In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.
We have no outstanding stock options or other equity compensation plans.
We are subject to certain reporting requirements and will furnish annual financial reports to our stockholders, certified by our independent accountants, and will furnish unaudited quarterly financial reports in our quarterly reports filed electronically with the SEC. All reports and information filed by us can be found at the SEC website, www.sec.gov.
The stock transfer agent for our securities is Island Stock Transfer.
We have not previously declared or paid any dividends on our common stock and do not anticipate declaring any dividends in the foreseeable future. The payment of dividends on our common stock is within the discretion of our board of directors. We intend to retain any earnings for use in our operations and the expansion of our business. Payment of dividends in the future will depend on our future earnings, future capital needs and our operating and financial condition, among other factors that our board of directors may deem relevant. We are not under any contractual restriction as to our present or future ability to pay dividends.
We have no outstanding stock options or other equity compensation plans.
The following selected consolidated statement of operations data contains consolidated statement of operations data and consolidated balance sheet for the period from inception (March 28, 2012) through April 30, 2012. There is no comparable data for prior periods. The consolidated statement of operations data and balance sheet data were derived from the audited consolidated financial statements. Such financial data should be read in conjunction with the consolidated financial statements and the notes to the consolidated financial statements starting on page F-1 and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
The following selected consolidated statement of operations data contains consolidated statement of operations data and consolidated balance sheet for the three-month period ended June 30, 2012. There is no comparable data for prior periods. The consolidated statement of operations data and balance sheet data were derived from the audited consolidated financial statements. Such financial data should be read in conjunction with the consolidated financial statements and the notes to the consolidated financial statements starting on page F-1 and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operation for the period from inception (March 28, 2012) to April 30, 2012 and for the three months ended June 30, 2012 and should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the “Risk Factors,” “Cautionary Notice Regarding Forward-Looking Statements” and “Our Business” sections in this Form S-1. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.
Plan of Operation
From inception (March 28, 2012), Alliance Media Group Holdings, Inc. (the “Company”) was organized as a vehicle to engage in the commercial production, distribution and exploitation of Motion Pictures and other Entertainment products including but not limited to animation, television, live events, commercial retail and destination property’s as well as other entertainment related enterprises such as theme parks and theme restaurants and destinations. As of the date of this prospectus, the Company has yet to engage in any meaningful business activities and is an early development stage company.
The Company’s goal is to create motion pictures and to fully exploit the Films and the Ancillary Rights through several avenues, including theatrical release, cable television, home viewing versions (DVD, VHS) and the Internet. The Company intends to achieve growth through both acquisition and internally generated business. The Company intends to promote the Films utilizing industry marketing efforts such as advance publicity and utilizing recent technological advances through the Internet as well as a target-specific marketing campaigns. The Company intends to establish a website and to explore possibilities including publicizing the Company on, and allowing audiences to download trailers, highlights, clips, script excerpts and/or artwork from such website. The Company’s Officers and consultants have experience in feature film production, distribution and promotions, including target-specific marketing efforts.
The Business
Initially, the Company intends to be almost exclusively a film production company which will seek distribution of its productions through third party distributors. With the passage of time, the Company will consider building a distribution infrastructure to not only distribute its own productions but also films produced by third parties. Given that the film distribution business required significant financial resources, the Company does not intend to enter the film distribution business until is has successfully established itself in the film production business and therefore an investor should not rely on the potential that the Company will enter the film distribution business in the near term, if ever.
We intend to make motion pictures with production budgets of $3-10 million or more. We will need to raise all the money required to fund the production of motion pictures from outside financing. Such financing could take the form of co-production or joint venture arrangements or partnerships, additional sales of our securities or an operating line of credit. Regardless of the amount of money we raise, additional financing will be needed to produce additional motion pictures. No assurance can be given that financing will be available to us, at all, or on favorable terms. Unless such additional financing is available to us, our production activities may be materially adversely affected and you may lose your entire investment. We have no financing commitments at this time.
