As Filed with the Securities and Exchange Commission August 5, 2009
Registration No.: 333-XXXXXX
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SILVERHILL MANAGEMENT SERVICES, INC.
Delaware | SIC 8471 | 26-2274999 |
(State or Other Jurisdiction of Organization) | (Primary Standard Industrial Classification Code) | (IRS Employer Identification #) |
21 Merrimac Way, Unit B Tyngsboro, MA 01879 978-697-1180 |
(Address and telephone of registrant’s executive office) |
Ms. Emily Lussier 21 Merrimac Way, Unit B Tyngsboro, MA 01879 978-697-1180 |
(Name, address and telephone of agent for service of process) |
Copies of all communication to: Eric W. Richardson, Esq. Cohen & Richardson, LLP 2321 Rosecrans Avenue, Suite 4210 El Segundo, CA 90266 Telephone (310) 469-9601 Fax (310) 469-9610 |
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this prospectus
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box. X.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under 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 pursuant to Rule 462(c) under 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 pursuant to Rule 462(d) under 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 mar whether the registrant is a large accelerated filer, a non accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, a “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer . Accelerated Filer .
Non-accelerated Filer . Smaller Reporting Company X.
CALCULATION OF REGISTRATION FEE
Title Of Each Class Of Securities To Be Registered | Amount To Be Registered | Proposed Maximum Offering Price Per Share | Proposed Maximum Aggregate Offering Price | Amount of Registration Fee |
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Common Stock, par value $.0001 per share (1) | 702,000 | $0.25 | $175,500 | $9.79 |
(1) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(a) under the Securities Act of '33, as amended and based upon the amount of consideration received by the issuer. As of the date hereof, there is no established public market for the common stock being registered. Accordingly, and in accordance with Item 505 of Regulation S-B requirements certain factor(s) must be considered and utilized in determining the offering price. The factor considered and utilized herein consisted of and is based upon the issuance price of those securities issued which shares of common stock were all issued at $0.25 per share.
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WE HEREBY AMEND THIS REGISTRATION STATEMENT ON DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL WE 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 DATES AS THE COMMISSION, ACTING UNDER SAID SECTION 8(a), MAY DETERMINE.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SILVERHILL MANAGEMENT SERVICES, INC.
21 Merrimac Way – Unit B
Tyngsboro, MA 01879
Up to 693,000 Shares of Common Stock
Offering Price: $0.25 per share
As of August 4, 2009 we had 4,212,000 shares of our common shares outstanding.
This is a resale prospectus for the resale of up to 702,000 shares of our common stock by the selling stockholders listed herein. We will not receive any proceeds from the sale of the shares.
Our common stock is not traded on any public market and, although we intend to initiate steps to have our common stock quoted on the Over the Counter Bulletin Board (“OTCBB”) maintained by the Financial Industry Regulatory Authority ("FINRA") upon the effectiveness of the registration statement of which this prospectus is a part, we may not be successful in such efforts, and our common stock may never trade in any market. We have not yet contacted any broker-dealer to request that they apply to have our stock included on the OTCBB.
Selling stockholders selling pursuant to this prospectus will sell at a fixed price of $0.25 per share until our common shares are quoted on the OTCBB or another market and thereafter at prevailing market prices, or privately negotiated prices.
Silverhill Management Services, Inc. is a start up venture intending to engage in the business of offering business support services and outsourced business processes to proprietors, entrepreneurs and small businesses. Our services will include project management, database and information storage, the creation of legally compliant business policies, document management services, and finance and accounting services. We will require substantial additional capital contributions for our business to become fully operational.
Investing in our common stock involves very high risks. See "Risk Factors" beginning on page 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is August 4, 2009.
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SUMMARY OF OUR OFFERING
The following summary information is qualified in its entirety by the detailed information and financial statements appearing elsewhere in the Prospectus.
OUR BUSINESS
The Company intends to offer business support services to proprietors, entrepreneurs, and small business owners. By offering a full suite of outsourced business processes including project management, database and information storage, document management services, and finance and accounting services, the Company will market its “Virtual Admin” brand to businesses to help optimize their managements’ time and allow them to focus on their core business activities. The Company will secure office space, hire necessary personnel, purchase equipment, further develop the service offering, and commence its marketing efforts. There is no assurance that the Company will be successful in these endeavors or that if accomplishes all of these steps it will be able to operate profitably. Based on management’s personal experience, the Company believes that its product is a legitimate business opportunity for the Company and its shareholders.
We were incorporated in March of 2008, under the laws of the State of Delaware and have not commenced marketing or sales of our product. Our headquarters are located at 21 Merrimac Way – Unit B, Tyngsboro, MA 01879, which is the residence of our Chief Executive Officer, and our telephone number is 978-697-1180. We intend to establish a web site to help in marketing our product. Any information that may appear on our web site once it is operational should not be deemed to be a part of this prospectus.
About This Offering
The Offering |
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Securities being offered: | Up to 702,000 shares of common stock, par value $0.0001, by the selling stockholders. |
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Offering price per share: | $0.25 |
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Offering period: | The shares will be offered on a time-to-time basis by the selling stockholders. |
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Net proceeds: | We will not receive any proceeds from the sale of the shares. |
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Use of proceeds: | We will not receive any proceeds from the sale of the shares. |
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Number of Shares of Common Stock and Preferred Stock Authorized and Outstanding: | 50,000,000 shares of common stock authorized, 4,212,000 shares issued and outstanding, |
10,000,000 shares of blank check preferred stock authorized – none issued.
There is no trading market for our shares. We intend to find a broker dealer to sponsor us for inclusion on the Over the Counter Bulletin Board and thereafter we hope that a trading market will develop. To date we have not contacted any broker-dealer to act as a sponsor for our stock. Selling stockholders will sell at a fixed price of $0.25 per share until our common shares are quoted on the Over-the-Counter Bulletin Board or another market and thereafter at prevailing market prices, or privately negotiated prices.
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Selected Financial Information
BALANCE SHEET DATA: As of June 30, 2009 |
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Cash: | $ | 6,091 |
Total assets: | $ | 6,091 |
Accrued expenses: | $ | 3,800 |
Total liabilities: | $ | 3,800 |
Total stockholders’ deficit: | $ | 2,291 |
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STATEMENT OF OPERATIONS DATA: For the Period from March 25, 2008 (inception) through December 31, 2008 |
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Revenues: | $ | 0.00 |
Operating expenses: | $ | 6,542 |
Net loss: | $ | (6,542) |
BALANCE SHEET DATA: As of December 31, 2008 |
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Cash: | $ | 5,433 |
Total assets: | $ | 5,433 |
Accrued expenses: | $ | 9,600 |
Total liabilities: | $ | 9,600 |
Total stockholders’ deficit: | $ | (4,167) |
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STATEMENT OF OPERATIONS DATA: For the period from March 25, 2008 through December 31, 2008 |
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Revenues: | $ | 0.00 |
Operating expenses: | $ | (48,563) |
Net loss: | $ | (48,563) |
The foregoing summary information is qualified by and should be read in conjunction with our audited financial statements and accompanying footnotes.
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RISK FACTORS
You should carefully consider the following factors in evaluating our business, operations and financial condition. Additional risks and uncertainties now known to us as well as those presently unknown to us, that we currently deem either material or immaterial or that are similar to those faced by other companies in our industry or business in general, such as competitive conditions, may also impair our business operations. The occurrence of any the following risks could have a material adverse effect on our business, financial condition and results of operations.
Risks Related to Our Business
We are not yet operational and will require substantial additional funds. We intend to enter the business of offering business support services and outsourced business processes to proprietors, entrepreneurs and small businesses. Our services will include project management, database and information storage, document management and finance and accounting services. The exact array of services we will offer will be affected by our ability to raise additional capital to secure the office space, personnel and equipment required to provide these services. The greater amount of capital we raise, the greater our services will be both in the quantity of different services we offer and the number of clients we might serve. We have not raised the capital we require for our proposed business operations. However, we have not yet hired any personnel, acquired the necessary equipment or otherwise begun operations. Our activities to date have been organizational and developmental (pre-operational). We believe that our presently available funds and our financing commitments will be sufficient to meet our anticipated needs for our business plan in the pre-operational stage for at least the next twelve months. We will need to raise additional funds of $500,000 to $2,500,000 to further develop our product and additional funds to truly become operational, implement our business plan, bring our product to market, respond to competitive pressures or acquire complementary businesses or technologies. We may also need to raise funds if our available funds decrease during our various operational stages. If additional funds are raised through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders will be reduced and stockholders may experience dilution. Moreover, such securities may have rights, preferences and privileges senior to those of our common stock. There can be no assurance that additional financing will be available on terms favorable to us or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to fund our expansion, take advantage of unanticipated acquisition opportunities, develop or enhance new product offerings or respond to competitive pressures. We have no commitments to raise the additional capital we will need to become operational. Thus we may never become operational and, even if we do, we may not have sufficient funds to grow to meet demand if we are successful and investors may lose their entire investment. Recent economic developments and the current economic climate may make it especially difficult to raise additional funds.
Our independent auditors have expressed doubt about our ability to continue as a going concern. We received a report on our financial statements for the period from March 25, 2008 (inception) through December 31, 2008 from our independent registered public accounting firm that includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern. We are not operational and have limited resources. We can offer no assurance that the actions we plan to take to address these conditions will be successful. Inclusion of a “going concern qualification” in the report of our independent accountants may have a negative impact on our ability to obtain financing and may adversely impact our stock price in any market that may develop.
Our ability to hire additional personnel is important to the continued growth of our business.Our continued success depends upon our ability to attract and retain a group of motivated marketing and business support professionals. Our growth may be limited if we cannot recruit and retain a sufficient number of people. We cannot guarantee that we will be able to hire and retain a sufficient number of qualified personnel.
We face substantial competition. Competition in all aspects of the outsourced services and business services industry is intense. We will compete against established outsourced business services companies with name familiarity and greater financial resources. A large part of our effort will be directed to being recognized in this market of large players and, as a small company, to gain the trust of purchasing decision makers at our potential customers. Competitors may seek to duplicate the benefits of our services in ways that do not infringe on any benefits that our services offer. As a result we could find that our entire marketing plan and business model is undercut or made irrelevant by actions of other companies under which we have no control. We cannot promise that we can accomplish our marketing goals and as a result may experience negative impact upon our operating results.
Our success depends to a large extent upon the continued service of key managerial and technical employees and our ability to attract and retain qualified personnel. Specifically, we are highly dependent on the ability and experience of our key employee, Emily Lussier, our president and CEO. We do not have an employment agreement with Ms. Lussier. The loss of Ms. Lussier would present a significant setback for us and could impede the implementation of our business plan. There is no assurance that we will be successful in acquiring and retaining qualified personnel to execute our current plan of operations.
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Our president/CEO serves us on a part time basis and conflicts may arise. Ms. Lussier devotes only a small portion of her time to our operations. Since she also has other outside commitments, it is inevitable that conflicts will arise in her allocation of time and effort. While she will seek to give us sufficient time to allow us to operate on a basis that is beneficial to our shareholders, this goal may not be accomplished and our operating results may be negatively impacted by the unavailability of our key personnel.
