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EX-32.1 - Pier Acquisition I, Inc. | v204924_ex32-1.htm |
EX-31.1 - Pier Acquisition I, Inc. | v204924_ex31-1.htm |
EX-32.2 - Pier Acquisition I, Inc. | v204924_ex32-2.htm |
EX-31.2 - Pier Acquisition I, Inc. | v204924_ex31-2.htm |
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.20549
FORM 10-K
(Mark
One)
x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
For
the fiscal year ended July 31, 2010.
or
¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
For
the transition period from to .
Commission
File Number 000-53552
Pier Acquisition I,
Inc.
(Exact
name of registrant as specified in its charter)
DELAWARE
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94–3436298
|
|
State
or other jurisdiction of
incorporation
or organization
|
(I.R.S.
Employer
Identification
No.)
|
|
c/o
Brandon Hill
Hill
Financial Advisors
2815
Townsgate Road, Suite 100
Westlake Village,
CA91361
|
||
(Address
of principal executive
offices)
|
Registrant’s
telephone number, including area code (805) 449-1132
Securities
registered pursuant to Section 12(b) of the Act:
None
Securities
registered pursuant to Section 12(g) of the Act:
Common
stock, par value $0.0001 per share
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act o Yes x No
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. o Yes x No
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past
90 days. x Yes ¨ No
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this
chapter) during the preceeding 12 months (or for such shorter period that the
registrant was required to submit and post such files). ¨ Yes ¨ No
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. x
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨
|
Smaller
reporting company x
|
|||
(Do
not check if a smaller reporting
company)
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). x Yes ¨ No
The
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter was $0.00 as no market existed for our common stock at such
time.
The
number of shares outstanding of Registrant’s common stock, $0.0001 par value at
November 30, 2010 was 6,500,000.
DOCUMENTS
INCORPORATED BY REFERENCE
None
PIER
ACQUISITION I, INC.
FORM 10-K
FOR
THE YEAR ENDED JULY 31, 2010
INDEX
Page
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||||
PART I
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||||
Item
1.
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Business
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3
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Item
1A.
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Risk
Factors
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5
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Item
2.
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Properties
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11
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Item
3.
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Legal
Proceedings
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11
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Item
4.
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Removed
and Reserved
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11
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PART II
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||||
Item
5.
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Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
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12
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||
Item
6.
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Selected
Financial Data
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12
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Item
7.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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13
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Item
7A.
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Quantitative
and Qualitative Disclosures About Market Risk
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14
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Item
8.
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Financial
Statements and Supplementary Data
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15
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||
Item
9.
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Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure
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16
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||
Item
9A.
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Controls
and Procedures
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16
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PART III
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||||
Item
10.
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Directors,
Executive Officers and Corporate Governance
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17
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Item
11.
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Executive
Compensation
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18
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||
Item
12.
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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19
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Item
13.
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Certain
Relationships and Related Transactions, and Director
Independence
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20
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||
Item
14.
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Principal
Accounting Fees and Services
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20
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PART IV
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||||
Item
15.
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Exhibits,
Financial Statement Schedules
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21
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2
We
urge you to read this entire Annual Report on Form 10-K, including the” Risk
Factors” section and the financial statements and related notes included
herein. As used in this Annual Report, unless context otherwise
requires, the words “we,” “us”,”our,” “the Company,” “Pier Acquisition I” and
“Registrant” refer to Pier Acquisition I, Inc.Any reference to “common shares,”
“Common Stock,” “common stock” or “Common Shares” refers to our $.0001 par value
common stock.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain
statements contained in this Annual Report on Form 10-K constitute
“forward-looking statements”. All statements included in this Annual Report,
including those related to our cash, liquidity, resources and our anticipated
cash expenditures, as well as any statements other than statements of historical
fact, regarding our strategy, future operations, financial position, projected
costs, prospects, plans and objectives are forward-looking
statements. These forward-looking statements are derived, in part,
from various assumptions and analyses we have made in the context of our current
business plan and information currently available to us and in light of our
experience and perceptions of historical trends, current conditions and expected
future developments and other factors we believe are appropriate in the
circumstances. You can generally identify forward looking statements through
words and phrases such as “believe”, “expect”, “seek”,
“estimate”, “anticipate”, “intend”, “plan”, “budget”, “project”, “may likely
result”, “may be”, “may continue” and other similar
expressions, although not all forward-looking statements contain these
identifying words. We cannot guarantee future results, levels of activity,
performance or achievements, and you should not place undue reliance on our
forward-looking statements.
Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of various factors, including the risks
described in Part I, Item 1A, “Risk Factors” and elsewhere in this
Annual Report. Our forward-looking statements do not reflect the potential
impact of any future acquisitions, mergers, dispositions, joint ventures or
strategic investments. In addition, any forward-looking statements represent our
expectation only as of the day this Annual Report was first filed with the
Securities and Exchange Commission (“SEC”) and should not be relied on as
representing our expectations as of any subsequent date. While we may elect to
update forward-looking statements at some point in the future, we specifically
disclaim any obligation to do so, even if our expectations change.
When
reading any forward-looking statement you should remain mindful that actual
results or developments may vary substantially from those expected as expressed
in or implied by such statement for a number of reasons or
factors. Each forward-looking statement should be read in context
with and in understanding of the various other disclosures concerning our
company and our business made elsewhere in this Annual Report as well as our
public filings with the SEC. You should not place undue reliance on any
forward-looking statement as a prediction of actual results or developments. We
are not obligated to update or revise any forward-looking statements contained
in this Annual Report or any other filing to reflect new events or circumstances
unless and to the extent required by applicable law.
ITEM 1.
|
BUSINESS
|
Item
1.Description of Business.
Pier
Acquisition I, Inc. (“we”, “us”, “our”, the "Company") was incorporated in the
State of Delaware on August 14, 2008. Since inception, the Company has been
engaged in organizational efforts and obtaining initial
financing. The Company was formed as a vehicle to pursue a business
combination and has made no efforts to identify a possible business
combination. As a result, the Company has not conducted negotiations
or entered into a letter of intent concerning any target business. The business
purpose of the Company is to seek the acquisition of, or merger with, an
existing company. The Company selected July 31 as its fiscal year
end.
The
Company is currently considered to be a "blank check" company. The U.S.
Securities and Exchange Commission (the “SEC”) defines those companies as "any
development stage company that is issuing a penny stock, within the meaning of
Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and that has no specific business plan or purpose, or has
indicated that its business plan is to merge with an unidentified company or
companies." Under SEC Rule 12b-2 under the Exchange Act, the Company also
qualifies as a “shell company,” because it has no or nominal assets (other than
cash) and no or nominal operations. Many states have enacted
statutes, rules and regulations limiting the sale of securities of "blank check"
companies in their respective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in our securities, either
debt or equity, until we have successfully concluded a business combination. The
Company intends to comply with the periodic reporting requirements of the
Exchange Act for so long as it is subject to those requirements.
The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation (“Acquisition Strategy”). The Company’s
principal business objective for the next 12 months and beyond such time will be
to achieve long-term growth potential through a combination with a business
rather than immediate, short-term earnings. The Company will not restrict its
potential candidate target companies to any specific business, industry or
geographical location and, thus, may acquire any type of business.
As of
this date the Company has not entered into any definitive agreement with any
party, nor have there been any specific discussions with any potential business
combination candidates regarding business opportunities for the Company. The
Company has unrestricted flexibility in seeking, analyzing and participating in
potential business opportunities. In its efforts to analyze potential
acquisition targets, the Company will consider the following kinds of
factors:
3
(a) Potential
for growth, indicated by new technology, anticipated market expansion or new
products;
(b) Competitive
position as compared to other firms of similar size and experience within the
industry segment as well as within the industry as a whole;
(c) Strength
and diversity of management, either in place or scheduled for
recruitment;
(d) Capital
requirements and anticipated availability of required funds, to be provided by
the Company or from operations, through the sale of additional securities,
through joint ventures or similar arrangements or from other
sources;
(e) The
cost of participation by the Company as compared to the perceived tangible and
intangible values and potentials;
(f) The
extent to which the business opportunity can be advanced;
(g) The
accessibility of required management expertise, personnel, raw materials,
services, professional assistance and other required items; and
(h) Other
relevant factors.
In
applying the foregoing criteria, no one of which will be controlling, management
will attempt to analyze all factors and circumstances and make a determination
based upon reasonable investigative measures and available data. Potentially
available business opportunities may occur in many different industries, and at
various stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Due to the Company's limited capital available for investigation,
the Company may not discover or adequately evaluate adverse facts about the
opportunity to be acquired.
COMPETITION
In
identifying, evaluating and selecting a target business, we may encounter
intense competition from other entities having a business objective similar to
ours. There are numerous “public shell” companies either actively or passively
seeking operating businesses with which to merge in addition to a large number
of “blank check” companies formed and capitalized specifically to acquire
operating businesses. Additionally, we are subject to competition from other
companies looking to expand their operations through the acquisition of a target
business. Many of these entities are well established and have extensive
experience identifying and effecting business combinations directly or through
affiliates. Many of these competitors possess greater technical, human and other
resources than us and our financial resources will be relatively limited when
contrasted with those of many of these competitors. Our ability to compete in
acquiring certain sizable target businesses is limited by our available
financial resources. This inherent competitive limitation gives others an
advantage in pursuing the acquisition of a target business. Further, our
outstanding warrants and the future dilution they potentially represent may not
be viewed favorably by certain target businesses.
Any of
these factors may place us at a competitive disadvantage in successfully
negotiating a business combination. Our management believes, however, that our
status as a public entity and potential access to the United States public
equity markets may give us a competitive advantage over privately-held entities
with a business objective similar to ours to acquire a target business on
favorable terms.
If
we succeed in effecting a business combination, there will be, in all
likelihood, intense competition from competitors of the target business. Many of
our target business’ competitors are likely to be significantly larger and have
far greater financial and other resources than we will. Some of these
competitors may be divisions or subsidiaries of large, diversified companies
that have access to financial resources of their respective parent companies.
Our target business may not be able to compete effectively with these companies
or maintain them as customers while competing with them on other projects. In
addition, it is likely that our target business will face significant
competition from smaller companies that have specialized capabilities in similar
areas. We cannot accurately predict how our target business’ competitive
position may be affected by changing economic conditions, customer requirements
or technical developments. We cannot assure you that, subsequent to a business
combination, we will have the resources to compete effectively.
