Attached files
FORM S-1 OF SWORDFISH VENTURES INC.
As Filed With the Securities and Exchange Commission on April 27,
2011
Registration No. 333-165985
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1/A-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SWORDFISH VENTURES INC.
(Exact name of registrant as specified in its charter)
Nevada 7370
N/A
(State or other jurisdiction (Primary Standard Industrial
(IRS Employer
of organization) Classification Code)
Identification #)
Room B3 20th Floor Boldwin Industrial Building
16-18 Wah Sing Street, Kwai Chung N.T. Hong Kong
T: (852) 69463282 F: (949)272-0088
Incorp Services, Inc., 375 N. Stephanie St. Ste 1411
Henderson, Nevada, 89014-8909 800-737-3372)
with a copy to:
Catalyst Capital Img
Unit 232 2498 w. 41st.
Vancouver, B.C. V6N 2A7
(949)272-0088
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after the effective date of this Registration
Statement.
If any of the securities being registered on the Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933 check the following box: [X]
If this Form is filed to register additional common stock for an
offering under Rule 462(b) of the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering.
If this Form is a post-effective amendment filed under Rule 462(c)
of the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed under Rule 462(d)
of the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of
the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if smaller reporting company)
CALCULATION OF REGISTRATION FEE
=====================================================================
Securities to be Amount To Be Offering Price Aggregate
Registration
be Registered Registered Per Share Offering Price Fee [1]
--------------------------------------------------------------------------------
Common Stock: 2,000,000 0.01 $20,000 $1.43
=====================================================================
[1] Estimated solely for purposes of calculating the registration
fee under Rule 457.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF
1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT
TO SAID SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
SWORDFISH VENTURES INC.
SHARES OF COMMON STOCK
1,000,000 MINIMUM - 2,000,000 MAXIMUM
Before this offering, there has been no public market for our common
stock. In the event that we sell at least the minimum number of
shares in this offering, of which there is no assurance, we intend
to have our shares of common stock quoted on the Over the Counter
Bulletin Board operated by the Financial Industry Regulatory
Authority. There is no assurance that our shares will ever be quoted
on the Over the Counter Bulletin Board.
We are offering, under best efforts, a minimum of 1,000,000 up
to a maximum of 2,000,000 shares of our common stock in a direct public
offering, without any involvement of underwriters or broker-dealers.
The offering price is $0.01 per share. In the event that
1,000,000 shares are not sold within 270 days, all money received
by us will be promptly returned to you without interest or deduction
of any kind.
However, future actions by creditors in the subscription period
could preclude or delay us in refunding your money. If at least
1,000,000 shares are sold within 270 days, all money received will
be retained by us and there will be no refund. Funds will be held in
a separate bank account at US Bank, 2385 North Oxnard Boulevard,
Oxnard, CA, 93136. The banks telephone number is (805)604-2200.
Sold securities are deemed securities which have been paid for with
collected funds prior to expiration of 270 days. Collected funds
are deemed funds that have been paid by the drawee bank. The
foregoing account is not an escrow, trust or similar account.
The account into which proceeds will be deposited is not a trust
or escrow, it is merely a separate account under our control where
we have segregated your funds. As a result, creditors could
attach the funds.
There is no minimum purchase requirement and there are no
arrangements to place the funds in an escrow, trust, or similar
account.
Our common stock will be sold on our behalf by Gao Hai, our sole
officer and director. Mr. Hai will not receive any commissions or
proceeds from the offering for selling shares on our behalf.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE RISK FACTORS
STARTING AT PAGE 4.
Offering Price Expenses Proceeds to Us
-------------- -------- --------------
Per Share - Minimum $ 0.01 $0.005 $0.005
Per Share - Maximum $ 0.01 $0.0025 $0.0075
Minimum $ 10,000 $5,000 $5,000
Maximum $ 20,000 $5,000 $15,000
In the situation where the minimum amount of shares (1,000,000)
is sold, we will incur an expense of $5,000 or $0.005 per share.
If we sell the maximum amount of shares (2,000,000) we will incur an
expense of $5,000 or $0.0025 per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is April 27, 2011.
The prospectus will not be used prior to the effective date
of the registration statement.
TABLE OF CONTENTS
Page No.
--------
Summary of Prospectus 3
Risk Factors 4
Use of Proceeds 7
Determination of Offering Price 8
Dilution of the Price You Pay for Your Shares 8
Plan of Distribution; Terms of the Offering 11
Managements Discussion and Analysis of Financial Condition
and Results of Operations 14
Business 16
Management 18
Executive Compensation 19
Principal Shareholders 20
Description of Securities 21
Certain Transactions 22
Litigation 22
Experts 23
Legal Matters 23
Financial Statements 24
2
SUMMARY OF OUR OFFERING
OUR BUSINESS
We were incorporated on October 29, 2009. We are a development stage
company. We do not have any revenues or operations, and we have
minimal assets and have incurred losses since inception. We
intend to open karaoke studios in various locations in China, and
serve food and beverage to our patrons in those locations.
We have no revenues, have achieved losses since inception, have no
operations, have been issued a going concern opinion and rely upon
the sale of our securities and loans from our officer and director
to fund operations. Also, we have no guarantee that we will be able
to generate revenues in the future.
While we are still in our development stage, Mr. Hai
intends to continue contacting with club and lounge owners to
place our business. We expect to incur costs between $500 to
$1,000 to negotiate and discuss our proposed plan to potential club
and lounge owners who wish to lend space for our business free of
charge.
We propose to club and lounge owners that our service directly
complements with their businesses. Our karaoke service is expected to
assist in drawing in more patrons to the facility, and thus, may
increase overall revenues for the club or lounge owner willing to offer
us empty floor space. We intend to have an arrangement where the club
or lounge will lend us space for free, while we generate revenues by
renting out our karaoke equipment and selling food and beverages. No
government approval is necessary to apply for a business license,
however, we may be required to obtain a liquor license.
Our business intends to generate revenue by renting out our
studios facility where we offer our karaoke service, which is our library
of music, to patrons. We intend on charging 100 CNY (15 US) per
hour for renting out the karaoke studio. Furthermore, we intend on
selling food and beverage in our studios to complement our services.
The food and beverages will be provided by the club or lounge that the
studio is located in and we intend to be entitled to 1/3 sharing of the
net profits. Waitresses will visit each room occasionally to see if the
customers would like any refreshments.
Songs will be acquired from domestic artists within South East Asia.
We will be required to pay a daily charge of 12 yuan ($1.56 US) for
each karaoke studio to the National Copyright Administration for the
use of copyrighted songs.
Currently, we do not have any secure locations for our studios.
Once we are funded we will actively explore, negotiate and secure a
location for our first studio. Once it is open, we expect the studio will
mainly be used in the evenings and weekends.
Our business since inception had an average monthly burn rate of $596.
Once we begin to implement our proposed business our burn rate is
approximately $416 to $1,250 each month in the event that we raise the
minimum or maximum amount, respectively. We expect to have a positive
cash flow once operations are fully functional after the 12-month period,
as explained in our Plan of Operations.
We have not conducted any market research into the likelihood of
success of our operations or the acceptance of our services
by the public.
Our administrative office is located at Room B3 20TH Floor Boldwin
Industrial Building. Wah Sing Street, Kwai Chung, N.T. Hong Kong.
Phone: 852-694-63282 Fax:(852) 69463282. Our fiscal year end is
February 28.
Management or affiliates thereof will not purchase shares in this
offering in order to reach the minimum.
THE OFFERING
Following is a brief summary of this offering:
Securities being offered A minimum of 1,000,000 shares of
common stock
and a maximum of 2,000,000 shares
of common
stock, par value $0.001.
Offering price per share $0.01
Offering period Our shares are being offered for a
period not
to exceed 270 days.
Net proceeds to us Approximately $5,000 assuming the
minimum
numbers of shares are sold.
Approximately
$15,000 assuming the maximum
number of shares
is sold.
Use of proceeds We intend to use the proceeds to pay
for offering
expenses, the implementation of
our business
plan, and for working capital.
Number of shares outstanding
before the offering 4,000,000
Number of shares outstanding
after the offering if all
of the shares are sold 6,000,000
3
SELECTED FINANCIAL DATA
The following financial information summarizes the more complete
historical financial information at the end of this prospectus.
As of February 28, 2010 As of August 31, 2010
----------------------- ---------------------
(unaudited) (unaudited)
BALANCE SHEET
Total Assets $ 0 $ 0
Total Liabilities $ 1,367 $ 1,367
Stockholders Deficit $ (1,367) $ (1,367)
October 29, 2009 (Inception) to Six Months To
February 28, 2010 August 31, 2010
---------------- -------------------
(unaudited) (unaudited)
INCOME STATEMENT
Revenue $ 0 $ 0
Total Expenses $ 5,367 $ 0
Net Loss $ 5,367 $ 0
Net Loss Per Share $ (0.00) $ (0.00)
RISK FACTORS
PLEASE CONSIDER THE FOLLOWING RISK FACTORS BEFORE DECIDING TO INVEST
IN OUR COMMON STOCK.
RISKS ASSOCIATED WITH SWORDFISH VENTURES INC.
BECAUSE OUR AUDITORS HAVE ISSUED A GOING CONCERN OPINION, THERE IS
SUBSTANTIAL UNCERTAINTY THAT WE WILL CONTINUE OPERATIONS IN WHICH
CASE YOU COULD LOSE YOUR INVESTMENT.
Our auditors have issued a going concern opinion. This means that
there is substantial doubt that we can continue as an ongoing
business for the next twelve months. The financial statements do not
include any adjustments that might result from the uncertainty about
our ability to continue in business. As such we may have to cease
operations and you could lose your investment.
OUR COMPANY IS OPERATED AND MANAGED BY ONE EMPLOYEE WHOM IS ALSO
THE SOLE DIRECTOR. THIS SOLE DIRECTOR WILL DETERMINE HIS SALARY AND
THERE MAY OR MAY NOT BE SUFFICIENT FUNDS AVAILABLE TO MAINTAIN HIS SALARY.
Due to the lack of funds available, the sole director must also be
the sole employee to operate the company. This employee will also
determine his own salary and perquisites. Our ability to achieve and
maintain a profitable and positive cash flow business will be dependent
on the financial decisions made by this sole employee.
WE LACK AN OPERATING HISTORY AND HAVE LOSSES THAT WE EXPECT TO
CONTINUE INTO THE FUTURE. THERE IS NO ASSURANCE OUR FUTURE
OPERATIONS WILL RESULT IN PROFITABLE REVENUES. IF WE CANNOT GENERATE
SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE WILL CEASE OPERATIONS
AND YOU WILL LOSE YOUR INVESTMENT.
We were incorporated on October 29, 2009 and we have not started our
proposed business operations or realized any revenues. We have no
operating history upon which an evaluation of our future success or
failure can be made. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon:
* completion of this offering;
* our ability to create a viable distribution and a data
collection mode for our service; and,
* Our ability to generate ad revenues through the use of our
service.
Our business will require a minimum of $10,000 in gross
proceeds, as illustrated in our Plan of Operations, to proceed
with our proposed business.
4
Based upon current plans, we expect to incur operating losses in
future periods since we will be incurring expenses and not
generating revenues. We cannot guarantee that we will be successful
in generating revenues in the future. Failure to generate revenues
will cause you to lose your investment.
IF WE DO NOT ATTRACT USERS, WE WILL NOT MAKE A PROFIT WHICH
ULTIMATELY WILL RESULT IN A CESSATION OF OPERATIONS.
We currently have no karaoke service being offered. We cannot
guarantee we will ever have any customers using this service. Even
if we obtain users, there is no guarantee that we will generate a
profit. If we cannot generate a profit, we will have to suspend or
cease operations.
WE ARE SOLELY DEPENDENT UPON THE FUNDS TO BE RAISED IN THIS OFFERING
TO START OUR BUSINESS, THE PROCEEDS OF WHICH MAY BE INSUFFICIENT TO
ACHIEVE REVENUES. IF WE NEED ADDITIONAL FUNDS AND ARE UNABLE TO
RAISE THEM WE WILL HAVE TO TERMINATE OUR OPERATIONS.
We have not yet started our business. We need the proceeds from this
offering to start our operations. If the minimum of $10,000 is
raised, the net amount to the company would be $5,000 which would allow
the company to operate at a burn rate of $416 per month. If the maximum
of $20,000 is raised, the net amount to the company would be $15,000
which would allow the company to operate at a burn rate of $1,250.