The ability of our president to control our business will limit minority shareholders' ability to influence corporate affairs. Our president, Emily Lussier, owns 3,875,000 or approximately 92.00% of our 4,212,000 issued and outstanding shares. Even if she were to sell all of her shares that are covered by this prospectus, she would still own 3,485,000 shares or approximately 83.33% of our issued and outstanding shares. Because of her stock ownership, our president will be in a position to continue to elect our board of directors, decide all matters requiring stockholder approval and determine our policies. The interests of our president may differ from the interests of other shareholders with respect to the issuance of shares, business transactions with or sales to other companies, selection of officers and directors and other business decisions. The minority shareholders would have no way of overriding decisions made by our president. This level of control may also have an adverse impact on the market value of our shares because she may institute or undertake transactions, policies or programs that result in losses, may not take any steps to increase our visibility in the financial community and/ or may sell sufficient numbers of shares to significantly decrease our price per share.
If we do not receive additional financing we will not become operational. We require between $500,000 and $2,500,000 in debt or equity financing. Our management believes that it will be able to raise funds for us after this registration statement becomes effective and after we commence trading on the Over the Counter Bulletin Board (“OTCBB”). However, we cannot be certain that we will accomplish these goals or that, even if we do, that additional funds will be raised. No one has committed to invest the money we need to become operational. If we cannot become operational, we will eventually be required to abandon our plans and, unless we can find a suitable acquisition or merger partner our shareholders will lose their investment. We have not located any suitable potential merger partner because we intend to proceed with our business. Recent economic developments and the current economic climate may make it especially difficult to raise additional funds. If we do not raise additional funds, we may be required to abandon our current business plan and either operate our plan on a much smaller scaled basis or seek a different line of business. However, we will use our concerted best efforts to seek additional funds and effect our planned business and we have no other present plans.
We may be exposed to potential risks resulting from new requirements under Section 404 of the Sarbanes-Oxley Act of 2002. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we will be required, beginning with our fiscal year ending December 31, 2009, to include in our annual report our assessment of the effectiveness of our internal control over financial reporting as of the end of 2009. Furthermore, our independent registered public accounting firm will be required to attest to whether our assessment of the effectiveness of our internal control over financial reporting is fairly stated in all material respects and separately report on whether it believes we have maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009. We have not yet completed our assessment of the effectiveness of our internal control over financial reporting. We expect to incur additional expenses and diversion of management's time as a result of performing the system and process evaluation, testing and remediation required in order to comply with the management certification and auditor attestation requirements.
The Success of Our Business Depends on the Development and Enhancement of Our Services and Attracting and Retaining a Large Number of Potential Customers. Our success depends on developing and enhancing our services and attracting a large number of potential customers and persuading them to use our services. Our success is also dependent on ensuring that these customers remain our loyal long-term customers. If we fail to persuade customers to utilize our services or our competitors are more successful in achieving sales, then our revenues will suffer. As a new business, we lack recognition in the market. We do not have any services currently available. The limited funding that will be available to us upon the successful completion of this offering, which is not assured, will not permit us to offer extensive logistical services and may not enable us to obtain the number and caliber of customers necessary to achieve profitable operations. Our customers may not accept our logistics solutions over those offered by our competitors because they may doubt our ability to continue without funding. Furthermore, we may be required to incur significantly higher and more sustained advertising and promotional expenditures than we currently anticipate to attract and convert potential customers to purchasing customers. As a result, we may not be able to achieve profitability when we expect, or at all. As of the date of this prospectus, we have no existing, and a limited number of potential, customers, none of whom have made any commitments to purchase any services from us.
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The Logistical Services Business Is Subject to Rapid Technological Change and, if We Do Not Respond to Technological Developments on a Timely and Cost-Effective Basis to Better Serve Our Customers and Meet Their Expectations, it Could Adversely Impact Our Ability to Attract and Retain Customers.The markets that we will serve are subject to rapid technological change, changing customer requirements, frequent new product introductions and evolving industry standards that may render our proposed logistical services obsolete from time-to-time. If we are unable to license leading technologies useful in our business, enhance our existing services, develop new services and technology that address the increasingly sophisticated and varied needs of our prospective customers and respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis, it could adversely impact our ability to attract and re tain customers. As a result, our market position could be eroded rapidly by advancements by competitors. It is not possible to predict presently the life cycle of any of our proposed logistics services. Broad acceptance of these proposed services by customers will be critical to our future success, as will our ability to perform services on a timely basis that meet changing customer needs and respond to technological developments and emerging industry standards. We may experience difficulties that could delay or prevent the successful marketing and delivery of our proposed logistics services. We may not be able to successfully implement new technologies, proprietary technology and transaction-processing systems to customer requirements or emerging industry standards. Further, new services offered by others may meet the requirements of the marketplace and achieve market acceptance.
Intense Competition May Result in Price Reductions and Decreased Demand for Our Services; We Will Be at a Competitive Disadvantage as Compared to Virtually All Existing Companies in Overcoming These Competitive Factors; and Our Business Strategy May Not Be Successful.We expect to face strong competition from well-established companies and small independent companies like ourselves that may result in price reductions and decreased demand for our services. Our strategy to overcome these competitive factors, which is described in this prospectus under "Our Proposed Business - Competition," may not be successful. We will be at a competitive disadvantage in obtaining the facilities, employees, financing and other resources required to provide the superior, highly customized, state-of-the-art logistical analysis and problem-solving services and solutions demanded by customers. Our opportunity to obtain customers may be limited by our financial resources and oth er assets. We expect to be less able than our larger competitors to cope with generally increasing costs and expenses of doing business. Additionally, it is expected that there may be significant technological advances in the future and we may not have adequate creative management and resources to enable us to take advantage of those advances.
We may not have a sufficient number of employees to segregate responsibilities and may be unable to afford increasing our staff or engaging outside consultants or professionals to overcome our lack of employees. During the course of our testing, we may identify other deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to help prevent financi al fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
Risks Related to Our Common Stock
Currently, there is no public market for our securities, and there can be no assurances that any public market will ever develop or that our common stock will be quoted for trading and, even if quoted, it is likely to be subject to significant price fluctuations.Prior to the date of this prospectus, there has not been any established trading market for our common stock, and there is currently no public market whatsoever for our securities. We have not obtained a market maker to file an application with the FINRA on our behalf so as to be able to quote the shares of our common stock on the OTC Bulletin Board ("OTCBB") maintained by the FINRA commencing upon the effectiveness of our registration statement of which this prospectus is a part. There can be no assurance as to whether such market maker's application will be accepted by the FINRA. We are not permitted to file such application on our own behalf. If the application is accepted, there can be no assu rances as to whether any market for our shares will develop or the prices at which our common stock will trade. If the application is accepted, we cannot predict the extent to which investor interest in us will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.
In addition, our common stock is unlikely to be followed by any market analysts, and there may be few institutions acting as market makers for the common stock. Either of these factors could adversely affect the liquidity and trading price of our common stock. Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception, and general economic and market conditions. No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.
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Because of the anticipated low price of the securities, many brokerage firms may not be willing to effect transactions in these securities. See "Plan of Distribution" subsection entitled "Selling Shareholders and any purchasers of our securities should be aware that any market that develops in our stock will be subject to the penny stock restrictions."
Our board of directors is authorized to issue shares of preferred stock, which may have rights and preferences detrimental to the rights of the holders of our common shares. We are authorized to issue up to 10,000,000 shares of preferred stock, $0.0001 par value. As of the date of this prospectus, we have not issued any shares of preferred stock. Our preferred stock may bear such rights and preferences, including dividend and liquidation preferences, as the Board of Directors may fix and determine from time to time. Any such preferences may operate to the detriment of the rights of the holders of the common stock being offered hereby.
Our articles of incorporation provide for indemnification of officers and directors at our expense and limit their liability that may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended for the benefit of officers and/or directors.Our articles of incorporation and applicable Delaware law provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney's fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person's promise to repay us, therefore if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us, which w e will be unable to recoup.
We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against these types of liabilities, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a 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 indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, either of which factors is are likely to materially reduce the market and price for our shares, if such a market ever develops.
Any market that develops in shares of our common stock will be subject to the penny stock restrictions that are likely to create a lack of liquidity and make trading difficult or impossible. Until our shares of common stock qualify for inclusion in the NASDAQ system, if ever, the trading of our securities, if any, will be in the over-the-counter market which is commonly referred to as the OTCBB as maintained by the FINRA. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of our securities.
SEC Rule 15g-9 (as most recently amended and effective on September 12, 2005) establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects the market liquidity for our common stock. For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:
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the basis on which the broker or dealer made the suitability determination, and
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that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
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Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities, if and when our securities become publicly traded. In addition, the liquidity for our securities may decrease, with a corresponding decrease in the price of our securities. Our shares in all probability will be subject to such penny stock rules for the foreseeable future and our shareholders will, in all likelihood, find it difficult to sell their securities.
We do not intend to pay dividends on our common stock. We have not paid any dividends on our common stock to date and there are no plans for paying dividends on the common stock in the foreseeable future. We intend to retain earnings, if any, to provide funds for the implementation of our business plan. We do not intend to declare or pay any dividends in the foreseeable future. Therefore, there can be no assurance that holders of our common stock will receive any additional cash, stock or other dividends on their shares of our common stock until we have funds which the Board of Directors determines can be allocated to dividends.
If a market develops for our shares, sales of our shares relying upon rule 144 may depress prices in that market by a material amount. All of the outstanding shares of our common stock are "restricted securities" within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required under applicable state securities laws. Rule 144 provides in essence that a person who has held restricted securities for a prescribed period may, under certain conditions, sell their shares As a result of revisions to Rule 144 which became effective on or about February 15, 2008, there is no limit on the amount of restricted securities that may be sold by a non-affiliate (i.e., a stockholder who has not been an officer, director or control person for at le ast 90 consecutive days) after the restricted securities have been held by the owner for a period of one year. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.
Any trading market that may develop may be restricted by virtue of state securities "Blue Sky" laws to the extent they prohibit trading absent compliance with individual state laws. These restrictions may make it difficult or impossible to sell shares in those states. There is no public market for our common stock, and there can be no assurance that any public market will develop in the foreseeable future. Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as "Blue Sky" laws. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered for resale under the “Blue Sky” laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop i n the future, should be aware that there may be significant state “Blue Sky” law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. These restrictions prohibit the secondary trading of our common stock. We currently do not intend and may not be able to qualify securities for resale in approximately 17 states that do not offer manual exemptions and require shares to be qualified before they can be resold by our shareholders. Accordingly, investors should consider the secondary market for our securities to be a limited one. See also "Plan of Distribution-State Securities-Blue Sky Laws."
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares of the common stock offered by the selling stockholders. We are registering 702,0000 of our 4,212,000 currently outstanding shares for resale to provide the holders thereof with freely tradable securities, but the registration of such shares does not necessarily mean that any of such shares will be offered or sold by the holders thereof.
SELLING STOCKHOLDERS
From March, 2008 through July 2009, 4,212,000 shares of common stock were issued to 42 individuals:
Upon our formation we issued 3,900,000 shares to Emily Lussier, our founder, director and CEO/President who donated 25,000 shares to AAD, LLC, a not-for-profit engaged in animal rescue.
10
Upon our formation we issued 20,000 shares to Robert Steele, our CFO.
Upon our formation we also issued 40,000 shares to our counsel Eric W. Richardson for their par value ($0.0001 per share).
An additional 252,000 shares were issued to 47 shareholders for $63,000 in cash ($0.25 per share). These shares were issued in a private offering pursuant to Regulation D under the Securities Act of 1933, as amended, and each of the investors therein represented in writing that such investor was an accredited investor as that term is defined in Regulation D and that he was acquiring the shares for his own account and for investment.