FORM OF
ACQUISITION
The
manner in which the Company participates in an opportunity will depend upon the
nature of the opportunity, the respective needs and desires of the Company and
the promoters of the opportunity, and the relative negotiating strength of the
Company and such promoters.
It is
likely that the Company will acquire its participation in a business opportunity
through the issuance of common stock or other securities of the Company.
Although the terms of any such transaction cannot be predicted, it should be
noted that in certain circumstances the criteria for determining whether or not
an acquisition is a so-called "tax free" reorganization under Section 368(a)(1)
of the Internal Revenue Code of 1986, as amended (the "Code") depends upon
whether the owners of the acquired business own 80% or more of the voting stock
of the surviving entity. If a transaction were structured to take advantage of
these provisions rather than other "tax free" provisions provided under the
Code, all prior stockholders would in such circumstances retain 20% or less of
the total issued and outstanding shares of the surviving entity. Under other
circumstances, depending upon the relative negotiating strength of the parties,
prior stockholders may retain substantially less than 20% of the total issued
and outstanding shares of the surviving entity. This could result in substantial
additional dilution to the equity of those who were stockholders of the Company
prior to such reorganization.
4
The
present stockholders of the Company will likely not have control of a majority
of the voting securities of the Company following a reorganization transaction.
As part of such a transaction, all or a majority of the Company's directors may
resign and one or more new directors may be appointed without any vote by
stockholders.
In the
case of an acquisition, the transaction may be accomplished upon the sole
determination of management without any vote or approval by stockholders. In the
case of a statutory merger or consolidation directly involving the Company, it
will likely be necessary to call a stockholders' meeting and obtain the approval
of the holders of a majority of the outstanding securities. The necessity to
obtain such stockholder approval may result in delay and additional expense in
the consummation of any proposed transaction and will also give rise to certain
appraisal rights to dissenting stockholders. Most likely, management will seek
to structure any such transaction so as not to require stockholder
approval.
It is
anticipated that the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and
substantial cost for accountants, attorneys and others. If a decision is made
not to participate in a specific business opportunity, the costs theretofore
incurred in the related investigation might not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific business
opportunity, the failure to consummate that transaction may result in the loss
to the Registrant of the related costs incurred.
We
presently have no employees apart from our management. Our officers and
directors are engaged in outside business activities and anticipate that they
will devote to our business very limited time until the acquisition of a
successful business opportunity has been identified. We expect no significant
changes in the number of our employees other than such changes, if any, incident
to a business combination.
Employees
We have a
total of 1 employee which includes our Chief Executive Officer. Our employee is
considered a part-time employee.
Where
to Find More Information
We make
our public filings with the SEC, including our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all
exhibits and amendments to these reports. These materials are
available on the SEC’s web site, http://www.sec.gov .
You may also read or copy any materials we file with the SEC at the SEC’s Public
Reference Room at 100 F Street, N.E., Washington, DC20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. Alternatively, you may obtain copies of these
filings, including exhibits, by writing or telephoning us at: c/o Brandon Hill,
Hill Financial Advisors, 2815 Townsgate Road, Suite 100, Westlake Village, CA
91361, (805) 449-1132.
RISK
FACTORS
|
We
have described below a number of uncertainties and risks which, in addition to
uncertainties and risks presented elsewhere in this Annual Report, may adversely
affect our business, operating results and financial condition. The
uncertainties and risks enumerated below as well as those presented elsewhere in
this Annual Report should be considered carefully in evaluating our company and
our business and the value of our securities. The following important factors,
among others, could cause our actual business, financial condition and future
results to differ materially from those contained in forward-looking statements
made in this Annual Report or presented elsewhere by management from time to
time.
Risks
Related to our Business
Our
limited resources may not be sufficient for us to implement our Acquisition
Strategy.
We have
limited resources. We are pursuing an acquisition strategy, whereby we will seek
to acquire undervalued businesses. The implementation of our strategy
is highly dependent on retaining professions such as lawyers, accountants and
investment bankers to consummate any proposed transaction. As a
result of our limited resources, we may not have sufficient capital to retain
such professions and as a result, may not be able to successfully implement our
strategy.
We
may
not be able to continue as going concern
Based on
our limited operations, lack of revenue and relatively minimal assets there can
be no assurance that we will be able to continue as a going concern or complete
a merger, acquisition or other business combination.
5
We
will
need additional financing in order to execute our business plan and it may be
extremely expensive
We are
entirely dependent upon our limited available financial resources to implement
our acquisition strategy. We cannot ascertain with any degree of certainty the
capital requirements for the successful execution of our acquisition strategy.
In the event that our limited financial resources prove to be insufficient to
implement our acquisition strategy, we will be required to seek additional
financing. Also, in the event of the consummation of an acquisition, we may
require additional financing to fund the operations or growth of the target.
Additionally, as we are considered a “shell” or “blank check” company,
purchasers of our securities cannot currently rely on Rule 144 promulgated under
the Securities Act with regard to the resale of their shares. Accordingly, any
financing in the form of equity may be deeply discounted to compensate the
investors for the added risk and inability to rely on Rule 144. Depending on
such discount, our current shareholders may be substantially
diluted.
We
may
not be able to secure additional financing
There can
be no assurance that additional financing will be available on acceptable terms,
or at all. To the extent that additional financing proves to be unavailable when
needed, we would, in all likelihood, be compelled to abandon plans of further
acquisitions, and would have minimal capital remaining to pursue other targets.
Our inability to secure additional financing, if needed, could also have a
material adverse effect on our continued development or growth. We have no
arrangements with any bank or financial institution to secure additional
financing and there can be no assurance that any such arrangement, if required
or otherwise sought, would be available on terms deemed to be commercially
acceptable to us and in our best interests.
There
may be conflicts of interest between our management and the non-management
stockholders of the Company.
Conflicts
of interest create the risk that management may have an incentive to act
adversely to the interests of the stockholders of the Company. A conflict
of interest may arise between our management's personal pecuniary interest and
its fiduciary duty to our stockholders.
In
addition, our management is currently involved with other blank check companies,
and in the pursuit of business combinations, conflicts with such other blank
check companies with which it is, and may in the future become, affiliated, may
arise. If we and the other blank check companies that our management
is affiliated with desire to take advantage of the same opportunity, then those
members of management that are affiliated with both companies would abstain from
voting upon the opportunity. In the event of identical officers and directors,
the officers and directors will arbitrarily determine the company that will be
entitled to proceed with the proposed transaction.
We
have a limited operating history.
We have a
limited operating history and no revenues or earnings from operations since
inception, and there is a risk that we will be unable to continue as a going
concern and consummate a business combination. We have no significant
assets or financial resources. We will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until the consummation of a
merger or other business combination with a private company. This may result in
our incurring a net operating loss that will increase unless we consummate a
business combination with a profitable business. We cannot assure you that we
can identify a suitable business opportunity and consummate a business
combination, or that any such business will be profitable at the time of its
acquisition by us or ever.
We
have incurred and may continue to incur losses.
As of
July 31, 2010, we have incurred a cumulative net loss of $96,617. We
expect that we will incur losses at least until we complete a business
combination and perhaps after such a combination as well. There can be no
assurances that we will ever be profitable.
We
face a number of risks associated with potential acquisitions, including the
possibility that we may incur substantial debt which could adversely affect our
financial condition.
We intend
to use reasonable efforts to complete a merger or other business combination
with an operating business. Such combination will be accompanied by risks
commonly encountered in acquisitions, including, but not limited to,
difficulties in integrating the operations, technologies, products and personnel
of the acquired companies and insufficient revenues to offset increased expenses
associated with acquisitions. Failure to manage and successfully
integrate acquisitions we make could harm our business, our strategy and our
operating results in a material way. Additionally, completing a
business combination is likely to increase our expenses and it is possible that
we may incur substantial debt in order to complete a business combination, which
can adversely affect our financial condition. Incurring a substantial amount of
debt may require us to use a significant portion of our cash flow to pay
principal and interest on the debt, which will reduce the amount available to
fund working capital, capital expenditures, and other general
purposes. Our indebtedness may negatively impact our ability to
operate our business and limit our ability to borrow additional funds by
increasing our borrowing costs, and impact the terms, conditions, and
restrictions contained in possible future debt agreements, including the
addition of more restrictive covenants; impact our flexibility in planning for
and reacting to changes in our business as covenants and restrictions contained
in possible future debt arrangements may require that we meet certain financial
tests and place restrictions on the incurrence of additional indebtedness and
place us at a disadvantage compared to similar companies in our industry that
have less debt.
6
There
is competition for those private companies suitable for a merger transaction of
the type contemplated by management.
The
Company is in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. We are, and will continue to be, an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including small public companies and venture capital
firms, are active in mergers and acquisitions of companies that may be desirable
target candidates for us. Nearly all these entities have significantly greater
financial resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination. These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination.
There
are relatively low barriers to becoming a blank check company or shell company,
thereby increasing the competitive market for a small number of business
opportunities.
There are
relatively low barriers to becoming a blank check company or shell
company. A newly incorporated company with a single stockholder and
sole officer and director may become a blank check company or shell company by
voluntarily subjecting itself to the SEC reporting requirements by filing and
seeking effectiveness of a Form 10, thereby registering its common stock
pursuant to Section 12(g) of the Securities Exchange Act of 1934 with the
SEC. Assuming no comments to the Form 10 have been received from the
SEC, the registration statement is automatically deemed effective 60 days after
filing the Form 10 with the SEC. The relative ease and low cost with
which a company can become a blank check or shell company can increase the
already highly competitive market for a limited number of businesses that will
consummate a successful business combination.
Future
success is highly dependent on the ability of management to locate and attract a
suitable acquisition.
The
nature of our operations is highly speculative, and there is a consequent risk
of loss of an investment in the Company. The success of our plan of operation
will depend to a great extent on the operations, financial condition and
management of the identified business opportunity. While management intends to
seek business combination(s) with entities having established operating
histories, we cannot provide any assurance that we will be successful in
locating candidates meeting that criterion. In the event we complete a business
combination, the success of our operations may be dependent upon management of
the successor firm or venture partner firm and numerous other factors beyond our
control.
