Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding shares of common stock as of June 20, 2006, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly.
Our original articles of incorporation authorized 100,000,000 shares of common stock at a par value of $0.001 per share and 10,000,000 shares of preferred stock at a par value of $0.001 per share. There are no provisions in our charter or by-laws that would delay, defer or prevent a change in our control.
As of June 20, 2006, 24,000,000 shares of common stock are issued and outstanding and held by 47 shareholders. Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote.
Holders of common stock do not have cumulative voting rights.
Therefore, holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors. Holders of our common stock representing a majority of the voting power of our capital stock issued and outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation.
Although there are no provisions in our charter or by-laws that may delay, defer or prevent a change in control, we are authorized, without shareholder approval, to issue shares of preferred stock that may contain rights or restrictions that could have this effect.
Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.
Preferred Stock
Our articles of incorporation also provide that we are authorized to issue up to 10,000,000 shares of preferred stock with a par value of $.001 per share. As of the date of this prospectus, there are no shares of preferred stock issued and outstanding. Our Board of Directors has the authority, without further action by the shareholders, to issue from time to time the preferred stock in one or more series for such consideration and with such relative rights, privileges, preferences and restrictions that the Board may determine. The preferences, powers, rights and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and purchase funds and other matters. The issuance of preferred stock could adversely affect the voting power or other rights of the holders of common stock.
Dividends
Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.
Warrants
There are no outstanding warrants to purchase our securities.
Options
There are no options to purchase our securities outstanding. We may in the future establish an incentive stock option plan for our directors, employees and consultants.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
The financial statements included in this prospectus and the registration statement have been audited by Malone & Bailey, PC, to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our director and officer is indemnified as provided by the Texas Statutes and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933.Insofar as indemnification for liabilities arising under the Securities Act of1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person 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, we will, unless in the opinion of our 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 Securities Act and will be governed by the final adjudication of such issue.
We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.
ORGANIZATION WITHIN LAST FIVE YEARS
We were incorporated on October 11, 2005 in the State of Texas and 10,000,000 shares of common stock were issued Ivette Hunsinger for services rendered during pre-incorporation work in formation of the corporation and in securing the franchise. In addition, in October 2005, we issued an additional 10,000,000 shares to Ms. Hunsinger for $20,000.
DESCRIPTION OF BUSINESS
Ivette Hunsinger, our founder and sole officer and director, acquired a travel franchise from Cruise Planners, Inc. in September 2005. Cruise Planners, Inc. is established as one of the most highly professional, reputable, and well known companies in the cruise industry with over 500 franchisees in 42 states nationwide. Ms. Hunsinger contributed the franchise to us when we were formed in October of 2005. The franchise agreement allows world wide marketing territory. Cruisestock can book cruises and travel throughout the world, however, we plan to concentrate our marketing to the local Houston, Texas market.
We earn a fee of 14% to 16% of the commissionable cruise cost on a cruise, of which 3% is paid to the franchisor Cruise Planners. We earn a commission of 5% to 14% for booking ground tours, land packages and hotels. We anticipate 70% or more of our revenues will come from cruises.
We have a policy of giving a 5% discount on cruises and land packages to shareholders of our stock that demonstrate they own 1000 shares or more at the time of booking and departing. We believe this will help to build shareholder loyalty and give us a marketing edge that many other travel agents do not enjoy. To date we have booked cruises and land packages worth almost $50.000.00. Cruises and land packages commissions are paid after the trips are completed. We have also sold 7 insurance policies. Insurance polices pay 20 – 30 % commissions and these are paid immediately.
We intend to market to individuals using word of mouth, and through business and social acquaintances. So far, we have booked most of our cruises and packages from this source. We also intend to host parties where we will display brochures on various cruise lines and tour companies. We already booked one family of three for a $16,000 trip from one of these parties. Ms. Hunsinger sponsored her youngest son’s little league baseball team and each of the players and coaches shirts displayed our company name. We also had a sign at the ball field. We also hosted a vendor table at the ballpark’s fun day. From this we have already booked some cruises and the ball field also purchased a $700 gift certificate they awarded as a raffle prize. We were then able to book that trip.
