Attached files
file | filename |
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EX-31.2 - Pier Acquisition I, Inc. | v204921_ex31-2.htm |
EX-32.2 - Pier Acquisition I, Inc. | v204921_ex32-2.htm |
EX-31.1 - Pier Acquisition I, Inc. | v204921_ex31-1.htm |
EX-32.1 - Pier Acquisition I, Inc. | v204921_ex32-1.htm |
WASHINGTON,
DC 20549
FORM
10-Q
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
Quarterly Period Ended October 31, 2009
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 Small Business Issuer as Specified in its Charter)
DELAWARE
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94–3436298
|
|||
(State
or Other Jurisdiction
Incorporation
or Organization)
|
|
|
(IRS
Employer
Identification
No.)
|
c/o
Brandon Hill
Hill
Financial Advisors
2815
Townsgate Road, Suite 100
Westlake Village, CA
91361
(Address
of principal executive offices)
(Registrant's
telephone number, including area code) (805) 449-1132
3902 Peartree Place,
Calabasas, CA 91302, (310) 367-6667
(Former
Name or Former Address, if Changed Since Last Report)
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. YES ¨ NO x
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files). YES ¨ NO
¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in rule 12b-2 of the Exchange Act. (Check one):
Large
Accelerated filer ¨
|
Accelerated
filer ¨
|
|
Non-accelerated
filer ¨
|
Smaller
reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). YES x NO ¨
Indicate
the number of shares outstanding of each of the issuer’s classes of common
equity as of the latest practicable date: As of November 30, 2010 the issuer had
6,500,000 shares of common stock, par value $.0001 per share,
outstanding.
FORM
10-Q
For the
quarterly period ended October 31, 2009
INDEX
Page
|
|||
PART
I
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FINANCIAL
INFORMATION
|
||
Item
1
|
Condensed
Balance Sheets at July 31, 2009 and October 31, 2009 (unaudited at October
31, 2009)
|
4
|
|
Condensed
Statements of Operations for the three months ended October 31, 2009, for
the period from August 14, 2008 (Date of Inception) to October 31, 2008
and for the period August 14, 2008 (inception) to October 31, 2009
(unaudited)
|
5
|
||
Condensed
Statement of Changes in Stockholders’ Equity for the period from August
14, 2008 (inception) to October 31, 2009 (unaudited)
|
6
|
||
Condensed
Statements of Cash Flows for the three months ended October 31, 2009, for
the period from August 14, 2008 (Date of Inception) to October 31, 2008
and for the period August 14, 2008 (inception) to October 31, 2009
(unaudited)
|
7
|
||
Notes
to Condensed Financial Statements (unaudited)
|
8
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||
Item
2
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Management’s
Discussion and Analysis or Plan of Operation
|
10
|
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Item
3
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Quantitative
and Qualitative Disclosures About Market Risk
|
18
|
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Item
4
|
Controls
and Procedures
|
18
|
|
PART
II
|
Other
Information
|
20
|
|
Item
1
|
Legal
Proceedings
|
20
|
|
Item
2
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
20
|
|
Item
3
|
Defaults
Upon Senior Securities
|
20
|
|
Item
4
|
(Removed
and Reserved)
|
20
|
|
Item
5
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Other
Information
|
20
|
|
Item
6
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Exhibits
|
20
|
|
Signatures
|
20
|
2
ADVISEMENT
Unless
the context requires otherwise, “Pier Acquisition I”, “
the Company ”, “ we ”, “ us ”, “ our ” and similar terms refer
to Pier Acquisition I, Inc. Our common stock, par value $.0001 per share is
commonly referred to in this quarterly report as our “common shares” or “common
stock”. The information in this quarterly report is
current as of the date of this quarterly report (October 31, 2009), unless
another date is specified.
We
prepare our interim financial statements in accordance with United States
generally accepted accounting principles. Our financial condition and
results of operations for the three-month interim period ended October 31, 2009
are not necessarily indicative of our prospective financial condition and
results of operations for the pending full fiscal year ended July 31, 2010.
The interim financial statements presented in this quarterly report as
well as other information relating to our company contained in this quarterly
report should be read in conjunction and together with any reports, statements
and information filed with the SEC.
FORWARD
LOOKING STATEMENTS
In this
quarterly report we make a number of statements, referred to as “forward-looking
statements”, within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), which
are intended to convey our expectations or predictions regarding the occurrence
of possible future events or the existence of trends and factors that may impact
our future plans and operating results. 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 use
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.
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 report as well as our public filings with the Securities and
Exchange Commission. 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
report or any other filing to reflect new events or circumstances unless and to
the extent required by applicable law.
3
PART
I
FINANCIAL
INFORMATION
PIER
ACQUISITION I, INC.