With respect to the budget of a film, it is generally accepted in the motion picture industry that one is referring to the final cost of producing a negative from which the final distribution copies can be produced (i.e. the actual cost of making and delivering the picture.) A $5,000,000 motion picture for instance might cost approximately $500,000 to develop; approximately $750,000 to be expended during pre-production; approximately $2,500,000 expended during principal photography and approximately $1,250,000 during post production.
Depending on the production and the film, it may be financed through a combination of State-sponsored incentive programs, production agreements with local production vendors and cash advances raised through a variety of sources including but not limited to pre-sale of territorial rights, bank loans and private investment.
The marketing and distribution of the film is financed separately and is either the responsibility of a third-party contracted distributor or it may be a function of the Company through a variety of sources including but not limited to bank loans and private investment.
It will be the responsibility of management and the Board of Directors to utilize its expertise and experience to determine the best possible financing scenario for each project to be implemented.
The Company intends to seek to identify and acquire story rights, complete screenplays, and complete projects ready for distribution through a number of sources . These sources include talent agencies that represent writers, directors and producers, law firms that specialize in the representation of writers, directors and producers, unions and guilds including the Screen Actors Guild, the Directors Guild and the Writers Guild of America.
In addition the Company intends to form strategic alliances with various domestic and foreign sales agents. This will allow the Company access to various film markets that take place several times a year. It is part of the Company’s business plan to potentially acquire production and distribution companies that also may have production rights already under their control.
The Company currently has under consideration a number of potential film productions and opportunities to distribute films which are either in process or are in the planning stages. The Company is also reviewing and considering several opportunities to distribute productions which are either under production or have completed production by third parties. At this time, the Company has yet to enter into any specific commitments. It is the Company’s goal to enter into at least one specific production commitment prior to the end of calendar 2012. Notwithstanding, the Company is not able to state any specific milestones until it has undertaken at least its first production. While the Company expects that its initial productions will be financed on a project-by-project basis, the Company believes that it will be able to attract additional equity or debt financing on a corporate level once it has projects which are in a committed status based on the value of such projects. The Company believes that it will not be able to undertake any production projects without obtaining both film project finance and additional funding at the corporate level. At this time, the Company has no commitments for any additional project or corporate finance. As a result, the Company’s first milestone will be to make specific commitments to specific film productions.
As of the current date, management and members of the Board have met with various producers, writers, distributors, sales agents and studio executives, in the United States and in Europe, to begin the process of identifying and eventually engaging in working relationships for the purpose of developing, producing and distributing the Company productions once the rights to a property have been secured by the Company. In addition, we have disclosed that Company Management and members of the Board have met with sources of motion picture production financing in the United States, South Africa and Europe to seek commitments for financing productions which the Company intends to undertake. No such commitments or agreements in principle have been obtained as of the current date.
The Company has entered into preliminary negotiations with Prelude Pictures (“Prelude”) to potentially acquire rights to one of Prelude’s unproduced screenplays. At this date, no agreement has been reached and there is no guarantee one can be reached. Notwithstanding, if an agreement is eventually reached between Prelude and the Company, then the parties would execute a rights purchase agreement and the Company would begin the development process with respect to the purchased property. The development process can take anywhere from 30 to 120 days and the Company would intend to complete this process during calendar year 2012. During the development process, the Company would undertake to secure the production financing through one of the sources that the Company has identified. Thereafter, the Company would undertake to secure talent and production staff for the production. Upon completion of these two tasks, the Company would intend to schedule the actual production of the film.
The process of assembling financing and undertaking production of independent films is detailed in the INDEPENDENT MOTION PICTURE INDUSTRY OVERVIEW,below. Notwithstanding, there are no guarantees that the Company will ever be able to raise any additional funding on either a project finance or corporate level and it has no present commitments to provide any such finance.