If we need additional funds and are unable to raise the money, we will
have to cease operations.
The activities we will undertake with the minimum amount raised
are as follows:
1. Development of our website to educate and connect with our
potential clients
2. Discussions and negotiations to secure a location to operate
3. Promote and market our business offering
4. Purchase equipments to conduct operations
IF WE DO NOT EARN A PROFIT, WE MAY HAVE TO SUSPEND OR CEASE OPERATIONS.
Since we are small and do not have much capital, we must limit
marketing our services. The sale of goods and services is how we
intend to initially generate revenues. Because we
intend on limiting our marketing activities, we may not
be able to attract enough customers to operate profitably.
If we cannot operate profitably, we may have to suspend
or cease operations.
BECAUSE OUR SOLE OFFICER AND DIRECTOR INTENDS ON DEVOTING LIMITED
TIME TO OUR OPERATIONS, OUR OPERATIONS MAY BE SPORADIC WHICH MAY RESULT
IN PERIODIC INTERRUPTIONS OR SUSPENSIONS OF OPERATIONS. THIS ACTIVITY
COULD PREVENT US FROM ATTRACTING CUSTOMERS AND RESULT IN A LACK OF REVENUES
THAT MAY CAUSE US TO SUSPEND OR CEASE OPERATIONS.
Our sole officer and director, Mr. Hai, intends on
devoting limited time to our operations. Mr. Hai, our president
and sole director intends on devoting approximately
20 hours per week of his working time to our operations.
Because our sole officer and director intends on
devoting limited time to our operations, our operations may
be sporadic and occur at times which are convenient to him.
As a result, operations may be periodically interrupted or
suspended which could result in a lack of revenues and a
possible cessation of operations.
BECAUSE WE HAVE ONLY ONE OFFICER AND DIRECTOR WHO HAS NO FORMAL
TRAINING IN FINANCIAL ACCOUNTING AND MANAGEMENT, WHO IS RESPONSIBLE
FOR OUR MANAGERIAL AND ORGANIZATIONAL STRUCTURE, IN THE FUTURE,
THERE MAY NOT BE EFFECTIVE DISCLOSURE AND ACCOUNTING CONTROLS TO
COMPLY WITH APPLICABLE LAWS AND REGULATIONS WHICH
COULD RESULT IN FINES, PENALTIES AND ASSESSMENTS AGAINST US.
We have only one officer and director. He has no formal training in
financial accounting and management; however, he is responsible for
our managerial and organizational structure which will include
preparation of disclosure and accounting controls under the Sarbanes
Oxley Act of 2002. When the disclosure and accounting controls
referred to above are implemented, he will be
responsible for the administration of them. Should he not have
sufficient experience, he may be incapable of creating and
implementing the controls which may cause us to be subject to
sanctions and fines by the SEC which ultimately
5
could cause you to lose your investment.
RISKS ASSOCIATED WITH THIS OFFERING:
BECAUSE WE DO NOT HAVE AN ESCROW OR TRUST ACCOUNT FOR YOUR
SUBSCRIPTION, IF WE FILE FOR BANKRUPTCY PROTECTION OR ARE FORCED
INTO BANKRUPTCY, OR A CREDITOR OBTAINS A JUDGMENT AGAINST US AND
ATTACHES THE SUBSCRIPTION, YOU WILL LOSE YOUR INVESTMENT.
Your funds will not be placed in an escrow or trust account.
Accordingly, if we file for bankruptcy protection or a petition for
involuntary bankruptcy is filed by creditors against us, your funds
will become part of the bankruptcy estate and administered according
to bankruptcy laws. If a creditor sues us and obtains a judgment
against us, the creditor could garnish the bank account and take
possession of the subscriptions. As such, if the minimum conditions
of this
offering are not satisfied, it is possible that a creditor could
attach your subscription which could preclude or delay the return of
money to you. If that happens, you will lose your investment and
your funds will be used to pay creditors.
BECAUSE OUR SOLE OFFICER AND DIRECTOR WHO IS ALSO OUR SOLE PROMOTER,
WILL OWN 80% OF OUR TOTAL OUTSTANDING COMMON STOCK IF THE MINIMUM
AMOUNT OF THE OFFERING IS SOLD AND 67% OF OUR TOTAL OUTSTANDING
COMMON STOCK OF THE MAXIMUM AMOUNT OF THE OFFERING IS SOLD, HE WILL
RETAIN CONTROL OF US AND WILL BE ABLE TO DECIDE
WHO WILL BE DIRECTORS AND YOU MAY NOT BE ABLE TO ELECT ANY DIRECTORS
WHICH COULD DECREASE THE PRICE AND MARKETABILITY OF OUR SHARES.
Even if we sell all 2,000,000 shares of common stock in this
offering, Gao Hai will own 66.67% of the total outstanding common
stock; if the minimum amount of the offering is sold he will own 80%
of the total outstanding common stock. As a result, after completion
of this offering, regardless of the number of shares we sell, Mr.
Hai will be able to elect all of our directors and
control our operations, which could decrease the price and
marketability of our shares.
BECAUSE THERE IS NO PUBLIC TRADING MARKET FOR OUR COMMON STOCK, YOU
MAY NOT BE ABLE TO RESELL YOUR STOCK.
There is currently no public trading market for our common stock.
Therefore there is no central place, such as stock exchange or
electronic trading system, to resell your shares. If you want to
resell your shares, you will have to locate a buyer and negotiate
your own sale.
BECAUSE THE SEC IMPOSES ADDITIONAL SALES PRACTICE REQUIREMENTS ON
BROKERS WHO DEAL IN OUR SHARES THAT ARE PENNY STOCKS, SOME BROKERS
MAY BE UNWILLING TO TRADE THEM. THIS MEANS THAT YOU MAY HAVE
DIFFICULTY RESELLING YOUR SHARES AND THIS MAY CAUSE THE PRICE OF OUR
SHARES TO DECLINE.
6
Our shares would be classified as penny stocks and are covered by
Section 15(g) of the Securities Exchange Act of 1934 and the rules
promulgated there under which impose additional sales practice
requirements on brokers/dealers who sell our securities in this
offering or in the aftermarket. For sales of our securities, the
broker/dealer must make a special suitability determination and
receive from you a written agreement prior to making a sale for you.
Because of the imposition of the foregoing additional sales
practices, it is possible that brokers will not want to make a
market in our shares. This could prevent you from reselling your
shares and may cause the price of our shares to decline.
FINRA SALES PRACTICE REQUIREMENTS MAY LIMIT A STOCKHOLDERS ABILITY
TO BUY AND SELL OUR STOCK.
The FINRA has adopted rules that require that in recommending an
investment to a customer, a broker-dealer must have reasonable
grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to
their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers
financial status, tax status, investment objectives and other
information. Under interpretations of these rules, FINRA believes
that there is a high probability that speculative
low priced securities will not be suitable for at least some
customers. FINRA requirements make it more difficult for
broker-dealers to recommend that their customers buy our common
stock, which may have the effect of reducing the level of trading
activity and liquidity of our common stock. Further, many brokers
charge higher transactional fees for penny stock transactions. As a
result, fewer broker-dealers may be willing to make a market in our
common stock, which may limit your ability to buy and sell our stock.
BECAUSE WE ARE FILING TO BECOME A PUBLIC COMPANY WE WILL INCUR
EXPENSES THAT WOULD NOT NORMALLY OCCUR IF WE REMAIN TO BE A PRIVATE
ORGANIZATION.
The company is expected to immediately incur an offering expense of
$5,000. As a public Company, we expect to also incur
additional legal, auditing, accounting and filing fees. If our company
raises the minimum amount in our shares offering, we expect to
expend, over a 12-month period, $2,000 to pay auditors and
accountants.
BECAUSE THE COMPANY IS BASED IN HONG KONG AND THE SOLE OFFICER AND
DIRECTOR RESIDES IN HONG KONG, SHAREHOLDERS MAY FIND IT DIFFICULT TO
SERVE PROCESS TO EITHER THE COMPANY OR THE OFFICER AND DIRECTOR.
Shareholders may have to voyage to Hong Kong in order to serve
process to either the company or the officer and director.
Shareholders may have to hire a representative to conduct such
process on their behalf in Hong Kong.
BECAUSE THE BUSINESS WILL GENERATE REVENUE IN CHINESE CURRENCY
(YUAN), YOU MAY BE FACED WITH EXCHANGE RATE RISKS.
The Chinese currency is presently a fixed currency. The foreign
exchange market is susceptible
to various economic conditions that may cause volatility in exchange
rates. You may lose your invested capital if the currency you have
invested in depreciates against your home currency.
BECAUSE WE MAY NOT BE ABLE TO OBTAIN A LIQUOR LICENSE THE BUSINESS MAY SUFFER.
We might be required to obtain a liquor license. If new government
regulations, laws, or licensing requirements are passed that would restrict
or eliminate delivery of a liquor license, then our business may suffer.
Alcoholic beverage sales are an integral part of the entertainment industry's
revenues and if we are unable to obtain a liquor license then
our business may suffer as a result of this.
USE OF PROCEEDS
Our offering is being made in a direct public offering, without any
involvement of underwriters or broker-dealers, 1,000,000 common
shares minimum, 2,000,000 common shares maximum basis. The table
below sets forth the use of proceeds if 1,000,000 or 2,000,000
common shares of the offering are sold.
1,000,000 1,250,000 1,500,000 1,750,000 2,000,000
------- --------- --------- --------- ---------
Gross proceeds $ 10,000 $ 12,500 $ 15,000 $ 17,500 $ 20,000
Offering expenses $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000
Net proceeds $ 5,000 $ 7,500 $ 10,000 $ 12,500 $ 15,000
The net proceeds will be used as follows:
Website development$ 1,000 $ 1,500 $ 2,000 $ 2,600 $ 3,000
Marketing and
advertising $ 500 $ 1,300 $ 2,000 $ 2,500 $ 3,000
Computer
Equipment $ 500 $ 800 $ 1,400 $ 1,600 $ 2,000
Legal, Audit,
accounting and
filing fees $ 2,000 $ 2,500 $ 3,000 $ 4,000 $ 5,000
Other expenses $ 500 $ 700 $ 800 $ 900 $ 1,000
Negotiating and
Discussing Plan
with Club/Lounge
Owners $5,00 $700 $800 $900 $1,000
TOTAL $ 5,000 $ 7,500 $ 10,000 $ 12,500 $ 15,000
7
The proceeds from the offering are expected to
allow us to operate for twelve months, whether the minimum
or maximum amount is raised. Gao Hai our sole officer and
director determined that the funds are expected to
last twelve months, including filing reports with the Securities
and Exchange Commission as well as the business activities
contemplated in our business plan.
To operate for the next twelve months, the business must receive a
minimum of $5,000 in net proceeds from the sale of common shares.
With the minimum net proceeds of $10,000 we intend to
build the basis of our operations; however, in a smaller scale. Our
anticipated expenditures will be lower in the event that we sell our
minimum offering of 1,000,000 common shares relative to our sale of
2,000,000 shares as illustrated in our table above. If we receive
the maximum funding for $20,000 in net proceeds, we anticipate
greater spending to access our markets.
Total offering expenses of $5,000 to be paid from the proceeds of
the offering are for legal fees and auditing fees related to this
offering. No other expenses of the offering will be paid from the
proceeds.
After the completion of this offering, we intend to initiate the
development of our website WWW.SWORDFISHVENTURES.CN
We intend to hire an outside web designer to assist us in designing
and building our website. We expect that customers will be
able to log onto our website and make bookings and reservations
for our studios. We anticipate there will also be a list of locations of
the studios and contact information.
First, we intend to purchase all necessary equipments
required in our initial stage of development. Equipments
necessary for our operations are general technical machineries
such as computers and network devices. Computer
equipments will cost approximately $1,000.
The cost of establishing a web site is estimated to be between
$1,000 to $3,000.
Marketing and advertising intends to be focused on
promoting our karaoke service. We intend to
advertise in local newspapers, magazines, city billboards,
online, etc. To market and advertise our service
we anticipate expenditures to be between $500 to $3,000
We estimate our legal, auditing, accounting and filing fees to be
between $2,000 to $5,000 during the next twelve months. We have
allocated between $500 and $1,000 for additional unforeseen
expenses which may arise as a result of initiating our operations.