No underwriter participated in the foregoing transactions, and no underwriting discounts or commissions were paid, nor was any general solicitation or general advertising conducted. The securities bear a restrictive legend and stop transfer instructions are noted on our stock transfer records.
All shares offered under this prospectus are being offered by selling shareholders and may be sold from time to time for the account of the selling stockholders named in the following table. The table also contains information regarding each selling stockholder's beneficial ownership of shares of our common stock as of the date of this prospectus, and as adjusted to give effect to the sale of the shares offered hereunder.
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SELLING SECURITYHOLDER AND RELATIONSHIP TO THE COMPANY OR ITS AFFILIATES, IF ANY |
| SHARES OWNED (NUMBER AND PERCENTAGE) BEFORE OFFERING |
| SHARES OFFERED |
| SHARES OWNED (NUMBER AND PERCENTAGE) AFTER OFFERING | ||||
|
|
|
|
|
|
|
|
|
|
|
Emily Lussier, |
| 3,875,000 |
| 92.00% |
| 390,000 |
| 3,485,000 |
| 83.33% |
President, CEO and Director |
|
|
|
|
|
|
|
|
|
|
Robert Steele, CFO |
| 20,000 |
| * |
| 20,000 |
| 0 |
| 0% |
Eric W. Richardson, Counsel |
| 40,000 |
| * |
| 40,000 |
| 0 |
| 0% |
AAD, LLC |
| 25,000 |
| * |
| 25,000 |
| 0 |
| 0% |
James Anderson |
| 8,000 |
| * |
| 8,000 |
| 0 |
| 0% |
Berger Family Enterprises, FLP |
| 25,000 |
| * |
| 25,000 |
| 0 |
| 0% |
Moises Bonilla Vega |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Robin Bromberg |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Cambria Investment Fund, LP |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Kathy Carter |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Jennifer Christensen |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
DC Network Solutions, Inc |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Chris DeMatteo |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Gary Dergazarian |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Lisa Dergazarian |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Karen Faiman |
| 20,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Randall Fergusen |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Wendy Girardi |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Ira Goldfarb |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Jing Gou |
| 8,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Andrew Haag |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Bernadette Haag |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Carol Humphrey |
| 8,000 |
| * |
| 8,000 |
| 0 |
| 0% |
Domenico Inglese |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
KGB Family LTD Partnership |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Barry Kravette |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Jacqueline Kravette |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Yun Liu |
| 8,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Jaclyn Marsoubian |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Rose Marsoubian |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Gloria Martinez |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Marilyn Moline |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Mark Moline |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Ryan Nawmann |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Nishika, Inc. |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Lynn Oddo |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Dylan Pettit |
| 8,000 |
| * |
| 8,000 |
| 0 |
| 0% |
Laurel Pettit |
| 8,000 |
| * |
| 8,000 |
| 0 |
| 0% |
Jonathan Rahn |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Real Path, Inc |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Phyllia Realmuto |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Eric Richardson |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Brett Robertson |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Scott Sansiviero |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Michelle Sotnikow |
| 12,000 |
| * |
| 12,000 |
| 0 |
| 0% |
David Stein |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Tara Stein |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Sidney Ann Toohey |
| 8,000 |
| * |
| 8,000 |
| 0 |
| 0% |
Jonathan Vanderbilt |
| 8,000 |
| * |
| 8,000 |
| 0 |
| 0% |
Brian Williams |
| 4,000 |
| * |
| 4,000 |
| 0 |
| 0% |
Hong Yi Wang |
| 8,000 |
| * |
| 8,000 |
| 0 |
| 0% |
Total |
| 4,212,000 |
| 100.0% |
| 702,000 |
| 3,485,000 |
| 100.0% |
* Percentage is only indicated if greater than 1%. None of the Selling Stockholders are broker/dealers or affiliates of broker/dealers.
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Emily Lussier, our CEO/president is a Selling Stockholder and will be considered to be an underwriter for purposes of this offering. Her current intention is to remain as our officer regardless of whether she sells a substantial portion of her stockholding in us. She is nevertheless offering 390,000 shares of her shareholder interest in this offering (approximately 9.26% of all outstanding common shares) since otherwise sales by her would be restricted to 1% (or approximately 42,120 shares) of all outstanding shares every three months in accordance with Rule 144. As our officer/control person, Ms. Lussier may not avail herself of the provisions of Rule 144(k) which otherwise would permit a non-affiliate to sell an unlimited number of restricted shares provided that the one-year holding period requirement is met.
Selling Stockholders will sell at a fixed price of $0.25 per share until our common shares are quoted on the Over the Counter Bulletin Board or another quotation medium and thereafter at prevailing market prices, or privately negotiated prices.
DETERMINATION OF OFFERING PRICE
There is no established public market for the common equity being registered. 3,960,000 of our outstanding shares were issued at $0.0001 in March 2008 upon formation of the Company and 252,000 of our outstanding shares were issued at $0.25 per share between March, 2008 and July, 2009. Accordingly, in determining the offering price, we selected $0.25 per share, which was the highest and most recent price at which we have issued our shares.
DIVIDEND POLICY
We have never paid a cash dividend on our common stock, and we do not anticipate paying cash dividends in the foreseeable future. Moreover, any future credit facilities might contain restrictions on our ability to declare and pay dividends on our common stock. We plan to retain all earnings, if any, for the foreseeable future for use in the operation of our business and to fund the pursuit of future growth. Future dividends, if any, will depend on, among other things, our results of operations, capital requirements and on such other factors as our board of directors, in its discretion, may consider relevant.
PLAN OF DISTRIBUTION
The selling stockholders may offer the shares at various times in one or more of the following transactions:
•
on any market that might develop;
•
in transactions other than market transactions;
•
by pledge to secure debts or other obligations;
•
purchases by a broker-dealer as principal and resale by the broker-dealer for its account; or
•
in a combination of any of the above.
Selling stockholders will sell at a fixed price of $0.25 per share until our common shares are quoted on the Over the Counter Bulletin Board or another quotation medium and thereafter at prevailing market prices or privately negotiated prices. In order to comply with the securities laws of certain states, if applicable, the shares may be sold only through registered or licensed brokers or dealers.
The selling stockholders may use broker-dealers to sell shares. If this happens, broker-dealers will either receive discounts or commissions from the selling stockholders, or they will receive commissions from purchasers of shares for whom they have acted as agents. To date, no discussions have been held or agreements reached with any broker/dealers. No broker–dealer participating in the distribution of the shares covered by this prospectus may charge commissions in excess of 7% on any sales made hereunder.
Affiliates and/or promoters of the Company who are offering their shares for resale and any broker-dealers who act in connection with the sale of the shares hereunder will be deemed to be "underwriters" of this offering within the meaning of the Securities Act, and any commissions they receive and proceeds of any sale of the shares may be deemed to be underwriting discounts and commissions under the Securities Act.
Selling shareholders and any purchasers of our securities should be aware that any market that develops in our common stock will be subject to "penny stock" restrictions.
We will pay all expenses incident to the registration, offering and sale of the shares other than commissions or discounts of underwriters, broker-dealers or agents. We have also agreed to indemnify the selling stockholders against certain liabilities, including liabilities under the Securities Act.
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This offering will terminate on the earlier of the:
a) date on which the shares are eligible for resale without restrictions pursuant to Rule 144 under the Securities Act or
b) date on which all shares offered by this prospectus have been sold by the selling stockholders.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
If any of the selling shareholders enter into an agreement after the effectiveness of our registration statement to sell all or a portion of their shares in the Company to a broker-dealer as principal and the broker-dealer is acting as underwriter, we will file a post-effective amendment to our registration statement identifying the broker-dealer, providing the required information on the Plan of Distribution, revising disclosures in our registration statement as required and filing the agreement as an exhibit to the registration statement.
Selling shareholders and any purchasers of our securities should be aware that any market that develops in our stock will be subject to the penny stock restrictions.
Until our shares of common stock qualify for inclusion in the NASDAQ system, if ever, the trading of our securities, if any, will be in the over-the-counter markets, which are commonly referred to as the OTCBB as maintained by the FINRA. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of, our securities.
SEC Rule 15g-9 (as most recently amended and effective September 12, 2005) establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions. It is likely that our shares will be considered to be penny stocks for the immediate foreseeable future. For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth the basis on which the broker or dealer made the suitability determination, and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The above-referenced requirements may create a lack of liquidity, making trading difficult or impossible, and accordingly, shareholders may find it difficult to dispose of our shares.
STATE SECURITIES – BLUE SKY LAWS
There is no public market for our common stock, and there can be no assurance that any market will develop in the foreseeable future. Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as "Blue Sky" laws. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered for resale under the “Blue Sky” laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state “Blue Sky” law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. Accordingly, investors may not be able to liquidate their investments and should be prepar ed to hold the common stock for an indefinite period of time.
Selling Security holders may contact us directly to ascertain procedures necessary for compliance with Blue Sky Laws in the applicable states relating to Sellers and/or Purchasers of our shares of common stock.
We intend to apply for listing in a nationally recognized securities manual which, once published, will provide us with "manual" exemptions in 33 states as indicated in CCH Blue Sky Law Desk Reference at Section 6301 entitled "Standard Manuals Exemptions."
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Thirty-three states have what is commonly referred to as a "manual exemption" for secondary trading of securities such as those to be resold by selling stockholders under this registration statement. In these states, so long as we obtain and maintain a Standard and Poor's Corporate Manual or another acceptable manual, secondary trading of our common stock can occur without any filing, review or approval by state regulatory authorities in these states. These states are: Alaska, Arizona, Arkansas, Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Texas, Utah, Washington, West Virginia and Wyoming. We cannot secure this listing, and thus this qualification, until after our registration statement is declared effective. O nce we secure this listing, secondary trading can occur in these states without further action.
We currently do not intend to and may not be able to qualify securities for resale in other states which require shares to be qualified before they can be resold by our shareholders.
LIMITATIONS IMPOSED BY REGULATION M
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the shares may not simultaneously engage in market making activities with respect to our common stock for a period of two business days prior to the commencement of such distribution. In addition and without limiting the foregoing, each selling stockholder will be subject to applicable provisions of the Exchange Act and the associated rules and regulations thereunder, including, without limitation, Regulation M, which provisions may limit the timing of purchases and sales of shares of our common stock by the selling stockholders. We will make copies of this prospectus available to the selling stockholders and have informed them of the need for delivery of copies of this prospectus to purchasers at or prior to the time of any sale of the shares offered hereby. We assume no obligation to deliver copies of this prospectus or any related prospectus supplement.
LEGAL PROCEEDINGS
We are not a party to any pending litigation and, to the best of our knowledge, none is threatened or anticipated.
DIRECTORS, EXECUTIVE OFFICERS PROMOTERS AND CONSULTANTS
Our directors, officers and consultants are as follows:
Name |
| Age |
| Position(s) |
Emily Lussier |
| 32 |
| President, Chief Executive Officer and a Director |
Robert Steele |
| 43 |
| Chief Financial Officer |
Term and Family Relationships
Our director currently has terms which will end at our next annual meeting of the stockholders or until successors are elected and qualify, subject to their prior death, resignation or removal. Officers serve at the discretion of the Board of Directors. We only have one officer and director and no family relationships exist among our officers, directors and consultants.
usiness Experience
Emily Lussierwas elected president, CEO and a director upon our formation in March, 2008. She has been employed by Financial Advisors Network as Office Manager and Executive Assistant to the CEO since 2005. From 2002 -2005 she was Executive Assistant to the CEO at Caritas St. Elizabeth’s Medical Center in Boston, MA. She holds a Bachelor of Science in Management, Human Resources Minor from Plymouth State College.