However, our principal plan is to market to groups. Ms. Hunsinger’s mother in law is active in several bridge groups and we have already booked, and had sail, one group of 19 people in 9 cabins. We intend to book one more bridge group this year and two for next year. We intend to book a spring-break baseball group for ‘07. We have already contacted one association that has 4 conventions a year and we will probably book one of their conventions for ‘08. They usually have from 200 to 300 attendees per convention. Our goal is to book 5 large groups a year: two for bridge, one for baseball/school and two for businesses. We will market through membership in two Country Clubs, Civic Associations memberships, Business and Professional organizations, trade organizations, card clubs and school groups, etc. Ms Hunsinger has 5 children and they are all active in various sports and school activities.
We also market through our web site www.travelwithsavy.com. It is backed into the Cruise Planner website and when an individual searches for a travel agent in Houston, Texas, we are the only Cruise Planner franchisee.
Cruise Planners
Cruise Planners requires all of its franchisees to complete a comprehensive 5 day training program at their headquarters in Ft. Lauderdale, FL. Cruise Planners became an affiliate of American Express in 2002 and Franchisees can use the American Express logo and name in their marketing material after they complete several qualifying steps. Cruise Planners does national marketing including internet, direct mail, and print ads, at no additional cost to the franchisee, in order to generate leads for the franchisees.
Cruise Planners Ranked #1 in Cruise Only Franchises by Entrepreneur Magazine 2004 & 2005 Annual Franchise 500. With more than 85 million dollars in sales, Cruise Planners has become one of the largest home-based businesses in the cruise industry today and was named by The Wall Street Journal as one of the hottest franchise concepts. Their well-trained staff has over 85 years experience in the travel business. Cruise Planners is licensed, bonded and insured and is a member of CLIA (Cruise Line International Association) NACOA (National Association of Cruise Only Agencies) and ASTA (American Society of Travel Agents. They have achieved top National Account status with all of the top cruise lines in America.
This affords Cruise Planners, Inc., and therefore, us, not only quick access to upper management, but the best commission rates offered in the industry. Cruise Planners, Inc. provides its franchisees with high commissions, preferential cruise pricing, superior booking opportunities, direct marketing support, cooperative advertising programs and advanced training. Cruise Planners has an in-house web development team that created a professional and effective Internet sites for its franchisees. We customized our own site, www.travelwithsavy.com , which not only gives us credibility in the marketplace, but also provided us with an excellent marketing and communication vehicle.
The Cruise Planners, Inc. website cruiseplanners.com features:
* Lead generation (when a prospect selects Houston Texas to select a Travel agent, we are the only franchise listed.)
* Over 15,000 pages of cruise information
* The Cruise Line content is updated daily
* Our client’s can register on our website and receive weekly e-mail specials
* Cruise ship videos
* Destination videos
Due to Cruise Planners volume, they have the ability to arrange special sales and preferred pricing advantages with amenities on select dates, giving us an edge in the marketplace Cruise Planners blocks group space on thousands of departures, allowing us to take advantage of the Group Rates and Special Amenities, without the financial and operational commitments of blocking our own groups. This provides us with an advantage over our competition. We can book as little as one cabin and still get our clients the group rate. (Normally an agency would have to book a minimum of 8 cabins/16 passengers to be eligible for these discounted rates.) In addition, applicable Group Amenities apply to these bookings, such as:
* Cabin Upgrades
* Onboard Credits
* Tour Conductors (“Free” berth)
* Cocktail Party/Meeting Space
* Shore Excursions
* Wine in Cabin
* Champagne and Chocolate-Covered Strawberries
Ms. Hunsinger is studying for her CLIA certification. It entails 100 hours of instruction, passing a test, and exploring a minimum or 5 cruise ships, 15 cabins and sailing on two cruises within one year. When this is completed we can put the CLIA certification on her business card and it lends credibility to knowledgeable travelers.
We purchase 10 leads per month from Cruise Planners @ a cost of 49.00. If we do not ‘pull’ these leads each month, they roll over.
Employees
Ms. Hunsinger is currently our only employee, and we will depend on her ability to develop customers.
MANAGEMENT DISCUSSION AND ANALYSIS
Ivette Hunsinger, our founder and sole officer and director, acquired a travel franchise from Cruise Planners, Inc. in September 2005. Cruise Planners, Inc. is established as one of the most highly professional, reputable, and well known companies in the cruise industry with over 500 franchisees in 42 states nationwide. Ms. Hunsinger contributed the franchise to us when we were formed in October of 2005. Cruise Planners is one of the largest travel franchisors and currently has over 600 franchisees. The franchise agreement allows world wide marketing territory. Cruisestock can book cruises and travel throughout the world, however, we plan to concentrate our marketing to the local Houston, Texas market.