Concurrently, while we are still in our development stage, Mr. Hai
intends to continue contacting with club and lounge owners to
place our business. We expect to incur costs between $500 to
$1,000 to negotiate and discuss our proposed plan to potential club
and lounge owners who wish to lend space for our business.
DETERMINATION OF OFFERING PRICE
The price of the shares we are offering was arbitrarily determined
in order for us to raise a minimum of $10,000 and a maximum of
$20,000 in this offering. The offering price bears no relationship
to our assets, earnings, book value or other criteria of value.
Among the factors we considered were:
* our lack of operating history;
* the proceeds to be raised by the offering;
* the amount of capital to be contributed by purchasers in
this offering in proportion to the amount of stock to be retained
by our existing stockholder; and
* our relative cash requirements.
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
Dilution represents the difference between the offering price and
the net tangible book value per share immediately after completion
of this offering. Net tangible book value is the amount that results
from subtracting total liabilities and intangible assets from total
assets. Dilution arises mainly as a result of our arbitrary
determination of the offering price of our shares being
8
offered. Dilution of the value of our shares from new purchases is
also a result of the lower book value of our shares held by our
existing stockholders.
As of August 31, 2010 the net tangible book value of our shares
of common stock was approximately ($0.00) per share based upon
4,000,000 shares outstanding.
IF 100% OF THE SHARES ARE SOLD:
Upon completion of this offering, in the event all of our shares are
sold, the net tangible book value of the 6,000,000 shares to be
outstanding will be $13,633 or approximately $0.0023 per share. The
net tangible book value of our shares held by our existing
stockholder will be increased by $0.0023 per share without any
additional investment on their part. New shareholders from this
offering will incur an immediate dilution from $0.01 per share to
$0.0023 per share
After completion of this offering, if 2,000,000 shares are sold, new
shareholders from this offering will own 33% of the total number of
outstanding. New shareholders from this offering will have made a
cash investment of $20,000, or $0.01 per share. Our existing
stockholders will own 67% of the total number of outstanding shares
for which they have made cash contributions totaling $nil or
approximately $0.00 per share.
IF 75% OF THE SHARES ARE SOLD:
Upon completion of this offering, in the event 75% of the shares are
sold, the net tangible book value of the 5,500,000 shares then
outstanding will be $8,633 or approximately $0.0016 per share. The
net tangible book value of our shares held by our existing
stockholders will be increased by $0.0016 per share without any
additional investment on their part. New shareholders from this
offering will incur an immediate dilution from $0.01 per share to
$0.0016 per share.
After completion of this offering, if 1,500,000 shares are sold, new
shareholders will own approximately 27% of the total number of
outstanding shares. New shareholders from this offering will have
made a cash investment of $15,000, or $0.01 per share. Our existing
stockholders will own approximately 73% of the total number of
outstanding shares for which they have made cash contributions
totaling nil or approximately $0.00 per share.
IF THE MINIMUM NUMBER OF SHARES IS SOLD:
Upon completion of this offering, in the event the minimum amount of
shares are sold, the net tangible book value of the 5,000,000 shares
to be outstanding will be $3,633 or approximately $0.0007 per share.
The net tangible book value of the shares held by our existing
stockholders will be increased by $0.001 per share without any
additional investment on their part. New shareholders from this
offering will incur an immediate dilution from $0.01 per share to
$0.0007
per share.
After completion of this offering, if 1,000,000 shares are sold, new
shareholders from this offering will own approximately 20% of the
total number of outstanding shares. New shareholders from this
offering will have made a cash investment of $10,000, or $0.01 per
share. Our existing stockholders will own approximately 80% of the
total number of outstanding shares for which they have made cash
contributions totaling nil or approximately $0.00 per share.
The following table compares the differences of the investment made
by new shareholders from this offering with the investment of our
existing stockholders.
9
EXISTING STOCKHOLDERS IF ALL OF THE SHARES ARE SOLD:
Price per share $ 0.00000
Net tangible book value per share before offering $ (0.00)
Potential gain to existing shareholders $ 20,000
Net tangible book value per share after offering $ 0.0023
Increase to present stockholders in net tangible book
value per share after offering $ 0.0023
Capital contributions $ 0
Number of shares outstanding before the offering 4,000,000
Number of shares after offering assuming the sale of the maximum
number of shares 6,000,000
Percentage of ownership after offering 67%
PURCHASERS OF SHARES IN THIS OFFERING IF ALL SHARES SOLD
Price per share $ 0.01
Dilution per share $ 0.0023
Capital contributions $ 20,000
Number of shares after offering held by public investors 2,000,000
Percentage of capital contributions by existing shareholders 0.00%
Percentage of capital contributions by new investors 100%
Percentage of ownership after offering 33%
PURCHASERS OF SHARES IN THIS OFFERING IF 75% OF SHARES SOLD
Price per share $ 0.01
Dilution per share $ 0.0016
Capital contributions $ 15,000
Number of shares after offering held by public investors 1,500,000
Percentage of capital contributions by existing shareholder 0.000%
Percentage of capital contributions by new investors 100%
Percentage of ownership after offering 27%
PURCHASERS OF SHARES IN THIS OFFERING IF MINIMUM NUMBER OF SHARES SOLD
Price per share $ 0.01
Dilution per share $ 0.0007
Capital contributions $ 10,000
Percentage of capital contributions by existing shareholders 0.000%
Percentage of capital contributions by new investors 100.0%
Number of shares after offering held by public investors 1,000,000
Percentage of ownership after offering 20%
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PLAN OF DISTRIBUTION; TERMS OF THE OFFERING
We are offering up to 2,000,000 shares of common stock on a
self-underwritten basis, 1,000,000 shares minimum, 2,000,000 shares
maximum. The offering price is $0.01 per share. Funds from this
offering will be placed in a separate bank account at US Bank, 2385
North Oxnard Blvd, Oxnard, CA, 93136, Tel: 805 604 2200. The funds
will be maintained in a separate bank until we receive a minimum of
$10,000 at which time we will remove those funds and use the same as
set forth in the Use of Proceeds section of this Prospectus. This
account is not an escrow, trust or similar account. Your
subscription will only be deposited in a separate bank account
under our name. As a result, if we are sued for any reason and a
judgment is rendered against us, your subscription could be seized
in a garnishment proceeding and you could lose your investment,
even if we fail to raise the minimum amount in this offering. As a
result, there is no assurance that your funds will be returned to
you if the minimum offering is not reached. Any funds received by us
thereafter will immediately used by us. If we do not receive the
minimum amount of $10,000 within 270 days of the effective date of
our registration statement, all funds will be promptly returned to
you without a deduction of any kind. During the 270 day period, no
funds will be returned to you. You will only receive a refund of
your subscription if we do not raise a minimum of $10,000 within the
270 day period referred to above. There are no finders involved in
our distribution. Officers, directors, affiliates or anyone involved
in marketing our shares will
not be allowed to purchase shares in the offering. You will not have
the right to withdraw your funds during the offering. You will only
have the right to have your funds returned if we do not raise the
minimum amount of the offering or if there is a material change in
the terms of the offering. The following, but not limited to,
are material changes that would entitle you to a refund of your
money:
* an extension of the offering period beyond 270 days;
* a change in the offering price;
* a change in the minimum sales requirement;
* a change to allow sales to affiliates in order to meet the
minimum sales requirement; or
* a change in the amount of proceeds necessary to release
the funds held
in the separate bank account.
If any of the above material changes occur, we may not make a new offering
by post effective amendment.
We intend on selling the shares in this offering
through Mr. Hai, our sole officer and director. He does not
intend on receiving a commission from the sale of any
shares. He does not intend on registering as a
broker-dealer under section 15 of the Securities Exchange Act
of 1934 in reliance upon Rule 3a4-1. Rule 3a4-1 sets forth
those conditions under which a person associated with an
issuer may participate in the offering of the issuers securities
and not be deemed to be a broker/dealer. The conditions are that:
1. The person is not statutorily disqualified, as that term is
defined in Section 3(a)(39) of the Act, at the time of his
participation; and,
2. The person is not compensated in connection with his
participation by the payment of commissions or other remuneration
based either directly or indirectly on transactions in securities;
3. The person is not at the time of their participation, an
associated person of a broker/dealer; and,
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4. The person meets the conditions of Paragraph (a)(4)(ii) of
Rule 3a4-1 of the Exchange Act, in that he (A) primarily performs,
or is intended primarily to perform at the end of the offering,
substantial duties for or on behalf of the Issuer otherwise than in
connection with transactions in securities; and (B) is not a broker
or dealer, or an associated person of a broker or dealer, within
the preceding twelve months; and (C) does not participate in selling
and offering of securities for any Issuer more than once every
twelve months other than in reliance on Paragraphs (a)(4)(i) or
(a)(4)(iii).
Mr. Hai is not statutorily disqualified, is not being compensated,
and is not associated with a broker/dealer. He is and intends
to continue to be our sole officer and director at the end of
the offering and has not been during the last twelve months and
is currently not a broker/dealer or associated with a broker/dealer.
He intends on not participating in selling and offering
securities for any issuer more than once every twelve months.
Only after our registration statement is declared effective by the
SEC, do we intend to advertise, through tombstones, and hold
investment meetings in various states where the offering will be
registered. We do not intend on utilizing the Internet
to advertise our offering. Mr. Hai intends on also distributing
the prospectus to potential investors at meetings, to business
associates and to his friends and relatives who are interested in a
possible investment in the offering. No shares purchased in this
offering are expected to be subject to any kind of
lock-up agreement.
Management and affiliates thereof will not purchase shares in this
offering to reach the minimum. We intend to sell our shares outside
of the United States.
SECTION 15(g) OF THE EXCHANGE ACT - PENNY STOCK RULES
The SEC has adopted rules that regulate broker-dealer practices in
connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges
or quoted on the OTC Bulletin Board system, provided that current
price and volume information with respect to transactions
in such securities is provided by the exchange or system).
The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from those rules,
deliver a standardized risk disclosure document prepared by the SEC,
which:
* contains a description of the nature and level of risk in
the market or penny stocks in both public offerings and secondary
trading;
* contains a description of the brokers or dealers duties
to the customer and of the rights and remedies available to the
customer with respect to a violation to such duties or other
requirements;
* contains a brief, clear, narrative description of a dealer
market, including BID and ASK prices for penny stocks and the
significance of the spread between the bid and ask price;
* contains a toll-free telephone number for inquiries on
disciplinary actions;
* defines significant terms in the disclosure document or in
the conduct of trading penny stocks; and
* contains such other information and is in such form
(including language, type, size, and format) as the SEC shall
require by rule or regulation.
12
The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer:
* with bid and offer quotations for the penny stock;
* the compensation of the broker-dealer and its salesperson
in the transaction;
* the number of shares to which such bid and ask prices
apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and
* monthly account statements showing the market value of
each penny stock held in the customers account.
In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from those rules;
the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive
the purchasers written acknowledgment of the receipt of a risk
disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability
statement. These disclosure requirements will have the effect of
reducing the trading activity in the secondary market for our
securities because it will be subject to these penny stock rules.
Therefore, security holders may have difficulty selling those
securities.
REGULATION M
Our sole officer and director, who will sell the shares, is aware
that he is required to comply with the provisions of Regulation M,
promulgated under the Securities and Exchange Act of 1934, as
amended. With certain exceptions, Regulation M precludes officers
and/or directors, sales agents, any broker-dealers or other person
who participate in the distribution of shares in this offering from
bidding for or purchasing, or attempting to induce any person to bid
for or purchase any security which is the subject of the
distribution until the entire distribution is complete.
OFFERING PERIOD AND EXPIRATION DATE
This offering will start on the date that this registration
statement is declared effective by the SEC and continue for a period
of 270 days, or sooner if the offering is completed or otherwise
terminated by us.
We will not accept any money until this registration statement is
declared effective by the SEC.
PROCEDURES FOR SUBSCRIBING
We will not accept any money until this registration statement is
declared effective by the SEC. Once the registration statement is
declared effective by the SEC, if you decide to subscribe for any
shares in this offering, you must:
1. Execute and deliver a subscription agreement, a copy of
which is included with the prospectus; and
2. Deliver a check, wire transfer, bank draft or money order to
us for acceptance or rejection.
All checks for subscriptions must be made payable to SWORDFISH
VENTURES INC..
RIGHT TO REJECT SUBSCRIPTIONS
We have the right to accept or reject subscriptions in whole or in
part, for any reason or for no reason. All monies from rejected
subscriptions will be returned immediately by us to the subscriber,
without interest or deductions. Subscriptions for securities will be
accepted or rejected within 48 hours after we receive them.