Management
intends to devote only a limited amount of time to seeking a target company
which may adversely impact our ability to identify a suitable acquisition
candidate.
While
seeking a business combination, management anticipates devoting very limited
time to the Company's affairs. Our officers have not entered into written
employment agreements with us and are not expected to do so in the foreseeable
future. This limited commitment may adversely impact our ability to identify and
consummate a successful business combination.
Management
has no prior experience as directors or officers of a development stage public
company.
Our
current officers and director have no prior experience serving as officers or
directors of a development stage public company with the business purpose of
acquiring a target business. The inexperience of our officers and directors and
the fact that the analysis and evaluation of a potential business combination is
to be taken under the supervision of our directors and officers may adversely
impact our ability to identify and consummate a successful business
combination.
There
can be no assurance that the Company will successfully consummate a business
combination.
We can
give no assurances that we will successfully identify and evaluate suitable
business opportunities or that we will conclude a business combination.
Management has not identified any particular industry or specific business
within an industry for evaluation. We cannot guarantee that we will be able to
negotiate a business combination on favorable terms.
Our
business is difficult to evaluate because we have no operating
history.
As the
Company has no operating history or revenue and only minimal assets, there is a
risk that we will be unable to continue as a going concern and consummate a
business combination. The Company has no recent operating history nor
any revenues or earnings from operations since inception. We have no significant
assets or financial resources. We will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until the consummation of a
business combination. This may result in our incurring a net operating loss that
will increase continuously until we can consummate a business combination with a
profitable business opportunity. We cannot assure you that we can identify a
suitable business opportunity and consummate a business
combination.
7
We
are a development stage company, and our future success is highly dependent on
the ability of management to locate and attract a suitable
acquisition.
We were
incorporated in August 2008 and are considered to be in the development stage.
The nature of our operations is highly speculative, and there is a consequent
risk of loss of any investment in the Company. The success of our plan of
operation will depend to a great extent on the operations, financial condition
and management of the identified business opportunity. While management intends
to seek business combination(s) with entities having established operating
histories, we cannot provide any assurance that we will be successful in
locating candidates meeting that criterion. In the event we complete a business
combination, the success of our operations may be dependent upon management of
the successor firm or venture partner firm and numerous other factors beyond our
control.
The
Company has not identified a specific potential acquisition target and there are
no existing agreements for a business combination or other
transaction.
We have
no arrangement, agreement or understanding with respect to engaging in a merger
with, joint venture with or acquisition of, a private or public entity. No
assurances can be given that we will successfully identify and evaluate suitable
business opportunities or that we will conclude a business combination.
Management has not identified any particular industry or specific business
within an industry for evaluation. We cannot guarantee that we will be able to
negotiate a business combination on favorable terms, and there is consequently a
risk that funds allocated to the purchase of our shares will not be invested in
a company with active business operations. We have virtually unrestricted
flexibility in identifying and selecting a prospective acquisition candidate.
Although our management will endeavor to evaluate the risks inherent in a
particular target business, we cannot assure you that we will properly ascertain
or assess all significant risk factors.
Reporting requirements under the
Exchange Act and
compliance with the Sarbanes-Oxley Act of 2002, including establishing and
maintaining acceptable internal controls over financial reporting, are
costly.
The
Company has no business that produces revenues, however, the rules and
regulations pursuant to the Exchange Act require a public company to provide
periodic reports which will require that the Company engage legal, accounting
and auditing services. The engagement of such services can be costly
and the Company is likely to incur losses which may adversely affect the
Company’s ability to continue as a going concern. Additionally, the
Sarbanes-Oxley Act of 2002 will require that the Company establish and maintain
adequate internal controls and procedures over financial
reporting. The costs of complying with the Sarbanes Oxley Act of 2002
and the limited time that management will devote to the Company may make it
difficult for the Company to establish and maintain adequate internal controls
over financial reporting. In the event the Company fails to maintain
an effective system of internal controls or discover material weaknesses in our
internal controls, we may not be able to produce reliable financial reports or
prevent fraud, which may harm our financial condition and result in loss of
investor confidence and a decline in our share price.
The
time and cost of preparing a private company to become a public reporting
company may preclude us from entering into a merger or acquisition with the most
attractive private companies.
Target
companies that fail to comply with SEC reporting requirements may delay or
preclude acquisition. Sections 13 and 15(d) of the Exchange Act require
reporting companies to provide certain information about significant
acquisitions, including certified financial statements for the company acquired,
covering one, two, or three years, depending on the relative size of the
acquisition. The time and additional costs that may be incurred by some target
entities to prepare these statements may significantly delay or essentially
preclude consummation of an acquisition. Otherwise suitable acquisition
prospects that do not have or are unable to obtain the required audited
statements may be inappropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
The
Company may be subject to further government regulation which would adversely
affect our operations.
Although
we will be subject to the reporting requirements under the Exchange Act,
management believes we will not be subject to regulation under the Investment
Company Act of 1940, as amended (the “Investment Company Act”), since we will
not be engaged in the business of investing or trading in securities. If we
engage in business combinations which result in our holding passive investment
interests in a number of entities, we could be subject to regulation under the
Investment Company Act. If so, we would be required to register as an investment
company and could be expected to incur significant registration and compliance
costs. We have obtained no formal determination from the SEC as to our status
under the Investment Company Act and, consequently, violation of the Investment
Company Act could subject us to material adverse consequences.
Any
potential acquisition or merger with a foreign company may subject us to
additional risks.
If we
enter into a business combination with a foreign company, we will be subject to
risks inherent in business operations outside of the United States. These risks
include, for example, currency fluctuations, regulatory problems, punitive
tariffs, unstable local tax policies, trade embargoes, risks related to shipment
of raw materials and finished goods across national borders and cultural and
language differences. Foreign economies may differ favorably or
unfavorably from the United States economy in growth of gross national product,
rate of inflation, market development, rate of savings, and capital investment,
resource self-sufficiency and balance of payments positions, and in other
respects.
The
Company may be subject to certain tax consequences in our business, which may
increase our cost of doing business.
We may
not be able to structure our acquisition to result in tax-free treatment for the
companies or their stockholders, which could deter third parties from entering
into certain business combinations with us or result in being taxed on
consideration received in a transaction. Currently, a transaction may be
structured so as to result in tax-free treatment to both companies, as
prescribed by various federal and state tax provisions. We intend to structure
any business combination so as to minimize the federal and state tax
consequences to both us and the target entity; however, we cannot guarantee that
the business combination will meet the statutory requirements of a tax-free
reorganization or that the parties will obtain the intended tax-free treatment
upon a transfer of stock or assets. A non-qualifying reorganization could result
in the imposition of both federal and state taxes that may have an adverse
effect on both parties to the transaction.
8
Our
business may have no revenue unless and until we merge with or acquire an
operating business.
We are a
development stage company and have had no revenue from operations. We may not
realize any revenue unless and until we successfully merge with or acquire an
operating business.
The
Company has conducted no market research or identification of business
opportunities, which may affect our ability to identify a business to merge with
or acquire.
The
Company has not conducted market research concerning prospective business
opportunities, nor have others made the results of such market research
available to the Company. Therefore, we have no assurances that market demand
exists for a merger or acquisition as contemplated by us. Our management has not
identified any specific business combination or other transactions for formal
evaluation by us, such that it may be expected that any such target business or
transaction will present such a level of risk that conventional private or
public offerings of securities or conventional bank financing will not be
available. There is no assurance that we will be able to acquire a business
opportunity on terms favorable to us. Decisions as to which business opportunity
to participate in will be unilaterally made by our management, which may act
without the consent, vote or approval of our stockholders.
Because
we may seek to complete a business combination through a “reverse merger,”
following such a transaction we may not be able to attract the attention of
major brokerage firms.
Additional
risks may exist since it is likely that we will assist a privately held business
to become public through a “reverse merger.” Securities analysts of major
brokerage firms may not provide coverage of our Company since there is no
incentive to brokerage firms to recommend the purchase of our Common Stock. No
assurance can be given that brokerage firms will want to conduct any secondary
offerings on behalf of our post-merger company in the future.
We
cannot assure you that following a business combination with an operating
business, the Common Stock will be listed on NASDAQ or any other securities
exchange.
Following
a business combination, we may seek the listing of Common Stock on NASDAQ or the
American Stock Exchange. However, we cannot assure you that following such a
transaction, we will be able to meet the initial listing standards of either of
those or any other stock exchange, or that we will be able to maintain a listing
of the Common Stock on either of those or any other stock exchange. After
completing a business combination, until our Common Stock is listed on the
NASDAQ or another stock exchange, we expect that our Common Stock would be
eligible to trade on the OTC Bulletin Board, another over-the-counter quotation
system, or on the “pink sheets,” where our stockholders may find it more
difficult to dispose of shares or obtain accurate quotations as to the market
value of our Common Stock. In addition, we would be subject to an SEC rule that,
if it failed to meet the criteria set forth in such rule, imposes various
practice requirements on broker-dealers who sell securities governed by the rule
to persons other than established customers and accredited investors.
Consequently, such rule may deter broker-dealers from recommending or selling
our Common Stock, which may further affect its liquidity. This would also make
it more difficult for us to raise additional capital following a business
combination.
Risks
Related to our Stockholders and Shares of Common Stock
Our
stockholders may have a minority interest in the Company following a business
combination.
If we
enter into a business combination with a company with a value in excess of the
value of our Company, and issue shares of our Common Stock to the stockholders
of such company as consideration for merging with us, our stockholders will
likely own less than 50% of the Company after the business combination. The
stockholders of the acquired company would therefore be able to control the
election of our board of directors (the “Board of Directors”) and control our
Company.
There
is currently no trading market for our Common Stock, and liquidity of shares of
our Common Stock is limited.