We earn a fee of 14% to 16% of the commissionable cruise cost on a cruise, of which 3% is paid to the franchisor Cruise Planners. We earn a commission of 5% to 14% for booking ground tours, land packages and hotels. We anticipate 70% or more of our revenues will come from cruises.
We have a policy of giving a 5% discount on cruises and land packages to shareholders of our stock that demonstrate they own 1000 shares or more at the time of booking and departing. We believe this will help to build shareholder loyalty and give us a market edge that many other travel agents do not enjoy. To date we have booked cruises and land packages worth almost $50,000. Cruises and land packages commissions are paid after the trips are completed. We have also sold 7 insurance policies. Insurance polices pay 20 – 30 % commissions and these are paid immediately.
We also market through our web site travelwithsavy.com. It is backed into the Cruise Planner website and when an individual searches for a travel agent in Houston, Texas, we are the only Cruise Planner franchisee.
Plan of Operations
During the next twelve months, we expect to take the following steps in connection with the further development of our business and the implementation of our plan of operations:
Ms. Hunsinger plans to hire and train one assistant during the next 12 months. They will work under Ms. Hunsinger’s direct supervision and must attend the 5 day training course put on by Cruise Planners which costs $695. Any marketing assistants will be paid 66% of the commissions they earn. They will pay their own overhead and will have the ability to work part time out of their home. Since the marketing assistants can have flexible work hours and have minimal capital expense to get started and become a travel agent, we appeal to a large number of women that want to work part time.
If we are successful in raising additional capital we plan to buy the customer leads of franchisees from around the country that do not continue their franchise obligations. Cruise Planners minimum obligation is $50,000 dollars revenue by the end of the second year of the term of the franchise agreement and each year thereafter. Cruisestock has substantially met the minimum 2 year production quota.
The first year we plan to spend approximately $1,000 per month in marketing expense. The cruise lines and tour operators all provide 4 color brochures and letterhead and paper to print flyers on. This helps curb the cost of advertising. As our sales increase, the franchisor reduces our commission and helps with even more print ads. Because Cruise Planners is a huge account for most cruise lines, the cruise lines are very favorable to them and significantly help with their advertising budget.
Ms. Hunsinger will not take a salary for the next 12 months in an effort to build up the company’s cash and operating capital. At the end of 12 months Ms Hunsinger plans on taking 50% of the commissions earned in the form of compensation.
Results of Operations
For the period from inception ending March 31, 2006, we received revenue of $1,568. Expenses for the period totaled $26,888 resulting in a loss of $25,820. Expenses of $25,820 for the period consisted entirely of general and administrative expenses.
Capital Resources and Liquidity
As of June 20, 2006 we had $51,696 in cash. Our general and administrative expenses are expected to average $2,500 per month for the next 12 months. As of June 20, 2006 we received a total of $60,000 from financing activities from the sale of shares by us pursuant to an exemption from registration at Regulation D Rule 506 of the Securities Act of 1933.
We believe we can satisfy our cash requirements for the next twelve months with our current cash and expected revenues. However, completion of our plan of operation is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated. In the absence of our projected revenues, we may be unable to proceed with our plan of operations. Even without significant revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we may require financing to potentially achieve our goal of profit, revenue and growth.
We anticipate that our operational as well as general and administrative expenses for the next 12 months will total $25,000. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant changes in the number of employees although depending on if financing is raised we may add additional marketing assistants. We do not intend to increase our staff until such time as we can raise the capital or generate revenues to support the increase in overhead expense. At this time we have not entered into any agreements or negotiations with a sales and marketing entity to undertake marketing for us. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and status of our business plan.
In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we would then not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we would likely seek additional financing to support the continued operation of our business. We anticipate that depending on market conditions and our plan of operations, we would incur operating losses in the foreseeable future. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit from our online marketing services to cover our operating expenses.
