, construction, moving, hauling, etc.) in various truck deck
sizes. The Damar TruckDeck primarily consists of lockable repositionable
storage units.
The advantages of the Damar TruckDeck
system are as follows:
1. Organize gear in removable
containers with the DAMAR Load-N-Go™ containers, easily converting atruck's
usage by quickly swapping containers.
2. Protect items in lockable hatches.
Lockable, repositionable hatches protect items in the Load-N-Go™ containers
from theft and weather while a rear hatch allows the full length of the bed to
be used for securing longer materials.
3. Keep ability to haul large items.
The recessed CargoDeck surface is built to support and haul large materials
and equipment, and by maintaining some bed wall height there is no need to strap
items down.
4. Can be installed or removed in
minutes by one person with no tools and no drilling. The Damar
Corporation has entered into contracts for sale of its Damar TruckDeck with
Lowe's, The Home Depot, Advanced Auto Parts, Sam's Club, Costco and Meyer
Distributing.
The Company shall receive all rights
and title to the patents, the TruckDeck system, and all related assets, for a
purchase price of:
1. $750,000 payable as $500,000 cash
and the remaining $250,000 payable in the form of Shares of the Company's
common stock; and
2. Royalty payments equal to $2.50 for
each unit sold from items arising from the patent, including the Damar
TruckDeck, for a period of five years. After such five years, the parties will
renegotiate the terms of the agreement. If no agreement can be reached, then the
parties agree to extend the royalty payments for one addition year after which
time all royalty payments will terminate.
3. The cash payment portion of the
purchase price is payable within 90 days of the successful completion of
the registration as a publicly traded company pursuant to the Securities
Act of 1933.
The Company intends to continue to
produce and market the product continuing with the name
Damar TruckDeck.
20
Other
Opportunities
The Company is in discussion with other
opportunities related to the transportation industry. The Company is in
discussions with a major manufacturer of certain materials used in the
construction of highways and other transportation systems. The discussions
contemplate a two-fold transaction by which the Company would initially
buy the manufacturing plant and then subsequently purchase the remaining
non-cash assets of the company. The Company contemplates that the
negotiations will be finalized no later than 90 days of the successful
completion of the registration as a publicly traded company pursuant to the
Securities Act of 1933. The Company anticipates that the purchase of this
company and its assets would serve as the supplier of the materials that the
Company will be using for some of its transportation projects.
Related
Companies
There are several companies (each is
listed below) that are affiliated with, or under common control with, the
Company. With respect to the companies, in each of these companies,
Shah Mathias, the founder and chief executive officer of the Company, is the
president and chief executive officer. No other officers and
directors exist in any of these related companies.
HSR Freight Line, Inc. (“HSR Freight”),
a company which handles the use of track time and arranges for freight service
on tracks from 10:00 p.m. and 6:00 a.m. The shareholders of HSR
Freight include the Company, which holds a 25% ownership interest, and Shah
Mathias, who holds a 22% ownership interest.
HSR Passenger Services, Inc. (“HSR
Passenger”), a company which handles all ticketing and booking reservations
including related food service, hotel bookings and car
rentals. The shareholders of HSR Passenger include the Company, which
holds a 25% ownership interest, and Shah Mathias, who holds a 22% ownership
interest.
HSR Technologies, Inc. (“HSR
Technologies”), a company that secures all technology from domestic and
international manufacturers of high-speed rail elements. The shareholders
of HSR Technologies include the Company, which holds a 20% ownership interest,
and Shah Mathias, who holds a 22% ownership interest.
HSR Logistics, Inc. (“HSR Logistics”),
a company that handles all purchasing for all the Company's entities. HSR
Logistics, Inc. will also provide maintenance for train engines and rail
car and track maintenance. The shareholders of HSR Logistics include the
Company, which holds a 20% ownership interest, and Shah Mathias, who holds a 22%
ownership interest.
Penndel Land Company (“Penndel”) is
wholly owned by Shah Mathias, the Company's founder, chief executive
officer and majority shareholder. Penndel is an established company and
serves as the official and exclusive land developer for the Company and its
subsidiaries, affiliates and other related companies, including sale of
land, leasing of land, and land development including developing industrial
sites for assembly plants, rail yards, train stations, train terminals,
manufacturing plans, machines, and equipment, parts distribution centers, rail
crossings, rail yards, cargo terminals, parking lots, garages, and other related
construction of offices, hotels, shopping centers, and all on-site and
off-site improvements.
The Company also will work closely with
two non profit entities, High-Speed Rail Facilities, Inc., and High-Speed Rail
Facilities Provider, Inc. Headquartered in Pennsylvania, each of
these two non-profit entities have put together a plan for providing states and
cities across America with the funds necessary to finance entire high-speed
light rail projects. The board of directors of each of these two
non-profit entities consists of the following individuals: Mr. Shah Mathias,
founder and chief executive officer of the Company; Mr. Kirk Wilson; Mr. James
Kingsborough; and Mr. Otto Banks.
The High-Speed Rail Facilities, Inc.,
local state chapter master indenture is estimated to in the future fund
20% of the cost of its selected projects. The balance of the funding
will then come from combination of federal grants and or subsequent bond
indenture for the local chapter. Each state's high- speed rail bond
indenture will be state specific.
Upon adoption of the proposed
high-speed rail project and floating of the proposed financing bond indenture by
the non-profit entity, the Company will act as the project manager and will
oversee the entire project including, not only the development, but also the
continued operations of the high-speed rail project. The Company will also
serve as the main central point for coordination of and between the
municipalities, contractors, and operators of the project and, once established,
the rail system.
Private
Placement
Since inception, the Company has
solicited investor participation in a private placement, but has not actually
issued any Shares, or received any funds, to the Company as a result
therefrom.
Loans
The Company currently has no loans
outstanding as of the date of this registration statement.
21
Agreement
with Tiber Creek Corporation
The Company previously entered into a
consulting agreement with Tiber Creek Corporation (“Tiber Creek”) whereby Tiber
Creek would provide assistance to the Company in effecting transactions for the
Company to become a public company, including causing the preparation and filing
a registration statement with the Securities and Exchange Commission, assisting
with applicable state blue sky requirements, advising and assisting on
listing its securities on a trading exchange, assisting in establishing and
maintaining relationships with market makers and broker-dealers and assisting in
other transactions, marketing and corporate structure activities. Tiber
Creek received certain cash fees plus 250,000 common shares of the Company (or
3% of the outstanding common shares at time of engagement, whichever is greater.
The consulting agreement also provides that the shares issued to Tiber
Creek shall be included in a registration statement to be filed by the
Company. The consulting agreement further provides that the Company
will not at any time take or allow any action (whether by reverse stock
split or otherwise) which would have the effect of reducing the absolute number
of Shares held by Tiber Creek
The consulting agreement also includes
a reset provision, which provides that if, on the one year anniversary date (the
reset date) of the execution of the consulting agreement the market value
of the Shares is less than $1.00 per share, the Company will issue to Tiber
Creek additional shares necessary to equal the difference between the
market value (calculated as the average closing bid of the Shares for the 30
days immediately prior to the reset date) of the Shares held by Tiber Creek and
$1.00 per share. If, on the reset date, the Shares are
not trading, the reset date shall be extended until the first date on
which the Company’s Shares shall have been trading for 30 days. At
such time, additional shares, if required, shall be issued pursuant to an S-8
registration statement if available at that time.
