UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 20-F
[_] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended FEBRUARY 28, 2007
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number
OR
[_] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report: Not applicable
ALLSHIPS LTD.
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(Exact name of Registrant as specified in its charter)
ALLSHIPS LTD.
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(Translation of Registrant's name into English)
BERMUDA
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(Jurisdiction of incorporation or organization)
Covenant House
85 Reid Street
Hamilton, Bermuda HM 12
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(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
None
Securities registered or to be registered pursuant to Section 12(g) of the Act:
Common stock, $0.000167 par value
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Title of class
Securities for which there is a reporting obligation
pursuant to Section 15(d)of the Act:
None
Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:
As of February 28, 2007, there were 45,230,693 shares of the registrant's
common stock outstanding.
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
[_] Yes [X] No
If this report is an annual report or transition report, indicate by check mark
if the registrant is not required to file reports pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934.
[_] Yes [X] No
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [_] No
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.
Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [X]
Indicate by check mark which financial statement item the registrant has
elected to follow.
[_] Item 17 [X] Item 18
If this is an annual report, indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act).
[X] Yes [_] No
FORWARD-LOOKING STATEMENTS
AllShips Ltd., or the Company, desires to take advantage of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 and is
including this cautionary statement in connection with this safe harbor
legislation. This document and any other written or oral statements made by us
or on our behalf may include forward-looking statements, which reflect our
current views with respect to future events and financial performance. The words
"believe," "except," "anticipate," "intends," "estimate," "forecast," "project,"
"plan," "potential," "will," "may," "should," "expect" and similar expressions
identify forward-looking statements.
Please note in this annual report, "we," "us," "our," "The Company," all refer
to AllShips Ltd.
The forward-looking statements in this document are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, management's examination of historical operating
trends, data contained in our records and other data available from third
parties. Although we believe that these assumptions were reasonable when made,
because these assumptions are inherently subject to significant uncertainties
and contingencies which are difficult or impossible to predict and are beyond
our control, we cannot assure you that we will achieve or accomplish these
expectations, beliefs or projections.
In addition to these important factors and matters discussed elsewhere herein,
important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements include our
ability to make favorable acquisitions and/or investments, and other important
factors described from time to time in the reports filed by the Company with the
Securities and Exchange Commission.
TABLE OF CONTENTS
Page
PART I ......................................................................1
Item 1 Identity of Directors, Senior Management and Advisers........1
Item 2 Offer Statistics and Expected Timetable......................1
Item 3 Key Information..............................................1
Item 4 Information on the Company...................................4
Item 4A Unresolved Staff Comments....................................6
Item 5 Operating and Financial Review and Prospects.................6
Item 6 Directors, Senior Management and Employees...................7
Item 7 Major Shareholders and Related Party Transactions............8
Item 8 Financial information........................................9
Item 9 The offer and Listing.......................................10
Item 10 Additional Information......................................10
Item 11 Quantitative and Qualitative Disclosures
about Market Risk...........................................13
Item 12 Description of Securities Other than Equity Securities......13
PART II .....................................................................13
Item 13 Defaults, Dividend Arrearages and Delinquencies.............13
Item 14 Material Modifications to the Rights of Security
Holders and Use of Proceeds.................................13
Item 15 Controls and Procedures.....................................13
Item 16A Audit Committee Financial Expert............................13
Item 16B Code of Ethics..............................................13
Item 16C Principal Accountant Fees and Services......................13
Item 16D Exemptions from the Listing Standards for
Audit Committees............................................14
Item 16E Purchases of Equity Securities by the Issuer and
Affiliated Purchasers.......................................14
PART III ....................................................................14
Item 17 Financial Statements........................................14
Item 18 Financial Statements........................................14
Item 19 Exhibits....................................................14
PART I
Item 1 Identity of Directors, Senior Management and Advisers
Not Applicable.
Item 2 Offer Statistics and Expected Timetable
Not Applicable.