13
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
OR PLAN OF OPERATION
This section of the prospectus includes a number of forward-looking
statements that reflect our current views with respect to future
events and financial performance. Forward-looking statements are
often identified by words like: believe, expect, estimate,
anticipate, intend, project and similar expressions, or words which,
by their nature, refer to future events. You should not place undue
certainty on these forward-looking statements, which apply only as
of the date of this prospectus. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual
results to differ materially from historical results or our
predictions.
We are a development stage corporation and have not started
operations and have not yet generated or realized any revenues.
Our auditors have issued a going concern opinion. This means that
our auditors believe there is substantial doubt that we can continue
as an on-going business for the next twelve months unless we obtain
additional capital to pay our bills. This is because we have not
generated any revenues and no revenues are anticipated until we
complete the development of our website and begin
implementing and marketing our service to our target markets. We
believe the technical aspects of our website will be sufficiently
developed to use for our operations within 90 days from the
completion of our offering. Accordingly, we must raise cash from
sources other than operations. Our only other source for cash at
this time is investments by others in our company. We must raise
cash to implement our project and begin our operations. Whether we
raise the minimum or maximum amount of money in this offering, it
will last twelve months. The
difference between the minimum and maximum amount relates to the
website development; marketing and advertising; equipment; legal,
audit, accounting and and filing fees; . In each case, if we raise
the maximum amount, we intend on devoting more funds
to the same in order to enhance the quality of the website and promote
our business plan to potential customers. We do not intend on
beginning operations until we raise money from this offering.
We have only one officer and director. He is responsible for our
managerial and organizational structure which will include
preparation of disclosure and accounting controls under the Sarbanes
Oxley Act of 2002. When these controls are implemented, he will be
responsible for the administration of the controls. Should he not
have sufficient experience, he may be incapable of creating and
implementing the controls which may cause us to be subject to
sanctions and fines by the SEC which ultimately could cause you to
lose your investment.
PLAN OF OPERATION
Assuming we raise the minimum amount in this offering, we believe we
can satisfy our cash requirements during the next 12 months. We
do not intend on conducting any product research or development;
however, we will develop our website and purchase equipments.
Upon completion of our public offering, our goal is to commence our
operations. We intend to accomplish the foregoing through the
following milestones, and the estimated timelines are from the date
of effectiveness: (You may also refer to our Use of Proceeds section)
1. Complete our public offering. We believe that we will
raise sufficient capital to begin our operations, and we believe that
this could take up to 270 days from the date the Securities and
Exchange Commission declares our offering effective. We do
not intend on beginning operations until we have closed this
offering. We intend to concentrate all of our efforts on raising as
much capital as we can during this period. If we raise the
minimum amount of $10,000 from our public offering, our burn
rate will be $416 per month. If we raise the maximum amount of
$20,000, our burn rate will be $1,250 per month. We expect to
immediately incur a $5,000 one-time expense due to costs associated
with this offering.
14
2. After completion of the offering, we expect to
immediately begin to develop our website. First, we
intend to purchase all necessary equipments
required in our initial stage of development. Equipments
necessary for our operations are general technical machineries
such as computers and network devices. Computer
equipments will cost approximately $500.
With computer equipments in place, we believe that our website can be
fully operational within 90 days. During this 90 day period we
expect to also expense between $1,000 to $3,000 to develop
the website. Additional details are available under the Business section.
Concurrently, while we are still in our development stage, Mr. Hai
intends to continue contacting with club and lounge owners to
place our business. We expect to incur costs between $500 to
$1,000 to negotiate and discuss our proposed plan to potential club
and lounge owners who wish to lend space for our business.
We anticipate to secure our location by the end of our sixth month of
operations.
We plan to propose to club and lounge owners that our service directly
complements with their businesses. Our karaoke service is expected to
assist in drawing in more patrons to the facility, and thus, may increase
overall revenues for the club or lounge owner willing to offer us empty
floor space. Additional information is provided in the following Business
section.
Total costs to our business during our first 90 days are between
$1,248 to $3,750. The cost of $1,248 is based a burn rate of
$416 per month if the company is successful in raising the minimum
pursuant to the offering. The cost of $3,750 is based on a burn rate
of $1,250 per month if the company is successful in raising the
maximum pursuant to the offering.
3. Once our website is fully operational, approximately 90 days
after the completion of the offering, we intend to launch our website.
Additionally we intend to begin to market our business
to potential customers through various marketing channels mentioned
under the marketing section.
Our marketing activities are expected to span over nine months
and are expected to costs between $500 to $3,000.
By the time we have reached our 12 month of operations
our costs which include legal, auditing, accounting and filing fees, and
less offering expenses, are expected to be approximately
between $5,000 to $15,000, the minimum or maximum amount raised
through this offering.
4. Once we are near completion of our third milestone, approximately
10 months after the effective date, we intend on purchasing our karaoke
equipments to setup our location of operations. The karaoke equipment is
estimated to cost between $500 to $2,000. Other than Mr. Hai, We
do not expect to hire any employees before our business is fully operational.
Mr. Hai intends on implementing our objectives and execute our
strategies stated in our business plan.
5. The company intends to rent out our karaoke studio to clients as
our main revenue source. We intend on selling food and
beverages such as potato chips, soda drinks and alcoholic drinks to our
clients as the secondary source. The lounge or club that we are
based in will provide the customers with food and beverages but
we intend to be entitled to 1/3 sharing of the net profits.
Our operations are expected to be ready to generate
revenue immediately after the 12 month period. At this time,
our business may seek additional funding or loans from our officer
to cover expenses that may incur after the 12 month period.
6. The company intends to create a viable distribution and a data
collection mode for our karaoke services which will generate karaoke revenue
and also derive revenues from advertisements placed in our karaoke centers.
The source of revenue generated will be derived from customers who are
attentive to our distribution of the karaoke services and the amount of
advertising revenues that we can generate at the karaoke centers.
If we cannot generate sufficient revenues to continue operations, we
intend on suspending or ceasing operations. If we cease
operations, we do not know what we will do and we do not have
any plans to do anything else.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to
base an evaluation of our performance. We are in development stage
operations and have not yet generated any revenues. We cannot
guarantee we will be successful in our business operations. Our
business is subject to risks inherent in the establishment of a new
business enterprise, including limited capital resources and
possible cost overruns.
In addition to this offering, we are seeking equity financing in
order to obtain the capital required to implement our business plan.
We have no assurance that future financing will be available to us
on acceptable terms. If financing is not available to us on
satisfactory terms, we may be unable to continue, develop or expand
our operations. Equity financing could result in additional dilution
to our existing shareholders.
RESULTS OF OPERATIONS
FROM INCEPTION ON OCTOBER 29, 2009 TO February 28, 2010
During this period we incorporated the company and hired an auditor
for the preparation of this registration statement. We also prepared
an internal business plan. Our loss since inception is $5,367. We
have not yet started our proposed business operations and do
not intend to do so until we have completed this offering.
Since inception, we have issued 4,000,000 shares of common stock to
our sole officer and director.
SIX MONTH PERIOD ENDED AUGUST 31, 2010
During this period we have discussed our business with prospective
club and bar owners to host our business. However, we have not
conducted any activities to generate revenue. We have revised our
internal business plan during this time. Our financial activities
remain unchanged.
15
LIQUIDITY AND CAPITAL RESOURCES
To meet our need for cash we are attempting to raise money from this
offering. We believe that we will be able to raise enough money
through this offering to begin operations but we cannot guarantee
that once we begin operations we will stay in business after
operations have commenced. If we are unable to successfully attract
customers to utilize our service, we may use up the proceeds
from this offering and will need to find alternative sources, like a
second public offering, a private placement of securities, or loans
from our officers or others in order for us to continue our
operations. At present, we have not made any arrangements to raise
additional capital, other than through this offering.
Our sole officer and director is willing to loan us money for our
operations until this offering has been completed or until the
offering period has expired. If we need additional capital and
cannot raise it we will either have to suspend operations until we
do raise the capital or cease operations entirely. If we raise the
minimum amount of money from this offering, it is expected
to last one year. Other than as described in this paragraph, we
have no other financing plans.
As of the date of this prospectus, we have yet to generate any
revenues from our business operations.
We issued 4,000,000 shares of common stock pursuant to an exemption
from registration contained in Regulation S of the General Rules and
Regulations promulgated under the Securities Act of 1933. This was
accounted for as a sale of common stock.
As of August 31, 2010, our total assets were $0 and our total
liabilities were $1,367.
BUSINESS
GENERAL
We were incorporated in the State of Nevada on October 29, 2009. We
have not started operations. We intend to develop a website
WWW.SWORDFISHVENTURES.CN. In the
beginning of our business operations, we plan to advertise our
business on the local billboards that will promote our business
locally. We intend to open our first karaoke studio in Shenzhen, China.
Our business will compete in the entertainment
industry. The entertainment industry in Shenzhen, China
encompasses numerous types of service offerings such as clubs,
bars, karaokes and lounges. Our karaoke studio intends to
offer clients privacy when singing their favorite new or
classical songs by providing separate rooms, as well as
food and beverage such as potato chips and soda drinks.
The business will intend on specializing in
karaoke services that offer a wide range of popular music
accompanied by high-technology equipments for amplification.
Swordfish's service offering aims to accommodate the
growing demand for leisure and comfort from consumers with rising
disposable income. Swordfish's goals are to capture market share along
with customer loyalty before the sector is saturated with competitors
offering similar services.
The karaoke business is highly competitive in Shenzehn and very
fragmented with predominantly single independent operators. The
business model is consistently the same throughout the karaoke
providers in that they only allow customers to sing.
We have not yet generated any revenues and the only operations that
we have engaged in is the development of a business plan. Our
business office is located at Room B3 20th Floor Boldwin Industrial
Building. 16-18 Wah Sing Street, Kwai Chung N.T. Hong Kong. Our
telephone number is (852) 69463282. This is the office of our
President, Gao Hai.
We have no plans to change our planned business activities or to
combine with another business, and we are not aware of any events or
circumstances that might cause these plans to change. We have not
yet begun operations and will not begin operations until we have
completed this offering. Our plan of operation is forward looking
and there is no assurance that we will ever begin operations.
We have not conducted any market research into the likelihood of
success of our operations or the acceptance of our services
by the public.
16
OUR STRATEGY
We intend to create a chain of karaoke studios, starting with our
first in Shenzhen. Currently, we do not have any customers or any
contracts for our service. We also have not yet commenced any operations.
The company's first karaoke studio intends on being strategically
located in an existing club or lounge. Either location that we subsequently
select intends on being in high-traffic areas. Finally, our studio
will serve food and beverage that are appropriate for the companys targeted
customers. The food and beverage will be provided by the existing
club or lounge but we will intend on being entitled to 1.3 sharing of the
net profits.
Mr. Hai is currently in contact with club and lounge owners so
that we may utilize their space to base our studio free of charge. Clubs
and lounges we approach will have existing space available along with
separate rooms to lend our business to conduct operations. We intend
on obtaining all revenues from the rental of the room by the hour, however,
we intend on being entitled to 1/3 sharing of the net profits of food and
beverage. There are currently no agreements in place with club or lounge
owners at this time.
Our business activities highly complement services offered by clubs and
lounges. We believe customers will utilize our services for an average of
3 hours but will plan on visiting another entertainment provider such as
a club or lounge to complete their night. Our services initially draw
customers into the facility, and thus, the close proximity of the club
or lounge that we are located is expected be our clients
immediate choice.
TARGET MARKET
Swordfish services intends to targetcustomers primarily
within the age of 18 to 30 years. These consumers are either in school or
working, nevertheless they are seeking entertainment alternatives.
The company has not yet commenced with operations, and therefore,
has not generated any revenue.
We intend to target the city of Shenzhen, China. In our first year of
operation, we plan to open our first karaoke studio. Furthermore, we plan
on selling food and drink to the customers at our various studio locations.
We have selected Shenzhen to commence our business due the citys
proximity to Hong Kong.
REGULATORY REQUIREMENTS
We might be required to obtain special licenses, or meet special
regulatory requirements before establishing our business, other than
a business license. If new government regulations, laws, or
licensing requirements are passed that would restrict or eliminate
delivery of any of our intended services, then our business may
suffer. For example, if we were required to obtain a government
issued liquor license for the purpose of opening the karaoke studio,
then we may not be able to qualify for such a license. If such a
licensing requirement existed, and we were not able to qualify, then
our business would suffer.
