Encompass Energy Services (EESI) 10-Q 2010 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2010
o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________________ to _________________
Commission file number 814-00776

Ametrine Capital, Inc. (Exact name of registrant as specified in its charter)
Delaware  (State or other jurisdiction of incorporation or organization)	74-3252949 (IRS Employer Identification No.)
340 West Superior Street, Unit 1601, Chicago, Illinois 60610 (Address of principal executive offices) (312) 205-9101 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o  No o

Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes x  No o

The number of shares outstanding of the registrant’s Common Stock, $0.01 par value, was 2,671,799 as of August 30, 2010.

 Table of Contents

		Page
PART I - FINANCIAL INFORMATION:			3
Item 1.	Balance Sheets (Unaudited)		5
	Statements of Operations (Unaudited)		6
	Statements of Cash Flows (Unaudited)		8
	Notes to Financial Statements (Unaudited)		9-12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		14
Item 4T.	Controls and Procedures		15
PART II - OTHER INFORMATION:			16
Item 1.	Legal Proceedings		16
Item 1A.	Risk Factors		16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		16
Item 3.	Defaults Upon Senior Securities		16
Item 4.	Submission of Matters to a Vote of Security Holders		16
Item 5.	Other Information		16
Item 6.	Exhibits		16
SIGNATURES			17

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

AMETRINE CAPITAL, INC.

FINANCIAL STATEMENTS AS OF JUNE 30, 2010

UNAUDITED

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AMETRINE CAPITAL, INC.

FINANCIAL STATEMENTS AS OF JUNE 30, 2010

UNAUDITED

TABLE OF CONTENTS

	Page
Balance Sheets as of June 30, 2010 (unaudited) and December 31, 2009	5
Statements of Operations (unaudited) for the three and six months ended June 30, 2010 and 2009.	6
Statements of Changes in Net Assets (unaudited) for the three and six months ended June 30, 2010 and 2009.	7
Statements of Cash Flows (unaudited) for the three and six months ended June 30, 2010 and 2009.	8
Notes to Financial Statements (unaudited)	9-12

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AMETRINE CAPITAL, INC.

BALANCE SHEETS

UNAUDITED

	June 30			December 31
	2010			2009
ASSETS
Cash and cash equivalents	$	16,755		$	16,755
Total assets		16,755			16,755
LIABILITIES
Related party		85,238			55,472
Total liabilities		85,238			55,472
NET ASSETS
Common stock, par value $.01 per share, 25,000,000 shares authorized and 2,671,799 shares issued and outstanding		26,718			26,718
Paid-in capital in excess of par		106,872			106,872
Undistributed net investment loss		(202,073	)		(172,307	)
Total net assets		(68,483	)		(38,717	)
Total liabilities and net assets		16,755			16,755
Net assets value per share	$	(0.026	)	$	(0.014	)

/S/ Lior Ostashinsky	August 5, 2010
Lior Ostashinsky President	Date of approval of the Financial statements

The accompanying notes are an integral part of the financial statements.

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AMETRINE CAPITAL, INC.

STATEMENTS OF OPERATIONS

UNAUDITED

	Six Months Ended  June 30,						Three Months Ended  June 30,
	2010			2009			2010			2009
Investment Income	$	-		$	-		$	-		$	-
Expenses:
Professional fees		29,766			3,600			18,766			1,800
Total Expenses		29,766			3,600			18,766			1,800
Net Investment Loss		(29,766	)		(3,600	)		(18,766	)		(1,800	)
Net decrease in net assets resulting from operations	$	(29,766	)	$	(3,600	)	$	(18,766	)	$	(1,800	)
Loss per share - Basic and Diluted (See note 3)		(0.011	)		(0.006	)		(0.007	)		(0.003	)
Weighted average shares outstanding - Basic and Diluted		2,671,799			615,460			2,671,799			615,460

The accompanying notes are an integral part of the financial statements.

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AMETRINE CAPITAL, INC.

STATEMENTS OF CHANGES IN NET ASSETS

UNAUDITED

	Six Months Ended  June 30,						Three Months Ended  June 30,
	2010			2009			2010			2009
Decrease in net assets from operations:
Net investment loss	$	29,766		$	3,600		$	18,766		$	1,800
Net decrease in net assets resulting from operations		(29,766	)		(3,600	)		(18,766	)		(1,800	)
Total decrease in net assets		(29,766	)		(3,600	)		(18,766	)		(1,800	)
Net Assets:
Beginning of period		(172,307	)		(73,491	)		(183,307	)		(75,291	)
End of period	$	(202,073	)	$	(77,091	)	$	(202,073	)	$	(77,091	)

The accompanying notes are an integral part of the financial statements.