(A
Development Stage Company)
CONDENSED
BALANCE SHEETS
October
31,
|
July
31,
|
|||||||
2009
|
2009
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash
and cash equivalents
|
$ | 10,125 | $ | 24,212 | ||||
Prepaid
expenses
|
- | 1,855 | ||||||
Total
current assets
|
$ | 10,125 | $ | 26,067 | ||||
LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Advance
from Stockholder
|
$ | 100 | $ | 100 | ||||
Accounts
payable
|
2,000 | 2,429 | ||||||
2,100 | 2,529 | |||||||
LONG
TERM LIABILITIES:
|
||||||||
Notes
payable - Stockholders
|
69,751 | 69,751 | ||||||
Interest
payable - Stockholders
|
7,062 | 5,612 | ||||||
Total
long-term liabilities
|
76,813 | 75,363 | ||||||
TOTAL
LIABILITIES
|
78,913 | 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
|
(76,287 | ) | (59,324 | ) | ||||
Total
stockholders' deficit
|
(68,788 | ) | (51,825 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$ | 10,125 | $ | 26,067 |
The
accompanying notes are an integral part of these unaudited condensed financial
statements.
4
PIER
ACQUISITION I, INC.
(A
Development Stage Company)
CONDENSED
STATEMENTS OF OPERATIONS
(Unaudited)
For
the Period
|
Cumulative
|
|||||||||||
For
the Three
|
From
August 14, 2008
|
From
August 14, 2008
|
||||||||||
Months
Ended
|
(Date
of Inception)
|
(Date
of Inception)
|
||||||||||
October 31, 2009
|
to October 31, 2008
|
To October 31, 2009
|
||||||||||
Net
revenue
|
$ | - | $ | - | $ | - | ||||||
Expenses
|
16,963 | 32,169 | 76,287 | |||||||||
Net
loss
|
$ | (16,963 | ) | $ | (32,169 | ) | $ | (76,287 | ) | |||
Net
loss per common share - basic and diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | ||||||
Weighted
average common equivalent shares outstanding - basic and
diluted
|
6,500,000 | 6,500,000 |
The
accompanying notes are an integral part of these unaudited
condensed financial statements.
5
PIER
ACQUISITION I, INC.
(A
Development Stage Company)
CONDENSED
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR
THE PERIOD FROM AUGUST 14, 2008 (DATE OF INCEPTION) TO OCTOBER 31,
2009
(Unaudited)
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
|
- | - | - | (16,963 | ) | (16,963 | ) | |||||||||||||
Balance,
October 31, 2009
|
6,500,000 | $ | 650 | $ | 6,849 | $ | (76,287 | ) | $ | (68,788 | ) |
The
accompanying notes are an integral part of these unaudited
condensed financial statements.
6
PIER
ACQUISITION I, INC.
(A
Development Stage Company)
CONDENSED
STATEMENTS OF CASH FLOWS
(Unaudited)
For
the Period
|
Cumulative
|
|||||||||||
For
the Three
|
From
August 14, 2008
|
From
August 14, 2008
|
||||||||||
Months
Ended
|
(Date
of Inception)
|
(Date
of Inception)
|
||||||||||
October
31, 2009
|
to
October 31, 2008
|
To
October 31, 2009
|
||||||||||
CASH
FLOWS (TO) FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
loss
|
$ | (16,963 | ) | $ | (32,169 | ) | $ | (76,287 | ) | |||
Adjustment
to reconcile net loss to net cash used in operating
activities
|
||||||||||||
Increase
in accounts payable - related party
|
- | 478 | - | |||||||||
Decrease
in prepaid expenses
|
1,855 | - | - | |||||||||
Increase
in interest payable - Stockholders
|
1,450 | 1,308 | 7,062 | |||||||||
Increase
(decrease) in accounts payable
|
(429 | ) | 6,250 | 2,000 | ||||||||
Net
cash used in operating activities
|
(14,087 | ) | (24,133 | ) | (67,225 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Advance
from stockholder
|
- | 100 | 100 | |||||||||
Notes
payable - Stockholders
|
- | 69,751 | 69,751 | |||||||||
Sale
of common stock
|
- | 3,500 | 5,000 | |||||||||
Sale
of warrants
|
- | 1,749 | 2,499 | |||||||||
Net
cash provided by financing activities
|
- | 75,100 | 77,350 | |||||||||
NET
INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS
|
(14,087 | ) | 50,967 | 10,125 | ||||||||
CASH
& CASH EQUIVALENTS, BEGINNING BALANCE
|
24,212 | - | - | |||||||||
CASH
& CASH EQUIVALENTS, ENDING BALANCE
|
$ | 10,125 | $ | 50,967 | $ | 10,125 | ||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||||
Interest
paid
|
$ | - | $ | - | $ | - | ||||||
Income
taxes paid
|
$ | - | $ | - | $ | - | ||||||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING:
|
||||||||||||
Stock
subscription receivable
|
$ | - | $ | 2,250 | $ | - |
The
accompanying notes are an integral part of these unaudited condensed financial
statements.
7
Pier
Acquisition I, Inc.
Notes
To Condensed Financial Statements
For
the Three Months Ended October 31, 2009 and 2008
And
For The Period From August 14, 2008
(Date
of Inception) to October 31, 2009
(Unaudited)
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 a development stage entity as defined in Financial Accounting
Standards Board Accounting Standards Codification (“ASC”) Topic 915,
“Development Stage Entities.” The fiscal year end is July
31.
Business
and Basis of Presentation
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 October 31, 2009, we have accumulated
losses of $76,287.