MARKETING
Initially, our services will be promoted by Mr. Hai. Mr. Hai will
develop a marketing and advertising campaign to create awareness of
the concept and services of Swordfish Ventures Inc. He will discuss
our services with his friends and business associates. We also
anticipate utilizing other marketing avenues in our attempt to make
our services known to the general public and attract potential
customers. These marketing activities are expected to
be designed to inform potential customers about the benefits of
using our services and may include the following: development and
distribution of marketing literature; direct mail and email advertising;
billboards advertisement and, promotion of our web site.
The suggested marketing tools are expected to be
directed to appeal to our targeted customers.
Depending on the amount raised through this offering, we have allocated
between $500 to $3,000 to employ our marketing and advertising
initiatives. The capital employed will be strictly on a variable basis
until we begin generating revenues. Advertisement costs are not
expected be fixed and expected to incur only when we
utilize the channels suggested for distribution.
Our website is our primary advertisement unit to educate our business
offering to endusers. Our website development costs are expected to
be between $1,000 to $3,000 after completion of the offering.
Website development is expected to be contracted to
professional developers and will include the following:
1. Business and needs assessments.
2. Website development focused on cosmetic and persuasive content.
Our website completion date is expected to be approximately 90 days
after the effective date. Once our website is completed, we intend to
deploy our proposed marketing and advertising activities and will commence
for 9 months. Our marketing and advertising activities will precede the
securing of a location for our first karaoke studio which is anticipated to
be secured by the end of our sixth month.
If we raise the minimum amount of $5,000 in net proceeds, our promotional
initiatives intend to be limited to email advertisements, as well as
to a short list of online advertisers. We expect to expense $500 over
a nine month period immediately after completing our website to advertise our
business offering in various local websites.
In the event that we raise the maximum amount of $15,000 in net proceeds,
our business intends to advertise using the proposed methods
stated in the above.
The following is a breakdown
of the $3,000 allocated for marketing and advertising:
1. $1,500 over a nine month period on billboards in Shenzhen.
2. $500 over a nine month period on a variety of online space
to our targeted endusers.
3. $500 to contract a professional writer to complete our marketing
literature.
4. $500 over a nine month period to mass direct mail and email to
potential endusers and businesses. The direct mail list and
email list will be acquired from businesses that specialize in
maintaining a data base of this information. We will select the
target customers who fit the profile of a karaoke user and direct
the mailer to them. We expect to direct mail and email to
approximately 100,000 names.
REVENUE
We intend to generate revenues by selling our karaoke services, as
well as food and beverage products. Therefore, we will require substantial
startup capital in order to setup our location and begin operations. Gao Hai,
our president, is expected to be devoting approximately 20 hours
a week of his time to our operations. Once we begin operations Mr.Hai has
agreed to commit more time as required. Because Mr. Hai is expected
to only be devoting limited time to our operations, our operations
may be sporadic and occur at times which are convenient to Mr. Hai. As a
result, operations may be periodically interrupted or suspended which could
result in a lack of revenues and a cessation of operations. Also, we have no
guarantee that we will be able to generate revenues in the future.
Swordfish karaoke studio intends on having two revenue
streams. We intend on generating revenue by renting out
our studio where we intend on offering our library of
music to our patrons to sing along. Our studio is expected to
have rooms to accommodate small to large parties. Our prices
are expected to vary depending on size of the rooms
and the time requested for use. Furthermore, we intend on
selling food and beverage such as potato chips, soda drinks and
alcoholic drinks to complement our services.
We expect to generate revenue once operations are fully functional after
the 12 month period. We have dedicated our initial 12 months towards
the development and marketing of our business to ensure a
smooth running operation. Because we do not anticipate positive cash flow
after the 12 month development period, our burn rate is approximately $416
to 1,250 each month in the event that we raise the minimum or maximum
amount, respectively.
EMPLOYEES; IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES
We are a development stage company and currently have no employees,
other than our sole officer and director. We intend to hire
additional employees when they are needed.
OFFICES
Our offices are currently located at Room B3 20th Floor Boldwin
Industrial Building. 1618 Wah Sing Street, Kwai Chung N.T. Hong
Kong. Our telephone number is (852) 69463282.
17
MANAGEMENT
OFFICERS AND DIRECTORS
Our sole director will serve until his successor is elected and
qualified. Our sole officer is elected by the board of directors to
a term of one year and serves until his successor is duly elected
and qualified, or until he is removed from office. Our board of
directors has no nominating, auditing or compensation committees.
The name, address, age and position of our sole officer and director
is set forth below:
Name and Address Age Positions
--------------- --- ---------
Gao Hai 28 President,Chief Executive
Officer, Secretary,
Room B3 20th Floor Treasurer,and the
Chief Financial Officer, sole memeber of the
Boldwin Industrial Building Board of Directors
16-18 Wah Sing Street
Kwai Chung, N.T. Hong Kong
The person named above has held his offices/positions since January
23, 2009 and is expected to hold his offices/positions until the
next annual meeting of our stockholders.
BACKGROUND OF OUR SOLE OFFICER AND DIRECTOR
GAO HAI - PRESIDENT, CHIEF EXECUTIVE OFFICER, SECRETARY, TREASURER,
CHIEF FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER AND OUR SOLE
DIRECTOR.
Since October 29, 2009 , Mr. Hai has been our President, Chief
Executive Officer, Secretary, Treasurer, Chief Financial Officer,
Principal Accounting Officer and sole member of our Board of
Directors. From 2000-2004 Mr. Hai obtained his Degree in Computer
Science, University of Jilin. From 2005-present he has worked as a
Web Developer at Shen Da Technology Ltd in Luohu District, Shenzhen,
Guangdong, China
AUDIT COMMITTEE FINANCIAL EXPERT
The functions of the Audit Committee are currently carried out by
our Board of Directors. Our Board of Directors has determined that
we do not have an audit committee financial expert on our Board of
Directors carrying out the duties of the Audit Committee. The Board
of Directors has determined that the cost of hiring a financial
expert to act as a director and to be a member of the Audit
Committee or otherwise perform Audit Committee functions outweighs
the benefits of having a financial expert on the Audit Committee.
CONFLICTS OF INTEREST
Mr. Hai devotes approximately 20 hours per week to our Company. The
only conflict that exists is Mr. Hai s devotion of time to other
projects. We have no provisions for handling conflicts of interest
should they arise in the future; however, Mr. Hai has agreed not to
engage in any business activity which conflicts with our activities.
18
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by us from
inception on October 29, 2009, through August 31, 2010, for our
sole officer and director. This information includes the dollar
value of base salaries, bonus awards and number of stock options
granted, and certain other compensation, if any.
SUMMARY COMPENSATION TABLE
Name Year Salary $ Bonus $ Stock Option Non-Equity Non-qualified All Other Total $
and Awards $ Awards $ Incentive Deferred Compensation
Principal (1) Plan Compensation $
Position Compensation Earnings $
$
Gao Hai
President,
Secretary/Treasurer,20090 0 $4,000 0 0 0 0 $4,000
Director
Gao Hai
President, 2010 0 0 0 0 0 0 0 0
Secretary/Treasurer,
Director
(1) Mr. Hai's past and future contribution to the Company has been
valued at $4,000.00. Common shares of the Company were issued to Mr.
Hai at par value in the amount of $4,000 as payment for his contribution
to the company. Mr. Hai will not be paid any further compensation until
such time that the Company deems it financially prudent.
The only employee agreement that exists between Mr Hai
and the company is that he commit at least 20 hours a week
of his time to our operations. Once we begin operations Mr.Hai has
agreed to commit more time as required.
The compensation discussed herein addresses all compensation awarded
to, earned by, or paid to our named executive officer.
There are no other stock option plans, retirement, pension, or
profit sharing plans for the benefit of our sole officer and
director other than as described herein.
LONG-TERM INCENTIVE PLAN AWARDS
We do not have any long-term incentive plans that provide
compensation intended to serve as incentive for performance.
COMPENSATION OF DIRECTORS
Our sole director does not receive any compensation for serving as a
member of the board of directors.
INDEMNIFICATION
Under our Articles of Incorporation and Bylaws of the corporation,
we may indemnify an officer or director who is made a party to any
proceeding, including a lawsuit, because of his position, if he
acted in good faith and in a manner he reasonably believed to be in
our best interest. We may advance expenses incurred in defending a
proceeding. To the extent that the officer or director is successful
on the merits in a proceeding as to which he is to be indemnified,
we must indemnify him against all expenses incurred, including
attorneys fees. With respect to a derivative action, indemnity may
be made only
19
for expenses actually and reasonably incurred in defending the
proceeding, and if the officer or director is judged liable, only by
a court order. The indemnification is intended to be to the fullest
extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the
Securities Act of 1933, which may be permitted to directors or
officers under Nevada law, we are informed that, in the opinion of
the Securities and Exchange Commission, indemnification is against
public policy, as expressed in the Act and is, therefore,
unenforceable.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this prospectus,
the total number of shares owned beneficially by our directors,
officers and key employees, individually and as a group, and the
present owners of 5% or more of our total outstanding shares. The
table also reflects their ownership assuming the sale of all of the
shares in this offering. The stockholders listed below
have direct ownership of their shares and possesses sole voting and
dispositive power with respect to the shares.
Name and Address of Number of Percentage of Ownership Number of Shares After Percentage of
Beneficial Owner Shares of Before the Offering Offering Assuming all Ownership After the
Before the of the Shares are Sold Offering Assuming all
Offering of the Shares are Sold
Gao Hai 4,000,000 100% 4,000,000 67%
Room B3 20th Floor
Boldwin Industrial Building
16-18 Wah Sing St.Kwai Chung,
N.T. Hong Kong
[1] The person named above may be deemed to be a parent and
promoter of our company, within the meaning of such terms under
the Securities Act of 1933, as amended, by virtue of his direct
stock holdings. Mr. Hai is the only promoter of our company.
20
FUTURE SALES BY EXISTING STOCKHOLDERS
A total of 4,000,000 shares of common stock were issued to our sole
officer and director, all of which are restricted securities, as
defined in Rule 144 of the General Rules and Regulations promulgated
under the Securities Act of 1933. Under Rule 144, since Mr. Hai is
an affiliate as defined in that rule, the shares can be publicly
sold, subject to volume restrictions and restrictions on the manner
of sale, commencing one year after their acquisition.
Shares purchased in this offering, which will be immediately
resalable, and sales of all of our other shares after applicable
restrictions expire, could have a depressive effect on the market
price, if any, of our common stock and the shares we are offering.
There is no public trading market for our common stock. There are no
outstanding options or warrants to purchase, or securities
convertible into, our common stock. There is one holder of record
for our common stock. The record holder is our sole officer and
director and he owns 4,000,000 restricted shares of our common stock.
DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized capital stock consists of 75,000,000 shares of common
stock, par value $0.001 per share. The holders of our common stock:
* have equal ratable rights to dividends from funds legally
available if and when declared by our board of directors;
* are entitled to share ratably in all of our assets
available for distribution to holders of common stock upon
liquidation, dissolution or winding up of our affairs;
* do not have preemptive, subscription or conversion rights
and there are no redemption or sinking fund provisions or rights; and
* are entitled to one non-cumulative vote per share on all
matters on which stockholders may vote.
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting
rights, which means that the holders of more than 50% of the
outstanding shares, voting for the election of directors, can elect
all of the directors to be elected, if they so choose, and, in that
event, the holders of the remaining shares will not be able to elect
any of our directors. After this offering is completed,
assuming the sale of all of our shares of common stock, present
stockholders will own approximately 67% of our outstanding shares.
21
CASH DIVIDENDS
As of the date of this prospectus, we have not paid any cash
dividends to stockholders. The declaration of any future cash
dividend will be at the discretion of our board of directors and
will depend upon our earnings, if any, our capital requirements and
financial position and our general economic condition. It is our
intention not to pay any cash dividends in the foreseeable future,
but rather to reinvest earnings, if any, in our business operations.
PREFERRED STOCK
We do not have a class of preferred stock.
ANTI-TAKEOVER PROVISIONS
There are no Nevada anti-takeover provisions that may have the
effect of delaying or preventing a change in control.