Item 3 Key Information
A. Selected Financial Data
The following table sets forth our selected financial data as of February 28,
2003, February 29, 2004, and February 28, 2005, 2006 and 2007 and for each of
the five years in the period ended February 28, 2007. The following information
should be read in conjunction with Item 5 "Operating and Financial Review and
Prospects" and the financial statements and related notes included herein which
have been prepared in accordance with U.S. generally accepted accounting
principles ("US GAAP") and have been audited by Ernst & Young (Hellas) Certified
Auditors Accountants S.A. ("Ernst & Young"), an independent registered public
accounting firm.
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Year Ended
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February 28, February 29, February 28,
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2003 2004 2005 2006 2007
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(in U.S. dollars)
STATEMENT OF LOSS
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Revenue 0 0 0 0 0
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General &
administrative
expenses (35,506) (60,040) (189,017) (216,377) (293,467)
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Net loss (35,506) (60,040) (189,017) (216,377) (293,467)
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Preferential deemed
dividend 0 0 (1,500,000) 0 0
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Loss attributable to
common stockholders (35,506) (60,040) (1,689,017) (216,377) (293,467)
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Loss per common share,
basic and diluted (2) (0.01) (0.01) (0.06) (0.00) (0.01)
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Weighted average basic
and diluted shares
outstanding 7,947,828 10,060,165 27,095,500 45,230,693 45,230,693
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BALANCE SHEET
(period end)
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Current assets,
including cash 7,019 5,528 312,842 125,686 4,195
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Total assets 7,019 5,528 312,842 125,686 4,195
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Current liabilities 268,474 69,030 158,971 188,192 360,168
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Total liabilities 268,474 69,030 158,971 188,192 360,168
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Stockholders'
equity/(deficit) (261,455) (63,502) 153,871 (62,506) (355,973)
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B. Capitalization and Indebtedness
Not Applicable.
C. Reasons for the Offer and Use of Proceeds
Not Applicable.
D. Risk factors
The company has identified the following risk factors as significant. The order
in which they appear is not intended to reflect our management's prioritizing of
such risks.
WE HAVE A HISTORY OF LOSSES AND CANNOT BE CERTAIN TO ACHIEVE POSITIVE CASH FLOW.
We had net losses of $293,467, $216,377 and $189,017 (before a preferential
deemed dividend of $1,500,000) for the years ended February 28, 2007, February
28, 2006 and February 29, 2005. In addition, we had an accumulated deficit of
$3,690,636 through February 28, 2007. At present we do not have any revenue
producing operations and we anticipate monthly operating expenses of
approximately $18,000, including administration, salaries, listing and audit
costs.
Even if we acquire an operating entity or individual assets, we cannot be
certain that we will achieve or sustain positive cash flow or profitability from
our operations. Our net losses and negative cash flow are likely to continue
even longer than we currently anticipate if we do not acquire a viable operating
entity or asset and if we do not attract and retain qualified personnel. Our
ability to achieve our objectives is subject to financial, competitive,
regulatory, legal, technical and other factors, many of which are beyond our
control.
OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO ASSESS PAST PERFORMANCE AND
FUTURE PROSPECTS.
There is only limited historical operating and financial information on which to
base an evaluation of our performance and prospects. We have acquired and
disposed of one company since our inception in March 1998. Any company which we
may acquire in the future may be in a completely different business than the
company that we previously owned. This limits the comparability of our operating
and financial information from period to period.
WE ARE SUBJECT TO RISKS AS WE MAKE ACQUISITIONS.
As part of our business strategy, we intend to acquire and/or make investments
in, as yet unidentified operating companies and assets. Any such future
acquisitions and investments would involve risks, such as:
- incorrect assessment of the value, strengths and weaknesses of
acquisition and investment opportunities;
- underestimating the difficulty of integrating the operations and
personnel of newly acquired companies with other companies we may
acquire;
- the potential disruption of any ongoing business, including possible
diversions of resources and management time; and
- the threat of impairing relationships with employees and customers as
a result of changes in management or ownership.