Marketing
Strategy
The Company has conducted limited
advertising and marketing to date as the primary focus of the Company since
inception has been to develop, refine and ready its projects. The
Company has, however, given substantial attention to constructing the marketing
strategy and plans that it will use once its projects enter the
market.
A major challenge facing the Company is
finding and using cost-effective, efficient sales, marketing and distribution
strategies and tactics to commercialize its projects. As a developing
company, the Company has limited resources and can only devote a certain
amount of expenditure to sales, marketing and advertising services.
As the Company’s products and
technology present novel technology and functionality for customers, the Company
believes that raising awareness of its projects and the benefits of its
technology will be important to the success of the Company. The
Company believes that using a combination of television, radio, public
relations, print media, and internet advertising to create a awareness of
its products will help the Company introduce its products and technology to the
marketplace. The Company believes the best way to reach this market is
generally through media advertising.
Since inception, the Company has sought
opportunities to promote its technology and projects via free advertising
channels, such as television or radio news coverage, profiles in trade
publications or print media and other public relations
activities. The Company plans to continue to seek these opportunities
as they present a cost-effective mechanism for the Company to directly reach
potential end users and build brand awareness.
Marketing
Plan
The marketing plan of the Company
is to enter local markets in an organized manner so as to concentrate efforts to
build brand awareness and visibility for the Company’s projects. The
Company’s belief is that the Company will be best served by focusing its efforts
on penetrating particular market segments rather than attempting to reach a wide
array of projects in varying geographic areas. The overall marketing
plan, consistent with the marketing strategy outlined above, consists of a
multifaceted approach that encompasses a versatile effort to reach key
decision-makers for large transportation-related projects.. The
Company’s efforts will generally be directed toward each of the following,
subject to change from time to time as required by business or market conditions
or otherwise:
Strategic
Partners
The Company believes that strategic
partnerships will be a major component of the Company’s operating strategy and
path to success. As discussed above, the Company plans to build
alliances with distributors, manufacturers, large associations and groups, and
government agencies.
22
Revenues
from Operations
The Company is a development stage
company incorporated in the State of Delaware in 2010.
Since its inception, the Company has
focused its efforts on project development and has devoted little attention or
resources to sales and marketing. Accordingly, the Company has no
revenues to date and has not sold any of its projects as of yet. In
order to succeed, the Company needs to develop a viable and cost-effective and
efficient sales, marketing and distribution strategy and execution plan to
successfully development, implement and sell its projects and generate
meaningful revenues from the same.
The Company believes that its initial
project is ready to come to market and will be positively received once formally
introduced into the marketplace.
Employees
In addition to the Chief Executive
Officer, the Company has four employees. These employees currently receive
no salaries or other compensation and no salaries have been accrued. These
employees will not receive any compensation until, and if, the Company becomes a
public company. Of these officers, only Mr. Mathias is employed by the
Company in a full-time capacity. The Company has no other
employees but expects that it will hire additional personnel as it
expands.
Property
The Company’s offices are located at
Windsor Commons, Suite 3137-A, Red Lion, Pennsylvania 17356. Its
telephone number is (717) 246-3876 and its fax number is (717)
417-1439.
The Company has entered into a
five-year lease, which is scheduled to begin in January 2011, at this location
for 3,200 square feet for approximately $12.00 per square foot. The
property is owned by Penndel, an affiliate of the Company. The
Company's administrative, accounting and in-office employees, including
technical direction, and officers and directors are located in these
offices. Until such time as the Company raises financing through this
offering (or otherwise), the cost of the lease shall be advanced on account of
the Company by its chief executive officer, Mr. Shah Mathias. The
Company will grant Mr. Mathias a convertible note or other instrument or
security in consideration of his advancement of funds to the Company to pay
lease costs.
Subsidiaries
The Company recently incorporated a
subsidiary, Global Transportation & Infrastructure Inc. (“Global), in the
State of Delaware. Global is currently a wholly owned subsidiary of
the Company.
Industry
Regulation
Industry regulation affecting the
Company is threefold, and each of the areas of regulation are likely to be at
all levels of government (federal, state and local): (1) certain regulators
(such as, at the federal level, the Department of Transportation) may in certain
instances review, evaluate or guide the development and implementation of the
Company’s projects; (2) certain agencies (such as, at the state level, the
applicable state transportation board) may conduct inspections or project
reviews of the Company’s plans and implementations; and (3) certain codes,
ordinances and regulations will direct how the Company will implement any
manufacturing, construction or other activities, and the Company intends to
ensure that its services at all times comply with all applicable codes,
ordinances and regulations at all levels of government.
Reports
to Security Holders
The Company intends to deliver a copy
of its annual report to its security holders, and will voluntarily send a
copy of the annual report, including audited financial statements, to any
registered shareholder who requests the same. The Company will not be
a reporting issuer with the Securities and Exchange Commission until its
registration statement on Form S-1 is declared effective.
The Company has filed a registration
statement on Form S-1, under the Securities Act of 1933, with
the Securities and Exchange Commission with respect to the shares of its
common stock. This prospectus is filed as a part of that registration
statement, but does not contain all of the information contained in the
registration statement and exhibits. Statements made in the
registration statement are summaries of the material terms of the referenced
contracts, agreements or documents of the company. Reference is made to the
Company’s registration statement and each exhibit attached to it for a more
detailed description of matters involving the Company. A potential investor may
inspect the registration statement, exhibits and schedules filed with the
Securities and Exchange Commission at the Commission's principal office in
Washington, D.C. Copies of all or any part of the registration statement
may be obtained from the Public Reference Section of the Securities and
Exchange Commission, 100 F Street N.E., Washington, D.C. 20002. Please call
the Commission at 1-800-SEC-0330 for further information on the operation of the
public reference rooms. The Securities and Exchange Commission also
maintains a web site at http://www.sec.gov that contains reports,
proxy statements and information regarding registrants that file
electronically with the Commission. The Company’s registration
statement and the referenced exhibits can also be found at the web site
address.
23
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
The Company is a development stage
company and was incorporated in the State of Delaware in 2010. As of
July 31, 2010, the Company has not generated any revenue since inception
and has incurred significant operating losses, as part of the
Company's development stage activities, of $90,920. The Company has
received all of its operating funds from the sale of its securities.
The Company has recently completed the plans for its first
project and plans to bring this project to the marketplace soon (subject to
raising adequate capital for manufacturing, sales, marketing and distribution
activities).
Going
Concern
The Company’s auditors have issued a
report questioning the Company’s ability to continue as a going
concern without the influx of additional capital. The Company
believes that the influx of capital from this offering will allow it to
capitalize on these relationships by developing projects. Once
these initial activities are established, the Company can further implement
the other aspects of its business plan.
Alternative
Financial Planning
The Company has no alternative
financial plans. If the Company is not able to successfully raise
monies in this offering, or otherwise obtain or raise funding, the Company’s
ability to survive as a going-concern and implement any part of its business
plan or strategy will be severely jeopardized.