REPORTS
After we complete this offering, we will not be required to furnish
you with an annual report. Further, we will not voluntarily send you
an annual report. We will be required to file reports with the SEC
under section 15(d) of the Securities Act and the reports will be
filed electronically. The reports we will be required to file are
Forms 10-K, 10-Q, and 8-K. You may read copies of any materials we
file with the SEC at the SECs Public Reference Room at 100 F
Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain
information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0331. The SEC also maintains an Internet site
that will contain copies of the reports we file electronically. The
address for the Internet site is www.sec.gov.
STOCK TRANSFER AGENT
We have not yet selected a stock transfer agent.
CERTAIN TRANSACTIONS
On or about October 29, 2009, we issued a total of 4,000,000 shares
of restricted common stock to Gao Hai, our President, Chief
Executive Officer, Principal Accounting Officer, Principal
Financial Officer, Treasurer, Secretary and sole director, in
exchange for his services to us, and those shares were valued at
$0.001 per share for a total value of $4,000.00. These shares
represent 100% of our issued and outstanding shares. This represents
the complete interest of our sole current shareholder prior to any
future issuance of stock under this registration statement.
Mr. Gao Hai has arranged the usage of office space on a rent-free
basis.
LITIGATION
We are not a party to any pending litigation and none is
contemplated or threatened.
22
EXPERTS
Our financial statements for the period from inception to February 28,
2010, included in this prospectus have been audited by Stan
J.H. lee, CPA as set forth in their report included in this prospectus.
Their report is given upon their authority as experts in accounting
and auditing.
The six months ended August 31, 2010 interim financial statements
are unaudited.
LEGAL MATTERS
We have no legal counsel at this time.
FINANCIAL STATEMENTS
Our fiscal year end is February 28. We will provide audited
financial statements to our stockholders on an annual basis; the
statements will be prepared by Stan J.H. Lee, CPA.
23
FINANCIAL STATEMENTS
Swordfish Ventures Inc.
(a Development Stage Company)
Index
-----
Report of Independent Registered Public Accounting Firm................... F-1
Balance Sheet for the Year Ended February 28, 2010......................... F-2
Statements of Operations for the cumulative Period From October 29, 2009
(inception) Through February 28, 2010.......................................F-3
Statements of Cash Flows for the cumulative Period From October 29, 2009
(inception) Through February 28, 2010.......................................F-4
Statement of Changes in Stockholders Deficit for the cumulative Period From
October 29, 2009 (inception) Through February 28, 2010................... F-5
Notes to the Financial Statements
As of February 28, 2010................................................... F-6
Balance Sheet for the six months ended August 31, 2010 (unaudited) ....... F-7
Statements of Operations for the cumulative period From October 29, 2009
(inception)Through August 31, 2010 (unaudited)............................. F-8
Statements of Cash Flows for the cumulative Period From October 29, 2009
(inception) Through August 31, 2010 (unaudited).............................F-9
Statement of Changes in Stockholders Deficit for the cumulative Period From
October 29, 2009 (inception) Through August 31, 2010 (unaudited).......... F-10
Notes to the Financial Statements
As of August 31, 2010 (unaudited)...........................................F-11
Balance Sheet for the nine months ended November 30, 2010 and year ended
February 28, 2011 (unaudited) ...... .......................................F-12
Statements of Operations for the cumulative period From October 29, 2009
(inception) Through February 28, 2011 (unaudited)...........................F-13
Statements of Cash Flows for the cumulative Period From October 29, 2009
(inception) Through February 28, 2011 (unaudited)...........................F-14
Statement of Changes in Stockholders Deficit for the cumulative Period From
October 29, 2009 (inception) Through February 28, 2011 (unaudited)........ F-15
Notes to the Financial Statements
As of February 28, 2011 (unaudited)........................................F-16
24
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Stan J.H. Lee, CPA
2160 North Central Rd. Suite 203 Fort Lee NJ 07024
P.O. Box 436402 San Ysidro CA 92143
619-623-7799 Fax 619-564-3408 E-mail) stan2u@gmail.com
F-2
Report of Independent Registered Public Accounting Firm
-------------------------------------------------------
To the Board of Directors and
Shareholders of
Swordfish Ventures Inc.
We have audited the accompanying balance sheets of Swordfish
Ventures Inc. ( A Development
Stage Company) as of February 28, 2010 and the related statements of
operations, changes in shareholders equity and cash flows for the
period from October 29,2009 ( inception) to February 28, 2010.
These financial statements are the responsibility of the Companys
management.
Our responsibility is to express an opinion on these financial
statements based on
our audits.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial
statements are free of material misstatement.The Company is not
required to have, nor were we engaged to perform an audit of its
internal control over financial reporting. Our audits 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 Companys internal control
over financial reporting. Accordingly, we express no such opinion.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Swordfish Ventures Inc. as of February 28, 2010 and the results of
their operations and its cash flows for the aforementioned period in
conformity with U.S. generally accepted accounting principles.
The financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to
the financial statements, the Companys results of operations and
lack of capital and liquidity raise substantial doubt about its
ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Stan J.H. Lee, CPA
------------------
Stan J.H. Lee, CPA
March 3, 2010
Fort Lee, NJ 07024
F-2
25
Swordfish Ventures Inc.
(A Development Stage Company)
Balance Sheet
As of February 28, 2010
ASSETS:
Total Assets $ --
LIABILITIES AND STOCKHOLDERS DEFICIT:
Current Liabilities
Due to related parties $ 117
Accrued expense 1,250
Total Current Liabilities 1,367
Stockholders Deficit
Capital Stock, 75,000,000 shares
authorized, $ 0.001 par value,
4,000,000 shares issued and
outstanding 4,000
Additional Paid-in-Capital -
Deficit accumulated during the
development stage (5,367)
Total Stockholders Deficit (1,367)
Total Liabilities and Stockholders Deficit $ 0
The Accompanying Notes are an Integral Part of These Financial Statements
26
F-3
Swordfish Ventures Inc.
(A Development Stage Company)
Statement of Operations
For the Period From October 29, 2009 (Inception)
Through February 28, 2010
October 29, 2009 (Inception)
Through February 28, 2010
Operating Expenses;
Consulting expense $ 4,000
Filing fee 117
Audit fee 1,250
Total Expenses 5,367
Net Loss $ (5,367)
Net Loss Per Common Share - Basic and Diluted $ (0.00)
Weighted Average Number of Common Shares Outstanding 4,000,000
The Accompanying Notes are an Integral Part of These Financial
Statements
27
F-4
Swordfish Ventures Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Period from October 29, 2009 (inception)
Through February 28, 2010
October 29, 2009 (Inception)
Through February 28, 2010
Operating Activities;
Net loss $(5,367)
Adjustments to reconcile net loss to cash
used in operating activities:
Common stock issued for service performed 4,000
Increased in accrued expense 1,250
Net Cash Used in Operating Activities (117)
Net Cash Provided by Investing Activities; -0-
Net Cash Provided by Financing Activities;
Advance from related party 117
Net Cash Provided by Investing Activities 117
Increase (Decrease) in Cash --
Cash - Beginning of Period --
Cash - End of Period $ --
NONCASH INVESTING AND FINANCING ACTIVITIES:
Common stocks issued for service performed $ 4,000
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Interest $ --
Income taxes $ --
The Accompanying Notes are an Integral Part of These Financial
Statements
28
F-5
Swordfish Ventures Inc.
(A Development Stage Company)
Statement of Changes in Stockholders Deficit
For the Period from October 29, 2009 (inception)
Through February 28, 2010
Common Shares Stock Amount Additional Deficit Total
Paid-in Capital Accumulated
Balances at October
29, - - - - -
2009(Inception)
Issuance of 4,000,000 4,000 - - 4,000
founders
shares in exchange
for service
Net loss for the (5,367) (5,367)
period
Balances at 4,000,000 4,000 -- $(5,367) $(1,367)
February 28,
2010
Accompanying Notes are an Integral Part of These Financial Statements
29
F-6
Swordfish Ventures Inc.
(A Development Stage Company)
Notes to the Financial Statements
February 28, 2010
NOTE 1 Nature and Continuance of Operations
The Company is a development stage company, which was incorporated on
October 29, 2009 in the state
of Nevada.
These financial statements have been prepared on a going concern basis.
The company has yet to achieve profitable operations and losses are
anticipated in the development of its business, raising substantial
doubt about the Companys ability to continue as a going concern. Its
ability to continue as a going concern is dependent upon the ability
of the Company to generate profitable operations in the future and/or
to obtain the necessary financing to meet its obligations and repay its
liabilities arising from normal business operations when they come due.
Management plans to continue to provide for its working capital needs
by seeking loans from its shareholders. These financial statements do not
include any adjustments to the recoverability and classification of
assets, or the amount and classification of liabilities that may be necessary
should the Company be unable to continue as a going concern.
The Companys year-end is February 28.
NOTE 2 - Summary of Significant Accounting Policies
The financial statements of the Company have been prepared in accordance
with accounting principles generally accepted in the United States of
America. Because a precise determination of many assets and liabilities is
dependent upon future events, the preparation of financial statements for
a period necessarily involves the use of estimates, which have been made
using careful judgment. Actual results may vary from these estimates.
The financial statements have, in managements opinion, been properly prepared
within the framework of the significant accounting policies summarized below:
Development Stage Company
The Company complies with Statement of Financial Accounting Standard
FASB ASC No. 915 and the Securities and Exchange Commission Exchange Act
7 for its characterization of the Company as development stage.
Impairment of Long Lived Assets
Long-lived assets are reviewed for impairment in accordance with FASB
ASC No. 360, Accounting for the Impairment or Disposal of Long- lived
Assets. Under FASB ASC No. 360, property, plant and equipment are tested
for recoverability whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. An impairment charge
is recognized or the amount, if any, which the carrying value of the asset
exceeds the fair value.
Financial Instruments
The carrying value of the Companys financial instruments consisting of
cash equivalents and accounts payable and accrued liabilities approximates
their fair value because of the short maturity of these instruments.
Unless otherwise noted, it is managements opinion that the Company is not
exposed to significant interest, currency or credit risks arising from
these financial instruments.
Income Taxes
The Company uses the assets and liability method of accounting for income
taxes in accordance with FASB ASC NO. 740 Accounting for Income Taxes.
Under this method, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to temporary differences between
the financial statements carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled.
Basic and Diluted Net Loss Per Share
In accordance with FASB ASC No. 260, Earnings Per Share, the basic net
loss per common share is computed by dividing net loss available to common
stockholders by the weighted average number of common shares outstanding.
Diluted net loss per common share is computed similar to basic net loss per
common share except that the denominator is increased to include the number
of additional common shares that would have been outstanding if the potential
common shares had been issued and if the additional common shares were
dilutive. As at February 28, 2010, diluted net loss per share is equivalent
to basic net loss per share.
Stock Based Compensation
The Company accounts for stock options and similar equity instruments
issued in accordance with FASB ASC No. 718,Share-Based Payment. Accordingly,
compensation costs attributable to stock options or similar equity instruments
granted are measured at the fair value at the grant date, and expensed over
the expected vesting period. Transactions in which goods or services are
received in exchange for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the
equity instruments issued, whichever is more reliably measurable. FASB ASC
No. 718 requires excess tax benefits be reported as a financing cash inflow
rather than as a reduction of taxes paid.
30
The Company did not grant any stock options during the period ended
February 28, 2010.
Comprehensive Income
The Company adopted Statement of FASB ASC No. 220, Reporting
Comprehensive Income, which establishes standards for reporting and display
of comprehensive income, its components and accumulated balances. The Company
is disclosing this information on its Statement of Stockholders Equity.
Comprehensive income comprises equity except those resulting from investments
by owners and distributions to owners.
The Company has no elements of other comprehensive income during the period
ended February 28, 2010.
New Accounting Standards
Management does not believe that any recently issued, but not yet effective
accounting standards if currently adopted could have a material effect on
the accompanying financial statements.
Accounting Standard Codification
The Financial Accounting Standards Board (FASB) issued the Accounting
Standards Codification (the Codification or ASC) on July,1 2009
(which became effective for interim and annual periods ending after September
15, 2009). The Codification changes the way that accounting principles
generally accepted in the United States (U.S. GAAP) are referenced.
Beginning on that date the Codification officially became the single
source of authoritative nongovernmental U.S. GAAP. The change affects
the way the Company refers to U.S.GAAP in its financial statements
and accounting policies. All existing standards that were use to
create the Codification were superseded. Rules and interpretive
releases of the Securities and Exchange Commission (SEC) under
authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. The Company adopted and applied
the provisions of the ASC and has eliminated references to pre-ASC
accounting standards throughout its financial statements. The adoption
of this new guidance did not impact the Companys financial position or
results of operations.