Shares of
our Common Stock are not registered under the securities laws of any state or
other jurisdiction, and accordingly there is no public trading market for the
Common Stock. Further, no public trading market is expected to develop in
the foreseeable future unless and until the Company completes a business
combination with an operating business and the Company thereafter files and
obtains effectiveness of a registration statement under the Securities Act of
1933, as amended (the “Securities Act”). Therefore, outstanding shares of
Common Stock cannot be offered, sold, pledged or otherwise transferred unless
subsequently registered pursuant to, or exempt from registration under, the
Securities Act and any other applicable federal or state securities laws or
regulations. Further, stockholders may rely on the exemption from
registration provided by Rule 144 of the Securities Act (“Rule 144”), subject to
certain restrictions, starting one year after (i) the completion of a business
combination with a private company in a reverse merger or reverse takeover
transaction after which the Company would cease to be a “shell company” (as
defined in Rule 12b-2 under the Exchange Act) and (ii) the disclosure of certain
information on a Current Report on Form 8-K within four business days
thereafter, and only if the Company has been current in all of its periodic SEC
filings for the 12 months preceding the contemplated sale of
stock. Compliance with the criteria for securing exemptions under federal
securities laws and the securities laws of the various states is extremely
complex, especially in respect of those exemptions affording flexibility and the
elimination of trading restrictions in respect of securities received in exempt
transactions and subsequently disposed of without registration under the
Securities Act or state securities laws.
9
It
is likely that our Common Stock will be considered “penny stock,” which may make
it more difficult for investors to sell their shares due to suitability
requirements.
Our
common stock may be deemed to be “penny stock” as that term is defined under the
Exchange Act. Penny stocks generally are equity securities with a
price of less than $5.00 (other than securities registered on certain national
securities exchanges or quoted on the NASDAQ system, provided that current price
and volume information with respect to transactions in such securities is
provided by the exchange or system). Penny stock rules impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and "accredited investors" as that term is
defined under the Securities Act of 1933.
The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC, which provides information about penny
stocks and the nature and level of risks in the penny stock
market. Moreover, broker/dealers are required to determine whether an
investment in a penny stock is a suitable investment for a prospective investor.
A broker/dealer must receive a written agreement to the transaction from the
investor setting forth the identity and quantity of the penny stock to be
purchased. These requirements may reduce the potential market for our
common stock by reducing the number of potential investors. This may make it
more difficult for investors in our common stock to sell shares to third parties
or to otherwise dispose of them. This could cause our stock price to
decline.
There
are issues impacting liquidity of our securities with respect to the SEC’s
review of a future resale registration statement.
Since our
shares of Common Stock issued prior to a business combination or reverse merger
cannot currently, nor will they for a considerable period of time after we
complete a business combination, be available to be offered, sold, pledged or
otherwise transferred without being registered pursuant to the Securities Act,
we will likely file a resale registration statement on Form S-1, or some other
available form, to register for resale such shares of Common Stock. We cannot
control this future registration process in all respects as some matters are
outside our control. Even if we are successful in causing the effectiveness of
the resale registration statement, there can be no assurances that the
occurrence of subsequent events may not preclude our ability to maintain the
effectiveness of the registration statement. Any of the foregoing items could
have adverse effects on the liquidity of our shares of Common
Stock.
In
addition, the SEC has disclosed that it has developed internal guidelines
concerning the use of a resale registration statement to register the securities
issued to certain investors in private investment in public equity (PIPE)
transactions, where the issuer has a market capitalization of less than $75
million and, in general, does not qualify to file a Registration Statement on
Form S-3 to register its securities if the issuer’s securities are listed on the
Over-the-Counter Bulletin Board or on the OTC Pink Sheets. The SEC has taken the
position that these smaller issuers may not be able to rely on Rule 415 under
the Securities Act (“Rule 415”), which generally permits the offer and sale of
securities on a continued or delayed basis over a period of time, but instead
would require that the issuer offer and sell such securities in a direct or
"primary" public offering, at a fixed price, if the facts and circumstances are
such that the SEC believes the investors seeking to have their shares registered
are underwriters and/or affiliates of the issuer.
It
appears that the SEC in most cases will permit a registration for resale of up
to one third of the total number of shares of common stock then currently owned
by persons who are not affiliates of such issuer and, in some cases, a larger
percentage depending on the facts and circumstances. SEC staff members also have
indicated that an issuer in most cases will have to wait until the later of six
months after effectiveness of the first registration or such time as
substantially all securities registered in the first registration are sold
before filing a subsequent registration on behalf of the same investors. Since,
following a reverse merger or business combination, we may have few or no
tradable shares of Common Stock, it is unclear as to how many, if any, shares of
Common Stock the SEC will permit us to register for resale, but SEC staff
members have at times indicated a willingness to consider a higher percentage in
connection with registrations following reverse mergers with shell companies
such as the Company. The SEC may require as a condition to the declaration of
effectiveness of a resale registration statement that we reduce or “cut back”
the number of shares of Common Stock to be registered in such registration
statement. The result of the foregoing is that a stockholder’s liquidity in our
Common Stock may be adversely affected in the event the SEC requires a cut back
of the securities as a condition to allowing the Company to rely on Rule 415
with respect to a resale registration statement, or, if the SEC requires us to
file a primary registration statement.
We
are controlled by our management.
Management
and affiliates of our management currently beneficially own and vote 100% of all
the issued and outstanding Common Stock of the Company. Consequently,
management has the ability to influence control of the operations of the Company
and, acting together, will have the ability to influence or control
substantially all matters submitted to stockholders for approval,
including:
|
·
|
Election of our board of
directors (the “Board of
Directors”);
|
|
·
|
Removal of
directors;
|
|
·
|
Amendment to the Company’s
certificate of incorporation or bylaws;
and
|
|
·
|
Adoption of measures that could
delay or prevent a change in control or impede a merger, takeover or other
business combination.
|
10
These
stockholders have complete control over our affairs. Accordingly, this
concentration of ownership by itself may have the effect of impeding a merger,
consolidation, takeover or other business consolidation, or discouraging a
potential acquirer from making a tender offer for the Common Stock.
We
have never paid dividends on our Common Stock.
We have
never paid dividends on our Common Stock and do not presently intend to pay any
dividends in the foreseeable future. We anticipate that any funds available for
payment of dividends will be re-invested into the Company to further its
business strategy.
The
Company expects to issue more shares in a merger or acquisition, which will
result in substantial dilution.
Our
Certificate of Incorporation authorizes the issuance of a maximum of
100,000,000 shares of Common Stock and a maximum of 10,000,000 shares of
preferred stock, par value $0.0001 per share (the “Preferred Stock”). Any merger
or acquisition effected by us may result in the issuance of additional
securities without stockholder approval and may result in substantial dilution
in the percentage of our Common Stock held by our then existing stockholders.
Moreover, the Common Stock issued in any such merger or acquisition transaction
may be valued on an arbitrary or non-arm’s-length basis by our management,
resulting in an additional reduction in the percentage of Common Stock held by
our then existing stockholders. Our Board of Directors has the power to issue
any or all of such authorized but unissued shares without stockholder approval.
To the extent that additional shares of Common Stock or Preferred Stock are
issued in connection with a business combination or otherwise, dilution to the
interests of our stockholders will occur and the rights of the holders of Common
Stock might be materially adversely affected.
Our
stockholders may engage in a transaction to cause the Company to repurchase its
shares of Common Stock.
In order
to provide an interest in the Company to third parties, our stockholders may
choose to cause the Company to sell Company securities to one or more third
parties, with the proceeds of such sale(s) being utilized by the Company to
repurchase shares of Common Stock held by it. As a result of such
transaction(s), our management, stockholder(s) and Board of Directors may
change.
We
may issue Preferred Stock.
Our
Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares
of Preferred Stock with designations, rights and preferences determined from
time to time by the Board of Directors. Accordingly, our Board of Directors is
empowered, without stockholder approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting, or other rights which could adversely affect
the voting power or other rights of the holders of the Common Stock. In the
event of issuance, the Preferred Stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. Although we have no present intention to issue any
shares of its authorized Preferred Stock, there can be no assurance that the
Company will not do so in the future.
We
may
be deemed an Investment Company and subjected to related
restrictions
The
regulatory scope of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), which was enacted principally for the purpose of
regulating vehicles for pooled investments in securities, extends generally to
companies engaged primarily in the business of investing, reinvesting, owning,
holding or trading in securities. The Investment Company Act may, however, also
be deemed to be applicable to a company which does not intend to be
characterized as an investment company but which, nevertheless, engages in
activities which may be deemed to be within the definitional scope of certain
provisions of the Investment Company Act. We believe that our anticipated
principal activities, which will involve acquiring control of an operating
company, will not subject us to regulation under the Investment Company Act.
Nevertheless, there can be no assurance that at some future point we will not be
deemed to be an investment company. If we are deemed to be an investment
company, we may become subject to certain restrictions relating to our
activities, including restrictions on the nature of our investments and the
issuance of securities. In addition, the Investment Company Act imposes certain
requirements on companies deemed to be within its regulatory scope, including
registration as an investment company, adoption of a specific form of corporate
structure and compliance with certain burdensome reporting, record keeping,
voting, proxy, disclosure and other rules and regulations. In the event of the
characterization of us as an investment company, our inability to satisfy such
regulatory requirements, whether on a timely basis or at all, would, under
certain circumstances, have a material adverse effect on us.
ITEM 2.
|
PROPERTIES
|
The
Company neither rents nor owns any properties. Our executive offices
are located at c/o Hill Financial Advisors, 2815 Townsgate Road, Suite 100,
Westlake Village, CA 91361. We do not pay any rent for the use of the facilities
as our use of the facilities is minimal.
ITEM 3.
|
LEGAL
PROCEEDINGS
|
ITEM 4.
|
REMOVED AND
RESERVED
|
11
PART
II
ITEM
5.
|
MARKET FOR REGISTRANT’S COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
|
Market
Information
The
Common Stock is not trading on any stock exchange. The Company is not aware of
any market activity in its Common Stock since its inception through the date of
this filing.
Holders
As of
November 30, 2010, there were 7 holders of record of the Common
Stock.
Dividends
We have
not paid any cash dividends to date, and we have no plans to do so in the
immediate future.
Recent
Sales of Unregistered Securities.
We
have not issued any securities during our 2010 fiscal year that were
not registered under the Securities Act of 1933.
ITEM 6.
|
SELECTED FINANCIAL
DATA
|
We are
not required to provide the information as to selected financial data as we are
considered a smaller reporting company.
12
ITEM
7.
|
MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Overview
Pier
Acquisition I, Inc. was incorporated in the State of Delaware on August 14,
2008. Since inception, we have been engaged in organizational efforts and
obtaining initial financing. We were formed as a vehicle to pursue a business
combination through an acquisition of or merger with an existing company
(“Acquisition Strategy”). To date, we have not identified a possible
business combination, conducted negotiations or entered into a formal letter of
intent concerning any target business. The Company selected
July 31 as its fiscal year end. We are a development stage entity, as defined by
the Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) Topic 915.