We cannot assure you that we will be successful in overcoming these risks.
Moreover, we cannot be certain that any desired acquisition, investment or asset
could be made in a timely manner or on terms and conditions acceptable to us.
Neither can we assure you that we will be successful in identifying attractive
acquisition candidates. We expect that competition for such acquisitions may be
significant. We may compete with others who have similar acquisition strategies,
many of whom may be larger and have greater financial and other resources than
us.
An additional risk associated with acquisitions is that many attractive
acquisition candidates do not have audited financial statements and have varying
degrees of internal controls. Although we may believe that the available
financial information for a particular business is reliable, we cannot guarantee
that a subsequent audit would not reveal matters of significance, including with
respect to liabilities, contingent or otherwise. We expect that, from time to
time in the future, we will enter into acquisition agreements, the pro forma
effect of which is not known and cannot be predicted.
WE DO NOT EXPECT TO PAY DIVIDENDS. We do not anticipate paying cash dividends in
the foreseeable future.
RISKS INHERENT IN INTERNATIONAL OPERATIONS. We are not currently conducting
business. In the future, however, we may acquire an operating company or asset
located outside of the United States. If we acquire a non-U.S. operating
company, it is possible that a substantial portion of our business may be
conducted outside of the United States. In this event, our operations could be
subject to various risks such as the possibility of the loss of revenue,
property or equipment due to expropriation, nationalization, war, insurrection,
terrorism or civil disturbance, the instability of foreign economies, currency
fluctuations, and devaluations, adverse tax policies and governmental activities
that may limit or disrupt markets, restrict payments or the movement of funds or
result in the deprivation of contract rights. Additionally, our ability to
compete could be adversely affected by foreign governmental regulations that
encourage or mandate the hiring of local contractors, or by regulations that
require foreign contractors to employ citizens of, or purchase supplies from
vendors in, a particular jurisdiction. We could also be subject to taxation in a
number of jurisdictions, and the final determination of our tax liabilities
might involve the interpretation of the statutes and requirements of various
domestic and foreign taxing authorities. Any of these risks could have an
adverse effect on our operations.
DEPENDENCE ON KEY EMPLOYEES. Our growth and profitability are dependent upon,
among other things, the abilities and experience of our management team
including Mr. George Economou, our Chairman and Director. If the services of Mr.
George Economou or of our Chief Financial Officer became unavailable, our
business, financial condition and results of operations could be adversely
affected. In addition, on October 6,2006 our Chief Financial Officer, Mr.
Christopher Thomas, resigned from our Company. Mr. Aristeidis Ioannidis was
appointed to replace Mr. Thomas as our Chief Financial Officer.
RIGHTS OF SHAREHOLDERS UNDER BERMUDA LAW. We are incorporated under the laws of
Bermuda. Principles of law relating to such matters as the validity of corporate
procedures, the fiduciary duties of our management and directors and the rights
of our shareholders, are governed by Bermuda law and our Memorandum of
Association and Bye-laws. Such principles of law may differ from those that
would apply if we were incorporated in a jurisdiction in the United States.
Investors may have more difficulty in protecting their interests in the face of
actions by management, directors or controlling shareholders than would
shareholders of a corporation incorporated in a United States jurisdiction.
Under Bermuda law, a director generally owes a fiduciary duty only to the
company, not to the company's shareholders. Our shareholders may not have a
direct cause of action against our directors. In addition, Bermuda law does not
provide a mechanism for our shareholders to bring a class action lawsuit under
Bermuda law. Further, our bye-laws provide that we must indemnify our directors,
officers and members of committees to the fullest extent authorized by law. For
further information concerning our Memorandum of Association and Bye-laws, see
"Item 10 - Additional Information - Memorandum and Articles of Association."