Robert Steele has more than twenty years experience as an entrepreneur and corporate officer of public and private companies. He has been the President of Steele Consulting since April 2007. Prior to that, he was CEO and Chairman of the Board of Directors of Quintek Technologies, Inc. Quintek is a publicly traded company that provides Business Process Outsourcing services to Fortune 500 companies. While at Quintek, Mr. Steele has grown the company’s revenues by more than 600% and supervised a two year contract with GMAC to process 35 million pages of loan documents. Prior to Quintek, in 1999, Mr. Steele founded iBrite, a wireless information software company in Reston, Virginia, and from May 1999 through June 2001 served as its Chief Executive Officer. The company established contractual partnerships with AOL and Global Knowledge to provide technology for delivering sophisticated content to mobile devices. From 1988 through 1998, Mr. Steele served as Corporate Vice President & Chief Technology Officer for CADD Microsystems, Inc. (CMI), currently the leading provider of Autodesk Computer Aided Design software, consulting, training, and integration services in the Washington, DC metropolitan area. During his time at CMI, the company grew from $50,000 in annual sales to more than $3,000,000. Mr. Steele sold and supervised significant systems integration contracts with clients such as Lucent Technologies, Long Airdox Mining (Division of the Fortune 500 Marmon Group), ABB, GSA (General Services Administration), FAA (Federal Aviation Administration), and NRO (National Reconnaissance Office). Mr. Steele received a Bachelor of Science in Electronic and Computer Engineering from George Mason University in 1988.
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Legal Proceedings
No officer, director, or persons nominated for these positions, and no promoter or significant employee of our corporation has been involved in legal proceedings that would be material to an evaluation of our management.
Code of Ethics
We have determined that due to our early stage of development and our small size, the present adoption of a code of ethics is not appropriate. If we grow we will adopt a suitable code of ethics.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS
The information in the following table sets forth the beneficial ownership of our shares of common stock as of the date of this prospectus, by: (i) each of the three highest paid persons who are our officers and directors (or in the alternative, each officer and director); (ii) all officers and directors as a group; (iii) each shareholder who beneficially owns more than 10% of any class of our securities, including those shares subject to outstanding options.
Name and address of owner |
| Amount owned before the offering |
| Amount owned after the offering |
| Percent of class after the offering |
|
|
|
|
|
|
|
Emily Lusier |
| 3,875,000 |
| 3,485,000 |
| 83.33% |
21 Merrimac Way |
|
|
|
|
|
|
Unit - B |
|
|
|
|
|
|
Tyngsboro, MA 01879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Steele |
| 20,000 |
| - |
| 0.00% |
21 Merrimac Way |
|
|
|
|
|
|
Unit - B |
|
|
|
|
|
|
Tyngsboro, MA 01879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
All officers and directors |
| 3,895,000 |
| 3,485,000 |
| 83.33% |
as a group (2 people) |
|
|
|
|
|
|
DESCRIPTION OF CAPITAL STOCK
Introduction
We were established as a Delaware corporation in March 2008. We are authorized to issue 50,000,000 shares of common stock and 10,000,000 shares of preferred stock.
Preferred Stock
Our certificate of incorporation authorizes the issuance of 10,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by our board of directors. No shares of preferred stock have been designated, issued or are outstanding. Accordingly, our board of directors is empowered, without stockholder approval, to issue up to 10,000,000 shares of preferred stock with voting, liquidation, conversion, or other rights that could adversely affect the rights of the holders of the common stock. Although we have no present intention to issue any shares of preferred stock, there can be no assurance that we will not do so in the future.
Among other rights, our board of directors may determine, without further vote or action by our stockholders:
•
the number of shares and the designation of the series;
•
whether to pay dividends on the series and, if so, the dividend rate, whether dividends will be cumulative and, if so, from which date or dates, and the relative rights of priority of payment of dividends on shares of the series;
•
whether the series will have voting rights in addition to the voting rights provided by law and, if so, the terms of the voting rights;
•
whether the series will be convertible into or exchangeable for shares of any other class or series of stock and, if so, the terms and conditions of conversion or exchange;
16
•
whether or not the shares of the series will be redeemable and, if so, the dates, terms and conditions of redemption and whether there will be a sinking fund for the redemption of that series and, if so, the terms and amount of the sinking fund; and
•
the rights of the shares of the series in the event of our voluntary or involuntary liquidation, dissolution or winding up and the relative rights or priority, if any, of payment of shares of the series.
We presently do not have plans to issue any shares of preferred stock. However, preferred stock could be used to dilute a potential hostile acquirer. Accordingly, any future issuance of preferred stock or any rights to purchase preferred shares may have the effect of making it more difficult for a third party to acquire control of us. This may delay, defer or prevent a change of control in our company or an unsolicited acquisition proposal. The issuance of preferred stock also could decrease the amount of earnings attributable to, and assets available for distribution to, the holders of our common stock and could adversely affect the rights and powers, including voting rights, of the holders of our common stock.
Common Stock
Our certificate of incorporation authorizes the issuance of 50,000,000 shares of common stock. There are 4,212,000 shares of our common stock issued and outstanding on the date of this prospectus which shares are held by 42 shareholders. The holders of our common stock:
•
have equal ratable rights to dividends from funds legally available for payment of dividends when, as and if declared by the board of directors;
•
are entitled to share ratably in all of the 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, or redemption or access to any sinking fund; and
•
are entitled to one non-cumulative vote per share on all matters submitted to stockholders for a vote at any meeting of stockholders.
See also “Plan of Distribution” subsection entitled "Any market that develops in shares of our common stock will be subject to the penny stock restrictions which will make trading difficult or impossible" regarding negative implications of being classified as a "Penny Stock."
Authorized but Un-issued Capital Stock
Delaware law does not require stockholder approval for any issuance of authorized shares. However, the marketplace rules of the NASDAQ, which would apply only if our common stock were listed on the NASDAQ, require stockholder approval of certain issuances of common stock equal to or exceeding 20% of the then-outstanding voting power or then-outstanding number of shares of common stock, including in connection with a change of control of the company, the acquisition of the stock or assets of another company or the sale or issuance of common stock below the book or market value price of such stock. These additional shares may be used for a variety of corporate purposes, including future public offerings to raise additional capital or to facilitate corporate acquisitions.
One of the effects of the existence of un-issued and unreserved common stock may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our board by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of our common stock at prices higher than prevailing market prices.
17
Delaware Anti-Takeover Law
We will be subject to the provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. This section prohibits, subject to exceptions, publicly-traded Delaware corporations from engaging in a business combination, which includes a merger or sale of more than 10% of the corporation's assets, with any interested stockholder. An interested stockholder is generally defined as a person who, with its affiliates and associates, owns or, within three years before the time of determination of interested stockholder status, owned 15% or more of a corporation's outstanding voting securities. This prohibition does not apply if: the transaction is approved by the board of directors before the time the interested stockholder attained that status; upon the closing of the transaction that resulted in the stockholder becoming an interest stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the s tart of the transaction; or at or after the time the stockholder became an interested stockholder, the business combination is approved by the board and authorized at an annual or special meeting of stockholders by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
A Delaware corporation may opt out of this provision with an express provision in its original certificate of incorporation or an express provision in its certificate of incorporation or bylaws resulting from an amendment approved by at least a majority of the outstanding voting shares. However, we have not opted out of this provision. This provision of the Delaware General Corporation Law could prohibit or delay a merger or other takeover or change-in-control attempts and may discourage attempts to acquire us.
Shareholder Matters
Certain provisions of Delaware law create rights that might be deemed material to our shareholders. Other provisions might delay or make more difficult acquisitions of our stock or changes in our control or might also have the effect of preventing changes in our management or might make it more difficult to accomplish transactions that some of our shareholders may believe to be in their best interests.
Dissenters' Rights
Among the rights granted under Delaware law which might be considered as material is the right for shareholders to dissent from certain corporate actions and obtain payment for their shares (see Delaware Revised Statutes ("DRS") 92A.380-390). This right is subject to exceptions, summarized below, and arises in the event of mergers or plans of exchange. This right normally applies if shareholder approval of the corporate action is required either by Delaware law or by the terms of the articles of incorporation.
A shareholder does not have the right to dissent with respect to any plan of merger or exchange, if the shares held by the shareholder are part of a class of shares which are:
*
listed on a national securities exchange,
*
included in the national market system by the National Association of Securities Dealers, or
*
held of record by not less than 2,000 holders.
This exception notwithstanding, a shareholder will still have a right of dissent if it is provided for in the articles of incorporation (our certificate of incorporation does not so provide) or if the shareholders are required under the plan of merger or exchange to accept anything but cash or owner's interests, or a combination of the two, in the surviving or acquiring entity, or in any other entity falling in any of the three categories described above in this paragraph.
Inspection Rights
Delaware law also specifies that shareholders are to have the right to inspect company records. This right extends to any person who has been a shareholder of record for at least six months immediately preceding his demand. It also extends to any person holding, or authorized in writing by the holders of, at least 5% of our outstanding shares. Shareholders having this right are to be granted inspection rights upon five days' written notice. The records covered by this right include official copies of: the articles of incorporation, and all amendments thereto, bylaws and all amendments thereto; and a stock ledger or a duplicate stock ledger, revised annually, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation, showing their places of residence, if known, and the number of shares held by them, respectively.
In lieu of the stock ledger or duplicate stock ledger, Delaware law provides that the corporation may keep a statement setting out the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete post office address, including street and number, if any, where the stock ledger or duplicate stock ledger specified in this section is kept.
18
Transfer Agent
The transfer agent for our common stock is Colonial Stock Transfer Company, Inc., 66 Exchange Place - Suite 100, Salt Lake City, UT 84111, Phone: (801) 355-5740.
DESCRIPTION OF BUSINESS
FORWARD LOOKING STATEMENT INFORMATION
Certain statements made in this Registration Statement on Form S-1 are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions, technological developments related to cellular telephone or other mobile communications, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control.
Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this prospectus will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein particularly in view of the current state of our operations, the inclusion of such information should not be regarded as a statement by us or any other person that our objectives and plans will be achieved. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the factors set forth herein under the headings “Business,” “Risk Factors” and “Plan of Operations.”
OUR PROPOSED BUSINESS
We intend to enter the business of offering business support services and outsourced business processes to proprietors, entrepreneurs and small businesses. Our services will include project management, database and information storage, the creation of legally compliant business policies, document management services, and finance and accounting services. We are not presently operational, but anticipate commencing operations within the next six months contingent on the receipt of additional financing of between $500,000 and $2,500,000. Our primary focus will be to hire management personnel in both marketing and business support services areas.
Overview
The Company intends to offer business support services to proprietors, entrepreneurs, and small business owners by offering a full suite of outsourced business processes including project management, database and information storage, legally compliant policy manual generation, document management services, and finance and accounting services,. The Company will secure office space, hire necessary personnel, purchase equipment, further develop the service offering, and commence its marketing efforts. There is no assurance that the Company will be successful in these endeavors or that if accomplishes all of these steps it will be able to operate profitably. Based on management’s personal experience, the Company believes that its product is a legitimate business opportunity for the Company and its shareholders.
Through the Company’s service, clients will be able to gain the advantage of maintaining their growth goals without the need to sacrifice precious resources to address standard business bottlenecks. The company therefore will allow firms to retain their entrepreneurial speed and agility, advantages they would otherwise sacrifice in dealing with logistics rather than the specific focus of the client’s business. The company will also allow clients to grow at a faster pace as they will be less constrained by large capital expenditures for people, training, equipment, or mistakes made from lack of experience in areas which are unrelated to the client’s specific business purpose.