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INDEPENDENT MOTION PICTURE INDUSTRY OVERVIEW
General
Independent Motion Pictures are differentiated from the typical theatrical production which is made with the backing and support of a major film studio. These major productions are largely financed from inception by the major studios which also retain the bulk of the distribution rights for the film. These films tend to have larger budgets (generally over $10 million). Independent Motion Pictures are often produced initially without the backing of a major studio and are financed using a combination of investor funding, the sale of territorial or distribution channel distribution rights and loans (which are often collateralized by the proceeds of the sale of distribution rights. Independent Motion Picture Producers may often obtain the services of name talent by providing them a percentage ownership participation in the production in lieu of cash salary. Finally, Independent Motion Picture producers often take advantage of government incentive programs (such as those provided by Canada and France) which will provide funding based on the inclusion of local content in the film. Many of these are co-productions with production companies which have been established in the markets providing incentives which facilitate arranging for financing in those markets.
The manner in which Independent Motion Pictures are financed, produced and marketed greatly depends on factors such as genre, budget, star power, location and target market or audience. The Company believes that the management and board of directors have experience in marketing, advertising and promoting films of a significant cross-section of genres.
Essentially, there are three ways that an independent film is financed; 1) private investment; 2) mixture of private investment and domestic and foreign financial incentive programs and 3) pre-sale of certain distribution rights (i.e. foreign territories, video on demand, cable TV, etc.) then using those pre-sale contracts as collateral to secure bank or institutional financing. The financial of a production may include any or all of the above sources of financing. Each film project is evaluated on its own merits and a decision is made by the producers as to which the financing strategy which is most suitable for the particular film.
Once the financing structure has been determined and implemented, the producer will then commence the process of making the picture. During the production of the film the producers may also start the marketing, promotion and distribution efforts of the film. Each film is treated as an individual project during this phase. The various genres of film are promoted and marketed differently however the process is basically the same. The producers identify the target market; develop relationships with relevant retailers, TV networks, merchandisers and other specific groups and then begin pre-promoting the picture through these groups. Social media and web presence is created and exploited.
Throughout the production process, the producers engage in negotiations with foreign and domestic distributors and sales agents. Depending on the financial requirements of the production, the producers will pre-sell distribution in specific geographic markets and with respect to specific avenues of distribution (such as cable, pay-per-view and the like). The producers will retain certain distribution rights for their own benefit.
Once the film production is complete, it may be exhibited at various film markets throughout the world where it will obtain broad exposure to independent film distributors who might have an interest in purchasing additional distribution rights with respect to the film. At the release date(s) for the film, it will be delivered in final form to the various distributors and sales agents around the globe for exhibition to audiences. At this point a third party collection company tracks the revenues and receipts and collects the sales from the various distributors and sales agents and administers the sales and distribution agreements according to their terms, which generally provide for an allocation of revenues between the parties.
Film Production Process.
A film project goes through six (6) stages before it is ready for release. Combined, these stages can take approximately from one and a half to three years or more to complete. The stages are:
1) development | 4) post-production |
2) pre-production | 5) distribution |
3) principal photography | 6) exhibition |
Development. During the development stage, the executive producer and/or production company create or acquire the theatrical motion picture rights to a property. The production company then finances the cost of the screenplay creation and revision to the point where it is determined whether the project has sufficient merit to pursue.
If the decision is made to proceed with the film, the creation of a comprehensive budget and shooting schedule is commissioned. With a dollar figure established, the production entity then takes those steps necessary to acquire or have committed adequate funding to finance the production of the film. A distribution commitment may be sought during development, although many independent films are often developed and even produced before such a commitment is finalized. In order to facilitate the attractiveness of the film to potential sources of funding, some financial commitments to actors may be made during the development stage that guarantee the payment of a specific fee, even if the film does not get made.