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AMETRINE CAPITAL, INC.

STATEMENTS OF CASH FLOWS

UNAUDITED

	Six Months Ended  June 30,						Three Months Ended  June 30,
	2010			2009			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net decrease in net assets resulting from operations	$	(29,760	)	$	(3,600	)	$	(18,766	)$	$	(1,800	)
Adjustments to reconcile net decrease in net assets resulting from operations to net cash used by operating   activities:
Increase in accrued expenses		29,766			3,600			18,766			1,800
Net cash used in operating activities		-			-			-			-
Net  increase in cash and cash equivalents		-			-			-			-
Cash and cash equivalents at beginning of period		16,755			-			16,755			-
Cash and cash equivalents at the end of period		16,755			-			16,755			-

The accompanying notes are an integral part of the financial statements.

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AMETRINE CAPITAL, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION:

Ametrine Capital, Inc. ("Ametrine" or "Company") is a closed-end, non-diversified management investment company that elected to be regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended. It was formed on December 19, 2007 as a Delaware limited liability company. On February 12, 2008, the Company was converted into a Delaware corporation and changed its name from Ametrine Capital, LLC to Ametrine Capital, Inc. Until February 13, 2008 Ametrine was held by its sole incorporator. On February 14, 2008 Ametrine issued 615,460 shares of its common stock to Meitav Underwriting Ltd. (“Meitav”) for a total consideration of $30,773.

On August 31,2009 Ametrine issued 350,000 shares of its common stock, for a total consideration of $17,500.

On September 3, 2009 Ametrine issued to Meitav 1,706,339 shares of its common stock in conversion for Ametrine’s outstanding debt to Meitav.

As a BDC, the Company's investment objective was to maximize total return from capital appreciation and current income. The Company intended to achieve its investment objective by providing equity and debt financing primarily to small and midsized U.S. and Israeli companies.

On July 26, 2010 Meitav, representing the majority of the voting power of the Company, adopted, by written consent, resolutions authorizing and approving (1) a change in the Company’s business so that it ceases to be a BDC, and (2) the Company’s withdrawal of its notification of election to be subject to Sections 55 through 65 of the Investment Company Act of 1940 (the “1940 Act”) by filing Form N-54C with the Securities and Exchange Commission (the “SEC”).  The withdrawal as a BDC will be effective upon filing the notification on Form N-54C and receipt thereof by the SEC, after which the Company will no longer be subject to regulation under the relevant provisions of the1940 Act.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The significant accounting policies followed in the preparation of the financial statements are as follows:

A. Basis of Presentation:

The financial statements are prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP") and pursuant to the reporting requirement set forth on Article 6 of Regulation S-X, as appropriate. In accordance with Article 6-09 of Regulation S-X under the Exchange Act, a Statement of Changes in Net Assets is provided in lieu of a Statement of Changes in Stockholders’ Equity.

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AMETRINE CAPITAL, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.):

A. Basis of Presentation (cont.):

The accompanying unaudited financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required for annual financial statements. The unaudited interim financial statements and notes thereto should be read in conjunction with the financial statements and notes for the fiscal year ended December 31, 2009 included in the Company’s Annual report on Form    10-Q, as filed with the Securities and Exchange Commission (“SEC”).

The financial statements reflect all adjustments and reclassifications which, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition for the periods presented.

Furthermore, the preparation of the financial statements requires management to make significant estimates and assumptions including the fair value of investments that do not have a readily available market value. Actual results could differ from those estimates, and the differences could be material. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for the full year.

B. Use of Estimates in Preparation of Financial Statements:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. Actual result could differ from those estimates.

C. Cash and Cash Equivalents:

Cash and cash equivalents consist of demand deposits and highly liquid investments with original maturities of three months or less. Cash and cash equivalents are carried at cost which approximates fair value.

D.  Investments:

The Company intends to invest principally in the equity and debt securities of primarily non public and mid-sized companies. Currently, no such investments were done.

All of the Company's securities will be carried at fair value using different methodologies generally used to determine fair in accordance with FASB ASC Topic 820, Fair Value Measurement and Disclosures(“ASC 820“).

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AMETRINE CAPITAL, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.):

E.   Recent Accounting Pronouncements:

1. In May 2009, the FASB issued SFAS 165—Subsequent Events, which was subsequently included in ASC Topic 855—Subsequent Events, or ASC 855. This guidance establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, and specifically requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. We adopted this guidance during the quarter ended June 30, 2009.