Critical
Accounting Policies
The financial statements of the Company
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these financial statements
requires making estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. The estimates are based on historical
experience and on various other assumptions that are believed to
be reasonable under the circumstances, the results of which form the basis
of making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or
conditions.
The Company believes that the following
critical accounting policies, among others, affect its more significant
judgments and estimates used in the preparation of its financial
statements:
Use
of Estimates
The preparation of financial statements
in conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Revenue
recognition
The Company does not currently have any
issues with respect to revenue recognition policies, and does in all material
respects, comply with generally accepted accounting principles.
Share-based
payments
The Company may issue shares of common
stock to employees and non-employees for services. Stock-based compensation
is measured at the grant date, based on the fair value of the award, and is
recognized as expense over the requisite service period.
24
The Company will estimate the fair
value of stock options and warrants using the Black-Scholes
option-pricing model, which was developed for use in estimating the fair
value of options that have no vesting restrictions and are fully
transferable. This model requires the input of subjective assumptions,
including the expected price volatility of the underlying stock and the
expected life of stock options. Projected data related to the expected
volatility of stock options is based on the average volatility of the
trading prices of comparable companies and the expected life of
stock options is based upon the average term and vesting schedules of the
options. Changes in these subjective assumptions can materially
affect the fair value of the estimate, and therefore the existing valuation
models do not provide a precise measure of the fair value of our stock
options and warrants.
The Company will estimate the fair
value of shares of common stock issued for services based on the price of shares
of the Company’s common stock sold in contemporaneous private placements of
offerings on the date shares are granted.
Recent
Accounting Pronouncements
No recent accounting pronouncements or
policies were issued.
Discussion
of Fiscal Period Ended July 31, 2010
The Company incurred a net loss of
$90,920 for the period ended July 31, 2010, with general and administrative
expenses of $979 and total operating expenses of $77,174 for such
period. The Company received no revenue in such period.
Mr. Shah Mathias, as chief executive
officer of the Company, has received no salary to date, and will not receive any
salary until the effective date of this offering..
General and administrative expenses for
the period from inception (April 2010) through July 31, 2010 were
$979. The Company incurred total operating expenses of $77,174 during
such period.
Liquidity. The Company received little
to no monies from the private sale of its stock in the period
ended July 31, 2010. The Company has issued no shares of its
common stock to employees and other individuals for services rendered to it.
The Company has no continuous methods of generating
cash.
Capital Resources. The Company did not
incur any capital expenditures other than the purchase of office and computer
equipment.
Results of Operations. The Company
completed no sales and received no revenues since inception. The Company does
not anticipate that it will generate revenue sufficient to cover its
operating expenses until the close of this offering and the development
of its business plan.
MANAGEMENT
The following table sets forth
information regarding the members of the Company’s board of directors
and its executive officers:
Name
|
Age
|
Position
|
Year
Commenced
|
Shah
Mathias
|
51
|
Director
|
2010
|
James
Becker
|
51
|
Director
|
2010
|
Steve
Trout
|
54
|
Director
|
2010
|
Naresh
Mirchandani
|
43
|
Director
|
2010
|
Shahjahan
C. Mathias
|
44
|
Director
|
2010
|
Donald
E. (“Nick”) Williams, Jr.
|
53
|
Director
|
2010
|
Michael
W. Lasky
|
62
|
Director
|
2010
|
Sohual
Matthias
|
52
|
Director
|
2010
|
Name
|
Age
|
Position
|
Year
Commenced
|
Shah
Mathias
|
51
|
Chief
Executive Officer
|
2010
|
James
Becker
|
51
|
President
|
2010
|
Steve
Trout
|
54
|
Secretary/Treasurer
|
2010
|
Nick
Mirchandani
|
43
|
Chief
Financial Officer
|
2010
|
Carter
Clewes
|
58
|
Senior
Vice President
|
2010
|
Shahjahan
C. Mathias
|
44
|
Senior
Vice President
|
2010
|
25
Shah
Mathias, Chief Executive Officer and Director.
Shah Mathias serves as Chief Executive
Officer, President and a director of the Company. Mr. Mathias has an extensive
background in real estate and property development. Beginning in 1988, Mr.
Mathias commenced his career in real estate with the personal acquisition and
like-kind exchange sales of investment property. In 1992, Mr. Mathias
started a mortgage-banking corporation underwriting loans under his own name and
selling such loans on the open market. By 2000, Mr. Mathias’ company had
underwritten more than $1 billion in loans. In 2002, Mr. Mathias
started PennDel Land Co., a real estate company which now has substantial
assets and property. Mr. Mathias received his education at Penn State
Institute of Technology.
James
Becker, President and Director.
James Becker serves as President and a
director of the Company. Mr. Becker is an experienced entrepreneur in the
Pennsylvania area. In 1990, Mr. Becker purchased a partnership in a family style
restaurant and in 1992 bought out his partner and added additional
seating capacity. In 1997, he purchased a second restaurant and later sold
both. In 2004, Mr. Becker became Vice President of Sales for Yorktowne
Casket Company, a 14 state independent casket distributor company, where he
managed the 34 sales representatives and oversaw its continued sales force. In
2007, Yorktowne Casket was sold to Matthews International and Mr. Becker
currently serves as a Regional Sales Manager for Matthews International
where he manages an eight member sales force and personal accounts totaling $21
million in annual sales.
Steve
Trout, Secretary/Treasurer and Director.
Steve Trout serves as
Secretary/Treasurer and a director of the Company. Mr. Trout has extensive
experience in sales and marketing. Since 1997, he has handled all inside sales
for Military and Commerical Fasteners Corporation, York, Pennsylvania.
Prior to his employment with that company, Mr. Trout served as sales
representative to several companies including MetLife and Dauphin Electric
Supplies Co., both in Pennsylvania. Through his career Mr. Trout, has held
account responsibility for over one hundred industrial accounts and increased
sales to assigned industrial accounts substantially; prospected for and
added new accounts and planned sales strategies for target accounts. Mr.
Trout served as vice-chairman of Customer Service Committee, evaluated
suggestions from coworkers and customers, created customer service survey
and conducted interviews, compiled survey results and presented proposed
improvements to company management. Mr. Trout received his M.B.A. degree
from Syracuse University and his Bachelor of Business Administration from
Pennsylvania State University.
Naresh
Mirchandani, Chief Financial Officer and Director.
Naresh Mirchandani serves as Chief
Financial Officer of the Company. Mr. Mirchandani has more than 20 years
experience in high volume financial administration and negotiations with a
particular expertise in the areas of commercial and residential mortgage
financing, mergers and acquisitions, tax abatement, budgetary planning and
management, and government loan negotiation. As corporate controller for a
domestic and offshore marketing firm, Mr. Mirchandani oversaw a budget of
more than $180 million annually. Mr. Mirchandari was commissioned by the
United States Bankruptcy Court Trustee’s office to successfully develop a
case against MCI, Inc., which the telecommunications giant was forced to
settle for more than $7.5 million. A graduate with honors from India’s
University of Bombay, Mr. Mirchandani also has a Masters of Business
Administration from the Duke University Fuqua School of Business.