Pre-Production. Once the financing has been arranged or committed, the film is ready for pre-production. During this phase, a completion bond is secured, a director is retained, locations and production facilities are secured, casting is completed, and the shooting schedule is planned. Script polishing is also completed during this phase. The pre-production phase of a film usually takes approximately two to four months.
Principal Photography. The actual “shooting” of the film can commence with the completion of pre-production. Principal photography generally lasts from approximately six to fourteen weeks, and could be a longer period for larger budget productions.
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Post-Production. Post-Production may commence prior to the completion of principal photography and normally encompassing approximately three to six months. Post-Production includes editing, scoring, voice-over dialogue and other elements which are added following the completion of Principal Photography. During this phase, the director and producer make the agreed cuts, rearrangements or other changes in the raw film footage, and the necessary dialogue, music, sound effects, optical effects, and special effects are added. The result of this effort is the “completed negative” from which release prints are made for release and distribution.
Distribution. In today’s entertainment marketplace, the neighborhood movie theater is only the first link in a feature film’s distribution chain. Many productions are never theatrically released and go directly to other forms of distribution. Regardless of the exposure on initial release, films generally continue generating revenues for many years as they move through additional distribution channels. The Company does notsell its films. It rents or licenses them for specific uses and time periods, while retaining ownership of the underlying rights. In certain instances, the Company may license the distribution rights for specified markets. A typical distribution sequence is described below. Actual release patterns for films are individually tailored, and a film can be in more than one market at a time.
Marketing
The Company intends to rely on a variety of marketing tools, including those which are generally available for independent film exploitation and tools directly developed by the Company. Each production has its own “target audience”. The target audience for a particular production may be defined by age, sex, socio-economic status, geography, religious or cultural orientation. This is largely determined by the subject matter of the production. There are many marketing organizations within the film industry which specialize in the definition of target markets for a production and structuring of marketing and sales programs which best reach the specific targeted market. These organizations develop specific marketing and sales programs which enable the distributors to obtain the maximum impact for the amount spent. Many times, this may include joint marketing efforts with other entities or products which are similarly targeting the same market.
The responsibility for advertising and promoting a film once it is placed in the hands of distributors generally rests in the hands of the distributors and is considered a part of their cost of distribution. While the production company may be responsible for the cost of film prints. The production company is rarely responsible for the costs of distribution.
Within the motion picture industry there are several check and balances that are utilized industry-wide to ensure, to the extent possible, that licensed organizations are performing and reporting properly. Third party collection firms are often used to audit and track sales, distribution agreements that specifically address these issues are put in place. This is rarely undertaken directly by the film production company.
Unions
While the motion picture industry is highly unionized, the Company intends to produce both Union and non-Union pictures. Lower budget films (such as many the Company intends to produce) may be produced on a non-Union basis, which may limit certain distribution channels available for the film. Notwithstanding, there are actors, craft members and distribution companies and exhibitors which will work with non-Union productions. When producing a Union film, the costs of the production are increased significantly and there is always a risk of a labor dispute within the any of the unions and studios involved in the production, which could result in a work stoppage. This is a general risk which affects the entire industry and not the Company specifically. While work stoppages are rare within the film industry, they have occurred. The Company cannot specifically estimate the direct or indirect cost of any particular work stoppage.
Government Regulation
Other than the necessity to obtain licenses to film in a particular location from the governmental body which has jurisdiction over that location, the Company is not aware of any particular regulations which target the film industry specifically. Many local governmental bodies will also impose fees to film in the location and may also pass on the cost of providing law enforcement production while filming and may impose certain labor laws and time restrictions. Film production companies are subject to the same laws, rules and regulations which affect the conduct of business generally, including but not limited to intellectual property protection and environmental concerns. The Company intends to continue to retain qualified counsel in each jurisdiction where it operates to ensure that it is in compliance with all applicable laws, rules and regulations. Notwithstanding, there is no guaranty that the Company may not, from time to time, inadvertently engage in activities which may violate some law, rule or regulation. A significant part of the Company’s evaluation of locations to film its productions is the legal and regulatory environment with respect to motion picture production in that jurisdiction as some locations are considerably more production-friendly than others. On the positive side, some locations may even provide incentives to produce films in those locations.