The field of business process outsourcing has shown dramatic growth in recent years. Outsourcing statistics show that the largest percentage of jobs being outsourced is in information technology, by around 28%. The next largest field is human resources taking 15% of the outsourcing market, followed closely by sales and marketing outsourcing with 14% and financial services outsourcing at 11%. The remaining 32% is made up of other different processes such as administrative outsourcing. Most of the outsourcing is done by multinational companies and the most popular destinations are India, China and the Philippines. While these figures slightly differ depending on the study, this division gives an idea of the outsourcing market.
19
According to McKinsey, the global "addressable" business process outsourcing market is worth $122 - $154 billion, of which $35-40 billion relates to retail banking, $25-35 relates to the insurance field, $10-12 billion relates to travel and hospitality, $10-12 billion relates to the auto industry, $8-10 billion relates to telecoms, $8 devoted to pharmaceuticals, and $20-25 billion flows to the finance industry. Moreover, they estimate that 8% of that capacity was utilized as of 2006.
While expansion in all industries has slowed as a direct result of the recession and the current market conditions, growth rate in business process outsourcing for 2009 is still expected to be between 20% and 30%. That is not to say that business process outsourcing has not slowed as well. When comparing the current outlook to recent years, the outlook the rate of growth has in fact declined. The business process outsourcing industry had grown by an average of 50 percent for the past three years. In 2007, it generated US$4.9 billion revenues and employed around 300,000 workers.
We may also expand operations to some foreign countries, for both the benefit of our clients, and to generate greater profits as a result of lower operational costs. As an example, such operational costs would consist of lower average wages for workers. Expansion to overseas markets in business process outsourcing has been commonplace for the last decade.
•
According to Deloitte Consulting, 2 million jobs will move from the United States and Europe to cheaper destinations in the financial services business alone. The emigration of service jobs across all industries could be as high as 4 million. The consulting firm also forecasts that in the next five years 3/4 of major financial institutions and investment banks will allocate tasks to low labor cost countries and that India will be at the top of the list. Global financial institutions are predicted to invest $356 billion in India for outsourcing projects.
•
Forrester Research estimates that 3.3 million U.S. jobs and $136 billion in wages could be moved to such countries as India, China, and Russia by 2015.
•
Among the different offshore destinations, India has become the number one location for most companies.
India has revenues of 10.9 billion USD from offshore business process outsourcing and 30 billion USD from IT and total business process outsourcing (in FY 2008). India thus has some 5-6% share of the total business process outsourcing industry, but a commanding 63% share of the offshore component. This 63% is a drop from the 70% offshore share that India enjoyed in 2007, despite the industry growing 38% in India in 2007, other locations like Eastern Europe, Philippines, Morocco, Egypt and South Africa have emerged to take a share of the market. China is also trying to grow from a very small base in this industry. However, while the business process outsourcing industry is expected to continue to grow in India, its market share of the offshore piece is expected to decline. Important centers in India are Bangalore, Hyderabad, Kolkata, Mumbai, Pune, Chennai and New Delhi.
Proposed Products and Services
The Company will market its “Virtual Admin” brand to businesses to help optimize their management's time and allow them to focus on their core business activities Although we have not conducted any formal studies, we believe that the small business community will be receptive to our services. We will seek to obtain referrals through word-of-mouth from our relationships and utilize our initial performance record in our marketing strategy to commence building a larger customer base. Among the services that we propose to offer customers is:
(i)
overall analysis of the customer's various logistical systems and functions, such as customer service, purchasing, inventory control, transportation and warehousing;
(ii)
recommendations for and/or implementation of improvements, modifications, cost reductions and/or other efficiencies in the performance of various of these systems and functions;
(iii)
recommendations for and/or implementation of outsourcing of functions to third parties where appropriate;
(iv)
consulting in areas such as technology, feasibility and cost analysis, sales and management training, business, planning, website strategy, post training support, corporate training and development;
(v)
review of the customers policies and procedures to ensure compliance with various laws and regulations relating to employment practices, including procedural or training manuals with adherence to ISO or other quality standards of business. File storage of documentation is provided via CD or on-line. May include layout, design, scanning, and insertion of clip art, general input, formatting, printing, photocopying, and binding of the manuals created;
20
(vi)
specific problem-solving, such as creating timelines and plans, budget development, deliverables management, communications planning, and documentation. Project tracking and notification of past due tasks, generating reports, and maintenance of the project plan from initiation through completion of the project, contract negotiation, administration, reporting and control;
(vii)
office management, which includes faxing, research, book keeping, bill payment and invoicing, travel requirements, meeting and event planning, transcriptions, translations, correspondence, mail merge set-up of personalized form letters, flyers, and general mail outs; and
(viii)
client business expansion, which would include compilation of new or revisions to existing proposals, presentations, bids, or other forms of documentation and correspondence, and PowerPoint presentations to prospective clientle.
We will not, like some logistics firms, specialize in any one area of the logistics industry. Rather, our executive officer will seek to use her expertise and experience to make available to, and customize to the business and operations of, each customer all of the services aforementioned, including, but not limited to, overall analysis, recommendations, implementation and specific problem-solving.
We will charge each customer a fee for our services based upon, among other factors, the time necessitated in the performance of, and the difficulty of the services. We intend, depending upon the success of our initial operations, to employ limited additional personnel with experience in the logistics business. While we will have working capital available to employ a limited number of additional employees, in addition to our executive officers, a marketing specialist and a part-time bookkeeper, in the event of the maximum offering, these funds may ultimately be allocated differently. Our continuation in business after the expiration of one year from the date of this offering and the employment of significant additional staff, will be dependent upon our achievement of significant profits from operations and/or obtaining significant capital in excess of that anticipated to be realized from this offering. Eventually, assuming our initial success, management plans to expand th e scope of our services.
In order to ensure the performance of high quality, state-of-the-art, customized services, we will endeavor to follow specific procedures ourselves, double-checking crucial steps and benchmarking our services with those of competitors. Certain of the procedures that we intend to follow include: (i) prompt response to customers during, and availability to customers for emergencies after, business hours; (ii) provision of free, written estimates within approximately 72 hours; (iii) commencement of work within seven days following the receipt of a signed contract; (iv) completion of services undertaken without interruption; (v) use of the highest quality products and materials available; (vi) follow-up subsequent to the completion of each job to ensure customer satisfaction; and (vii) guarantee of satisfaction of the services performed. Additionally, we intend to evaluate and assess the nature, quality and timeliness of our services from time-to-time through surveys and other means in order to be responsive to changes in market conditions and customer demands and to be competitive with the services offered by competitors.
Planned Sales and Marketing
Our marketing effort will be a vital part of our operation. We will market direct to our customers and have allocated a significant portion of our operating budget to this marketing effort that may include hiring marketing personnel, advertising in trade publications and, if required, advertising in the general media. We have not conducted any studies to determine the optimal price points for our proposed product.
Competition
Competition in all aspects of the outsourced services and business services industry is intense. We will compete against established outsourced business services companies with name familiarity and greater financial resources. A large part of our effort will be directed to being recognized in this market of large players and, as a small company, to gain the trust of purchasing decision makers at our potential customers. Competitors may seek to duplicate the benefits of our services in ways that do not infringe on any benefits that our services offer. As a result we could find that our entire marketing plan and business model is undercut or made irrelevant by actions of other companies under which we have no control. We cannot promise that we can accomplish our marketing goals and as a result may experience negative impact upon our operating results.
Employees
As of December 31, 2008 and currently we have no employees. Our officers serve us on a part time basis without compensation. If we become fully operational, we foresee the need for five technical employees, at least two clerical employees, and marketing and sales personnel as determined by management’s judgment of our business’ needs.
Legal Proceedings
We are not party to any legal proceeding and are unaware of any threatened legal proceeding to which we may become subject.
21
MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Management’s Discussion and Analysis contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed in “Factors That May Affect Future Results and Financial Condition.”
OVERVIEW
We are in a developmental stage. Implementing our planned business operation is dependant on the effectiveness of this registration statement and our ability to raise between $500,000 and $2,500,000 of additional capital after all offering expenses paid to a placement agent, attorneys, accountant’s and the like.
Our plan is to utilize such capital we raise as follows:
|
| If a Net of $500,000 is Raised |
| If a Net of $2,500,000 is Raised |
|
|
|
|
|
Renting and Furnishing Offices | $ | 100,000 | $ | 250,000 |
|
|
|
|
|
Equipment | $ | 80,000 | $ | 300,000 |
|
|
|
|
|
Officer Salaries | $ | 100,000 | $ | 350,000 |
|
|
|
|
|
Marketing Expense | $ | 120,000 | $ | 850,000 |
|
|
|
|
|
Working Capital | $ | 100,000 | $ | 750,000 |
The foregoing are estimates only and any funds may be reallocated based upon management’s evaluation of then existing conditions.
INFLATION
Inflation can be expected to have an impact on our operating costs. A prolonged period of inflation could cause a general economic downturn and negatively impact our results. However, the effect of inflation has been minimal over the past three years.
SEASONALITY
We do not believe that our business will be seasonal to any material degree.
DESCRIPTION OF PROPERTY
We currently operate out of the residence of our CEO and president Emily Lussier and will not pay any rent to Ms. Lussier until such time as we generate cash flow from our fund raising activities or operations. When we receive additional funding and need space beyond our present facility, we believe that we will be able to find ample suitable space within our projected budget as set forth above.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company was incorporated on March 25, 2008 at which time 3,900,000 shares of common stock were issued to the Company’s founder, 20,000 shares of common stock were issued to the Company’s Chief Financial Officer and 40,000 shares of common stock were issued to the Company’s legal counsel. Our founder donated 25,000 of her shares to a not-for-profit organization.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash annual remuneration of each of the three highest paid persons who are officers or directors as a group during our last fiscal year:
Name of individual or identity of group | Capacities in which remuneration was received | Salary | Bonus | Stock Awards | All Other Compensation | Aggregate remuneration |
Emily Lussier | CEO | $5,000 | $0 | $0 | $0 | $0 |
Robert Steele | CFO | $0 | $0 | $0 | $0 | $0 |
22
The Company has not paid any compensation in cash to its officer/ director and does not intend to do so until such time as its capital resources are sufficient in the judgment of its Board of Directors. The Company has not paid and has no present plan to give any compensation other than cash. The Company does not have any Stock Option Plan or other equity compensation plans. Ms. Lussier will not withdraw any cash compensation from the Company until it receives debt or equity financing or cash flow from operations.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered hereby will be passed upon for us by Eric W. Richardson, Cohen & Richardson, LLP, 2321 Rosecrans Avenue, Suite 4210, El Segundo, California 90245. Mr. Richardson owns 40,000 shares of our common stock that are included in this registration statement.
EXPERTS
The financial statements of Silverhill Management Services, Inc. as of December 31, 2008 and for the period from March 25, 2008 (inception) through December 31, 2008, included in this prospectus have been audited by Li & Company, PC, independent registered public accounting firm, and have been so included in reliance upon the report of Li & Company, PC given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration statement on Form S-1, including exhibits, schedules and amendments, under the Securities Act with respect to the shares of common stock to be sold in this offering. This prospectus does not contain all the information included in the registration statement. For further information about us and the shares of our common stock to be sold in this offering, please refer to this registration statement.