DESCRIPTION OF PROPERTY
Our property consists of office space located at 5313 –B FM1960 West #224, Houston, Texas 77069. Our business address is a PO Box, and package service. Ms. Hunsinger provides office space in a spare room in her home. We use such space for no charge from Ms. Hunsinger and we currently have no written agreement with Ms. Hunsinger, our sole officer and director. We do not expect to enter into a written agreement with Ms. Hunsinger. Currently, this space is sufficient to meet our needs; however, if we expand our business to a significant degree, we will have to find a larger space
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our property consists of office space located at 5313 –B FM1960 West #224, Houston, Texas 77069. Our business address is a PO Box, and package service. Ms. Hunsinger provides office space in a spare room in her home. We use such space for no charge from Ms. Hunsinger and we currently have no written agreement with Ms. Hunsinger, our sole officer and director. We do not expect to enter into a written agreement with Ms. Hunsinger. Currently, this space is sufficient to meet our needs; however, if we expand our business to a significant degree, we will have to find a larger space.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No Public Market for Common Stock
There is presently no public market for our shares of common stock. We anticipate applying for trading of our common stock on the Over the Counter Bulletin Board upon the effectiveness of the registration statement of which this prospectus forms apart. However, we can provide no assurance that our shares of common stock will be traded on the Bulletin Board or, if traded, that a public market will materialize.
Holders of Our Common Stock
As of the date of this registration statement, we had 46 shareholders of both our common stock.
Rule 144 Shares
As of June 20, 2006, there are no shares of our common stock which are currently available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act. After October 18, 2006, the 20,000,000 shares issued to Ivette Hunsinger will become available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act. After February 2007, the 4,000,000 shares of our common stock held by the forty six shareholders who purchased their shares in the Regulation D 506 offering by us will become available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act.
In general, under Rule 144 as currently in effect, a person who has beneficially owned shares of a company’s common stock for at least one year is entitled to sell within any three month period a number of shares that does not exceed 1% of the number of shares of the company’s common stock then outstanding which, in our case, would equal approximately 240,000 shares of our common stock as of the date of this prospectus.
Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about the company. Under Rule 144(k), a person who is not one of the company’s affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.
Stock Option Grants
To date, we have not granted any stock options.
Registration Rights
We have not granted registration rights to the selling shareholders or to any other persons.
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us from the date of our inception until June 20, 2006.
ANNUAL COMPENSATION |
NAME | TITLE | YEAR | SALARY | BONUS | OTHER ANNUAL COMPENSATION |
| | | | | |
Ivette Hunsinger | President CEO and Chairman | 2006 | $0 | 0 | 0 |
|
LONG TERM COMPENSATION |
RESTRICTED OPTION STOCKS/ PAYOUTS AWARDED | SARS ($) | LTIP COMPENSATION | ALL OTHER COMPENSATION |
0 | 0 | 0 | 0 |
Stock Option Grants
We have not granted any stock options to our executive officers since our incorporation.
Employment Agreements
We do not have an employment or consultant agreement with Ivette Hunsinger, our Chief Executive Officer, President, and Chairman of the Board of Directors
AVAILABLE INFORMATION
We have filed a registration statement on Form SB-2 under the Securities Act of 1933 with the Securities and Exchange Commission with respect to the shares of our common stock offered through this prospectus. This prospectus is filed as apart of that registration statement and does not contain all of the information contained in the registration statement and exhibits. We refer you to our registration statement and each exhibit attached to it for a more complete description of matters involving us, and the statements we have made in this prospectus are qualified in their entirety by reference to these additional materials. You may inspect the registration statement and exhibits and schedules filed with the Securities and Exchange Commission at the Commission’s principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 100 F Street NE, Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The Securities and Exchange Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the Commission. In addition, we will file electronic versions of our annual and quarterly reports on the Commission’s Electronic Data Gathering Analysis and Retrieval, or EDGAR System. Our registration statement and the referenced exhibits can also be found on this site as well as our quarterly and annual reports. We will not send the annual report to our shareholders unless requested by the individual shareholders.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of
Cruisestock, Inc.
Houston, Texas
We have audited the accompanying balance sheet of Cruisestock, Inc. (a development stage company) as of March 31, 2006, and the related statements of loss, stockholder’s equity and cash flows for the period from inception (October 11, 2005) through March 31, 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Cruisestock, Inc. as of March 31, 2006, and its results of operations for the period from inception (October 11, 2005) through March 31, 2006, in conformity with accounting principles generally accepted in the United States of America.