NOTE 3 - INCOME TAXES
At February 28, 2010, the Company had a federal operating loss carryforward
of $5,367 which begins to expire in
2030.
Components of net deferred tax assets, including a valuation allowance,
are as follows at February 28, 2010.
2010
Deferred tax assets:
$ 1,878
Net operating loss carryforward $ -0-
1,878
Less: Valuation Allowance (1,878)
$ -0-
===============
The valuation allowance for deferred tax assets as of February 28, 2010 was
$ 1,878. In assessing the recovery of the 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
in the periods in which those temporary differences become deductible.
Management considers the scheduled reversals of future deferred tax
liabilities, projected future taxable income, and tax planning strategies
in making this assessment. As a result, management determined it was more
likely than not the deferred tax assets would not be realized as of
February 28, 2010, and recorded a full valuation allowance.
Reconciliation between the statutory rate and the effective tax rate for the
period ended February 28, 2010 is
as follows:
2010
Federal statutory tax rate (35.0)%
Change in valuation allowance 35.0%
Effective tax rate 0.0%
=================
NOTE 4- Capital Stock
On October 29, 2009, the Company issued 4,000,000 common shares in exchange to
the sole officer and director of the Company in exchange for his services to
the Company. These services were valued at $4,000.00. As of
February 28, 2010, the Company is authorized to issue one stock of common
stock up to 75,000,000 shares at $ 0.001 par value and 4,000,000 shares are
issued and outstanding.
NOTE 5- Subsequent Event
As of the February 28, 2010, there is no reportable subsequent event,
31
F-7
Swordfish Ventures Inc.
(A Development Stage Company)
Balance Sheet
As of February 28, 2010 and August 31, 2010
ASSETS: February 28, 2010 August 31, 2010
(Audited) (Unaudited)
Total Assets $ -- $ --
LIABILITIES AND STOCKHOLDERS DEFICIT:
Current Liabilities
Due to related parties $ 117 $ 117
Accrued expense 1,250 1,250
Total Current Liabilities 1,367 1,367
Stockholders Deficit
Capital Stock, 75,000,000 shares authorized, $ 0.001 4,000 4,000
par value, 4,000,000 shares issued and outstanding
Additional Paid-in-Capital - -
Deficit accumulated during the development stage (5,367) (5,367)
Total Stockholders Deficit (1,367) (1,367)
Total Liabilities and Stockholders Deficit $ 0 $0
The Accompanying Notes are an Integral Part of These Financial
Statements
32
F-8
Swordfish Ventures Inc.
(A Development Stage Company)
Statement of Operations
Six Months ended Cumulative
August 31, 2010 Period from
(Unaudited) Inception
October 29,
2009 Through
August 31,
2010
(Unaudited)
Operating Expenses;
Consulting expense - $4,000
Filing fee - 117
Audit fee - 1,250
Total Expenses - 5,367
Net Loss - $5,367
Net Loss Per Common Share - Basic and $ (0.00) $ (0.00)
Diluted
Weighted Average Number of Common Shares 4,000,000 4,000,000
Outstanding
The Accompanying Notes are an Integral Part of These Financial
Statements
33
F-9
Swordfish Ventures Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Period from October 29, 2009 (inception)
Through August 31, 2010
Six Months Cumulative Period
ended August from Inception
31, 2010 October 29, 2009
(Unaudited) Through August
31, 2010
(Unaudited)
Operating Activities;
Net loss - $(5,367)
Adjustments to reconcile net loss to cash
used in operating activities:
Common stock issued for service performed - 4,000
Increased in accrued expense - 1,250
Net Cash Used in Operating Activities - (117)
Net Cash Provided by Investing Activities; - -
Net Cash Provided by Financing Activities;
Advance from related party - -
Net Cash Provided by Investing Activities - -
Increase (Decrease) in Cash - --
Cash - Beginning of Period - --
Cash - End of Period - $ --
NONCASH INVESTING AND FINANCING ACTIVITIES:
Common stocks issued for service performed $4,000 $ 4,000
Supplemental Disclosures of Cash Flow
Information
Cash paid during the period for:
Interest $ - $ -
Income taxes $ - $ -
Accompanying Notes are an Integral Part of These Financial Statements
34
F-10
Swordfish Ventures Inc.
(A Development Stage Company)
Statement of Changes in Stockholders Deficit
For the Period from October 29, 2009 (inception)
To August 31, 2010
(Unaudited)
Common Stock Additional Deficit Total
Shares Amount Paid-in Accumulated
Capital
Balances at October 29,
2009(Inception) - - - - -
Issuance of founders 4,000,000 4,000 - - 4,000
shares in exchange
for service
Net loss for the period (5,367) (5,367)
Balances at February 28, 4,000,000 4,000 -- $(5,367) $(1,367)
2010
Net Loss for the Period - - - - -
October 29, 2009 to August
31, 2010
Balance at August 31, 2010 4,000,000 4,000 - $(5,367) $(1,367)
(Unaudited)
Accompanying Notes are an Integral Part of These Financial Statements
F-11
Swordfish Ventures Inc.
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010
(Unaudited)
NOTE 1 Nature and Continuance of Operations
The Company is a development stage company, which was incorporated on October
29, 2009 in the state of Nevada. These financial statements have been
prepared on a going concern basis. The company has yet to achieve profitable
operations and losses are anticipated in the development of its business,
raising substantial doubt about the Companys ability to continue as a
going concern. Its ability to continue as a going concern is dependent upon
the ability of the Company to generate profitable operations in the future
and/or to obtain the necessary financing to meet its obligations and repay
its liabilities arising from normal business operations when they come due.
Management plans to continue to provide for its working capital needs by
seeking loans from its shareholders. These financial statements do not include
any adjustments to the recoverability and classification of assets, or the
amount and classification of liabilities that may be necessary should the
Company be unable to continue as a going concern.
The Companys year-end is February 28.
The interim financial statements include all adjustments that, in the opinion
of management, are necessary in order to make all financial statements not
misleading.
NOTE 2 - Summary of Significant Accounting Policies
The financial statements of the Company have been prepared in accordance
with accounting principles generally accepted in the United States of
America. Because a precise determination of many assets and liabilities is
dependent upon future events, the preparation of financial statements for
a period necessarily involves the use of estimates, which have been made
using careful judgment. Actual results may vary from these estimates.
The financial statements have, in managements opinion, been properly
prepared within the framework of the significant accounting policies
summarized below:
Development Stage Company
The Company complies with Statement of Financial Accounting Standard
FASB ASC No. 915 and the Securities and Exchange Commission Exchange
Act 7 for its characterization of the Company as development stage.
Impairment of Long Lived Assets
Long-lived assets are reviewed for impairment in accordance with FASB
ASC No. 360, Accounting for the Impairment or Disposal of Long- lived
Assets. Under FASB ASC No. 360, property, plant and equipment are tested
for recoverability whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. An impairment charge
is recognized or the amount, if any, which the carrying value of the asset
exceeds the fair value.
Financial Instruments
The carrying value of the Companys financial instruments consisting
of cash equivalents and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is managements opinion that
the Company is not exposed to significant interest, currency or
credit risks arising from these financial instruments.
Income Taxes
The Company uses the assets and liability method of accounting for
income taxes in accordance with FASB ASC No. 740 Accounting for Income
Taxes. Under this method, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to temporary differences
between the financial statements carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled.
Basic and Diluted Net Loss Per Share
In accordance with FASB ASC No. 260, Earnings Per Share, the basic net
loss per common share is computed by dividing net loss available to
common stockholders by the weighted average number of common shares
outstanding. Diluted net loss per common share is computed similar to
basic net loss per common share except that the denominator is increased
to include the number of additional common shares that would have been
outstanding if the potential common shares had been issued and if the
additional common shares were dilutive. As at August 31, 2010, diluted
net loss per share is equivalent to basic net loss per share.
35
Stock Based Compensation
The Company accounts for stock options and similar equity instruments
issued in accordance with FASB No. 718,
Share-Based Payment.
Accordingly, compensation costs attributable to stock options or similar
equity instruments granted are measured at the fair value at the grant date,
and expensed over the expected vesting period. Transactions in which
goods or services are received in exchange for the issuance of equity
instruments are accounted for based on the fair value of the consideration
received or the fair value of the equity instruments issued, whichever is
more reliably measurable. FASB ASC No. 718 requires excess tax benefits be
reported as a financing cash inflow rather than as a reduction of taxes paid.
The Company did not grant any stock options during the period ended August
31, 2010.
Comprehensive Income
The Company adopted Statement of FASB ASC No. 220, Reporting Comprehensive
Income, which establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. The Company
is disclosing this information on its Statement of Stockholders Equity.
Comprehensive income comprises equity except those resulting from
investments by owners and distributions to owners.
The Company has no elements of other comprehensive income during the
period ended August 31, 2010.
New Accounting Standards
Management does not believe that any recently issued, but not yet effective
accounting standards if currently adopted could have a material effect
on the accompanying financial statements.
Accounting Standard Codification
The Financial Accounting Stadards Board (FASB) issued the Accounting
Standards Codification (the Codification or ASC) on July,1 2009
(which became effective for interim and annual periods ending after
September 15, 2009). The Codification changes the way that accounting
principles generally accepted in the United States (U.S. GAAP) are
referenced. Beginning on that date the Codification officially became the
single source of authoritative nongovernmental U.S. GAAP. The change
affects the way the Company refers to U.S. GAAP in its financial
statements and accounting policies. All existing standards that were
use to create the Codification were superseded. Rules and interpretive
releases of the Securities and Exchange Commission (SEC) under authority
of federal securities laws are also sources of authoritative GAAP for
SEC registrants. The Company adopted and applied the provisions of
the ASC and has eliminated references to pre-ASC accounting standards
throughout its financial statements. The adoption of this new guidance
did not impact the Companys financial position or results of operations.
NOTE 3 - INCOME TAXES
At August 31, 2010, the Company had a federal operating loss carryforward
of $5,367 which begins to expire in 2030.Components of net deferred tax
assets, including a valuation allowance, are as follows at August 31, 2010.
2010
Deferred tax assets: $ 1,878
Net operating loss carryforward $ -0-
___________
1,878
Less: Valuation Allowance (1,878)
============
$ -0-
The valuation allowance for deferred tax assets as of August 31, 2010 was
$ 1,878. In assessing the recovery of the 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 in the periods in which those temporary differences become deductible.
Management considers the scheduled reversals of future deferred tax
liabilities, projected future taxable income, and tax planning strategies
in making this assessment. As a result, management determined it was more
likely than not the deferred tax assets would not be realized as of May
31, 2010, and recorded a full valuation allowance.
Reconciliation between the statutory rate and the effective tax rate for
the period ended August 31, 2010 is as
follows:
2010
Federal statutory tax rate (35.0)%
Change in valuation allowance 35.0%
Effective tax rate 0.0%
=================
NOTE 4- Capital Stock
On October 29, 2009, the Company issued 4,000,000 common shares in exchange
to the sole officer and director of the Company in exchange for his services
to the Company. These services were valued at $4,000. As of August
31,2010, the Company is authorized to issue one stock of common stock up to
75,000,000 shares at $ 0.001 par value and 4,000,000 shares are issued and
outstanding.
NOTE 5- Subsequent Event
As of August 31, 2010, there is no reportable subsequent event,
F-12
Swordfish Ventures Inc.
(A Development Stage Company)
Balance Sheet
As of February 28, 2011 and November 30, 2010
ASSETS: February 28, 2011 November 30, 2010
(Audited) (Unaudited)
Total Assets $ -- $ --
LIABILITIES AND STOCKHOLDERS DEFICIT:
Current Liabilities
Due to related parties $ 117 $ 117
Accrued expense 1,250 1,250
Total Current Liabilities 1,367 1,367
Stockholders Deficit
Capital Stock, 75,000,000 shares authorized, $ 0.001 4,000 4,000
par value, 4,000,000 shares issued and outstanding
Additional Paid-in-Capital - -
Deficit accumulated during the development stage (5,367) (5,367)
Total Stockholders Deficit (1,367) (1,367)
Total Liabilities and Stockholders Deficit $ 0 $0
The Accompanying Notes are an Integral Part of These Financial
Statements
32
F-13
Swordfish Ventures Inc.