The
accompanying unaudited condensed financial statements as of October 31, 2009 and
for the three month periods ended October 31, 2009 and 2008 and from date of
inception as a development stage enterprise (August 14, 2008) to October 31,
2009 have been prepared by the Company pursuant to the rules and regulations of
the Securities and Exchange Commission, including Form 10-Q and Regulation S-X.
The information furnished herein reflects all adjustments (consisting of normal
recurring accruals and adjustments) which are, in the opinion of management,
necessary to fairly present the operating results for the respective periods.
Certain information and footnote disclosures normally present in annual
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been omitted pursuant to such
rules and regulations. The Company believes that the disclosures provided are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the audited financial statements
and explanatory notes for the fiscal year ended July 31, 2009 as disclosed in
the company's 10-K for that year as filed with the SEC, as it may be
amended.
The
results of the three months ended October 31, 2009 are not necessarily
indicative of the results to be expected for the pending full year ending July
31, 2010.
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.
8
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.
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 October 31, 2009 and 2008. For the three months ended
October 31, 2009 and 2008, these potential shares were excluded from the
shares used to calculate diluted earnings per share as their inclusion would
reduce net loss per share.
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.
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
- RELATED PARTY TRANSACTIONS
During
the three months ended October 31, 2009, the Company paid a shareholder
$1,350 for business expenses. For the period from August 14, 2008 (date of
inception) through October 31, 2009, the Company paid a shareholder $2,521
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
3 - NOTES PAYABLE – STOCKHOLDERS
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.
9
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.
10
The
following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our financial statements and notes
thereto and other financial information included elsewhere in this report.
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 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 the value of our
shares issued for compensation and our net operating loss for tax purposes.
Actual results could differ from those estimates.
Going
Concern - The financial
statements have been prepared on a going concern basis, and do not reflect any
adjustments related to the uncertainty surrounding our recurring losses or
accumulated deficit. At present, we have insufficient capital on hand
to fund our operations. 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.
Results
of Operations
Comparison
of the Three Month Period Ended October 31, 2009 to the initial period August
14, 2008 (Inception) to October 31, 2008
The
Company has not conducted any active operations since inception, except for its
efforts to organize, secure initial capital, file Exchange Act reports and
locate suitable acquisition candidates. We had no revenue in the quarterly
period ended October 31, 2009 or the initial period August 14, 2008 to October
31, 2008. Operating expenses decreased from $32,169 in 2008 to
$16,963 in 2009, a decrease of $15,206, or 47%. The decrease results primarily
from a decrease in professional fees. The primary components of our current
operating expenses are professional fees.
As our
current focus is on our Acquisition Strategy, we do not believe that quarter to
quarter and year to year comparisons of our historical results of operations are
meaningful in predicting our future financial performance. We
currently have no revenue generating activities. Accordingly, it is anticipated
that our results of operations will fluctuate from quarter to quarter and from
fiscal year to fiscal year.
Liquidity
and Capital Resources
As of
October 31, 2009 we had working capital of $8,025. Our cash on hand on at
October 31, 2009 of approximately $10,000 is insufficient to satisfy our
immediate financial needs or provide us with sufficient capital to maintain our
business and to finance acquisitions. Ultimately management anticipates needing
to need to raise additional funds in order to continue operating. 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 (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.
11
UNCERTAINTIES
AND OTHER RISK FACTORS THAT
MAY
AFFECT OUR FUTURE RESULTS AND FINANCIAL CONDITION
We
have described below a number of uncertainties and risks which, in addition to
uncertainties and risks presented elsewhere in this Quarterly 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 Quarterly 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 Quarterly 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.
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.
12
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
October 31, 2009, we have incurred a cumulative net loss of
$76,287. 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.
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.
13
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.
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.
14
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.
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.
15
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.
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.
16
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.
|
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.
17
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
3. Quantitative and Qualitative Disclosures About Market Risk
A smaller
reporting company is not required to provide the information required by this
Item.
Item
4. Controls and Procedures
We
maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) that are designed to be effective in providing reasonable assurance that
information required to be disclosed in our reports under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission (the “ SEC”),
and that such information is accumulated and communicated to our management to
allow timely decisions regarding required disclosure.
In
designing and evaluating disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable, not absolute assurance of achieving the
desired objectives. Also, 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. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance 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. The
design of any system of controls is based, in part, upon 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.
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 as of the end of the period covered by this report 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.
18
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.
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.
19
OTHER
INFORMATION
Item
1. Legal Proceedings
None
Item
2. Unregistered Sales of Equity Securities
None
Item
3. Defaults Upon Senior Securities
None
Item
4. (Removed and Reserved)
Item
5. Other Information
None
Item
6. Exhibits
31.1
Certification of the Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
31.2
Certification of the Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
32.1
Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section
1350
32.2
Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section
1350
SIGNATURES
In
accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, duly authorized.
PIER
ACQUISITION I, INC.
By:
|
/s/ Philip J. Huml
|
|
Philip
J. Huml, Chief Executive Officer and Principal
|
||
Accounting
Officer and Director
|
Dated:
December 15, 2010
20