2. In February 2010, the FASB issued ASU 2010-09 to amend ASC 855 to address certain implementation issues, including (1) eliminating the requirement for SEC filers to disclose the date through which it has evaluated subsequent events, (2) clarifying the period through which conduit bond obligors must evaluate subsequent events, and (3) refining the scope of the disclosure requirements for reissued financial statements. The adoption of this standard did not have a significant impact on our consolidated financial statements.

3. In January 2010, the FASB issued ASU No. 2010-01, Accounting for Distributions to Shareholders with Components of Stock and Cash (“ASU 2001-01”), which addresses the accounting for a distribution to shareholders that offers them the ability to elect to receive their entire distribution in cash or shares of equivalent value with a potential limitation on the total amount of cash that shareholders can receive in the aggregate. ASU2010-01 clarifies that the stock portion of such a distribution is considered a share issuance reflected prospectively in earnings per share. ASU 2010-01 is effective for interim and annual periods ending after December 15, 2009 and should be applied on a prospective basis. We adopted the requirements of ASU 2010-01 in the fourth quarter of 2009 and its adoption did not have a material effect on our consolidated financial statements.

4. In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (“ASU 2010-06”), which amends ASC 820 and requires additional disclosure related to recurring and nonrecurring fair value measurements with respect to transfers in and out of Levels 1 and 2 and activity in Level 3 fair value measurements. The update also clarifies existing disclosure requirements related to the level of disaggregation and disclosure about inputs and valuation techniques. ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009 except for disclosures related to activity in

Level 3 fair value measurements which are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years.

Management is currently evaluating the impact on our consolidated financial statements of adopting ASU 2010-06.

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AMETRINE CAPITAL, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 3 - EARNING PER SHARE:

	Six Months Ended  June 30,						Three Months Ended  June 30,
	2010			2009			2010			2009
Numerator for basic and diluted net decrease in net assets per share resulting from operations	$	(29,760	)	$	(3,600	)	$	(18,766	)	$	(1,800	)
Denominator for basic and diluted weighted average share:		2,671,799			615,460			2,671,799			615,460
Basic and diluted net decrease in net assets per share resulting from operations:	$	(0.011	)	$	(0.006	)	$	(0.007	)	$	(0.003	)

NOTE 4 - DISTRIBUTABLE INCOME

The Company intends to make annual distributions to holders of common stock. The amount of the annual distributions will be determined by the Board of Directors. The Company intends to distribute to its stockholders all of its net income and, in most cases, all of its net capital gains, although it may opt not to distribute certain net capital gains.

NOTE 5 - TAXES

The Company intends to elect to be treated for federal income tax purposes, and intends to qualify annually thereafter, as a a regulated investment company (“RIC”) under Subchapter M of the Internal  Revenue Code of 1986,  as amended. As a RIC, the Company’s income generally will not be subject to taxation to the extent such income is distributed to stockholders. However, certain of the Company’s investments may be owned by wholly owned subsidiaries that are subject to corporate level federal, state, and local income tax in their respective jurisdictions.

To obtain and maintain RIC tax treatment, the Company must meet specified source-of-income and asset diversification requirements and distribute annually at least 90% of its ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses. As of June 30, 2010, the Company has yet to be treated as a RIC.

As of June 30, 2010 the Company had net operating loss carry forwards in the amount of $202,073.

NOTE 6 - NET ASSETS:

As of June 30, 2010 the Company had 2,671,799 shares of common stock.

These shares confer upon their holders the rights to receive notice to participate and vote in general meetings, and the right to receive dividends if declared. Currently, Meitav is the controlling shareholder of the Company.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statements

The statements contained in this Quarterly Report on Form 10-Q are not historical facts but are "forward-looking statements." Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as "believes," "intends," "plan" "expects," "may," "will," "should," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, and these and other similar expressions are intended to identify forward-looking statements. Forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, our achievements or industry results to be materially different from any future results, performance, levels of activity, our achievements or industry results expressed or implied by such forward-looking statements. Such forward-looking statements appear in Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations," as well as elsewhere in this Quarterly Report and include statements regarding our outlook for the coming months and information with respect to any other plans and strategies for our business. The factors discussed herein and expressed from time to time in our filings with the Securities and Exchange Commission ("SEC") could cause actual results and developments to be materially different from those expressed in or implied by such forward-looking statements. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential uncertainties and other factors that could affect our business is described in our registration statement on Form N-2, which was declared effective on May 21, 2009, under “Risk Factors”. Readers are also urged to carefully review and consider the various disclosures we have made in that registration statement.