(A Development Stage Company)
Statement of Operations
Period ended Cumulative
February 28, Period from
2011 Inception
(Unaudited) October 29,
2009 Through
February 28,
2011
(Unaudited)
Operating Expenses;
Consulting expense - $4,000
Filing fee - 117
Audit fee - 1,250
Total Expenses - 5,367
Net Loss - $5,367
Net Loss Per Common Share - Basic and $ (0.00) $ (0.00)
Diluted
Weighted Average Number of Common Shares 4,000,000 4,000,000
Outstanding
The Accompanying Notes are an Integral Part of These Financial
Statements
33
F-14
Swordfish Ventures Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Period from October 29, 2009 (inception)
Through February 28, 2011
Period ended Cumulative Period
February 28, from Inception
2011 October 29, 2009
(Unaudited) Through February
28, 2011 (Unaudited)
Operating Activities;
Net loss - $(5,367)
Adjustments to reconcile net loss to cash
used in operating activities:
Common stock issued for service performed - -
Increased in accrued expense - 1,250
Net Cash Used in Operating Activities - (117)
Net Cash Provided by Investing Activities; - -
Net Cash Provided by Financing Activities;
Advance from related party - -
Net Cash Provided by Investing Activities - -
Increase (Decrease) in Cash - --
Cash - Beginning of Period - --
Cash - End of Period - $ --
NONCASH INVESTING AND FINANCING ACTIVITIES:
Common stocks issued for service performed $4,000 $ 4,000
Supplemental Disclosures of Cash Flow
Information
Cash paid during the period for:
Interest $ - $ -
Income taxes $ - $ -
Accompanying Notes are an Integral Part of These Financial Statements
34
F-15
Swordfish Ventures Inc.
(A Development Stage Company)
Statement of Changes in Stockholders Deficit
For the Period from October 29, 2009 (inception)
To August 31, 2010
(Unaudited)
Common Stock Additional Deficit Total
Shares Amount Paid-in Accumulated
Capital
Balances at October 29,
2009(Inception) - - - - -
Issuance of founders 4,000,000 4,000 - - 4,000
shares in exchange
for service
Net loss for the period (5,367) (5,367)
Balances at February 28, 4,000,000 4,000 -- $(5,367) $(1,367)
2010
Net Loss for the Period - - - - -
October 29, 2009 to August
31, 2010
Balance at August 31, 2010 4,000,000 4,000 - $(5,367) $(1,367)
(Unaudited)
Balance at November 30,
2010 4,000,000 4,000 - $(5,367) $(1,367)
Net Loss for the Period
October 29, 2009 to
November 30, 2010 - - - - -
Balance at February
28, 2011 4,000,000 4,000 - - -
Net loss for the Period
October 29 2009 to
February 28, 2011 - - - - -
Accompanying Notes are an Integral Part of These Financial
F-16
Swordfish Ventures Inc.
(A Development Stage Company)
Notes to the Financial Statements
February 28, 2011
(Unaudited)
NOTE 1 Nature and Continuance of Operations
The Company is a development stage company, which was incorporated on October
29, 2009 in the state of Nevada.These financial statements have been
prepared on a going concern basis. The company has yet to achieve profitable
operations and losses are anticipated in the development of its business,
raising substantial doubt about the Companys ability to continue as a
going concern. Its ability to continue as a going concern is dependent upon
the ability of the Company to generate profitable operations in the future
and/or to obtain the necessary financing to meet its obligations and repay
its liabilities arising from normal business operations when they come due.
Management plans to continue to provide for its working capital needs by
seeking loans from its shareholders. These financial statements do not include
any adjustments to the recoverability and classification of assets, or the
amount and classification of liabilities that may be necessary should the
Company be unable to continue as a going concern.
The Companys year-end is February 28.
The interim financial statements include all adjustments that, in the opinion
of management, are necessary in order to make all financial statements not
misleading.
NOTE 2 - Summary of Significant Accounting Policies
The financial statements of the Company have been prepared in accordance
with accounting principles generally accepted in the United States of
America. Because a precise determination of many assets and liabilities is
dependent upon future events, the preparation of financial statements for
a period necessarily involves the use of estimates, which have been made
using careful judgment. Actual results may vary from these estimates.
The financial statements have, in managements opinion, been properly
prepared within the framework of the significant accounting policies
summarized below:
Development Stage Company
The Company complies with Statement of Financial Accounting Standard
FASB ASC No. 915 and the Securities and Exchange Commission Exchange
Act 7 for its characterization of the Company as development stage.
Impairment of Long Lived Assets
Long-lived assets are reviewed for impairment in accordance with FASB
ASC No. 360, Accounting for the Impairment or Disposal of Long- lived
Assets. Under FASB ASC No. 360, property, plant and equipment are tested
for recoverability whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. An impairment charge
is recognized or the amount, if any, which the carrying value of the asset
exceeds the fair value.
Financial Instruments
The carrying value of the Companys financial instruments consisting
of cash equivalents and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is managements opinion that
the Company is not exposed to significant interest, currency or
credit risks arising from these financial instruments.
Income Taxes
The Company uses the assets and liability method of accounting for
income taxes in accordance with FASB ASC No. 740 Accounting for Income
Taxes. Under this method, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to temporary differences
between the financial statements carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled.
Basic and Diluted Net Loss Per Share
In accordance with FASB ASC No. 260, Earnings Per Share, the basic net
loss per common share is computed by dividing net loss available to
common stockholders by the weighted average number of common shares
outstanding. Diluted net loss per common share is computed similar to
basic net loss per common share except that the denominator is increased
to include the number of additional common shares that would have been
outstanding if the potential common shares had been issued and if the
additional common shares were dilutive. As at August 31, 2010, diluted
net loss per share is equivalent to basic net loss per share.
39
Stock Based Compensation
The Company accounts for stock options and similar equity instruments
issued in accordance with FASB No. 718,
Share-Based Payment.
Accordingly, compensation costs attributable to stock options or similar
equity instruments granted are measured at the fair value at the grant date,
and expensed over the expected vesting period. Transactions in which
goods or services are received in exchange for the issuance of equity
instruments are accounted for based on the fair value of the consideration
received or the fair value of the equity instruments issued, whichever is
more reliably measurable. FASB ASC No. 718 requires excess tax benefits be
reported as a financing cash inflow rather than as a reduction of taxes paid.
The Company did not grant any stock options during the period ended February
28, 2011.
Comprehensive Income
The Company adopted Statement of FASB ASC No. 220, Reporting Comprehensive
Income, which establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. The Company
is disclosing this information on its Statement of Stockholders Equity.
Comprehensive income comprises equity except those resulting from
investments by owners and distributions to owners.
The Company has no elements of other comprehensive income during the
period ended February 28, 2011.
New Accounting Standards
Management does not believe that any recently issued, but not yet effective
accounting standards if currently adopted could have a material effect
on the accompanying financial statements.
Accounting Standard Codification
The Financial Accounting Stadards Board (FASB) issued the Accounting
Standards Codification (the Codification or ASC) on July,1 2009
(which became effective for interim and annual periods ending after
September 15, 2009). The Codification changes the way that accounting
principles generally accepted in the United States (U.S. GAAP) are
referenced. Beginning on that date the Codification officially became the
single source of authoritative nongovernmental U.S. GAAP. The change
affects the way the Company refers to U.S. GAAP in its financial
statements and accounting policies. All existing standards that were
use to create the Codification were superseded. Rules and interpretive
releases of the Securities and Exchange Commission (SEC) under authority
of federal securities laws are also sources of authoritative GAAP for
SEC registrants. The Company adopted and applied the provisions of
the ASC and has eliminated references to pre-ASC accounting standards
throughout its financial statements. The adoption of this new guidance
did not impact the Companys financial position or results of operations.
NOTE 3 - INCOME TAXES
At February 28, 2011, the Company had a federal operating loss carryforward
of $5,367 which begins to expire in 2030.Components of net deferred tax
assets, including a valuation allowance, are as follows at February 28,
2011.
2010
Deferred tax assets: $ 1,878
Net operating loss carryforward $ -0-
___________
1,878
Less: Valuation Allowance (1,878)
============
$ -0-
The valuation allowance for deferred tax assets as of February 28, 2011 was
$ 1,878. In assessing the recovery of the 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 in the periods in which those temporary differences become deductible.
Management considers the scheduled reversals of future deferred tax
liabilities, projected future taxable income, and tax planning strategies
in making this assessment. As a result, management determined it was more
likely than not the deferred tax assets would not be realized as of February
28, 2011, and recorded a full valuation allowance.
Reconciliation between the statutory rate and the effective tax rate for
the period ended February 28, 2011 is as
follows:
2010
Federal statutory tax rate (35.0)%
Change in valuation allowance 35.0%
Effective tax rate 0.0%
=================
NOTE 4- Capital Stock
On October 29, 2009, the Company issued 4,000,000 common shares in exchange
to the sole officer and director of the Company in exchange for his services
to the Company which are valued at $4,000.00. As of February 28, 2011, the
Company is authorized to issue one stock of common stock up to 75,000,000
shares at $ 0.001 par value and 4,000,000 shares are issued and outstanding.
NOTE 5- Subsequent Event
As of February 28, 2011, there is no reportable subsequent event,
40
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering all of which are to be paid by the
registrant are as follows:
SEC Registration Fee $ 100
Accounting Fees and Expenses 3,000
Legal Fees and Expenses 1,900
-------
TOTAL $5,000
=======
RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the registrant has sold the following securities
which were not registered under the Securities Act of 1933, as amended.
Name and Address Date Shares Consideration
---------------- ---- ------ -------------
Gao Hai February 28, 2010 4,000,000 --
Room B3 20th Floor
Boldwin Industrial Building
16-18 Wah Sing Street
Kwai Chung N.T. Hong Kong
We issued the foregoing restricted shares of common stock to Mr. Hai
pursuant to Regulation S of the General Rules and Regulations promulgated under
the Securities Act of 1933. The sale of our shares to Mr. Hai took place
outside the United States of America and Mr. Hai is non-US persons as
defined in Regulation S. Further, no commissions were paid to anyone in
connection with the sale of our shares and general solicitation was not made to
anyone.
II-1
41
EXHIBITS.
The following Exhibits are filed as part of this Registration
Statement:
Exhibit No. Document Description
----------- --------------------
3.1 Articles of Incorporation.*
3.2 Bylaws.*
4.1 Form of Share Certificate.**
5.1 Opinion from a law firm regarding the legality of the
securities being registered.**
10.1 Employee Agreement*
23.1 Consent of Stan J.H. Lee, CPA.*
99.1 Subscription Agreement.*
* Filed Previously
** To Be Attached To Final S-1
II-2
42
UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price set
forth in the Calculation of Registration Fee table in the effective
registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4) Intentionally omitted.
(5) That, for the purpose of determining liability under the
Securities Act of 1933 to any purchaser:
(i) Intentionally omitted.
(ii) If the registrant is subject to Rule 430C , each prospectus
filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying
on Rule 431B or other than prospectuses filed in reliance on Rule
431A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by
reference into the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration
II-3
43
statement will, as to a purchaser with a time of contract of sale
prior to such first use, supersede or modify any statement that was
made in the registration statement or prospectus that was part of
the registration statement or made in any such document immediately
prior to such date of first use.
(6) That, for the purpose of determining liability of the registrant
under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities:
The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used
to sell the securities to the purchaser, if the securities are
offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to
such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to
Rule 424.
(ii) Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned registrant or used or referred to
by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to
the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv) Any other communication that is an offer in the offering made
by the undersigned registrant to the purchaser.
B. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
II-4
44
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized
in the City of Changchun, China, on the 27th day of April, 2011.
SWORDFISH VENTURES INC.
BY: /s/ Gao Hai
-------------------------------------------------------------------
Gao Hai, President, Principal Executive
Officer, Secretary, Treasurer,
Principal Financial
Officer, Principal Accounting
Officer and
sole member of the Board of
Directors.
Pursuant to the requirements of the Securities Act of 1933, the registrant
has been signed by the following persons in the capacities and on the dates
indicated.
Signature Name and Title Date
By: /s/ Gao Hai Gao Hai, President, Principal Executive April 27, 2011
_____________________ Officer, Secretary, Treasurer,Principal
Gao Hai Financial Officer, Principal Accounting
Officer and sole member of the Board of
Directors
.