Initial Capital Formation
On April 2, 2012, the Registrant sold an aggregate of 15,000,000 shares of Company Common Stock to its founders, Daniel de Liege (5,000,000 shares), Mark W. Koch (5,000,000 shares) and Johan Sturm (5,000,000 shares) for an aggregate investment of $15,000. Payment for these shares was booked as a stock subscription receivable. The Registrant sold these shares of Common Stock under an exemption from registration provided by Section 4(2) of the Securities Act.
On April 9, 2012, the Registrant sold an aggregate of 400,000 shares of Company Common Stock to four of the Company’s newly appointed directors for an aggregate investment of $4,000.00. Payment for these shares was booked as a stock subscription receivable. The Registrant sold these shares of Common Stock under an exemption from registration provided by Section 4(2) of the Securities Act.
Also on April 9, 2012, the Registrant sold an aggregate of 865,000 shares of Company Common stock to ten (10) consultants who had provided services in connection with the conceptualization of the Company and the
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development of the Company’s Business Plan. The shares were valued at $0.01 per shares and the Company recognized an aggregate expense of $8,650 on account of such share issuances. There were no written agreements with any of the consultants.
Also on April 9, 2012, the Registrant sold an aggregate of 2,000,000 shares of Company Common stock to three (3) persons who had been instrumental in the development of the concepts behind the Company’s Business Plan and who continue to be critical to the implementation of the same. The shares were valued at $0.01 per shares and the Company recognized an aggregate expense of $20,000 on account of such share issuances. There were no written agreements with any of these persons.
On April 30, 2012, the Company completed a private offering of 1,000,000 shares to 29 investors at $0.01 per share for an aggregate investment of $10,000. The Registrant sold these shares of Common Stock under an exemption from registration provided by Regulation D (Rule 506) issued pursuant to the Securities Act.
On May 4, 2012, the Company sold an aggregate of 130,000 shares of Company Common stock to two (2) consultants who had provided services in connection with the conceptualization of the Company and the development of the Company’s Business Plan. The shares were valued at $0.01 per shares and the Company recognized an aggregate expense of $1,300 on account of such share issuances. There were no written agreements with any of these consultants.
On July 6, 2012, the Company issued a Convertible Debenture in the face amount of $50,000 to W. Evan Tullos. The Debenture indebtedness is due and payable on July 6, 2013 and bears interest at a rate of ten percent (10%) per annum, payable at maturity. The face amount of the Debenture is convertible at the option of the holder into shares of the Company’s common stock at a conversion rate of $0.12 per share or is subject to automatic conversion at the same conversion rate in the event the Company’s common stock trades at a price in excess of $1.00 per share in excess of thirty (30) consecutive trading days.
On July 31, 2012, the Company issued a Convertible Debenture in the face amount of $30,000 to Jena Waldron. The Debenture indebtedness is due and payable on July 31, 2013 and bears interest at a rate of ten percent (10%) per annum, payable at maturity. The face amount of the Debenture is convertible at the option of the holder into shares of the Company’s common stock at a conversion rate of $0.12 per share or is subject to automatic conversion at the same conversion rate in the event the Company’s common stock trades at a price in excess of $1.00 per share in excess of thirty (30) consecutive trading days. A copy of the Debenture is attached as Exhibit 10.2 and is incorporated herein by this reference.
As of August 28 , 2012, the Company had $ 8,730.42 cash on hand and anticipates a monthly “burn rate” of approximately $3, 650 .00 for overhead until the Company commences actual operations. Such expenses comprise the following approximate amounts:
While our cash on hand will fund these basic expenses for the remainder of calendar year 2012, such funds will not be adequate to fund our requirements for such period to be incurred in connection with even a minimal level of operations. The Company will clearly require additional funding once it commences actual operations or viable projects are identified.