Carter
L. Clews, Senior Vice President of International Marketing.
Carter Clews serves as Senior Vice
President of International Marketing of the Company. Mr. Clews is an
offshore property marketing expert and a widely read international journalist
specializing in geopolitical investment trends. Currently, Mr. Clews
numbers among his clients resort and residential developments throughout
the Caribbean and in select Mediterranean countries. Mr. Clews investment
analyses frequently appear in such publications as International Living,
Caribpro.com, and EscapeArtist.com. An award-winning TV and newsletter writer,
Mr. Clews also has extensive experience in politics, having worked in U.S.
presidential campaigns and managed congressional campaigns throughout the
United States. In the early 1980s, Clews served as Director of Communications
for the U.S. Senate Conference of the Majority, a role in which he worked
closely with the Reagan White House. In 1995, Mr. Clews was named the
international Infomercial Writer of the Year.
Shahjahan
C. ("Chuck") Mathias, Executive Vice President and Director.
Shahjahan Mathias serves as Executive
Vice President and a director of the Company. Mr. Mathias is a recognized
authority in the marketing of electrical utility power backup systems, with a
long history of working with nuclear power generation facilities, communications
companies, large data centers and manufacturers of Uninterruptible Power Systems
(UPS). Currently the Director of OEM Sales for C&D Technologies, he is
responsible for having secured a $27 million contract with the government for
the Minuteman Missile Launch System and increasing sales from $69 million to $83
million in a single 15-month period. In his earlier position as Utility
Marketing Manager for Exide Corporation/EnerSys, Mr. Mathias was the Team
Leader supporting government contract interface with the Air Force and the
FAA.
26
Donald
E. (“Nick”) Wiliams, Jr., Director.
Nick Williams serves as a director of
the Company. Mr. Williams has over 30 years experience in Radiological
Engineering, Environmental Safety and Health, Physics and Hazardous Material
Management for both government and private industry in the U.S. and
internationally. Mr. Williams holds a Bachelor of Science degree in
biology from Providence College and an Masters of Science degree in
Radiological Sciences from the University of Massachusetts-Lowell. Over
the first 10 years of his career in the nuclear industry, Mr. Williams’ work was
centered in the areas of power reactor construction, operation, and
maintenance. Over the last 20 years, his focus has turned to decommissioning
major power reactors and nuclear weapons complex facilities in the United
States and abroad. These tasks involved the safe handling, packaging, and
disposal of large quantities of radioactive and hazardous materials in
accordance with stringent U.S. and international standards to ensure public
and workforce safety. Mr. Williams has been a consultant to many
utility companies (e.g. Exelon, Pacific Gas & Electric, British
Nuclear), architect-engineers (e.g. Shaw, Westinghouse, CH2MHill), and
government agencies (DOE, DOD). He was the owner of a private nuclear consulting
firm with over 130 employees for 10 years, and currently holds the position
of Director of Radiological Engineering for a large western U.S.
company.
Michael
W. Lasky, Director.
Michael Lasky serves as a director of
the Company. During the 1970's with approximately $200 as start-up capital,
Mr. Lasky built a sports handicapping business, "Mike Warrens Sports", grossing
more than $60 million a year by the late 1980's. Mr. Lasky sold the
business at that time. Then starting with a psychic reading mail
order business, in the 1990s, Mr. Lasky created the Psychic Friends
Network. By the end of its first full year, the Psychic Friends Network was
generating more than $7 million a month dwarfing every other infomercial on the
air. The Psychic Friends Network became the only infomercial in television
history to be on the air in the US 24 hours a day and to be on the
air worldwide 24 hours a day. By the time the Psychic Friends Network had
run its course, it had become the only billion-dollar infomercial in
television history. Having mastered the art of the infomercial by the mid 1990s,
Mike Lasky expanded his purview to include a variety of additional
programming entities under the umbrella of Inphomation, Inc. including:
The Helicopter Lure, featuring bass fishing champion Roland Martin and
country comedy icon Jerry Clower, which generated sales of nearly $40
million in just one year and made the Helicopter Lure the fastest-selling lure
in sports-fishing history; Psychic Readers Network, featuring the talented
Nell Carter, which became the Psychic Friends Network only
real competition, generating sales of more than $30 million for three years
running; and Making Love Work, starring Barbara DeAngelis, which became the
number one relationship infomercial in TV history and earned more than $150
million in just over three years on the air.
Suhail
Matthias, Director.
Suhail Matthias serves as a director of
the Company. Mr. Matthias is the founder and CEO of Diamond Carriages,
Ltd., a chauffeuring company which he started with a single taxi eight years ago
and has now developed into one of the largest limousine services in Central
London’s lucrative chauffeur circuit. Diamond Carriages is now listed among
the top five limousine services by the popular United Kingdom reference site
Zettai.
The directors will serve until the
annual meeting of the shareholders and until their respective successors
have been elected and qualified or until death, resignation, removal or
disqualification.
The Company’s by-laws provide that the
number of directors to serve on the Board of Directors may be established,
from time to time, by action of the Board of Directors. The number of
directors to compose the Company’s Board of Directors shall be no less
than one director and no greater than eight directors. Directors do
not receive any compensation for their service. Directors may be
shareholders of the Company. Vacancies in the existing Board are
filled by a majority vote of the remaining directors on the Board. The
Company’s executive officers are appointed by and serve at the discretion
of the Board.
Director
Independence
Pursuant to Rule 4200 of The NASDAQ
Stock Market one of the definitions of an independent director is a person
other than an executive officer or employee of a company. The Company's
board of directors has reviewed the materiality of any relationship that each of
the directors has with the Company, either directly or indirectly. Based on
this review, the board has determined that Nick Williams and Michael Lasky
are independent directors.
27
Committees
and Terms
The Board of Directors (the “Board”)
has not established any committees.
The Company will notify its
shareholders for an annual shareholder meeting and that they may present
proposals for inclusion in the Company’s proxy statement to be mailed in
connection with any such annual meeting; such proposals must be received by the
Company at least 90 days prior to the meeting. No other specific policy
has been adopted in regard to the inclusion of shareholder nominations to
the Board of Directors.
Legal
Proceedings
There are currently no pending,
threatened or actual legal proceedings in which the Company is a
party.
EXECUTIVE
COMPENSATION
Remuneration of Officers: Summary
Compensation Table
Description of Compensation
Table
Aggregate
|
All
|
Annual
|
||||||||||||||||
Annual
|
Annual
|
Accrued
|
Comp-
|
Other
|
Comp-
|
|||||||||||||
Payments
|
Payments
|
Salary Since
|
Stock and
|
-ensation
|
Comp-
|
ensation
|
||||||||||||
Name/Position
|
Year
|
Salary
|
Made
|
Inception
|
Bonus
|
Options
|
Plans
|
ensation
|
Total
|
|||||||||
2010
|
None
|
No salaries or accrued compensation has
been paid. There is no accrued compensation that is due to any member
of the Company’s management. No executive officer has received cash
compensation in excess of $100,000 in the Company's fiscal year which ends of
December 31, 2010. Upon successful completion of this offering,
however, certain management personnel will receive such compensation as is
discussed below in “Anticipated Officer and Director Remuneration”.