The
Company, based on proposed business activities, is a “blank check” company. The
SEC defines those companies as "any development stage company that is issuing a
penny stock, within the meaning of Section 3(a)(51) of the Securities Exchange
Act 1934, as amended (the “Exchange Act”), and that has no specific business
plan or purpose, or has indicated that its business plan is to merge with an
unidentified company or companies." Many states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check" companies in their
respective jurisdictions. The Company is also a “shell company,” defined in Rule
12b-2 under the Exchange Act as a company with no or nominal assets (other than
cash) and no or nominal operations. Management does not intend to undertake any
efforts to cause a market to develop in our securities, either debt or equity,
until we have successfully concluded a business combination. The Company intends
to comply with the periodic reporting requirements of the Exchange Act for so
long as we are subject to those requirements.
Plan
of Operation
The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. The Company’s principal business objective
for the next 12 months and beyond such time will be to achieve long-term growth
potential through a combination with an operating business. The Company will not
restrict its potential candidate target companies to any specific business,
industry or geographical location and, thus, may acquire any type of
business.
The
Company currently does not engage in any business activities that provide cash
flow. During the next twelve months we anticipate incurring costs
related to:
(i) filing
Exchange Act reports, and
(ii) investigating,
analyzing and if warranted, consummating an acquisition.
We
believe we will be able to meet these costs through use of funds in our
treasury, through deferral of fees by certain service providers and additional
amounts, as necessary, to be loaned to or invested in us by our stockholders,
management or other investors. Notwithstanding, there can be no
assurances that we will be able to obtain additional funds if and when
needed.
The
Company may consider acquiring a business which has recently commenced
operations, is a developing company in need of additional funds for expansion
into new products or markets, is seeking to develop a new product or service, or
is an established business which may be experiencing financial or operating
difficulties and is in need of additional capital. In the alternative, a
business combination may involve the acquisition of, or merger with, a company
which does not need substantial additional capital but which desires to
establish a public trading market for its shares while avoiding, among other
things, the time delays, significant expense, and loss of voting control which
may occur in a public offering.
Any
target business that is selected may be a financially unstable company or an
entity in its early stages of development or growth, including entities without
established records of sales or earnings. In that event, we will be subject to
numerous risks inherent in the business and operations of financially unstable
and early stage or potential emerging growth companies. In addition, we may
effect a business combination with an entity in an industry characterized by a
high level of risk, and, although our management will endeavor to evaluate the
risks inherent in a particular target business, there can be no assurance that
we will properly ascertain or assess all significant risks.
The
Company anticipates that the selection of a business combination will be complex
and extremely risky. Because of general economic conditions, rapid technological
advances being made in some industries and shortages of available capital, our
management believes that there are numerous firms seeking even the limited
additional capital which we will have and/or the perceived benefits of becoming
a publicly traded corporation. Such perceived benefits of becoming a publicly
traded corporation include, among other things, facilitating or improving the
terms on which additional equity financing may be obtained, providing liquidity
for the principals of and investors in a business, creating a means for
providing incentive stock options or similar benefits to key employees, and
offering greater flexibility in structuring acquisitions, joint ventures and the
like through the issuance of stock. Potentially available business combinations
may occur in many different industries and at various stages of development, all
of which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
13
Critical
Accounting Policies
The
preparation of our financial statements in conformity with accounting principles
generally accepted in the United States requires us to make estimates and
judgments that affect our reported assets, liabilities, revenues, and expenses,
and the disclosure of contingent assets and liabilities. We base our estimates
and judgments on historical experience and on various other assumptions we
believe to be reasonable under the circumstances. Future events, however, may
differ markedly from our current expectations and assumptions. While there are a
number of significant accounting policies affecting our consolidated financial
statements; we believe the following critical accounting policies involve the
most complex, difficult and subjective estimates and judgments:
Use of
Estimates - These financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and,
accordingly, require management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Specifically, our management has estimated our net operating
loss for tax purposes. Actual results could differ from those
estimates.
Going
Concern
We are
currently in the process of implementing our new business plan, focusing on our
acquisition strategy. At present, we have no cash on hand and are dependent on
our majority stockholder to provide working capital advances. There can be no
assurance that upon implementing our new business plan, we will be successful or
that we will start producing sufficient revenues to maintain our operations. The
foregoing matters raise substantial doubt about our ability to continue as a
going concern.
Comparison
of the Year Ended July 31, 2010 to the initial period August 14, 2008
(Inception) to July 31, 2009
Revenue
We have
no revenue for the year ended July 31, 2010 or the initial period August 14,
2008 (Inception) to July 31, 2009.
Loss
from Operations
We
incurred losses of $37,293 for the year ended July 31, 2010 and $59,324 for the
initial period August 14, 2008 (Inception) to July 31, 2009. Expenses
consist primarily of professional and consulting fees incurred in relation to
the formation of the Company, the filing of the Company’s registration statement
on Form 10 in January of 2009 and the filing Company’s Quarterly Reports on Form
10-Q and Annual Reports on Form 10-K.
Liquidity
and Capital Resources
We have
no cash on hand as of November 30, 2010. Ultimately management will need to
raise additional funds in order to satisfy our immediate financial needs and
provide us with sufficient capital to maintain our business and to finance
acquisitions. There can be no assurances that we will be able to obtain
additional funds if and when needed.
Additionally,
as we are considered a “shell” or “blank check” company, purchasers of our
securities cannot currently rely on Rule 144 promulgated under the Securities
Act with regard to the resale of their shares. Accordingly, any financing in the
form of equity may be deeply discounted to compensate the investors for the
added risk and inability to rely on Rule 144.
Recent
Accounting Pronouncements
Recent
accounting pronouncements issued by the FASB and the SEC did not, or are not
believed by management to, have a material impact on the Company's present or
future financial statements.
Off
Balance Sheet Arrangements
None.
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE
DISCLOSURE ABOUT MARKET RISK
|
We are
not required to provide the information as to selected financial data as we are
considered a smaller reporting company.
14
ITEM 8.
|
FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
|
INDEX
TO FINANCIAL STATEMENTS
Page
|
||
Report
of RBSM, LLP, Independent Registered Public Accounting
Firm
|
F-1
|
|
Balance
Sheets
|
F-2
|
|
Statements
of Operations
|
F-3
|
|
Statements
of Stockholders’ Deficit
|
F-4
|
|
Statements
of Cash Flows
|
F-5
|
|
Notes
to Financial Statements
|
F-6
|
15
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board
of Directors
Pier
Acquisition I, Inc.
Westlake
Village, CA
We have
audited the accompanying balance sheets of Pier Acquisition I, Inc., a
development stage company, as of July 31, 2010 and 2009, and the related
statements of operations, stockholders' deficit, and cash flows for each of the
two years in the period ended July 31, 2010 and the period August 14, 2008 (date
of inception) through July 31, 2010. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on the financial statements based upon our audits.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatements. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. 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 our audits provide a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Pier Acquisition I, Inc., a
development stage company, at July 31, 2010 and 2009 and the results of its
operations and its cash flows for each of the two years in the period ended July
31, 2010 and the period August 14, 2008 (date of inception) through 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 the Company
will continue as a going concern. As discussed in Note 1, the Company is a
development stage company which has incurred losses to date. The
Company’s ability to continue as a going concern is dependent on securing
additional sources of capital, consummating a merger with an operating company,
and ultimately achieving profitable operations. These factors raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to this matter are described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.
/s/ RBSM
LLP
New York,
New
York
December 15, 2010
F-1
PIER
ACQUISITION I, INC.
(A
Development Stage Company)
BALANCE
SHEET
July 31,
|
July 31,
|
|||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash
and cash equivalents
|
$ | - | $ | 24,212 | ||||
Prepaid
expenses
|
- | 1,855 | ||||||
Total
current assets
|
$ | - | $ | 26,067 | ||||
LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Advance
from Stockholder
|
$ | - | $ | 100 | ||||
Accounts
payable
|
8,000 | 2,429 | ||||||
Notes
payable - Stockholders
|
69,751 | - | ||||||
Interest
payable - Stockholders
|
11,367 | - | ||||||
89,118 | 2,529 | |||||||
LONG
TERM LIABILITIES:
|
||||||||
Notes
payable - Stockholders
|
- | 69,751 | ||||||
Interest
payable - Stockholders
|
- | 5,612 | ||||||
Total
long-term liabilities
|
- | 75,363 | ||||||
TOTAL
LIABILITIES
|
89,118 | 77,892 | ||||||
COMMITMENTS
AND CONTINGENCIES
|
||||||||
STOCKHOLDERS'
DEFICIT:
|
||||||||
Preferred
stock, $0.0001 par value, 10,000,000 shares authorized, none
issued
|
- | - | ||||||
Common
stock, $0.0001 par value, 100,000,000 shares authorized, 6,500,000 shares
issued and outstanding
|
650 | 650 | ||||||
Additional
paid-in capital
|
6,849 | 6,849 | ||||||
Deficit
accumulated during development stage
|
(96,617 | ) | (59,324 | ) | ||||
Total
stockholders' equity deficit
|
(89,118 | ) | (51,825 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$ | - | $ | 26,067 |
The
accompanying notes are an integral part of these financial
statements.
F-2
PIER
ACQUISITION I, INC.
(A
Development Stage Company)
STATEMENTS
OF OPERATIONS
For the Period
|
Cumulative
|
|||||||||||
From August 14, 2008
|
From August 14, 2008
|
|||||||||||
For the year ended
|
(Date of Inception)
|
(Date of Inception)
|
||||||||||
July 31, 2010
|
To July 31, 2009
|
To July 31, 2010
|
||||||||||
Net
revenue
|
$ | - | $ | - | $ | - | ||||||
Expenses
|
37,293 | 59,324 | 96,617 | |||||||||
Net
loss
|
$ | (37,293 | ) | $ | (59,324 | ) | $ | (96,617 | ) | |||
Net
loss per common share - basic and diluted
|
$ | (0.01 | ) | $ | (0.01 | ) | ||||||
Weighted
average common equivalent shares outstanding - basic and
diluted
|
6,500,000 | 6,500,000 |
The
accompanying notes are an integral part of these financial
statements.