As used in this quarterly report, the terms “we”, “us”, “our”, the “Company”, the “registrant” and “Ametrine” mean Ametrine Capital, Inc., unless otherwise indicated or as otherwise required by the context.

Overview

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

You should read the following discussion of our financial condition and results of operations together with the unaudited financial statements and the notes to unaudited financial statements included elsewhere in this report.

We were formed as a closed-end, non-diversified management investment company that filed an election to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, with the intent to invest principally in the equity and debt securities of primarily non-public U.S.- and Israeli-based small and mid-sized companies. We have not conducted any significant operating activities and have not made any investment. On July 26, 2010, Meitav Underwriting Ltd (“Meitav”), our majority shareholder determined that it would be beneficial for us to withdraw our election to be regulated as a BDC, in order to pursue other operating possibilities. In connection therewith, on August 10, 2010, we filed a preliminary information statement with the SEC. Upon the filing of a definitive information statement, we will mail a copy to our shareholders of record. At least 20 days after the mailing of the information statement, we will file notification on Form N-54C with the SEC, upon which the withdrawal as a BDC will be effective.  Thereafter, we will no longer be subject to the relevant sections under the Investment Company Act of 1940.

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We currently have a negative net worth, which means that we are insolvent at the present time before having raised capital or having any operations. An investment in our Company is highly speculative and investors may lose their whole investment.

Our shares of common stock are currently quoted on the OTC Bulletin Board under the symbol AMRZ.OB.

Results of Operations

Three Months Ended June 30, 2010 compared with Three Months Ended June 30, 2009

We have not had any revenues from operations since our formation on December 19, 2007. We have accumulated a net loss of $18,766 or $0.007 per share, for the three months ended June 30, 2010 compared with $1,800, or $0.003 loss per share, for the three months ended June 30, 2009.

During the three months ended June 30, 2010, all of our operating expenses were attributed to general and administrative expenses, mainly in connection with payment for accounting, printing and legal fees.

Liquidity and Capital Resources

As of June  30, 2010, we had $16,755 in cash.  We had the same cash balance as of December 31, 2009. As of now our liquidity needs are being covered by a related party.  Meitav is currently our controlling shareholder through its investment of $30,773 for common shares purchased for $0.05 per share.  Meitav also paid our accrued organization and registration expenses, which it provided in the form of an interest-free convertible loan (the “Loan”). On September 3, 2009, the Loan amount of $85,316 was converted at a conversion price of $0.05 per share and as a result we issued to Meitav 1,706,339 shares of our common stock.  Liabilities as of June 30, 2010 were $85,238, compared to $55,472 as of December 31, 2009. Liabilites were comprised of obligations to Meitav in relation to the ongoing funding of our business.  On August 31, 2009, we issued 350,000 shares of our common stock to 35 investors for an aggregate consideration of $17,500 or $0.05 per share. The shares were issued out of our N-2 registration statement.

Outlook

Our current cash may not be sufficient to meet our anticipated requirements for the next 12 months.  Our future sustainability depends on our ability to raise sufficient capital to meet our future expenses by making additional offerings of our stock.  There can be no assurance that we will be able to obtain financing at acceptable terms to us, or at all.  We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.  Our operations continue to be funded by Meitav, our principal shareholder.  Our inability to raise funds will have a severe negative impact on our ability to remain a viable company.  If we are unable to obtain the financing necessary to support our operations, we may not be able to conduct any significant operations, or may be unable to continue as a going concern. In that event, we may be forced to cease operations and our stockholders could lose their entire investment in the Company.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

A smaller reporting company is not required to provide the information required by this item.

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Item 4T.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures  

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Exchange Act. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based on our evaluation, management concluded that the Company did maintain effective internal control over financial reporting as of June 30, 2010.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the second quarter of 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

Item 1A. Risk Factors

A smaller reporting company is not required to provide the information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

There was no matter submitted to a vote of security holders during the fiscal quarter ended March 31, 2010.

Item 5. Other Information. No

None

Item 6. Exhibits.

* 31.1	Rule 13a-14(a) Certification of Principal Executive Officer.
* 31.2	Rule 13a-14(a) Certification of Principal Financial Officer.
** 32.1	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.

* Filed herewith

** Furnished herewith.

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SIGNATURES

           Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized:

	Ametrine Capital, Inc.
Dated: August 12, 2010	By:	/s/ Lior Ostashinsky
		Lior Ostashinsky
		President and Treasurer

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