There are no current plans to pay or
distribute cash or non-cash bonus compensation for fiscal year 2010 to the persons named
above. However, the
Board of Directors may allocate salaries and benefits to the officers for fiscal
year 2010 in its sole discretion. No such person is subject to a
compensation plan or arrangement that results from his or her resignation,
retirement, or any other termination of employment with the company or from a
change in control of the company or a change in his or her responsibilities
following a change in control. The members of the board of directors may,
if the Board of Directors so decides, receive a fixed fee and reimbursement of
expenses, for attendance at each regular or special meeting of the board of
directors, although no such program has been adopted to date. The Company
currently has no retirement, pension, or profit-sharing plan covering its
officers and directors.
Anticipated
Officer and Director Remuneration
The Company has not paid any
compensation to any officer or director. The Company intends to pay
annual salaries to all its officers and will pay an annual stipend to its
directors when, and if, it becomes a public company. At such time,
the Company anticipates payment to officers and directors in the following
amounts as compensation:
*Each
officer and director will receive 20,000 Shares
*The
Chief Executive Officer will receive an annual salary of $800,000 per annum plus
a commission (payable in cash orShares) equal to 10.00% of all incoming revenue
agreements obtained for the Company
*The Vice
Chairman will receive an annual salary of $500,000 per annum
*The
President, Chief Financial Officer and Secretary/Treasurer will each
respectively receive an annual salary of $250,000per annum
*Directors
will receive an annual stipend of $150,000 for each year of their service on the
board of directors of the Company
Although not presently offered, the
Company anticipates that its officers and directors will be provided with a
group health, vision and dental insurance program.
Employment Agreements
The Company has not entered into any
employment agreements with any officers and key personnel. The Company has
no oral agreements or understandings with any officer or employee regarding base
salary or other compensation.
28
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth
information as of the date of this prospectus regarding the beneficial
ownership of the Company’s common stock by each of its executive officers
and directors, individually and as a group and by each person who
beneficially owns in excess of five percent of the common stock after giving
effect to any exercise of warrants or options held by that
person.
Percent
|
|||||||||||||
Number of Shares of
|
of Class
|
||||||||||||
Common Stock
|
Percent of
|
After
|
|||||||||||
Number of Shares of
|
Class Before
|
Offering
|
|||||||||||
Name
|
Position
|
Common Stock
|
Offering (1)
|
(2) | |||||||||
Shah
Mathias
|
CEO
|
10,000,000 | 97.5 | % | 93.0 | % | |||||||
Total
owned by officers, directors and 5% shareholders
|
10,000,000 | 97.5 | % | 93.0 | % |
* Less
than 1%
(1) Based
upon 10,257,500 shares outstanding as of the date of this offering.
(2)
Assumes sale of all 500,000 Shares offered.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Steve Trout, Secretary/Treasurer and a
director, is the brother-in-law of Shah Mathias, the Chief Executive
Officer of the Company. Shahjahan Mathias is the brother, and Sohual
Matthias is the cousin, of Shah Mathias.
A partner in the law firm which acts as
counsel to the Company is the sole owner and director of Tiber
Creek Corporation which owns 250,000 shares of the Company's common
stock.
SHARES
ELIGIBLE FOR FUTURE SALE
As of the date of this prospectus,
there are 10,257,500 shares of common stock outstanding of which 10,000,000
shares are owned by officers and directors of the Company, namely Mr.
Mathias. The shares of common stock held by current shareholders are
considered “restricted securities” subject to the limitations of Rule 144
under the Securities Act. In general, securities may be sold pursuant to
Rule 144 after being fully-paid and held for more than 12 months. While
affiliates of the Company are subject to certain limits in the amount of
restricted securities they can sell under Rule 144, there are no such
limitations on sales by persons who are not affiliates of the Company.
In the event non-affiliated holders elect to sell such shares in the public
market, there is likely to be a negative effect on the market price of the
Company's securities.
LEGAL
MATTERS
Cassidy & Associates, Washington,
D.C., has given its opinion as attorneys-at-law regarding the validity of
the issuance of the Shares offered by the Company. A member of the law firm
of Cassidy & Associates is the sole officer and director of Tiber Creek
Corporation and may be considered the beneficial owner of the 250,000
shares of common stock of the Company owned by Tiber Creek
Corporation.
EXPERTS
Silberstein Ungar, PLLC
(“Silberstein”), an independent registered public accounting firm, has audited
Ameri Metro’s (a development stage company) consolidated balance sheets as of
July 31, 2010, and the related statements of operations, changes in
stockholders' deficiency, and cash flows for the period then ended. The
Company has included its financial statements in the prospectus and
elsewhere in the registration statement in reliance on the report
of Silberstein, given their authority as experts in accounting and
auditing.
29
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
FOR
SECURITIES ACT LIABILITIES
The Company’s Articles of Incorporation
include an indemnification provision that provides that the Company
shall indemnify directors against monetary damages to the Company or any of
its shareholders by reason of a breach of the director’s fiduciary except
(i) for any breach of the director’s duty of loyalty to the Company or its
shareholders or (ii) for acts or omissions not in good faith or which
involve intentional misconduct of (iii) for unlawful payment of dividend
or unlawful stock purchase or redemption or (iv) for any transaction from
which the director derived an improper personal benefit.
The Bylaws of the Company provide that
the Company shall, to the fullest extent permitted by applicable law,
as amended from time to time, indemnify all directors of the Company, as
well as any officers or employees of the Company to whom the Company
has agreed to grant indemnification. Section 145 of the Delaware General
Corporation Law ("DCL") empowers a corporation to indemnify its
directors and officers and to purchase insurance with respect to liability
arising out of their capacity or status as directors and officers provided that
this provision shall not eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) arising under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit. The Delaware
General Corporation Law provides further that the indemnification permitted
thereunder shall not be deemed exclusive of any other rights to which the
directors and officers may be entitled under the corporation's by-laws, any
agreement, vote of shareholders or otherwise.
The effect of the foregoing is to
require the Company to indemnify the officers and directors of the Company
for any claim arising against such persons in their official capacities if
such person acted in good faith and in a manner that he reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
The Articles of Incorporation do not
specifically indemnify the officers or directors or controlling persons
against liability under the Securities Act.
The Securities and Exchange
Commission’s position on indemnification of officers, directors and control
persons under the Securities Act by the Company is as follows:
INSOFAR AS INDEMNIFICATION FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933 MAY BE PERMITTED TO
DIRECTORS, OFFICERS AND CONTROLLING PERSONS OF THE SMALL BUSINESS ISSUER
PURSUANT TO THE RULES OF THE COMMISSION, OR OTHERWISE, THE SMALL BUSINESS ISSUER
HAS BEEN ADVISED THAT IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION
SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND
IS, THEREFORE, UNENFORCEABLE.
30
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
FINANCIAL
STATEMENTS
JULY
31, 2010
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
TABLE
OF CONTENTS
JULY
31, 2010
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Balance
Sheet as of July 31, 2010
|
F-2
|
Statement
of Operations for the period from April 13, 2010 (inception) to July
31, 2010
|
F-3
|
Statement
of Stockholder’s Deficit as of July 31, 2010
|
F-4
|
Statement
of Cash Flows for the period from April 13, 2010 (inception) to July
31, 2010
|
F-5
|
Notes
to the Financial Statements
|
F-6
-
F-11
|
Silberstein
Ungar, PLLC CPAs and
Business Advisors
|
Phone (248) 203-0080
Fax (248)
281-0940
30600
Telegraph Road, Suite 2175
Bingham
Farms, MI 48025-4586
www.sucpas.com
Report of Independent
Registered Public Accounting Firm
To the
Board of Directors of
Ameri
Metro, Inc.