F-3
PIER
ACQUISITION I, INC.
(A
Development Stage Company)
STATEMENT
OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR
THE PERIOD FROM AUGUST 14, 2008 (DATE OF INCEPTION) TO JULY 31,
2010
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
During
|
Total
|
|||||||||||||||||||
Common Stock
|
Additional Paid
|
Development
|
Stockholders'
|
|||||||||||||||||
Shares
|
Amount
|
in Capital
|
Stage
|
Deficit
|
||||||||||||||||
Balance,
August 14, 2008 (Inception)
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Sale
of common stock on September 5, 2008 for cash, @ $0.00076923 per
share.
|
6,500,000 | 650 | 4,350 | - | 5,000 | |||||||||||||||
Sale
of warrants with common stock on September 5, 2008 for cash, @ $0.00038462
per warrant.
|
- | - | 2,499 | - | 2,499 | |||||||||||||||
Net
loss
|
- | - | - | (59,324 | ) | (59,324 | ) | |||||||||||||
Balance,
July 31, 2009
|
6,500,000 | 650 | 6,849 | (59,324 | ) | (51,825 | ) | |||||||||||||
Net
loss
|
- | - | - | (37,293 | ) | (37,293 | ) | |||||||||||||
Balance,
July 31, 2010
|
6,500,000 | $ | 650 | $ | 6,849 | $ | (96,617 | ) | $ | (89,118 | ) |
The
accompanying notes are an integral part of these financial
statements.
F-4
PIER
ACQUISITION I, INC.
(A
Development Stage Company)
STATEMENTS
OF CASH FLOWS
For the Period
|
Cumulative
|
|||||||||||
From August 14, 2008
|
From August 14, 2008
|
|||||||||||
For the year ended
|
(Date of Inception)
|
(Date of Inception)
|
||||||||||
July 31, 2010
|
To July 31, 2009
|
To July 31, 2010
|
||||||||||
CASH
FLOWS (TO) FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
loss
|
$ | (37,293 | ) | $ | (59,324 | ) | $ | (96,617 | ) | |||
Adjustment
to reconcile net loss to net cash used in operating
activities
|
||||||||||||
(Increase)
decrease in prepaid expenses
|
1,855 | (1,855 | ) | - | ||||||||
Increase
in interest payable - Stockholders
|
5,755 | 5,612 | 11,367 | |||||||||
Increase
(decrease) in accounts payable
|
5,571 | 2,429 | 8,000 | |||||||||
Net
cash used in operating activities
|
(24,112 | ) | (53,138 | ) | (77,250 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Advance
from (repayment to) stockholder
|
(100 | ) | 100 | - | ||||||||
Notes
payable - Stockholders
|
- | 69,751 | 69,751 | |||||||||
Sale
of common stock
|
- | 5,000 | 5,000 | |||||||||
Sale
of warrants
|
- | 2,499 | 2,499 | |||||||||
Net
cash provided by financing activities
|
(100 | ) | 77,350 | 77,250 | ||||||||
NET
(DECREASE) INCREASE IN CASH & CASH EQUIVALENTS
|
(24,212 | ) | 24,212 | - | ||||||||
CASH
& CASH EQUIVALENTS, BEGINNING BALANCE
|
24,212 | - | - | |||||||||
CASH
& CASH EQUIVALENTS, ENDING BALANCE
|
$ | - | $ | 24,212 | $ | - | ||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||||
Interest
paid
|
$ | - | $ | - | $ | - | ||||||
Income
taxes paid
|
$ | - | $ | - | $ | - |
The
accompanying notes are an integral part of these financial
statements.
F-5
Pier
Acquisition I, Inc.
(A
Development Stage Company)
Notes
To Financial Statements
July
31, 2010 and 2009
and
for The Period From August 14, 2008
(Date
of Inception) to July 31, 2010
NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
History
Pier
Acquisition I, Inc. (the “Company”), a development stage company, was
incorporated under the laws of the State of Delaware on August 14, 2008. The
Company is in the development stage as defined in Statement of Financial
Accounting Standards (“SFAS”) No. 7. The fiscal year end is July
31.
Going
Concern and Plan of Operation
To date,
we have generated no sales revenues, have incurred significant expenses and have
sustained losses. Consequently, our operations are subject to all the risks
inherent in the establishment of a new business enterprise. For the period from
inception on August 14, 2008 through July 31, 2010, we have accumulated losses
of $96,617.
The
Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company is in the
development stage and has not earned any revenues from operations to date. These
conditions raise substantial doubt about its ability to continue as a going
concern.
The
Company is currently devoting its efforts to locating merger candidates. The
Company's ability to continue as a going concern is dependent upon its ability
to develop additional sources of capital, locate and complete a merger with
another company, and ultimately, achieve profitable operations. The accompanying
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying
disclosures. Although these estimates are based on management's best knowledge
of current events and actions the Company may undertake in the future, actual
results may differ from those estimates.
Cash
Equivalents
For
purposes of the statements of cash flows, we consider all highly liquid debt
instruments purchased with a maturity date of three months or less to be cash
equivalents. We maintain our cash in bank deposit accounts which, at times, may
exceed insured limits. We have not experienced any losses in our
accounts.
Concentrations
of Credit Risk
Financial
instruments and related items, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash and cash equivalents.
The Company places its cash and temporary cash investments with credit quality
institutions.
F-6
Fair
value of financial instruments
Our
short-term financial instruments, including cash, accounts payable and other
liabilities, consist primarily of instruments without extended maturities, the
fair value of which, based on management’s estimates, reasonably approximate
their book value. The fair value of long term notes is based on management
estimates and reasonably approximates their book value after comparison to
obligations with similar interest rates and maturities.
Income
Taxes
We utilize ASC 740 “Income Taxes” which
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred income taxes are
recognized for the tax consequences in future years of differences between the
tax bases of assets and liabilities and their financial reporting amounts at
each year-end based on enacted tax laws and statutory tax rates applicable to
the periods in which the differences are expected to affect taxable
income.
For
federal income tax purposes, substantially all startup and organizational
expenses must be deferred until the Company commences business. The
Company may elect a limited deduction of up to $5,000 in the taxable year in
which the trade or business begins. The $5,000 must be reduced by the
amount of startup costs in excess of $50,000. The remainder of the
expenses not deductible must be amortized over a 180-month period beginning with
the month in which the active trade or business begins. These expenses
will not be deducted for tax purposes and will represent a deferred tax
asset. The Company will provide a valuation allowance in the full amount
of the deferred tax asset since there is no assurance of future taxable
income. Tax deductible losses can be carried forward for 20 years until
utilized.
Loss
Per Share
We use
ASC 260, “Earnings Per Share” for calculating the basic and diluted loss per
share. We compute basic loss per share by dividing net loss and net loss
attributable to common shareholders by the weighted average number of common
shares outstanding. Basic and diluted loss per share are the same, in that any
potential common stock equivalents would have the effect of being anti-dilutive
in the computation of net loss per share. There were 6,500,000 common share
equivalents at July 31, 2010 and 2009. For the year ended July
31, 2010 and the initial period August 14, 2008 to July 31, 2009, these
potential shares were excluded from the shares used to calculate diluted
earnings per share as their inclusion would reduce net loss per
share.
Recently
Issued Accounting Pronouncements
Recent
accounting pronouncements issued by the FASB (including its Emerging Issues Task
Force), the AICPA, and the SEC did not, or are not believed by management to,
have a material impact on the Company's present or future financial
statements.
NOTE
2 - STOCKHOLDERS' EQUITY
Common
Stock
On
September 5, 2008, the Company sold for $3,749 cash and a $3,750 subscription
receivable 6,500,000 shares of its $0.0001 par value common stock and warrants
to purchase 6,500,000 shares of its $0.0001 par value common stock at an
exercise price of $.0004. The Company collected the subscriptions
receivable in the amounts of $1,500 and $2,250 on September 4, 2008 and January
7, 2009, respectively.
F-7
Warrants
The
following summarizes the warrant activity from the period from August 14, 2008
(date of inception) to July 31, 2010:
Weighted
|
Weighted
|
|||||||||||||||
Average
|
Number of
|
Average
|
||||||||||||||
Number of
|
Exercise
|
Warrants
|
Exercise
|
|||||||||||||
Warrants
|
Price
|
Exercisable
|
Price
|
|||||||||||||
Beginning
balance
|
-
|
-
|
-
|
-
|
||||||||||||
Granted
|
6,500,000
|
$
|
0.0004
|
6,500,000
|
$ |
0.0004
|
||||||||||
Forfeited
|
-
|
-
|
-
|
-
|
||||||||||||
Exercised
|
-
|
-
|
-
|
-
|
||||||||||||
Outstanding,
July 31, 2009
|
6,500,000
|
$
|
0.0004
|
6,500,000
|
$
|
0.0004
|
||||||||||
Granted
|
-
|
-
|
-
|
-
|
||||||||||||
Forfeited
|
-
|
-
|
-
|
-
|
||||||||||||
Exercised
|
-
|
-
|
-
|
-
|
||||||||||||
Outstanding,
July 31, 2010
|
6,500,000
|
$
|
0.0004
|
6,500,000
|
$
|
0.0004
|
At July
31, 2010, the range of warrant prices for shares under warrants and the
weighted-average remaining contractual life is as follows:
Outstanding Warrants
|
Exercisable Warrants
|
|||||||||||||||||
Average
|
Average
|
Average
|
||||||||||||||||
Exercise
|
Remaining
|
Remaining
|
||||||||||||||||
Price
|
Warrants
|
Contractual Life
|
Warrants
|
Contractual Life
|
||||||||||||||
$ | 0.0004 |
6,500,000
|
8.05
|
6,500,000
|
8.05
|
NOTE
3 - RELATED PARTY TRANSACTIONS
During
the year ended July 31, 2010, the Company paid a shareholder $11,275 for
business expenses. During the period from August 14, 2008 (date of
inception) through July 31, 2009, the Company paid a shareholder $1,171 for
business expenses. The officers and directors of the Company are involved
in other business activities and may, in the future, become involved in other
business opportunities that become available. Such persons may face a conflict
in selecting between the Company and their other business interests. The Company
has not formulated a policy for the resolution of such conflicts.