May 31, 2006
Malone & Bailey, PC
www.malone-bailey.com
Houston, Texas
CRUISESTOCK, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
March 31, 2006
ASSETS | | |
| | |
Assets | | |
Cash | $ | 51,696 |
Fixed Assets, net of accumulated depreciation of $500 | | 2,584 |
| | |
TOTAL ASSETS | | 54,180 |
| | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | |
| | |
Current liabilities | $ | - |
| | |
STOCKHOLDERS’ EQUITY: | | |
Preferred stock, $.001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding | | |
Class A common stock, $.001 par value, 100,000,000 shares authorized, 24,000,000 shares issued and outstanding | | 24,000 |
| | |
Additional paid in capital | | 56,000 |
Deficit accumulated during the development stage | | (25,820) |
Total Stockholders’ Equity | | 54,180 |
| | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 54,180 |
See accompanying summary of accounting policies
and notes to financial statements.
CRUISESTOCK, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF LOSS
Period from October 11, 2005 (Inception) Through March 31, 2006
Revenue | | $ | 1,568 |
| | | |
General and administrative | | | 26,888 |
Depreciation | | | 500 |
Net loss | | $ | (25,820) |
| | | |
See accompanying summary of accounting policies
and notes to financial statements
CRUISESTOCK, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS’ EQUITY
Period from October 11, 2005 (Inception) through March 31, 2006
| Class A Common Stock | | Additional | | Deficit accumulated during the development | | |
| Shares | | Amount | | paid in capital | stage | | Total |
Issuance of Class A Common Stock to: - Founder for $.001 per share at inception | 10,000,000 | $ | 10,000 | | 10,000 | | - | $ | 20,000 |
- Founder for $.001 per share for cash at inception | 10,000,000 | | 10,000 | | 10,000 | | - | | 20,000 |
• Investors from October 2005 to March 2006 at $.01 per share for cash | 4,000,000 | | 4,000 | | 36,000 | | | | 40,000 |
Net loss | | | | | | $ | (25,820) | | (25,820) |
Balance, March 31, 2006 | 24,000,000 | $ | 24,000 | $ | 56,000 | $ | (25,820) | $ | 54,180 |
See accompanying summary of accounting policies
and notes to financial statements
CRUISESTOCK, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
Period from October 11, 2005 (Inception) Through March 31, 2006
| | |
| | |
CASH FLOWS FROM OPERATING ACTIVITIES | | |
Net deficit accumulated during the development stage | $ | (25,820) |
Adjustments to reconcile net loss to cash used in operating activities: | | |
Depreciation | | 500 |
Stock issued for services | | 20,000 |
| | |
NET CASH USED IN OPERATING ACTIVITIES | | (5,320) |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES | | |
Purchase of fixed assets | | (2,984) |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | | |
Sale of stock | | 60,000 |
| | |
NET CHANGE IN CASH | | 51,696 |
Cash balance, beginning | | - |
Cash balance, ending | $ | 51,696 |
| | |
SUPPLEMENTAL DISCLOSURES: | | |
Interest paid | $ | - |
Income taxes paid | $ | - |
| | |
See accompanying summary of accounting policies
and notes to financial statements
CRUISESTOCK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – SUMMARY OF ACCOUNTING POLICIES
Nature of business. Cruisestock, Inc. was incorporated in Texas in October, 2005 to operate a franchise travel service. Cruisestock currently has an agreement to sell cruises under the Cruise Planners trademark.
Cruisestock’s fiscal year ends August 31, 2006.
Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
Cash and Cash Equivalents. Cash and cash equivalents include cash and all highly liquid financial instruments with purchased maturities of three months or less.
Revenue recognition. Cruisestock recognizes revenue when commissions are paid. No accounts receivable are recorded because of the uncertainty of collections.
Income Taxes. Cruisestock accounts for its income taxes in accordance with Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes” which requires the liability approach for the effect of income taxes.
Basic Loss Per Share. Basic loss per share has been calculated based on the weighted average number of shares of common stock outstanding during the period.
Recent Accounting Pronouncements. Cruisestock does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Cruisestock’s results of operations, financial position or cash flow.
Stock options and warrants. Cruisestock. accounts for stock options and warrants issued to employees under the intrinsic value method. Under this method, Cruisestock recognizes no compensation expense for stock options or warrants granted when the number of underlying shares is known and exercise price of the option or warrant is greater than or equal to the fair market value of the stock on the date of grant. Fair value is used for options and warrants issued to non-employees as compensation. There were no stock options or warrants outstanding as of March 31, 2006.