Red Lion,
PA 17356
We have
audited the accompanying balance sheet of Ameri Metro, Inc. as of July 31, 2010,
and the related statements of operations, stockholder’s deficit, and cash flows
for the period from April 13, 2010 (date of inception) to July 31, 2010. These
financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The
Company has determined that it is not required to have, nor were we engaged to
perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An
audit includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provide a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Ameri Metro, Inc., as of July 31,
2010 and the results of its operations and cash flows for the period from April
13, 2010 (date of inception) to July 31, 2010, in conformity with accounting
principles generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that Ameri Metro,
Inc. will continue as a going concern. As discussed in Note 9 to the
financial statements, the Company has incurred losses from operations, has
limited working capital, and is in need of additional capital to grow its
operations so that it can become profitable. These factors raise
substantial doubt about the Company’s ability to continue as a going
concern. Management’s plans with regard to these matters are
described in Note 9. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Silberstein Ungar, PLLC
|
|
Silberstein
Ungar, PLLC
|
|
Bingham
Farms, Michigan
|
|
October
8, 2010
|
F-1
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEET
AS
OF JULY 31, 2010
ASSETS
|
||||
Current
assets
|
||||
Cash
and cash equivalents
|
$ | 21 | ||
Other
assets
|
||||
Land
|
1,494,077 | |||
Total
Assets
|
$ | 1,494,098 | ||
LIABILITIES
AND STOCKHOLDER’S DEFICIT
|
||||
Liabilities
|
||||
Current
liabilities
|
||||
Accrued
property taxes
|
$ | 10,945 | ||
Accrued
professional fees
|
5,250 | |||
Loan
payable – related party
|
60,000 | |||
Mortgage
payable – related party
|
1,130,000 | |||
Accrued
interest – related party
|
377,823 | |||
Total
Liabilities
|
1,584,018 | |||
Stockholder’s
deficit
|
||||
Common
stock, par value $.0001, 100,000,000 shares authorized, 10,000,000 shares
issued and outstanding
|
1,000 | |||
Preferred
stock, par value $.0001, 20,000,000 shares authorized, 0 shares issued and
outstanding
|
0 | |||
Deficit
accumulated during the development stage
|
(90,920 | ) | ||
Total
Stockholder’s Deficit
|
(89,920 | ) | ||
Total
Liabilities and Stockholder’s Deficit
|
$ | 1,494,098 |
The
accompanying notes are an integral part of these financial
statements.
F-2
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF OPERATIONS
FOR
THE PERIOD FROM APRIL 13, 2010 (INCEPTION) TO JULY 31, 2010
REVENUES
|
$ | 0 | ||
OPERATING
EXPENSES
|
||||
Professional
fees
|
65,250 | |||
Real
estate taxes
|
10,945 | |||
General
& administrative expenses
|
979 | |||
TOTAL
OPERATING EXPENSES
|
77,174 | |||
LOSS
FROM OPERATIONS
|
(77,174 | ) | ||
OTHER
INCOME (EXPENSE)
|
||||
Interest
expense
|
(13,746 | ) | ||
LOSS
BEFORE PROVISION FOR INCOME TAXES
|
(90,920 | ) | ||
PROVISION
FOR INCOME TAXES
|
- | |||
NET
LOSS
|
$ | (90,920 | ) | |
BASIC
AND DILUTED LOSS PER SHARE
|
$ | (.02 | ) | |
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING: BASIC AND DILUTED
|
5,454,545 |
The
accompanying notes are an integral part of these financial
statements.
F-3
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF STOCKHOLDER’S DEFICIT
AS
OF JULY 31, 2010
Common Stock
|
Additional
Paid in
|
Deficit
Accumulated
During the
Development
|
Total
Stockholder’s
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Deficit
|
||||||||||||||||
Inception,
April 13, 2010
|
0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||
Shares
issued to founder for cash at par value
|
10,000,000 | 1,000 | 1,000 | |||||||||||||||||
Net
loss for the period ended July 31, 2010
|
(90,920 | ) | (90,920 | ) | ||||||||||||||||
Balance,
July 31, 2010
|
10,000,000 | $ | 1,000 | $ | 0 | $ | (90,920 | ) | $ | (89,920 | ) |
The
accompanying notes are an integral part of these financial
statements.
F-4
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF CASH FLOWS
FOR
THE PERIOD ENDED APRIL 13, 2010 (INCEPTION) TO JULY 31, 2010
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||
Net
loss for the period
|
$ | (90,920 | ) | |
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||
Increase
in accrued interest – related party
|
13,746 | |||
Increase
in accrued property taxes
|
10,945 | |||
Increase
in accrued professional fees
|
5,250 | |||
Cash
flows used in operating activities
|
(60,979 | ) | ||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||
Issuance
of common stock to founder for cash
|
1,000 | |||
Proceeds
from related party loan
|
60,000 | |||
Cash
flows from financing activities
|
61,000 | |||
NET
INCREASE IN CASH
|
21 | |||
CASH,
BEGINNING OF PERIOD
|
0 | |||
CASH,
END OF PERIOD
|
$ | 21 | ||
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
||||
Interest
paid
|
$ | - | ||
Income
taxes paid
|
$ | - | ||
SUPPLEMENTAL
NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
||||
Land
acquired through assumption of mortgage payable plus related accrued
interest
|
$ | 1,494,077 |
The
accompanying notes are an integral part of these financial
statements
F-5
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
JULY
31, 2010
NOTE
1 – NATURE OF OPERATIONS
Ameri
Metro, Inc. (“Ameri Metro” and the “Company”) was formed to engage primarily in
high-speed rail for passenger and freight transportation and related
transportation projects. The Company initially intends to develop a
Midwest high-speed rail system for passengers and freight. Currently
the Company is engaged in raising capital and entering into relationships in
furtherance of its planned activities.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage
Company
The
accompanying financial statements have been prepared in accordance with
generally accepted accounting principles related to development-stage
companies. A development-stage company is one in which planned
principal operations have not commenced or if its operations have commenced, and
there has been no significant revenues there from.
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 July 31 fiscal year
end.
Financial
Instruments
The
Company's financial instruments consist of cash and cash equivalents, loan
payable, mortgage payable, and accrued expenses. The carrying amounts of these
financial instruments approximate fair value due either to length of maturity or
interest rates that approximate prevailing rates unless otherwise disclosed in
these financial statements.
Cash and Cash
Equivalents
For
purposes of the statement of cash flows, the Company considers all short-term
debt securities purchased with a maturity of three months or less to be cash
equivalents.
Concentrations of Credit
Risk
The
Company maintains its cash in bank deposit accounts, the balances of which at
times may exceed federally insured limits. The Company continually monitors its
banking relationships and consequently has not experienced any losses in such
accounts. The Company believes it is not exposed to any significant credit risk
on cash and cash equivalents.
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles of 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 year. Management bases its
estimates on historical experience and on other assumptions considered to be
reasonable under the circumstances. However, actual results may differ from the
estimates.