In addition, there is uncertainty as to whether the courts of Bermuda would
enforce (i) judgments of United States courts obtained against us or our
officers and directors predicated upon the civil liability provisions of the
securities laws of the United States or any state or (ii) in original actions
brought in Bermuda, liabilities against us or such persons predicated upon the
securities laws of the United States or any state.
Item 4 Information on the Company
A. History and Development of the Company.
We were originally organized under the laws of Bermuda on March 24, 1998 under
the legal name, "Omninet International Ltd." The term of the Company is
perpetual. We amended our memorandum of association on June 30, 1998 in order to
increase the amount of our authorized common stock to 25,000,000 shares, par
value $0.001. On April 10, 2000, we further amended our memorandum of
association to increase the amount of our authorized common stock to 150,000,000
shares, par value $.000167. On October 6, 2004 we issued 30,000,000 additional
common shares and increased our share capital by $300,000. On March 18, 2005 we
changed our name to AllShips Ltd. The name change was made to better reflect the
future anticipated business of the Company which is to own and operate
ocean-going cargo vessels.
We are a Bermuda exempted company. A Bermuda exempted company is legislatively
exempt from Bermuda's usual requirement that Bermuda-formed businesses be 60%
owned by Bermuda citizens. A Bermuda exempted company may reside in Bermuda, but
must carry on its business transactions in other countries. Bermuda exempted
companies may not own real estate in Bermuda. There is no income tax,
withholding tax, capital gains tax, capital transfer tax, estate duty or
inheritance tax payable by a Bermuda exempted company or its shareholders to the
Bermuda Government.
A Bermuda exempted company is required to pay an annual fee to the Bermuda
Registrar by January 31 of each year. Annual fees are calculated based upon the
exempted company's assessable capital (authorized share capital plus any share
premiums) as of August 31 of the prior year. Exempted companies with assessable
capital of between $0 - $12,000, $12,001 - $120,000 and $120,001 - $1,200,000
must pay fees of $1,780, $3,635 and $5,610, respectively. Annual fees continue
to increase as the amount of assessable capital increases above $1,200,000. As
of August 31, 2006 we had assessable capital of $25,000 (150,000,000 authorized
shares of common stock with par value of $.000167). Accordingly, our annual fee
for the calendar year 2007 was $3,635. If an exempted company fails to timely
pay its annual fee, the Bermuda Registrar will charge that company $300 as a
late fee in addition to the annual fee. In extreme cases, the Bermuda Registrar
may cause the exempted company's charter to be suspended or revoked so that it
is no longer permitted to operate in Bermuda.
In addition, a Bermuda exempted company may apply under the Exempted
undertakings Tax Protection Act, 1966 for an assurance from the Bermuda
government that any tax imposing legislation will not be applied to the company
until after March 2016. We were granted such tax assurance on March 30, 1998.
Except as described above, we are subject to the laws and regulations applicable
to Bermuda-based corporations. Although Bermuda law at present is structured to
encourage foreign investment, there can be no assurance that future laws and
regulations will not have a negative impact on our operations. See also "Risks
Inherent in International Operations" in Item 3.D. above. At present, we are not
aware of any special country risks, such as existing or probable government
regulations, that could materially affect our operations.
B. Business Overview
We are a company who intends to own and operate ship operating businesses or to
acquire ocean-going cargo vessels. We are not presently engaged in any business.
Our only plan of operation is seeking a viable shipping business or ships to
acquire. At present, we have not identified another business or asset suitable
for acquisition. Over the next 12 months, we intend to continue our search to
acquire suitable shipping businesses or individual vessels.