NOTE 2 – COMMON STOCK
In October 2005, Cruisestock issued 10,000,000 shares of Class A common stock at $.001 to its founder in exchange for services, valued at $20,000, during pre-incorporation work in formation of the corporation and in securing the franchise.
In October 2005, Cruisestock issued 10,000,000 shares of Class A common stock at $.001 to its founder for $20,000.
From October 2005 to March 2006, Cruisestock sold 4,000,000 shares of Class A common stock to individuals at $.01 per share for $40,000.
NOTE 3 - INCOME TAXES
Cruisestock has net operating loss of approximately $25,820 as of March 31, 2006 which can be carried forward for 20 years. At March 31, 2006, the related deferred tax asset is considered fully impaired.
NOTE 4 – COMMITMENTS
Crusestock’s principal office is in the office of its president pursuant to an oral agreement on a rent-free month-to-month basis.
CRUISE STOCK, INC.
4,000,000 Shares of Common Stock
PROSPECTUS
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Until _____________, all dealers that effect transactions in these securities whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The General Corporation Law of Texas provides that directors, officers, employees or agents of Texas corporations are entitled, under certain circumstances, to be indemnified against expenses (including attorneys’ fees) and other liabilities actually and reasonably incurred by them in connection with any suit brought against them in their capacity as a director, officer, employee or agent, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. This statute provides that directors, officers, employees and agents may also be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by them in connection with a derivative suit brought against them in their capacity as a director, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made without court approval if such person was adjudged liable to the corporation.
Our Certificate of Incorporation provides that we shall indemnify any and all persons whom we shall have power to indemnify to the fullest extent permitted by the Texas Corporate Law. Article VII of our by-laws provides that we shall indemnify our authorized representatives to the fullest extent permitted by the Texas Law. Our by-laws also permit us to purchase insurance on behalf of any such person against any liability asserted against such person and incurred by such person in any capacity, or out of such person’s status as such, whether or not we would have the power to indemnify such person against such liability under the foregoing provision of the by-laws.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission registration fee | | $ | 4.83 | |
Federal Taxes | | $ | 0 | |
State Taxes and Fees | | $ | 0 | |
Transfer Agent Fees | | $ | 0 | |
Accounting fees and expenses | | $ | 10,000.00 | |
Legal fees and expense | | $ | $20,000.00 | |
Blue Sky fees and expenses | | $ | 0 | |
Miscellaneous | | $ | 0 | |
Total | | $ | 30,004.83 | |
All amounts are estimates other than the Commission’s registration fee. We are paying all expenses of the offering listed above. No portion of these expenses will be borne by the selling shareholders. The selling shareholders, however, will pay any other expenses incurred in selling their common stock, including any brokerage commissions or costs of sale.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
We were incorporated in the State of Texas on October 11, 2005 and 10,000,000 shares of common stock were issued Ivette Hunsinger for services rendered during pre-incorporation work in formation of the corporation and in securing the franchise. In addition, in October 2005, we issued an additional 10,000,000 shares to Ms. Hunsinger for $20,000. These shares were issued in reliance on the exemption under Section 4(2) of the Securities Act of 1933, as amended (the “Act”) and were issued to these individuals as founders shares. These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, Ms. Hunsinger had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction.