NOTE
4 - NOTES PAYABLE – STOCKHOLDERS
During
August and September of 2008, the Company received into escrow an aggregate
amount of $69,751 to pay for operating expenses. On September 8, 2008, the
advances were formalized as promissory notes, and have been presented as
long-term liabilities in the financial statements. The promissory notes are
unsecured, and due on or before the earlier of (i) December 31, 2010 or (ii) the
date that the Company consummates a business combination with a private company
in a reverse merger or reverse takeover transaction or other transaction after
which the Company would cease to be a shell company (as defined in Rule 12b-2
under the Securities Exchange Act of 1934, as amended). The promissory
notes accrue interest at 8.25% per annum. The interest is due and payable
at the maturity date. For the year ended July 31, 2010, the Company
accrued $5,755 of interest expense. For the period from August 14, 2008 (Date of
Inception) through July 31, 2009, the Company accrued $5,612 of interest
expense.
F-8
NOTE
5 - INCOME TAXES
The
Company utilizes ASC 740 “Income Taxes”, which requires the recognition of
deferred tax liabilities and assets for the expected future tax consequences of
events that have been included in the financial statements or tax returns. Under
this method, deferred tax liabilities and assets are determined based on the
difference between financial statement and tax bases of assets and liabilities
using enacted tax rates in effect for the year in which the differences are
expected to reverse. Temporary differences between taxable income reported for
financial reporting purposes and income tax purposes are
insignificant.
Deferred
start-up expenses for tax purposes of approximately $97,000 at July 31, 2010 are
available for carryover. We have provided a 100% valuation allowance for the
deferred tax benefit resulting from the deferred expenses due to our limited
operating history. In addressing the realizability of deferred tax assets,
management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences are deductible. The
valuation allowance increased by $13,000 in fiscal 2010 and increased by $20,000
in fiscal 2009. A reconciliation of the statutory Federal income tax rate and
the effective income tax rate for the years ended July 31, 2010 and 2009
follows.
Significant
components of deferred tax assets and liabilities are as follows:
July 31,
|
July 31,
|
|||||||
2010
|
2009
|
|||||||
Deferred
tax assets:
|
||||||||
Deferred
start-up expenses
|
33,000
|
20,000
|
||||||
Valuation
allowance
|
(33,000
|
)
|
(20,000
|
)
|
||||
Net
deferred tax assets
|
$
|
-
|
$
|
-
|
||||
Statutory
federal income tax rate
|
-34
|
%
|
-34
|
%
|
||||
State
income taxes, net of federal taxes
|
-7
|
%
|
-7
|
%
|
||||
Valuation
allowance
|
41
|
%
|
41
|
%
|
||||
Effective
income tax rate
|
0
|
%
|
0
|
%
|
F-9
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
Effective
September 20, 2010, we engaged RBSM, LLP (“RBSM”) as our principal
independent registered public accounting firm and dismissed AJ. Robbins P.C.
(“AJ. Robbins”). The decision to change its principal independent
registered public accounting firm was approved by the Company’s board of
directors.
The
report of AJ. Robbins on the Company’s financial statements for the year
ended July 31, 2009 and the period from August 14, 2008 (Inception) to July 31,
2009 did not contain any adverse opinion or a disclaimer of opinion and was not
qualified or modified as to uncertainty, audit scope or accounting principles,
except for an explanatory paragraph relative to the Company’s ability to
continue as a going. There were no disagreements with AJ. Robbins,
for the last two fiscal years or the interim through the date of the dismissal
on September 20, 2010, on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which, if not
resolved to the satisfaction of AJ. Robbins, would have caused it to make
reference to the subject matter of the disagreement(s) in connection with its
reports on the Company's financial statements for the fiscal year ended July 31,
2009 and for the period from August 14, 2008 (Inception) to August 31,
2008.
During
the two most recent fiscal years and the interim period through September 20,
2010, neither the Company nor anyone on its behalf consulted RBSM regarding
any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of
Regulation S-K
ITEM 9A.
|
CONTROLS AND
PROCEDURES
|
Evaluation
of Disclosure Controls and Procedures
Based on
management’s evaluation (with the participation of our CEO and Chief Financial
Officer (Principal Accounting Officer)), as of the end of the period covered by
this report, our CEO and Principal Accounting Officer have concluded that our
disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange
Act)), are effective to provide reasonable assurance that information required
to be disclosed by us in reports that we file or submit under the Exchange Act
is recorded, processed, summarized, and reported within the time periods
specified in SEC rules and forms, and is accumulated and communicated to
management, including our principal executive officer and principal financial
officer, as appropriate, to allow timely decisions regarding required
disclosure.
Changes
in Internal Control Over Financial Reporting
There
were no changes to our internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during
the period covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
Management
Report on Internal Control Over Financial Reporting
The
management of Pier Acquisition I, Inc. is responsible for establishing and
maintaining adequate internal control over financial reporting, as defined in
Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934.
Internal control over financial reporting is a process designed by, or under the
supervision of, the Company’s principal executive and principal accounting
officers to provide reasonable assurance to the Company’s management regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles. Internal control over financial reporting includes those
policies and procedures that:
|
·
|
pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the
Company;
|
|
·
|
provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the Company;
and
|
|
·
|
provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use
or disposition of the Company’s assets that could have a material effect
on the financial statements.
|
Because
of inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risks that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. A control system, no matter how well
designed and operated, can provide only reasonable, but not absolute, assurance
that the control system’s objectives will be met. The design of a control system
must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs.
16
Management
assessed the effectiveness of the Company’s internal control over financial
reporting as of July 31, 2010. In making this assessment, management used the
criteria set forth in Internal
Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”) as a guide. Based on this
assessment, our management concluded that, as of July 31, 2010, our internal
control over financial reporting were effective to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America.
Inherent
Limitations on Effectiveness of Controls
Our
management, including the CEO and Principal Accounting Officer, does not expect
that our disclosure controls or our internal control over financial reporting
will prevent or detect all error and all fraud. A control system, no matter how
well designed and operated, can provide only reasonable, not absolute, assurance
that the control system’s objectives will be met. The design of a control system
must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Further, because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that misstatements due to error or fraud will not
occur or that all control issues and instances of fraud, if any, have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns can occur because of simple
error or mistake. Controls can also be circumvented by the individual acts of
some persons, by collusion of two or more people, or by management override of
the controls. The design of any system of controls is based in part on certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Projections of any evaluation of controls effectiveness to
future periods are subject to risks. Over time, controls may become inadequate
because of changes in conditions or deterioration in the degree of compliance
with policies or procedures.
OTHER
INFORMATION
|
None.
PART III
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE
|
Directors
Identification
of Directors and Executive Officers. The following table sets forth
certain information regarding the Company’s directors and executive
officers:
Name
|
Age
|
Position
|
||
Philip
J. Huml
|
36
|
President
and Director
|
||
Katherine
Brady
|
41
|
Secretary,
Treasurer and Director
|
||
Anthony
DiGiandomenico
|
44
|
Director
|
The term
of office of each director expires at our annual meeting of stockholders or
until their successors are duly elected and qualified. Directors are
not compensated for serving as such. Officers serve at the discretion of the
Board of Directors.
Philip J.
Huml, the
Company's President and a director is currently a consultant working with middle
market and growth companies. Previously Mr. Huml was Managing Director of
Investment Banking at MDB Capital and focuses on corporate finance and capital
formation for growth-oriented companies both domestically and in Asia. Mr.
Huml started his career at Solomon Smith Barney. In 2000, Mr. Huml became
Vice President of corporate finance for Burnham Securities and opened their west
coast office. From 2005-2006, he was Vice President of institutional sales for
WestPark Capital. In December 2006, Mr. Huml joined Blackwater Capital
Group as Managing Director of their western banking and China operations. Prior
to starting in the brokerage community, Mr. Huml was the founder of two start-up
companies in the food and beverage industry. Mr. Huml attended the
University of Arizona and currently has his series 7, 63 and 65
licenses.
Katherine Brady, the Company’s
Secretary, Treasurer and a director began her career in finance in 1995 in New
York at DH Blair, a boutique investment banking firm. She then moved to
Los Angeles and became the CFO for Beechwood Financial in Santa Monica.
Beechwood Financial was a private investment company with holdings in private
and publicly traded companies. Katherine has recently been appointed
Chairperson for the Chaparral PFC Investment Committee. Katherine attended
the University of Nebraska and has her series 7 license.
17
Anthony DiGiandomenico, a
director, is the co-founder of MDB Capital, Mr. DiGiandomenico focuses on
corporate finance and capital formation for growth-oriented companies. He has
participated in all areas of corporate finance including private capital, public
offerings, PIPEs, business consulting and strategic planning, and mergers and
acquisitions. Mr. DiGiandomenico has also worked on a wide range of transactions
for growth-oriented companies in biotechnology, nutritional supplements,
manufacturing and entertainment industries. Prior to forming MDB Capital, Mr.
DiGiandomenico served as President and CEO of the Digian Company, a real estate
development company. Mr. DiGiandomenico holds an MBA from the Haas School of
Business at the University of California, Berkeley and a Bachelors of Science
Degree in Finance from the University of Colorado.
(b) Significant
Employees.
(c) Family
Relationships.
There
are no family relationships among directors, executive officers, or persons
nominated or chosen by the issuer to become directors or executive
officers.
(d) Involvement
in Certain Legal Proceedings.
There
have been no events under any bankruptcy act, no criminal proceedings and no
judgments, injunctions, orders or decrees material to the evaluation of the
ability and integrity of any director, executive officer, promoter or control
person of Registrant during the past five years.
(e) Prior
Blank Check Company Experience
As
indicated below, our management also serves as officers and directors
of:
Name
|
Filing Date
Registration
Statement
|
Operating
Status
|
SEC File
Number
|
Pending
Business
Combinations
|
Additional Information
|
|||||
Pier
Acquisition II, Inc.
|
January
13, 2009
|
Effective
|
000-53553
|
None.
|
Philip
J. Huml serves as President and director, Katherine Brady serves as
Secretary, Treasurer and director and Anthony DiGiandomenico serves as
director.
|
Compliance
with Section 16(a) of the Exchange Act
Section 16(a)
of the Exchange Act requires the Company’s directors and officers, and persons
who beneficially own more than 10% of a registered class of the Company’s equity
securities, to file reports of beneficial ownership and changes in beneficial
ownership of the Company’s securities with the SEC on Forms 3, 4 and 5.