In general, we intend to identify potential acquisitions through research and
referrals. Once identified, we will screen the target to determine whether or
not it might be suitable for acquisition. The initial screening will consist of
an evaluation of the candidate's potential, which may include factors such as
estimated future growth and income. If an existing shipping company is
identified as a potential target, we will conduct a detailed analysis of the
cost of acquisition, the target's fair market value, the prospective rate of
return on an investment in the target and the likelihood of achieving such
return. The detailed analysis may vary for each target and include criteria such
as an evaluation of the target against comparable companies in the shipping
industry, scrutiny of the target's financial condition and future earnings
potential and discounted cash flow analysis. We are particularly interested in
identifying and acquiring ship-owning companies and/or individual ocean-going
cargo vessels. If we decide that a company is a suitable acquisition candidate,
we anticipate that we will enter into an agreement to acquire such target,
subject to obtaining any financing and approvals necessary to carryout the
transaction.
We will need additional financing or future profitability to continue as a going
concern. We will also need additional capital in order to acquire either a
shipping company or ocean-going vessel. We plan to raise such funds through a
private placement of common stock or by borrowing from a lending institution.
There can be no assurance that we will be able to raise such funds. See "Item 5
- - Operating and Financial Review and Prospects".
Since our formation, we have explored entering into certain businesses but
commenced operations in only one business. In particular:
o In the spring of 1998, we explored providing Internet services to
users in the United Kingdom. On July 2, 1998, we acquired all of the
issued and outstanding shares (254,453 shares) of the common stock of
Colloquium Ltd. ("Colloquium"), a Scotland based provider of
connectivity and value-added Internet services to the United Kingdom,
in exchange for 954,964 shares of our common stock.
o Colloquium generated net operating losses from the date of its
acquisition until May 26, 1999. As Colloquium's losses increased, it
became clear that additional financing would be required in order to
fund its operations, and we were not certain when, if ever, Colloquium
would achieve profitability. These factors, among others, led to
disagreement between our management and that of Colloquium. In order
to avoid continuing liabilities, our Board of Directors determined to
sell Colloquium even if that involved realizing a one-time loss. On
May 26, 1999, we contributed $24,000 to the capital of Colloquium and
thereafter sold all of the issued and outstanding shares of Colloquium
to Brian McMillan and others in exchange for 479,988 of our shares
held by them. We incurred a loss upon the sale of Colloquium because
Colloquium's poor operating performance negatively impacted the
subsidiary's value.
o On September 8, 1998, we entered into a Plan and Agreement of Merger -
Reorganization with E&M Management, Inc. whereby, subject to numerous
terms and conditions, E&M was to be merged with and into us and we
would be the surviving corporation. E&M was a development stage
company originally incorporated in Nevada on November 2, 1992. E&M was
not engaged in any operations; however, trades in E&M's common stock
were quoted on the OTC Bulletin Board. As of October 15, 1999, E&M had
not obtained the requisite approval of the merger by its shareholders
as required by Nevada law and, on November 2, 1999, the companies
terminated the merger agreement by executing a Mutual Termination
Agreement and Release. We do not believe that we incurred any
liabilities as a result of termination of the merger agreement.
o During the fiscal year ended February 28, 2002, we entered into
negotiations for the acquisition of an Australian software company.
Because basic terms could not be agreed upon with that company's
management, we terminated our negotiations for such transaction before
any letter of intent or other agreements were prepared or executed.
o Since March 2002, we explored the acquisition of several companies,
however, no formal negotiations or agreements were entered into.
C. Organizational Structure
We are not a member of any group of companies. We do not presently have any
subsidiaries, although if we are successful in implementing our plan of
operation and identifying a company to acquire, we may form or acquire one or
more subsidiaries for such acquisition.
D. Property, Plant and Equipment
We do not own any material property, plant, or equipment. We have no material
assets except for cash in the amount of $686 as of February 28, 2007. We have no
office facilities or real property holdings. Our registered office is located at
the offices of Atlantic Corporate Management, Warner Building, 85 Reid Street,
Hamilton, Bermuda HM 12. Our registered office address is provided by Atlantic
Corporate Management Ltd., our corporate Secretary, in exchange for an annual
fee of $4,000. Atlantic Corporate Management Ltd. can terminate this arrangement
for any reason at 120 days notice. We believe that our existing arrangement is
adequate to meet our current needs.