In February 2006, we completed a Regulation D Rule 506 offering in which we sold 4,000,000 shares of common stock to 46 investors, at a price per share of $.01 for an aggregate offering price of $40,000. The following sets forth the identity of the class of persons to whom we sold these shares and the amount of shares for each shareholder:
Carly Bernhardt | 100,000 |
Janice L. Bredt | 100,000 |
BGlass/Robert W. Christian, Jr. | 100,000 |
Champions Financial/Robert W. Christian, Jr. | 100,000 |
Robert Christian | 100,000 |
Robert W. Christian | 100,000 |
Rosa L. Perez and Yerina S. Christian | 100,000 |
Yerina Stevens Christian | 100,000 |
Christopher H. Clark | 100,000 |
Jason Paul Danna | 100,000 |
Sonia Danna | 100,000 |
Ben Davis | 50,000 |
Troy Duhaney | 100,000 |
Vicki Garza | 100,000 |
Connie D. Gonzales | 100,000 |
Jerome E. Gonzales III | 50,000 |
Randolph J. Greiner | 100,000 |
Melissa C. Guerra | 100,000 |
Donald R. Harris | 50,000 |
Charles C. Hunsinger | 100,000 |
Keith Jarvis | 100,000 |
Andrew W. Johnson | 100,000 |
Nichol L. Johnson | 100,000 |
Jillaina d. Kennedy | 100,000 |
Diane E. Lawton | 100,000 |
Kyla D. Lockhart | 100,000 |
Tiffany C. Lockhart | 100,000 |
Tanya Marek | 50,000 |
Donald C. May | 50,000 |
Thelma Jean Morris | 50,000 |
Mary Francis Moss | 50,000 |
Philip L. Peek | 100,000 |
Christopher Rickard | 50,000 |
Deborah Robertson | 100,000 |
Danielle Schaefer | 50,000 |
Richard C. Schmitz | 50,000 |
Theodore A. Schwartz | 100,000 |
E. Del Thachuk | 100,000 |
Mary Anne Thachuk | 100,000 |
Noble B. Trenham | 100,000 |
Glenn Verret | 50,000 |
The Common Stock issued in our Regulation D, Rule 506 Offering was issued in a transaction not involving a public offering in reliance upon an exemption from registration provided by Rule 506 of Regulation D of the Securities Act of 1933. In accordance with Section 230.506 (b)(1) of the Securities Act of 1933, these shares qualified for exemption under the Rule 506 exemption for this offerings since it met the following requirements set forth in Reg. ss.230.506:
(A) | No general solicitation or advertising was conducted by us in connection with the offering of any of the Shares. |
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(B) | At the time of the offering we were not: (1) subject to the reporting requirements of Section 13 or 15 (d) of the Exchange Act; or (2) an “investment company” within the meaning of the federal securities laws. |
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(C) | Neither we, nor any of our predecessors, nor any of our directors, nor any beneficial owner of 10% or more of any class of our equity securities, nor any promoter currently connected with us in any capacity has been convicted within the past ten years of any felony in connection with the purchase or sale of any security. |
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(D) | The offers and sales of securities by us pursuant to the offerings were not attempts to evade any registration or resale requirements of the securities laws of the United States or any of its states. |
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(E) | None of the investors are affiliated with any of our directors, officers or promoters or any beneficial owner of 10% or more of our securities. |
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Please note that pursuant to Rule 506, all shares purchased in the Regulation D Rule 506 offering completed in February 2006 were restricted in accordance with Rule 144 of the Securities Act of 1933. In addition, each of these shareholders were either accredited as defined in Rule 501 (a) of Regulation D promulgated under the Securities Act or sophisticated as defined in Rule 506(b)(2)(ii) of Regulation D promulgated under the Securities Act.
We have never utilized an underwriter for an offering of our securities. Other than the securities mentioned above, we have not issued or sold any securities.
ITEM 27. EXHIBITS.
EXHIBIT | |
NUMBER | DESCRIPTION |
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3.1 | Articles of Incorporation |
3.2 | By-Laws |
5.1 | Opinion of Anslow & Jaclin, LLP |
21 | Subsidiaries |
23.1 | Consent of Malone & Bailey, PC |
23.2 | Consent of Counsel, as in Exhibit 5.1 |
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) Rule 415 Offering Undertaking:
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:
(a) To include any prospectus required by Section 10(a)(3) of the Securities Act; |
(b) To reflect in the prospectus any facts or events arising after the effective date of this registration statement, or most recent post-effective amendment, which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; and 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 prospects filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(c) To include any material information with respect to the plan of distribution not previously disclosed in this 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, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, 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 hereby which remain unsold at the termination of the offering.
4. For determining liability of the undersigned small business issuer under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned small business issuer undertakes that in a primary offering of securities of the undersigned small business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to he purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned small business issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(a) Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to Rule 424 (Sec. 230.424);
(b) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer;
(c) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and
(d) Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Houston, State of Texas on June 20, 2006.
By: | /s/ Ivette Hunsinger IVETTE HUNSINGER | | |
| President, Chief Executive Officer, | |
| Chief Financial Officer, Principal Accounting Officer and Chairman of the Board of Directors | |
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POWER OF ATTORNEY
ALL MEN BY THESE PRESENT, that each person whose signature appears below constitutes and appoints Ivette Hunsinger, true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all pre- or post-effective amendments to this registration statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any one of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof. In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.
By: | /s/ Ivette Hunsinger Ivette Hunsinger | President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Chairman of the Board of Directors | |
Dated: June 20, 2006