Organization and Start-up
Costs
Organization
and start-up costs are expensed as incurred.
F-6
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
JULY
31, 2010
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue
Recognition
The Company will recognize revenue when
products are fully delivered or services have been provided and collection is
reasonably assured.
Income
Taxes
There are
no taxes currently payable because of the loss incurred to date. A
net operating loss carry forward in the amount $90,920 is available for state
and federal income tax purposes. This results in a deferred tax asset
of $31,000. However, due to the uncertainty of future profits a
valuation allowance has been recorded equal to this deferred tax
asset. The loss carry forward expires in 2030.
It is the
policy of Ameri Metro to recognize accruals for interest and penalties related
to uncertain tax positions in interest expense. The Company has not
incurred any interest or penalties to date.
Research and
Development
The
Company has not incurred any research and development costs to
date.
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.
Stock-Based
Compensation
Stock-based
compensation is accounted for at grant date fair value in accordance with ASC
Topic 718. To date, the Company has not adopted a stock option plan
and has not granted any stock options.
Recent
Accounting Pronouncements
The
Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company’s results of
operations, financial position or cash flow.
NOTE
3 – LAND
On June
24, 2010, the Company acquired approximately 50 acres of vacant land located in
Cumberland County, Pennsylvania from a related party - see Note 4.
We test
land annually for impairment, or when indications of potential impairment
exist.
F-7
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
JULY
31, 2010
NOTE
4 – SIGNIFICANT EVENTS – RELATED PARTY TRANSACTION
On June
24, 2010, Penndel Land Company (a related party through common
ownership) transferred certain real estate located in
Cumberland County, Pennsylvania along with a mortgage it held on the property
and related accrued interest to the Company. Penndel took the deed in
lieu of foreclosing on the original mortgagee. The mortgage carries
an interest rate of 12%. The mortgage requires payment in full on
December 15, 2010. The transaction was accounted for as an asset
acquisition. See Note 11.
The land
acquisition was recorded as follows:
Description
|
Amount
|
|||
Land
|
$ | 1,494,077 | ||
Mortgage
payable
|
(1,130,000 | ) | ||
Accrued
interest payable
|
(364,077 | ) | ||
Total
|
$ | 0 |
NOTE
5 – MORTGAGE PAYABLE – RELATED PARTY
On June
24, 2010, Penndel Land Company (a related party through common ownership)
transferred certain real estate located in Cumberland County, Pennsylvania along
with a mortgage it held on the property and related accrued interest to the
Company. Penndel took the deed in lieu of foreclosing on the original
mortgagee. The mortgage carries an interest rate of
12%. The mortgage requires payment in full on December 15, 2010.
Interest expense for the period ended July 31, 2010 was $13,746. No
interest was paid. See Note 11
NOTE
6 – LOAN PAYABLE – RELATED PARTY
The
stockholder loaned funds to the Company to pay certain expenses. The loan is
unsecured, non-interest bearing, and has no specific terms of
repayment.
NOTE
7 – STOCKHOLDER’S EQUITY (DEFICIT)
The
Company was incorporated on April 13, 2010 in Delaware with authorized capital
of 100,000,000 shares of Common Stock with a par value of $.0001 per share and
20,000,000 of Preferred Stock with a par value of $.0001 per
share. On June 2, 2010 10,000,000 shares were issued at par value for
cash of $1,000.
NOTE
8 – INCOME TAXES
For the
period ended July 31, 2010, the Company has incurred net losses and, therefore,
has no tax liability. The net deferred tax asset generated by the
loss carry-forward has been fully reserved. The cumulative net
operating loss carry-forward is approximately $91,000 at July 31, 2010, and will
expire beginning in the year 2030.
F-8
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
JULY
31, 2010
NOTE
8 – INCOME TAXES (CONTINUED)
The
provision for Federal income tax consists of the following:
July 31,
2010
|
||||
Refundable
Federal income tax attributable to:
|
||||
Current
Operations
|
$ | 31,000 | ||
Less:
valuation allowance
|
(31,000 | ) | ||
Net
provision for Federal income taxes
|
$ | 0 |
The
cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
July 31,
2010
|
||||
Deferred
tax asset attributable to:
|
||||
Net
operating loss carryover
|
$ | 31,000 | ||
Valuation
allowance
|
(31,000 | ) | ||
Net
deferred tax asset
|
$ | 0 |
NOTE
9 – LIQUIDITY AND GOING CONCERN
The
Company has negative working capital, has incurred losses since inception, and
has not yet received revenues from sales of products or services. The ability of
Ameri Metro to continue as a going concern is dependent on the Company
generating cash from the sale of its common stock and/or obtaining debt
financing and attaining future profitable operations.
Management’s
plans include selling its equity securities and obtaining debt financing to fund
its capital requirement and ongoing operations; however, there can be no
assurance the Company will be successful in these efforts
These
factors create substantial doubt about the Company’s ability to continue as a
going concern. The financial statements do not include any adjustment
that might be necessary if the Company is unable to continue as a going
concern.
NOTE 10 – COMMITMENTS AND
CONTINGENCIES
The
Company neither owns nor leases office space as of July 31, 2010. The
stockholder has provided office services without charge. There is no
obligation for the stockholder to continue this arrangement. Such costs
are immaterial to the financial statements and accordingly are not reflected
herein.
F-9
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
JULY
31, 2010
NOTE 10 – COMMITMENTS AND
CONTINGENCIES
(CONTINUED)
The
Company entered into a joint venture with Penndel Land Company (“Penndel”), a
related party entity primarily owned by the Company’s Chief Executive Officer,
whereby Penndel will be the Company’s exclusive land developer, provider of
financial services in connection with raising capital for the land development
and provider of all requisite technology for the land
development. Penndel will receive a 2% fee for any capital raised for
development, and will charge Ameri Metro cost plus 30% for securing programs and
technology. As part of this joint venture, Penndel will receive a percentage of
each class of shares in the Company in exchange for consulting
services.
Land
development activities include, but are not limited to, the sale of land,
leasing of land, and land development including developing industrial sites for
the assembly plants, rail yards, train stations, train terminals, manufacturing
plants, machines, and equipment, parts distribution centers, rail crossings,
cargo terminals, parking lots, garages, and other related construction of
offices, hotels, shopping centers, and all on-site and off-site
improvements.
The
Company entered into a contract for the acquisition of the patents, rights,
titles, and business of Damar Corporation LLC, the
inventor/developer/manufacturer of Damar TruckDeck. The Damar
TruckDeck is a flexible truck deck storage and organization system that with an
integrated frame allowing the cargo deck to be used as a hauling
surface.
The
Company shall receive all rights and title to the patents, the TruckDeck system,
and all related assets for a purchase price of $750,000 payable as $500,000 cash
and the remaining $250,000 payable in the form of 7,500 shares of the Company’s
common stock. The cash portion is payable within 90 days of the
successful completion of the registration as a publically traded company
pursuant to the Securities Act of 1933. In addition, royalty payments
equal to $2.50 for each unit sold from the items arising from the patent,
including the Damar TruckDeck, for a period of five years. After five
years, the parties will renegotiate the terms of the agreement. If no
agreement can be reached, then the parties agree to extend the royalty payments
for one additional year after which time all royalty payments will
terminate.