As of the date of this prospectus, we became subject to the informational requirements of the Securities Exchange Act of 1934, as amended. Accordingly, we will file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference room at 100 F Street, N. E., Washington, D.C. 20649. You should call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings will also be available to the public at the SEC's web site at "http:/www.sec.gov."
You may request, and we will voluntarily provide, a copy of our filings, including our annual report containing audited financial statements, at no cost to you, by writing or telephoning us at the following address:
Silverhill Management Services, Inc.
21 Merrimac Way – Unit B
Tyngsboro, MA 01879
23
TABLE OF CONTENTS
PROSPECTUS SUMMARY | 4 |
RISK FACTORS | 5 |
USE OF PROCEEDS | 10 |
SELLING STOCKHOLDERS | 10 |
DETERMINATION OF OFFERING PRICE | 13 |
DIVIDEND POLICY | 13 |
MARKET FOR SECURITIES | 13 |
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS | 15 |
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS | 16 |
DESCRIPTION OF CAPITAL STOCK | 16 |
DESCRIPTION OF BUSINESS | 19 |
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION | 22 |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 22 |
LEGAL MATTERS | 23 |
EXPERTS | 23 |
WHERE YOU CAN FIND MORE INFORMATION | 23 |
INDEX TO FINANCIAL STATEMENTS | F-1 |
Dealer Prospectus Delivery Obligation
Until XXXXX, 2009, 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.
The selling stockholders are offering and selling shares of our common stock only to those persons and in those jurisdictions where these offers and sales are permitted.
You should rely only on the information contained in this prospectus, as amended and supplemented from time to time. We have not authorized anyone to provide you with information that is different from that contained in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. The information in this prospectus is complete and accurate only as of the date of the front cover regardless of the time of delivery or of any sale of shares. Neither the delivery of this prospectus nor any sale made hereunder shall under any circumstances create an implication that there has not been a change in our affairs since the date hereof.
This prospectus has been prepared based on information provided by us and by other sources that we believe are reliable. This prospectus summarizes information and documents in a manner we believe to be accurate, but we refer you to the actual documents or the agreements we entered into for additional information of what we discuss in this prospectus.
24
Silverhill Management Services, Inc.
(A Development Stage Company)
December 31, 2008
Index to Financial Statements
Contents | Page(s) |
|
|
Report of Independent Registered Public Accounting Firm | F-2 |
|
|
Balance Sheet at December 31, 2008 | F-3 |
|
|
Statement of Operations for the Period from March 25, 2008 (Inception) through December 31, 2008 | F-4 |
|
|
Statement of Stockholders’ Deficit for the Period from March 25, 2008 (Inception) through December 31, 2008 | F-5 |
|
|
Statement of Cash Flows for the Period from March 25, 2008 (Inception) through December 31, 2008 | F-6 |
|
|
Notes to the Financial Statements | F-7 |
|
|
Interim Financial Statements for the Interim Period Ended June 30, 2009, for the Period from March 25, 2008 (Inception) through June 30, 2008 and for the Period from March 25, 2008 (Inception) through June 30, 2009 (Unaudited) | F-11 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Silverhill Management Services, Inc.
(A development stage company)
Tyngsboro, Massachusetts
We have audited the accompanying balance sheet of Silverhill Management Services, Inc. (a development stage company) (the “Company”) as of December 31, 2008 and the related statements of operations, stockholders’ deficit and cash flowsfor the period from March 25, 2008 (inception) through December 31, 2008. 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 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 audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimate s made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2008 and the results of its operations and its cash flows for the period from March 25, 2008 (inception) through December 31, 2008 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company had negative working capital and a deficit accumulated during the development stage at December 31, 2008 and had a net loss and cash used in operations for the period from March 25, 2008 (inception) through December 31, 2008, with no revenues during the period. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/Li & Company, PC
Li & Company, PC
Skillman, New Jersey
July 28, 2009
F-2
SILVERHILL MANAGEMENT SERVICES, INC. | |||||
(A DEVELOPMENT STAGE COMPANY) | |||||
BALANCE SHEET | |||||
| |||||
|
|
|
|
| December 31, 2008 |
|
|
|
|
|
|
ASSETS |
|
|
| ||
CURRENT ASSETS: |
|
| |||
| Cash |
| $ | 5,433 | |
|
|
|
|
|
|
|
| Total Current Assets |
| 5,433 | |
|
|
|
|
|
|
|
|
| Total Assets | $ | 5,433 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
| |||
CURRENT LIABILITIES: |
|
| |||
| Accrued expenses | $ | 9,600 | ||
|
|
|
|
|
|
|
| Total Current Liabilities |
| 9,600 | |
|
|
|
|
|
|
STOCKHOLDERS' DEFICIT: |
|
| |||
| Preferred stock at $0.0001 par value: 10,000,000 shares authorized, |
|
| ||
|
| none issued or outstanding |
| - | |
| Common stockat $0.0001 par value: 50,000,000 shares authorized, |
|
| ||
|
| 4,136,000 shares issued and outstanding |
| 414 | |
| Additional paid-in capital |
| 43,982 | ||
| Deficit accumulated during development stage |
| (48,563) | ||
|
|
|
|
|
|
|
| Total Stockholders' Deficit |
| (4,167) | |
|
|
|
|
|
|
|
|
| Total Liabilities and Stockholders' Deficit | $ | 5,433 |
|
|
|
|
|
|
See accompanying notes to the financial statements. |
F-3
SILVERHILL MANAGEMENT SERVICES, INC. | ||||
(A DEVELOPMENT STAGE COMPANY) | ||||
STATEMENT OF OPERATIONS | ||||
|
|
|
|
|
|
|
|
| For the Period from |
|
|
|
| March 25, 2008 |
|
|
|
| (Inception) through |
|
|
|
| December 31, 2008 |
OPERATING EXPENSES: |
|
| ||
| Professional fees | $ | 42,200 | |
| General and administrative expenses |
| 6,363 | |
|
|
|
|
|
|
| Total operating expenses |
| 48,563 |
|
|
|
|
|
LOSS FROM OPERATIONS |
| (48,563) | ||
|
|
|
|
|
LOSS BEFORE TAXES |
| (48,563) | ||
|
|
|
|
|
INCOME TAXES |
| - | ||
|
|
|
|
|
NET LOSS | $ | (48,563) | ||
|
|
|
|
|
NET LOSS PER COMMON SHARE - |
|
| ||
| BASIC AND DILUTED: | $ | (0.01) | |
|
|
|
|
|
| Weighted Common Shares Outstanding - |
|
| |
|
| basic and diluted |
| 3,999,655 |
|
|
|
|
|
See accompanying notes to the financial statements. |
F-4
SILVERHILL MANAGEMENT SERVICES, INC. | |||||||||
(A DEVELOPMENT STAGE COMPANY) | |||||||||
STATEMENT OF STOCKHOLDERS' DEFICIT | |||||||||
For the Period from March 25, 2008 (Inception) through December 31, 2008 | |||||||||
|
|
|
|
|
|
|
|
|
|
| Common Stock, $0.0001 Par Value |
| Additional |
| Deficit accumulated During the |
| Total Stockhol- | ||
| Number of Shares |
| Amount |
| Paid-in Capital |
| Development Stage |
| ders' Deficit |
|
|
|
|
|
|
|
|
|
|
Balance, March 25, 2008 (Inception) | - | $ | - | $ | - | $ | - | $ | - |
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash at $0.0001 per share upon formation of the Company | 3,960,000 |
| 396 |
| - |
| - |
| 396 |
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash at $0.25 per share on May 7, 2008 | 4,000 |
| 1 |
| 999 |
| - |
| 1,000 |
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash at $0.25 per share between July 15, 2008 and September 25, 2008 | 92,000 |
| 9 |
| 22,991 |
| - |
| 23,000 |
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash at $0.25 per share between October 3, 2008 and December 15, 2008 | 80,000 |
| 8 |
| 19,992 |
| - |
| 20,000 |
|
|
|
|
|
|
|
|
|
|
Net loss | - |
| - |
| - |
| (48,563) |
| (48,563) |
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2008 | 4,136,000 | $ | 414 | $ | 43,982 | $ | (48,563) | $ | (4,167) |
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the financial statements. |
F-5
SILVERHILL MANAGEMENT SERVICES, INC. | ||||
(A DEVELOPMENT STAGE COMPANY) | ||||
STATEMENT OF CASH FLOWS | ||||
|
|
|
|
|
|
|
|
| For the Period from |
|
|
|
| March 25, 2008 |
|
|
|
| (Inception) through |
|
|
|
| December 31, 2008 |
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
| ||
Net loss | $ | (48,563) | ||
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in |
|
| ||
| operating activities |
|
| |
| Changes in operating assets and liabilities: |
|
| |
|
| Accrued expenses |
| 9,600 |
|
|
|
|
|
NET CASH USED IN OPERATING ACTIVITIES |
| (38,963) | ||
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
| ||
| Sale of common stock |
| 44,396 | |
|
|
|
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES |
| 44,396 | ||
|
|
|
|
|
NET INCREASE IN CASH |
| 5,433 | ||
|
|
|
|
|
Cash at beginning of period |
| - | ||
|
|
|
|
|
Cash at end of period | $ | 5,433 | ||
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
| ||
| Interest paid | $ | - | |
| Taxes paid | $ | - | |
|
|
|
|
|
See accompanying notes to the financial statements. |
F-6
Silverhill Management Services, Inc.
(A Development Stage Company)
December 31, 2008
Notes to the Financial Statements
NOTE 1 - ORGANIZATION AND OPERATIONS
Silverhill Management Services, Inc. (a development stage company) (“Silverhill” or the “Company”) was incorporated on March 25, 2008 under the laws of the State of Delaware. A substantial portion of the Company’s activities has involved developing a business plan and establishing contacts and visibility in the marketplace and the Company has not generated any revenues to date. The Company plans to offer business support services to proprietors, entrepreneurs, and small business owners.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The Company’s financial statements have been prepared in accordance withaccounting principles generally accepted in the United States of America (“U.S. GAAP”).
Development stage company
The Company is a development stage company as defined by Statement of Financial Accounting Standards No. 7 “Accounting and Reporting by Development Stage Enterprises”(“SFAS No. 7”). The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company's development stage activities.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Due to the limited level of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.
Cash equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Fair value of financial instruments
The Company follows Statement of Financial Accounting Standards No. 107“Disclosures about fair value of Financial Instruments” (“SFAS No. 107”) for disclosures about fair value of its financial instruments and has adopted Financial Accounting Standards Board (“FASB”) No. 157“Fair Value Measurements” (“SFAS No. 157”) to measure the fair value of its financial instruments. SFAS No. 157 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, SFAS No. 157 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for ident ical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by SFAS No. 157 are described below:
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. |
F-7
As defined by SFAS No. 107, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date. The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity of these instruments.
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at December 31, 2008, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the period from March 25, 2008 (inception) through December 31, 2008.
Revenue recognition
The Company follows the guidance of the Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) 101“Revenue Recognition” (“SAB No. 101”), as amended by SAB No. 104 (“SAB No. 104”) for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Income taxes
The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109“Accounting for Income Taxes” (“SFAS No. 109”). Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment da te.
The Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48“Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. FIN 48 also provides guidance on de-recognition, classification, interest and penaltie s on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of FIN 48.
Net loss per common share
Net loss per common share is computed pursuant to Statement of Financial Accounting Standards No. 128“Earnings Per Share” (“SFAS No. 128”). Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of December 31, 2008.