Item 4A Unresolved Staff Comments
None.
Item 5 Operating and Financial Review and Prospects
A. Operating Results
The following discussion is based on our audited financial statements for the
years ended February 28, 2007, 2006 and 2005. In the period between July 2, 1998
and May 26, 1999, we were engaged in the business of providing connectivity and
value added Internet services through our subsidiary Colloquium. We discontinued
our Internet-related operations on May 26, 1999 when we sold Colloquium due to
increasing net operating losses. We are not presently engaged in that or any
other business, and our sole activity is seeking shipping companies and
individual ocean-going cargo vessels to acquire. We have not begun new
operations since selling Colloquium because we have not acquired any company or
individual asset.
The Company's expenses are primarily administrative in nature and include
salaries, professional fees, legal fees, and transfer agent fees. Our general
and administrative expenses increased from $216,377 in 2006 to $293,467 in 2007
primarily due to higher audit fees. Our general and administrative expenses
increased from $189,017 in 2005 to $216,377 in 2006 primarily due to higher
audit fees. Our general and administrative expenses increased from $60,040 in
2004 to $189,017 in 2005 primarily due to increased directors' remuneration
expenses. Similarly, our net loss for 2007 was $293,467 compared to a net loss
in 2006 and in 2005 of 216,377 and $189,017, respectively. The 2005 net loss
does not include a preferential deemed dividend (see Note 5 to our audited
financial statements) of $1,500,000, which increased the 2005 loss attributable
to common stockholders to $1,689,017.
B. Liquidity and Capital Resources
As of February 28, 2007, our total cash and cash equivalents was $686, our total
current assets were $4,195 and our total current liabilities were $360,168. As
of February 28, 2006, our total cash and cash equivalents was $117,408 and our
total current assets were $125,686 and our current liabilities were $188,192.
During our fiscal year 2007 the Company derived most of its operating capital
from Cardiff Marine Inc. ("Cardiff") a related party under common control which
during 2007 paid, on our behalf, directly to third parties and made cash
advances to us of $291,298 in the aggregate. Of this amount $13,312 was refunded
to Cardiff during the same period. During the fiscal years 2006 and 2005 the
Company derived most of its operating capital from the issuance of 30,000,000
shares at $0.01 thereby raising $300,000 on October 6, 2004. We have no planned
capital expenditures at this time.
Net cash used in operating activities during the fiscal year 2007, 2006 and 2005
totaled $399,957, $190,185 and $21,700, respectively. These amounts were used
for administrative expenses, including salaries, accounting and legal fees.
Net cash from investing activities for the fiscal year 2007 was $5,249 being the
collection of amounts previously advanced to Cardiff. Net cash used in investing
activities for fiscal year 2006 totaled $5,249, being cash advances to Cardiff.
Net cash from investing activities for the fiscal year 2005 was $0.
Net cash provided by financing activities for fiscal years 2007, 2006 and 2005
was $277,986, $0 and $332,292, respectively. The 2007 amount reflects cash
advances we received by Cardiff as well as payments made by Cardiff, on our
behalf, directly to third parties of $291,298 in aggregate, net of the amounts
we refunded to Cardiff during the same period of $13,312. The 2005 amount
reflects the proceeds of $300,000 from issuance of common stock and advances of
$32,292 we received from our stockholders and certain related parties.
Our working capital deficit, defined as the excess of our current assets over
our current liabilities, for the fiscal years 2007 and 2006, was $355,973 and
$62,506, respectively.
We do not presently have any borrowing facility established with a financial
institution. We will require additional capital to fund our operations in the
future. We anticipate raising such additional capital through a private offering
of our securities or by borrowing from a lending institution.
C. Research and Development, Patents and Licenses
Not applicable.
D. Trend Information
Not applicable as the Company is not an operating company.