No principal of the Company has made and formal or informal arrangement to advance funds to the Company.
Going Concern
We have engaged in only development stage activities since inception through June 30, 2012. At June 30, 2012 we had $ 715 in cash and $0 other assets and, while we had not yet incurred any liabilities as of June 30, 2012, the Company expects to incur significant liabilities in connection with its start-up activities, including the cost associated with securities law compliance, which are estimated to exceed $50,000 at a minimum. As a result, the report of our independent registered public accounting firm on our financial statements for the period ended April 30, 2012 contains an explanatory paragraph regarding our ability to continue as a going concern based upon recurring operating losses and our need to obtain additional financing to sustain operations. Our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our liabilities when they become due and to generate sufficient revenues from our operations to pay our operating expenses. There are no assurances that we will continue as a going concern.
Results of Operations
Results of Operations for the period ended April 30, 2012
Alliance Media Group Holdings, Inc. was incorporated on March 28, 2012, and as such had no meaningful results of operations for the period ended April 30, 2012.
During the period from inception (March 28, 2012) to April 30, 2012, we had no revenues and have incurred start-up expenses of $28,650. We will incur significant additional expenses in connection with our start-up which have yet to be recognized which are estimated to exceed an additional $50,000. These expenses will principally comprise professional and legal fees and other costs related to the start-up and organization of our business and raising initial capital for the Company.
Results of Operations for the three months ended June 30, 2012
For the three-month period ended June 30, 2012, we had no revenues and have incurred start-up expenses of $39,235. We will incur significant additional expenses in connection with our start-up which have yet to be recognized which are estimated to exceed an additional $50,000. These expenses will principally comprise professional and legal fees and other costs related to the start-up and organization of our business and raising initial capital for the Company.
Liquidity and Capital Resources
As of June 30, 2012, the Company had cash on hand of $ 715 and had no current or long term liabilities. The Company expects to incur significant additional liabilities in connection with its start-up activities, including the cost associated with securities law compliance, which are estimated to exceed $50,000 at a minimum.
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Critical Accounting Policies
In April 2012, President Obama signed into law the Jumpstart Our Business Startups Act, or the JOBS Act. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for “emerging growth companies,” including certain requirements relating to accounting standards and compensation disclosure. We are classified as an emerging growth company. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (1) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes Oxley Act of 2002, (2) comply with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (3) comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise, (4) provide certain disclosure regarding executive compensation required of larger public companies or (5) hold shareholder advisory votes on executive compensation.
Further, our independent registered public accounting firm is not yet required to formally attest to the effectiveness of our internal controls over financial reporting, and will not be required to do so for as long as we are an “emerging growth company” pursuant to the provisions of the JOBS Act.
We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1), which allows us to delay adoption of new or revised accounting standards that have different effective dates for public and private until those standards apply to private companies.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.
FINANCIAL STATEMENTS
The accompanying financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles applicable in the United States. Under the accrual basis of accounting, revenues are recorded as earned and expenses are recorded at the time liabilities are incurred. The Company has adopted a December 31 year-end. In the opinion of management, all adjustments for a fair statement of the results and operations and financial position for the interim periods presented have been included.
PROPERTIES
Offices
At this time, the Company maintains its designated office at 400 N Congress Avenue, Suite 130, West Palm Beach Florida 33401. The Company’s telephone number is 888-607-3555. The Company has leased its offices for a period of three years at a rent of $ 1,600 per month which commenced on August 1, 2012 .
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial ownership of the Company's Common Stock as of August 28 , 2012, by: (I) each current director; each nominee for director, and executive officer of the Company; (ii) all directors and executive officers as a group; and (iii) each shareholder who owns more than five percent of the outstanding shares of the Company's Common Stock. Except as otherwise indicated, the Company believes each of the persons listed below possesses sole voting and investment power with respect to the shares indicated.