Recently issued accounting pronouncements
In June 2003, the Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended by SEC Release No. 33-8934 on June 26, 2008. Commencing with its annual report for the year ending December 31, 2009, the Company will be required to include a report of management on its internal control over financial reporting. The internal control report must include a statement
·
of management’s responsibility for establishing and maintaining adequate internal control over its financial reporting;
·
of management’s assessment of the effectiveness of its internal control over financial reporting as of year end; and
F-8
·
of the framework used by management to evaluate the effectiveness of the Company’s internal control over financial reporting.
Furthermore, in the following fiscal year, it is required to file the auditor’s attestation report separately on the Company’s internal control over financial reporting on whether it believes that the Company has maintained, in all material respects, effective internal control over financial reporting.
In March 2008, the FASB issued FASB Statement No. 161 “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133” (“SFAS No. 161”), which changes the disclosure requirements for derivative instruments and hedging activities. Pursuant to SFAS No.161, Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. SFAS No. 161 encourages but does not require disclosures for earlier periods presented for compara tive purposes at initial adoption. In years after initial adoption, this Statement requires comparative disclosures only for periods subsequent to initial adoption. The Company does not expect the adoption of SFAS No. 161 to have a material impact on the financial results of the Company.
In May 2008, FASB issued FASB Statement No. 162 “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”) to be effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board (“PCAOB”) amendments to AU Section 411,The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. The effect of adoption of SFAS No. 162 on the Company’s financial position and results of operations is not expected to be material.
In May 2009, FASB issued FASB Statement No. 165 “Subsequent events” (“SFAS No. 165”) to be effective for the interim or annual financial periods ending after June15, 2009. SFAS No. 165 The objective of this Statement is to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this Statement sets forth: 1. The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements. 2. The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements. 3. The disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The effect of ado ption of SFAS No. 165 on the Company’s financial position and results of operations is not expected to be material.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
NOTE 3 – GOING CONCERN
As reflected in the accompanying financial statements, the Company had a deficit accumulated during the development stage of $48,563 at December 31, 2008 and a net loss of $48,563 and cashed used in operations of $38,963 for the period from March 25, 2008 (inception) through December 31, 2008, with no revenues during the period.
While the Company is attempting to commence operations and produce revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – STOCKHOLDERS’ DEFICIT
Common stock
The Company was incorporated on March 25, 2008 at which time 3,960,000 shares of common stock were issued to the Company’s founders at $0.0001 per share for $396.
F-9
On May 7, 2008, the Company sold 4,000 shares of its common stock in a private placement at $0.25 per share to one (1) individual for $1,000.
For the period from July 15, 2008 through September 25, 2008, the Company sold 92,000 shares of its common stock in a private placement at $0.25 per share to sixteen (16) individuals for $23,000.
For the period from October 3, 2008 through December 15, 2008, the Company sold 80,000 shares of its common stock in a private placement at $0.25 per share to fifteen (15) individuals for $20,000.
NOTE 5 – INCOME TAXES
Deferred tax assets
At December 31, 2008, the Company had net operating loss (“NOL”) carry–forwards for Federal income tax purposes of $48,563 that may be offset against future taxable income through 2028. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Company’s net deferred tax assets of approximately $16,511 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance of $16,511.
Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability. The valuation allowance increased approximately $16,511 for the period from March 25, 2008 (Inception) through December 31, 2008.
Components of deferred tax assets at December 31, 2008 are as follows:
|
| December 31, 2008 |
Net deferred tax assets – Non-current: |
|
|
|
|
|
Expected income tax benefit from NOL carry-forwards |
| 16,511 |
Less valuation allowance |
| (16,511 |
Deferred tax assets, net of valuation allowance | $ | - |
Income taxes in the statements of operations
A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:
|
| For the Period from March 25, 2008 (inception) through December 31, 2008 |
|
|
|
Federal statutory income tax rate |
| 34.0% |
Change in valuation allowance on net operating loss carry-forwards |
| (34.0)% |
Effective income tax rate |
| 0.0% |
NOTE 6 – SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet date but before financial statements were available to be issued to determine if they must be reported. The Management of the Company determined that there were certain reportable subsequent events to be disclosed as follows:
For the period from January 12, 2009 through January 27, 2009, the Company sold 28,000 shares of its common stock at $0.25 per share to seven (7) individuals for $7,000.
For the period from May 29, 2009 through June 18, 2009, the Company sold 24,000 shares of its common stock at $0.25 per share to five (5) individuals for $6,000.
On July 2, 2009, the Company sold 24,000 shares of its common stock at $0.25 per share to three (3) individuals for $6,000.
F-10
SILVERHILL MANAGEMENT SERVICES, INC. | |||||||
(A DEVELOPMENT STAGE COMPANY) | |||||||
BALANCE SHEETS | |||||||
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
| June 30, 2009 |
| December 31, 2008 |
ASSETS |
|
| (Unaudited) |
|
| ||
CURRENT ASSETS: |
|
|
|
| |||
| Cash |
| $ | 6,091 | $ | 5,433 | |
|
|
|
|
|
|
|
|
|
| Total Current Assets |
| 6,091 |
| 5,433 | |
|
|
|
|
|
|
|
|
|
|
| Total Assets | $ | 6,091 | $ | 5,433 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
| |||
CURRENT LIABILITIES: |
|
|
|
| |||
| Accrued expenses | $ | 3,800 | $ | 9,600 | ||
|
|
|
|
|
|
|
|
|
| Total Current Liabilities |
| 3,800 |
| 9,600 | |
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY (DEFICIT): |
|
|
|
| |||
| Preferred stock at $0.0001 par value: 10,000,000 shares authorized, |
|
|
|
| ||
|
| none issued or outstanding |
| - |
| - | |
| Common stockat $0.0001 par value: 50,000,000 shares authorized, |
|
|
|
| ||
|
| 4,188,000 and 4,136,000 shares issued and outstanding, respectively |
| 419 |
| 414 | |
| Additional paid-in capital |
| 56,977 |
| 43,982 | ||
| Deficit accumulated during development stage |
| (55,105) |
| (48,563) | ||
|
|
|
|
|
|
|
|
|
| Total Stockholders' Equity (Deficit) |
| 2,291 |
| (4,167) | |
|
|
|
|
|
|
|
|
|
|
| Total Liabilities and Stockholders' Equity (Deficit) | $ | 6,091 | $ | 5,433 |
|
|
|
|
|
|
|
|
See accompanying notes to the financial statements. |
F-11
SILVERHILL MANAGEMENT SERVICES, INC. | ||||||
(A DEVELOPMENT STAGE COMPANY) | ||||||
STATEMENTS OF OPERATIONS | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| For the Period from |
|
|
|
| For the Three Months |
| March 25, 2008 |
|
|
|
| ended |
| (Inception) through |
|
|
|
| June 30, 2009 |
| June 30, 2008 |
|
| (Unaudited) |
| (Unaudited) | ||
OPERATING EXPENSES: |
|
|
|
| ||
| Professional fees | $ | - | $ | - | |
| General and administrative expenses |
| - |
| - | |
|
|
|
|
|
|
|
|
| Total operating expenses |
| - |
| - |
|
|
|
|
|
|
|
LOSS BEFORE TAXES |
| - |
| - | ||
|
|
|
|
|
|
|
INCOME TAXES |
| - |
| - | ||
|
|
|
|
|
|
|
NET LOSS | $ | - | $ | - | ||
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE - |
|
|
|
| ||
| BASIC AND DILUTED: | $ | - | $ | - | |
|
|
|
|
|
|
|
| Weighted Common Shares Outstanding - |
|
|
|
| |
|
| basic and diluted |
| 4,169,011 |
| 3,962,227 |
|
|
|
|
|
|
|
See accompanying notes to the financial statements. |
F-12
SILVERHILL MANAGEMENT SERVICES, INC. | ||||||||
(A DEVELOPMENT STAGE COMPANY) | ||||||||
STATEMENTS OF OPERATIONS | ||||||||
|
|
|
|
|
| For the Period from |
| For the Period from |
|
|
|
| For the Six Months |
| March 25, 2008 |
| March 25, 2008 |
|
|
|
| ended |
| (Inception) through |
| (Inception) through |
|
|
|
| June 30, 2009 |
| June 30, 2008 |
| June 30, 2009 |
|
|
|
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
| ||
| Professional fees | $ | 5,000 | $ | - | $ | 47,200 | |
| General and administrative expenses |
| 1,542 |
| - |
| 7,905 | |
|
|
|
|
|
|
|
|
|
|
| Total operating expenses |
| 6,542 |
| - |
| 55,105 |
|
|
|
|
|
|
|
|
|
LOSS BEFORE TAXES |
| (6,542) |
| - |
| (55,105) | ||
|
|
|
|
|
|
|
|
|
INCOME TAXES |
| - |
| - |
| - | ||
|
|
|
|
|
|
|
|
|
NET LOSS | $ | (6,542) | $ | - | $ | (55,105) | ||
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE - |
|
|
|
|
|
| ||
| BASIC AND DILUTED: | $ | (0.00) | $ | - | $ | (0.01) | |
|
|
|
|
|
|
|
|
|
| Weighted Common Shares Outstanding - |
|
|
|
|
|
| |
|
| basic and diluted |
| 4,163,735 |
| 3,962,227 |
| 4,078,277 |
|
|
|
|
|
|
|
|
|
See accompanying notes to the financial statements. |
F-13
SILVERHILL MANAGEMENT SERVICES, INC. | |||||||||||
(A DEVELOPMENT STAGE COMPANY) | |||||||||||
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) | |||||||||||
For the Period from March 25, 2008 (Inception) through June 30, 2009 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Common Stock, $0.0001 Par Value |
| Additional |
| Deficit accumulated During the |
| Total | ||||
| Number of Shares |
| Amount |
| Paid-in Capital |
| Development Stage |
| Stockholders' Equity (Deficit) | ||
|
|
|
|
|
|
|
|
|
| ||
Balance, March 25, 2008 (Inception) | - | $ | - | $ | - | $ | - | $ | - | ||
|
|
|
|
|
|
|
|
|
| ||
Issuance of common stock for cash at $0.0001 per share upon formation of the Company | 3,960,000 |
| 396 |
| - |
| - |
| 396 | ||
|
|
|
|
|
|
|
|
|
| ||
Issuance of common stock for cash at $0.25 per share on May 7, 2008 | 4,000 |
| 1 |
| 999 |
| - |
| 1,000 | ||
|
|
|
|
|
|
|
|
|
| ||
Issuance of common stock for cash at $0.25 per share between July 15, 2008 and September 25, 2008 | 92,000 |
| 9 |
| 22,991 |
| - |
| 23,000 | ||
|
|
|
|
|
|
|
|
|
| ||
Issuance of common stock for cash at $0.25 per share between October 3, 2008 and December 15, 2008 | 80,000 |
| 8 |
| 19,992 |
| - |
| 20,000 | ||
|
|
|
|
|
|
|
|
|
| ||
Net loss | - |
| - |
| - |
| (48,563) |
| (48,563) | ||
|
|
|
|
|
|
|
|
|
| ||
Balance, December 31, 2008 | 4,136,000 | $ | 414 | $ | 43,982 | $ | (48,563) | $ | (4,167) | ||
|
|
|
|
|
|
|
|
|
| ||
Issuance of common stock for cash at $0.25 per share between January 12, 2009 and January 27, 2009 | 28,000 |
| 3 |
| 6,997 |
| - |
| 7,000 | ||
|
|
|
|
|
|
|
|
|
| ||
Issuance of common stock for cash at $0.25 per share between May 29, 2009 and June 18, 2009 | 24,000 |
| 2 |
| 5,998 |
| - |
| 6,000 | ||
|
|
|
|
|
|
|
|
|
| ||
Net loss | - |
| - |
| - |
| (6,542) |
| (6,542) | ||
|
|
|
|
|
|
|
|
|
| ||
Balance, June 30, 2009 | 4,188,000 | $ | 419 | $ | 56,977 | $ | (55,105) | $ | 2,291 | ||
|
|
|
|
|
|
|
|
|
| ||
See accompanying notes to the financial statements. |
F-14
SILVERHILL MANAGEMENT SERVICES, INC. | ||||||||
(A DEVELOPMENT STAGE COMPANY) | ||||||||
STATEMENTS OF CASH FLOWS | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| For the Six Months Ended June 30, 2009 |
| For the Period from March 25, 2008 (Inception) through June 30, 2008 |
| For the Period from March 25, 2008 (Inception) through June 30, 2009 |
|
|
|
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
| ||
Net loss | $ | (6,542) | $ | - | $ | (55,105) | ||
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in |
|
|
|
|
|
| ||
| operating activities |
|
|
|
|
|
| |
| Changes in operating assets and liabilities: |
|
|
|
|
|
| |
|
| Accrued expenses |
| (5,800) |
| - |
| 3,800 |
|
|
|
|
|
|
|
|
|
NET CASH USED IN OPERATING ACTIVITIES |
| (12,342) |
| - |
| (51,305) | ||
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
| ||
| Sale of common stock |
| 13,000 |
| 1,396 |
| 57,396 | |
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES |
| 13,000 |
| 1,396 |
| 57,396 | ||
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH |
| 658 |
| 1,396 |
| 6,091 | ||
|
|
|
|
|
|
|
|
|
Cash at beginning of period |
| 5,433 |
| - |
| - | ||
|
|
|
|
|
|
|
|
|
Cash at end of period | $ | 6,091 | $ | 1,396 | $ | 6,091 | ||
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
| ||
| Interest paid | $ | - | $ | - | $ | - | |
| Taxes paid | $ | - | $ | - | $ | - | |
|
|
|
|
|
|
|
|
|
See accompanying notes to the financial statements. |
F-15
Silverhill Management Services, Inc.