E. Off-balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Item 6 Directors, Senior Management and Employees
A. Directors and Senior Management
The following sets forth the name of our directors, executive officers and key
employees, the positions and offices held by each such person, and the period
each such person has held such position.
Name Age Position Held and Term
- ---- --- ----------------------
George Economou 54 Chairman and Director since August 23, 2004.
Aristeidis Ioannidis 64 Director since August 23, 2004 and Chief
Financial Officer since November 28, 2006.
Christopher J. Thomas 47 Chief Financial Officer from August 23, 2004
to October 6, 2006.
Atlantic Corporate Management Secretary since January 1, 2004.
The following is a description of the business experience and other positions
held by each of our directors and key employees:
George Economou - has been actively involved in the shipping industry for over
25 years. After graduating from the Massachusetts Institute of Technology in
1976 with a B.A. and an M.S. in Naval Architecture and Marine Engineering and an
M.S. in Shipping and Shipbuilding Management, George Economou commenced working
as a Superintendent Engineer in Thenamaris Ship Management in Greece. From 1978
until 1981 he worked as Sale and Purchase Manager at Brokerage and Management in
New York. From 1981 to 1986 he held the position of General Manager of Oceania
Maritime Agency in New York. In 1986 he invested and participated in the
formation of numerous individual shipping companies. Mr. Economou is also the
Chairman, Chief Executive Officer, Interim Chief Financial Officer and director
of DryShips Inc., a company with securities registered under the Securities
Exchange Act of 1934.
Aristeidis Ioannidis - graduated from Newcastle University with a B.Sc.(Hons) in
Naval Architecture. He graduated after moving to MIT with an M.S. in Naval
Architecture and Marine Engineering and an M.S. in Shipping and Shipbuilding
Management. He has worked in the shipping industry for over thirty years and has
held senior executive management positions in both shipyards and shipping
companies. In 1998 he was appointed as General Manager of Cardiff Marine Inc.
Mr. Ioannidis was appointed to the board of directors of DryShips Inc. on May
29, 2007.
Christopher J. Thomas - served as our Chief Financial Officer and a director
from August of 2004 until October 6, 2006. Since November 2001, Mr. Thomas has
been an independent financial consultant to numerous international shipowning
and operating companies. Mr. Thomas was also on the board of directors of
DryShips Inc. and TOP Tankers Inc. each of which is a publicly traded company
with securities registered under the Securities Exchange Act of 1934. From 1999
to 2004, Mr. Thomas was the Chief Financial Officer and a director of Excel
Maritime Carriers Ltd.. Prior to joining Excel, he was Financial Manager of
Cardiff Marine Inc. Mr. Thomas holds a degree in Business Administration from
Crawley University, England.
Atlantic Capital Management is a Bermuda corporation providing professional
services to other Bermuda corporations. The Company entered into a contract for
Atlantic Capital Management to serve as the registered office and secretary of
the Company effective as of January 1, 2004.
B. Compensation
During the year ended February 28, 2007 an aggregate of $49,000 compensation was
paid to our officers or directors in their capacity as officers and directors.
We did not set aside any amounts during the last fiscal year to provide pension,
retirement or similar benefits for our directors and officers. On June 5, 2000,
our shareholders approved our 2000 Outside Directors' Stock Option Plan and set
aside 100,000 shares of our common stock for issuance there under. Under the
terms of the Outside Directors' Plan, each non-employee director will
automatically be eligible to receive an option, which option may be granted by a
committee of our board of directors, to purchase 5,000 shares of our common
stock for each year that he serves as our director. Our shareholders also
approved our 2000 Stock Incentive Plan and set aside 1,100,000 shares of our
common stock for issuance there under. The Stock Incentive Plan allows a
committee of our Board of Directors to make awards of a variety of equity-based
incentives to officers and key employees including stock awards, options to
purchase shares of company common stock, stock appreciation rights, phantom
shares, dividend equivalent rights and similar rights, and is intended to
enhance our ability to attract and retain key personnel. As of the date of this
Annual Report, no options have been granted pursuant to the Outside Directors'
Plan or the Stock Incentive Plan.