Officers, directors and greater than 10% stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based
solely on the Company’s review of the copies of the forms received by it during
the fiscal years ended July 31, 2010, the Company believes that no
person(s) who, at any time during such fiscal year, was a director, officer or
beneficial owner of more than 10% of the Company’s common stock failed to comply
with all Section 16(a) filing requirements during such fiscal
years.
Nominating
Committee
Do to our
size, limited operations and concentration of ownership; we have not adopted any
procedures by which security holders may recommend nominees to our Board of
Directors.
Audit
Committee
The Board
of Directors acts as the audit committee. The Company does not have a qualified
financial expert at this time.
Code
of Ethics
We have
not adopted a "Code of Ethics” as a result of our shell status, limited
management and limited number of transactions, if any, conducted by the
company.
Item
11.Executive Compensation.
The
Company's officers and directors have not received any cash or
other remuneration since inception. They will not receive any
remuneration until the consummation of an acquisition. No
remuneration of any nature has been paid for on account of services rendered by
a director in such capacity. Our officers and directors intend to
devote very limited time to our affairs.
18
It is
possible that, after the Company successfully consummates a business combination
with an unaffiliated entity, that entity may desire to employ or retain members
of our management for the purposes of providing services to the surviving
entity. However, the Company has adopted a policy whereby the offer of any
post-transaction employment to members of management will not be a consideration
in our decision whether to undertake any proposed transaction.
No
retirement, pension, profit sharing, stock option or insurance programs or other
similar programs have been adopted by the Company for the benefit of its
employees.
There are
no understandings or agreements regarding compensation our management will
receive after a business combination that is required to be
disclosed.
The
Company does not have a standing compensation committee or a committee
performing similar functions, since the Board of Directors has determined not to
compensate the officers and directors until such time that the Company completes
a reverse merger or business combination.
Employment
Agreements
The
Company is not a party to any employment agreements.
Item
12.Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
The
following tables set forth certain information as of November 30, 2010,
regarding (i) each person known by the Company to be the beneficial owner of
more than 5% of the outstanding shares of Common Stock, (ii) each director,
nominee and executive officer of the Company and (iii) all officers and
directors as a group. All warrants described below are currently exercisable and
have an exercise price equal to $.0001.
Amount and
Nature of
|
||||||||
Name and Address
|
Beneficial
Ownership
|
Percentage
of Class
|
||||||
Philip
J. Huml (1)
|
2,600,000
|
(2)
|
33.33
|
%
|
||||
3902
Peartree Place
|
||||||||
Calabasas,
CA91302
|
||||||||
Katherine
Brady (3)
|
2,600,000
|
(4)
|
33.33
|
%
|
||||
24037
Chestnut Way
|
||||||||
Calabasas,
CA91302
|
||||||||
Anthony
DiGiandomenico (5)
|
2,600,000
|
(6)
|
33.33
|
%
|
||||
401
Wilshire Blvd. 1020
|
||||||||
Santa
Monica, CA90401
|
||||||||
The
Patrick Riordan Trust
|
1,950,000
|
(7)
|
26.09
|
%
|
||||
3902
Peartree Place
|
||||||||
Calabasas,
CA91302
|
||||||||
John
F. Baier
|
975,000
|
(8)
|
13.95
|
%
|
||||
3902
Peartree Place
|
||||||||
Calabasas,
CA91302
|
||||||||
The
Marie Baier Foundation (9)
|
975,000
|
(10)
|
13.95
|
%
|
||||
3902
Peartree Place
|
||||||||
Calabasas,
CA91302
|
||||||||
JK
Advisors, Inc. (11)
|
1,300,000
|
(12)
|
18.18
|
%
|
||||
3902
Peartree Place
|
||||||||
Calabasas,
CA91302
|
||||||||
All
Officers and
|
7,800,000
|
75
|
%
|
|||||
Directors
as a group
|
||||||||
(3
individuals)
|
(1)
|
Philip
J. Huml serves as President and a director of the
Company.
|
|
(2)
|
Includes
1,300,000 shares of common stock and a warrant to purchase 1,300,000
shares of common stock owned by Mr. Huml.
|
|
(3)
|
Katherine
Brady serves as the Secretary, Treasurer and a director of the
Company
|
19
(4)
|
Includes
1,300,000 shares of common stock and shares underlying a warrant to
purchase 1,300,000 shares of common stock owned by Ms.
Brady.
|
|
(5)
|
Anthony
DiGiandomenico serves as a director of the Company.
|
|
(6)
|
Includes
1,300,000 shares of common stock and shares underlying a warrant to
purchase 1,300,000 shares of common stock owned by Mr.
DiGiandomenico.
|
|
(7)
|
Includes
975,000 shares of common stock and shares underlying a warrant to purchase
975,000 shares of common stock owned by The Patrick Riordan
Trust.
|
|
(8)
|
Includes
487,500 shares of common stock and shares underlying a warrant to purchase
487,500 shares of common stock owned by John F. Baier.
|
|
(9)
|
The
Marie Baier Foundation is a private foundation. John Baier, a
stockholder of the Company, is the President of the
foundation. Mr. Baier does not own any part of the
foundation nor does he have any rights to the assets of the
foundation. The primary purpose of the Marie Baier Foundation
is to give grants to higher education, the arts, hospitals, and health and
human services.
|
|
(10)
|
Includes
487,500 shares of common stock and shares underlying a warrant to purchase
487,500 shares of common stock owned by the Marie Baier
Foundation.
|
|
(11)
|
JK
Advisor’s, Inc. provides consulting services to the
Company. John Brady, the husband of Katherine Brady, our
Secretary, Treasurer and a director and stockholder of the Company, is the
owner of J.K. Advisor’s, Inc.
|
|
(12)
|
Includes
650,000 shares of common stock and shares underlying a warrant to purchase
650,000 shares of common stock owned by JK Advisors,
Inc.
|
Item
13.Certain Relationships and Related Transactions.
On
September 5, 2008, the Company issued 650,000 shares of common stock and
warrants to purchase 650,000 shares of common stock to JK Advisors,
Inc. JK Advisors, Inc. is a stockholder of the Company and provides
consulting services to the Company. John Brady, the husband of
Katherine Brady, our Secretary and a director of the Company, is the owner of JK
Advisor’s, Inc. The officers and directors of the Company are
involved in other business activities and may, in the future, become involved in
other business opportunities that become available. Such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such
conflicts.
During
the year ended July 31, 2010, the Company paid consulting fees of $9,925 to JK
Advisors, Inc.
Except as
otherwise indicated herein, there have been no other related party transactions,
or any other transactions or relationships required to be disclosed pursuant to
Item 404 and Item 407(a) of Regulation S-K.
ITEM
14.
|
PRINCIPAL
ACCOUNTING FEES AND
SERVICES
|
The
following table summarizes the approximate aggregate fees expected to be billed
to us by our independent auditor for our 2010 and 2009 fiscal
years:
Type of Fees
|
2010
|
2009
|
||||||
Audit
Fees
|
$ |
12,500
|
$ |
-
|
||||
Audit
Related Fees
|
-
|
-
|
||||||
Tax
Fees
|
-
|
-
|
||||||
All
Other Fees
|
-
|
-
|
||||||
Total
Fees
|
$ |
12,500
|
$ |
-
|
Pre-Approval
of Independent Auditor Services and Fees
On
September 20, 2010, the Company engaged RBSM, LLP (“RBSM”) as its principal
independent registered public accounting firm. RBSM was engaged to audit our
financial statements for the years ended July 31, 2010 and 2009. The above table
represents the audit fees that RBSM is expected to bill us for the years ended
July 31, 2010 and 2009.
Our board
of directors reviewed and pre-approved all audit and non-audit fees for services
provided by RBSM, LLP and has determined that the provision of such services to
us during fiscal 2010 and 2009 is compatible with and did not impair
independence. It is the practice of the audit committee to consider and approve
in advance all auditing and non-auditing services provided to us by our
independent auditor in accordance with the applicable requirements of the SEC.
RBSM, LLP did not provide us with any services, other than those listed
above.
20
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT
SCHEDULES
|
|
1.
|
Financial Statements: See “Index
to Financial Statements” in Part II, Item 8 of this
Form 10-K.
|
|
2.
|
Exhibits: The exhibits listed in
the accompanying index to exhibits are filed or incorporated by reference
as part of this
Form 10-K.
|
Certain
of the agreements filed as exhibits to this Form 10-K contain
representations and warranties by the parties to the agreements that have been
made solely for the benefit of the parties to the agreement. These
representations and warranties:
|
·
|
may have been qualified by
disclosures that were made to the other parties in connection with the
negotiation of the agreements, which disclosures are not necessarily
reflected in the agreements;
|
|
·
|
may apply standards of
materiality that differ from those of a reasonable investor;
and
|
|
were made only as of specified
dates contained in the agreements and are subject to later
developments.
|
Accordingly,
these representations and warranties may not describe the actual state of
affairs as of the date they were made or at any other time, and investors should
not rely on them as statements of fact.
SIGNATURES
In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PIER
ACQUISITION I, INC.
|
||||
Dated:
December15, 2010
|
By:
|
/S/ Philip J. Huml
|
||
Philip
J. Huml,Chief Executive
Officer, Director
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
following capacities and on the dates indicated.
Name
|
|
Title
|
Date
|
|
/s/ Philip J. Huml
|
|
Chief Executive Officer and Principal Accounting Officer and Director
|
December
15,
|
|
2010
|
||||
/s/
Katherine Brady
|
Director
|
December
15,
|
||
2010
|
||||
/s/ Anthony
|
Director
|
December
15,
|
||
DiGiandomenico
|
2010
|
21
EXHIBITS
LIST
INDEX
TO EXHIBITS
Exhibit
|
Description
|
*3.1
|
Certificate
of Incorporation
|
|
*3.2
|
By-laws
|
|
31.1
|
Certification
of the Company’s Principal Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certification
of the Company’s Principal Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
|
|
32.1
|
Certification
of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section
1350
|
|
32.1
|
Certification
of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section
1350
|
*
|
Filed
as an exhibit to the Company's registration statement on Form 10-SB, as
filed with the Securities and Exchange Commission on January 13, 2009 and
incorporated herein by this
reference.
|
22