The
Company entered into a one-year agreement with Transportation Economics &
Management Systems, Inc. (“TEMS”) regarding consulting services in relation to
the development of high-speed rail and other transportation projects by the
Company.
The
Company has agreed to issue to its securities attorney 500,000 common shares at
par value for services rendered after its initial registration statement has
gone effective.
NOTE 11 – SUBSEQUENT
EVENTS
Management
has evaluated subsequent events through the date on which the financial
statements were issued, October 8, 2010, and has determined it does not have any
material subsequent events to disclose other than what is disclosed
below.
On August
6, 2010, the Company paid a $15,000 deposit to Penndel Land Company, a related
party, as a deposit on the purchase of 3750 E. Market Street, York, Pennsylvania
for a total purchase price of $2,900,000. The property will be used for the
future development of corporate offices for Ameri Metro.
On August
7, 2010, the Company issued 44,348 common shares to Penndel Land Company as full
payment on the July 31, 2010 liabilities shown in these financial statements as
a $1,130,000 mortgage note payable – related party and the $377,823 accrued
interest payable – related party.
F-10
AMERI
METRO, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
JULY
31, 2010
NOTE 11 – SUBSEQUENT EVENTS (CONTINUED)
On
September 3, 2010, the Company acquired a certain real estate security
instrument (Mortgage) from an unrelated third party in the principal amount of
$3,276,833.75 in exchange for 120,000 of its common shares and $700
cash. The Mortgage is secured by real property located in the state
of Pennsylvania, bears interest at 10%, and full payment is due in January 2012;
instalment payments are due per a schedule if and when parcels are sold prior to
January 2012.
F-11
PART
II
Item
13. Other expenses of Issuance and Distribution
The following table sets forth the
Company’s expenses in connection with this registration statement. All of
the listed expenses
are estimates, other than the filing fees payable to the Securities and Exchange
Commission.
Registration
Fees
|
$ | |||
State
filing fees
|
$ | |||
Edgarizing
fees
|
$ | |||
Transfer
agent fees
|
$ | |||
Accounting
fee
|
$ | |||
Legal
fees
|
$ | |||
Printing
|
$ |
Item
14. Indemnification of Directors and Officers
The Company's Articles of
Incorporation, By-Laws and other contracts provide for indemnification of its
officers, directors, agents, fiduciaries and employees. These
provisions allow the Company to pay for the expenses of these persons in
connection with legal proceedings brought because of the person's position with
the Company, if the person is not ultimately adjudged liable to the Company for
misconduct in the action. Generally, no indemnification may be made where
the person has been determined to have intentionally, fraudulently or knowingly
violated the law.
The Company does not believe that such
indemnification affects the capacity of such person acting as
officer, director or control person of the Company.
Item
15. Recent Sales of Unregistered Securities
Since inception, the Company has issued
10,257,500 shares of common stock. Such shares were issued at a price
less than the price of the Shares offered by the Company pursuant to this
registration:
On April 13, 2010, at its inception,
the Company issued an aggregate of 10,000,000 shares of common stock to the
founder and chief executive officer of the Company Mr. Shah Mathias. Such
shares of the Company were issued to Mr. Mathias pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended,
as a transaction by an issuer not involving any public offering.
The Company has also issued the
following securities since its inceptions. Such securities were
also issued pursuant to an exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended, as a transaction by an issuer not
involving any public offering, as follows:
In 2010, the Company issued 7,500
shares to The Damar Corporation. No monetary consideration was
received by the Company in payment for such shares.
In October 2010, the Company issued
250,000 shares to Tiber Creek Corporation. No monetary consideration
was received by the Company in payment for such shares.
Item
16. Exhibits and Financial Statement Schedules.
EXHIBITS
3.1
|
Articles
of Incorporation,
|
3.2
|
By-laws
|
5.0**
|
Opinion
of Counsel on legality of securities being
registered
|
10.1
|
Master
Indenture Agreement of Alabama Toll Facilities,
Inc.
|
10.2
|
Master
Indenture Agreement of Hi Speed Rail Facilities,
Inc.
|
10.3
|
Master
Indenture Agreement of Hi Speed Rail Facilities Provider,
Inc.
|
10.4**
|
Form
of subscription agreement for sale of the
shares
|
23.1
|
Consent
of Accountants
|
23.2
|
**
Consent of Attorney (as part of Exhibit
5.0)
|
** To be
filed
31
Item
17. Undertakings
Pursuant
to Rule 415 under the Securities Act of 1933 (as amended and updated from time
to time)
The
undersigned registrant hereby undertakes:
(1)
|
To
file, during any period in which it offers or sales securities, 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 which, individually or
together, represent a fundamentalchange in the information in the
registration statement. Notwithstanding the foregoing, any increase
ordecrease in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered) 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 a 20% 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 additional material information with respect to the plan of
distribution not previouslydisclosed in the registration statement or
any material change to such information in the
registrationstatement.
|
(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 the
securities at that time to be the initial bona fide offering
thereof.
(3). To remove from registration by
means of a post-effective amendment any of the securities that remain unsold at
the termination of the offering.
(4). That, for the purpose of
determining liability under the Securities Act of 1933 to any purchaser in the
initial distribution of securities:
Each prospectus filed pursuant to Rule
424(b) as part of a registration statement relating to this offering, other
than registration statements relying on Rule 403B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of
and included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made
in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior
to such first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of first
use.
(5). That, for the purpose of
determining liability under the Securities Act of 1933 to any purchaser in the
initial distribution of 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 tothe 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 this offering
required to be filed pursuant to Rule 424;
ii. Any free writing prospectus
relating to this offering prepared by or on behalf of the undersigned
registrant or used or referred to by the undersigned
registrant;
iii. The portion of any other free
writing prospectus relating to the offering containing material information
about the undersigned registrant or its securities provided by or on behalf of
the undersigned registrant; and
iv. Any other communication that is an
offer in the offering made by the undersigned registrant to
the purchaser.
32
Undertaking Request for
acceleration of
effective date or filing of registration statement becoming effective
upon filing.
The
undersigned registrant hereby undertakes:
Insofar
as indemnification for liabilities arising under the Securities Act 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.
33
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 of filing on Form S-1 and
authorized this registration statement to be signed on its behalf by the
undersigned, in the City of Red Lion, State of Pennsylvania on December 8,
2010.
/s/
Shah Mathias
|
|
Title:
Chief Executive Officer
|
|
(Principal
executive officer)
|
|
/s/
Naresh Mirchandani
|
|
Title:
Chief Financial Officer
|
|
(Principal
financial and accounting officer)
|
Pursuant
to the requirements of the Securities Act, as amended, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature
|
Capacity
|
Date
|
/s/
Shah Mathias
|
Director
|
December
8, 2010
|
/s/
James Becker
|
Director
|
December
8, 2010
|
/s/
Naresh Mirchandani
|
Director
|
December
8, 2010
|
/s/
Shahjahan C. Mathias
|
Director
|
December
8, 2010
|
/s/
Donald E. (“Nick”) Williams, Jr.
|
Director
|
December
8, 2010
|
/s/
Sohual Matthias
|
Director
|
December
8, 2010
|
Steve
Trout
|
Director
|
|
Michael
W. Lasky
|
Director
|
34