(A Development Stage Company)
June 30, 2009 and 2008
Notes to the Financial Statements
(Unaudited)
NOTE 1 – ORGANIZATION AND OPERATIONS
Silverhill Management Services, Inc. (a development stage company) (“Silverhill” or the “Company”) was incorporated on March 25, 2008 under the laws of the State of Delaware. A substantial portion of the Company’s activities has involved developing a business plan and establishing contacts and visibility in the marketplace and the Company has not generated any revenues to date. The Company plans to offer business support services to proprietors, entrepreneurs, and small business owners.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full year. These financial statements should be read in conjunction with the financial statements of the Company for t he year ended December 31, 2008 and notes thereto contained in the information filed as part of the Company’s Registration Statement on Form S-1, of which this Prospectus is a part.
Development stage company
The Company is a development stage company as defined by Statement of Financial Accounting Standards No. 7 “Accounting and Reporting by Development Stage Enterprises”(“SFAS No. 7”). The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company's development stage activities.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Due to the limited level of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.
Cash equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Fair value of financial instruments
The Company follows Statement of Financial Accounting Standards No. 107“Disclosures about fair value of Financial Instruments” (“SFAS No. 107”) for disclosures about fair value of its financial instruments and has adopted Financial Accounting Standards Board (“FASB”) No. 157“Fair Value Measurements” (“SFAS No. 157”) to measure the fair value of its financial instruments. SFAS No. 157 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, SFAS No. 157 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for ident ical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by SFAS No. 157 are described below:
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Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. |
As defined by SFAS No. 107, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date. The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity of these instruments.
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at June 30, 2009 or 2008, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the interim period ended June 30, 2009 or for the period from March 25, 2008 (inception) through June 30, 2008.
Revenue recognition
The Company follows the guidance of the Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) 101“Revenue Recognition” (“SAB No. 101”), as amended by SAB No. 104 (“SAB No. 104”) for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Income taxes
The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109“Accounting for Income Taxes” (“SFAS No. 109”). Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment da te.
The Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48“Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. FIN 48 also provides guidance on de-recognition, classification, interest and penaltie s on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of FIN 48.
Net loss per common share
Net loss per common share is computed pursuant to Statement of Financial Accounting Standards No. 128“Earnings Per Share” (“SFAS No. 128”). Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of June 30, 2009 0r 2008.
Recently issued accounting pronouncements
In June 2003, the Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended by SEC Release No. 33-8934 on June 26, 2008. Commencing with its annual report for the year ending December 31, 2009, the Company will be required to include a report of management on its internal control over financial reporting. The internal control report must include a statement
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·
of management’s responsibility for establishing and maintaining adequate internal control over its financial reporting;
·
of management’s assessment of the effectiveness of its internal control over financial reporting as of year end; and
·
of the framework used by management to evaluate the effectiveness of the Company’s internal control over financial reporting.
Furthermore, in the following fiscal year, it is required to file the auditor’s attestation report separately on the Company’s internal control over financial reporting on whether it believes that the Company has maintained, in all material respects, effective internal control over financial reporting.
In March 2008, the FASB issued FASB Statement No. 161 “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133” (“SFAS No. 161”), which changes the disclosure requirements for derivative instruments and hedging activities. Pursuant to SFAS No.161, Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. SFAS No. 161 encourages but does not require disclosures for earlier periods presented for compara tive purposes at initial adoption. In years after initial adoption, this Statement requires comparative disclosures only for periods subsequent to initial adoption. The Company does not expect the adoption of SFAS No. 161 to have a material impact on the financial results of the Company.
In May 2008, FASB issued FASB Statement No. 162 “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”) to be effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board (“PCAOB”) amendments to AU Section 411,The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. The effect of adoption of SFAS No. 162 on the Company’s financial position and results of operations is not expected to be material.
In May 2009, FASB issued FASB Statement No. 165 “Subsequent events” (“SFAS No. 165”) to be effective for the interim or annual financial periods ending after June15, 2009. SFAS No. 165 The objective of this Statement is to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this Statement sets forth: 1. The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements. 2. The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements. 3. The disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The effect of ado ption of SFAS No. 165 on the Company’s financial position and results of operations is not expected to be material.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
NOTE 3 – GOING CONCERN
As reflected in the accompanying financial statements, the Company had a deficit accumulated during the development stage of $55,105 at June 30, 2009 and a net loss of $6,542 and cashed used in operations of $12,342 for the interim period ended June 30, 2009, with no revenues during the period.
While the Company is attempting to commence operations and produce revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
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NOTE 4 – STOCKHOLDERS’ DEFICIT
Common stock
The Company was incorporated on March 25, 2008 at which time 3,960,000 shares of common stock were issued to the Company’s founders at $0.0001 per share for $396.
On May 7, 2008, the Company sold 4,000 shares of its common stock in a private placement at $0.25 per share to one (1) individual for $1,000.
For the period from July 15, 2008 through September 25, 2008, the Company sold 92,000 shares of its common stock in a private placement at $0.25 per share to sixteen (16) individuals for $23,000.
For the period from October 3, 2008 through December 15, 2008, the Company sold 80,000 shares of its common stock in a private placement at $0.25 per share to fifteen (15) individuals for $20,000.
For the period from January 12, 2009 through January 27, 2009, the Company sold 28,000 shares of its common stock at $0.25 per share to seven (7) individuals for $7,000.
For the period from May 29, 2009 through June 18, 2009, the Company sold 24,000 shares of its common stock at $0.25 per share to five (5) individuals for $6,000.
NOTE 5 – SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet date but before financial statements were available to be issued to determine if they must be reported. The Management of the Company determined that there were certain reportable subsequent events to be disclosed as follows:
On July 2, 2009, the Company sold 24,000 shares of its common stock at $0.25 per share to three (3) individuals for $6,000.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth costs and expenses payable by Energy West in connection with the sale of common shares being registered. All amounts except the SEC filing fee are estimates.
SEC registration fee | $ | 21.48 |
Accounting fees and expenses |
| 10,000.00 |
Legal fees and expenses |
| 15,000.00 |
Miscellaneous |
| 478.52 |
|
|
|
Total | $ | 25,500.00 |
The foregoing are estimates only.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our certificate of incorporation, as amended, provides to the fullest extent permitted by Delaware law, that our directors or officers shall not be personally liable to us or our stockholders for damages for breach of such director’s or officer’s fiduciary duty. The effect of this provision of our certificate of incorporation, as amended, is to eliminate the right of us and our stockholders (through stockholders’ derivative suits on behalf of our company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or grossly negligent behavior, except under certain situations defined by statute. We believe that the indemnification provisions in our certificate of incorporation, as amended, are necessary to attract and retain qualified persons as directors and officers.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the Securities Act) may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, 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 the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suite or proceeding) is asserted by such director officer or controlling person in connection with the securities being registered, we willfulness 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 Securities Act and will be governed by the final adjudication of such issue.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On March 25, 2008 we issued 3,900,000 shares of our common stock to Emily Lussier, our president. On March 25, 2008 we also we issued 40,000 shares of our common stock to Eric Richardson, Esq. All of such transactions with the Company’s founders were exempt from registration by reason of Section 4(2) of the Securities Act of 1933, as amended (the “Act”). All of the shares issued in such transactions bear an appropriate restrictive legend.
An additional 252,000 shares were issued to 47 shareholders for $63,000 in cash ($0.25 per share). These shares were issued in a private offering pursuant to Regulation D under the Securities Act of 1933, as amended, and each of the investors therein represented in writing that such investor was an accredited investor as that term is defined in Regulation D and that he was acquiring the shares for his own account and for investment.
No underwriter participated in the foregoing transactions, and no underwriting discounts or commissions were paid, nor was any general solicitation or general advertising conducted. The securities bear a restrictive legend and stop transfer instructions are noted on our stock transfer records.
These shares were issued in a private offering pursuant to Regulation D under the Act, and each of the investors therein represented in writing that such investor was an accredited investor as that term is defined in Regulation D and that he was acquiring the shares for his own account and for investment. A copy of such subscription agreement is filed as Exhibit 4.1 to the registration statement of which this prospectus is a part. The offering was, accordingly, exempt by reason of Section 4(6) of the Act.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed with this Registration Statement on Form S-1.
Exhibit No. | Description |
3.1 | Certificate of Incorporation |
3.2 | Bylaws |
4.1 | Subscription Agreement |
4.2 | Specimen Stock Certificate (to be filed by amendment) |
5.1 | Legal Opinion of Cohen & Richardson, LLP |
23.1 | Consent of Li & Company, PC |
23.2 | Consent of Cohen & Richardson, LLP (included in Exhibit 5.1) |
UNDERTAKINGS
We hereby undertake to:
1. File, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the Securities Act; and
(ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the 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 prospectus 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
(iii) Include any additional or changed material information on the plan of distribution.
2. For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.
3. File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.
4. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, 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 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 a director, officer or controlling person of ours 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 us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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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 of filing on Form S-1 and authorized this registration statement to be signed on our behalf by the undersigned, in the City of Tyngsboro, State of Massachusetts, on 5th August, 2009
Silverhill Management Services, Inc.,
By:/s/ Emily Lussier
Name: Emily Lussier
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated:
Person | Capacity | Date |
/s/ Emily Lussier, President | President and Chief Executive Officer and a Director (Principal Executive, Financial and Accounting Officer) | August 4, 2009 |
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