C. Board Practices
The Company's directors are elected by the shareholders at our annual general
meeting, and serve a term of one year or until their successors are appointed
and duly elected to office. We have applied for a sanction with the Registrar of
Companies in Bermuda because we did not hold an annual general meeting in 2006.
We expect to hold an annual general meeting following receipt of the sanction.
Executive officers are appointed by our Board of Directors and serve until their
successors are appointed.
The Company does not presently have a compensation committee and has not yet
appointed an audit committee. The Company's entire board of directors is
performing the functions of an audit committee. There are no director services
contracts that provide for benefits upon termination of service.
D. Employees
We have no full time or part time employees, except for senior management and
the Board of Directors.
E. Share Ownership
Other than as set forth below under "Item 7 - Major Shareholders and Related
Party Transactions," as of July 17, 2007, none of our directors or officers
owned any of our common stock.
Item 7 Major Shareholders and Related Party Transactions
A. Major Shareholders
To the best of our management's knowledge, the following are the only owners of
more than 5% of the Company's issued and outstanding common stock as at July 17,
2007.
No. of Percentage
Name Shares Owned of Class
- ---- ------------ --------
Eurotrade Marine Inc.(1) 16,103,227 35.60%
Fairmont Services Corp. 10,064,517 22.25%
Gulfwind Maritime Inc. 6,038,710 13.35%
(1) Mr. George Economou, our Chairman and director, controls the
Entrepreneurial Spirit Foundation, a Liechtenstein foundation that
beneficially owns 100% of Eurotrade Marine Inc.
None of the above shareholders have different voting rights from other
shareholders of the Company. All of our common shares have equal voting rights.
B. Related Party Transactions
In the years ended February 28, 2007, 2006 and 2005 we paid $0, $0 and $2,000,
respectively, to Barons SA and Barons Financial Services S.A. in respect of
financial services provided to the Company. Both companies are controlled by Mr.
Eric Kohn, the Company's controlling shareholder and director until August 23,
2004. As of February 28, 2007 and 2006 there were no amounts due to these two
companies.
On September 9, 2003 and February 28, 2004, the Board of Directors resolved to
issue 4,889,855 shares and 1,053,807 shares, respectively, to settle advances
from Mr. Eric Kohn in the amounts of $244,493 and $52,690, respectively. The
4,889,855 shares and the 1,053,807 shares were issued on October 7, 2003 and on
May 28, 2004, respectively. Further, on August 3, 2004, the Board of Directors
resolved to issue 645,832 shares to settle advances from Mr. Eric Kohn in the
amount of $32,292. The 645,832 shares were issued on August 11, 2004.
In the year ended February 28, 2005, Cardiff made direct payments to third
parties on our behalf of $30,219 for some of our operating expenses. The amount
was outstanding at February 28, 2005 and was settled in January 2006.
In the year ended February 28, 2006 we made direct payments to third parties on
behalf of Cardiff of $5,249. The amount was outstanding at February 28, 2006 and
was settled in July 2006.
During the year ended February 28, 2007, Cardiff made cash advances to us and
direct payments to certain of our creditors, on our behalf, and advances to the
Company of $291,298 in the aggregate. Of this amount, $13,312, were refunded to
Cardiff during the same period. The balance of $277,986 was outstanding at
February 28, 2007 and has not been settled to date.
Mr. George Economou, our Chairman and director, controls the Entrepreneurial
Spirit Foundation (the "Foundation"), a Liechtenstein foundation that owns 70.0%
of the issued and outstanding capital stock of Cardiff. The other shareholder of
Cardiff is Prestige Finance S.A., a Liberian corporation, all of the issued and
outstanding capital of which is beneficially owned by Mr. Economou's sister.
Mr. Aristidis Ioannidis, our Chief Financial Officer and director, is the
General Manager of Cardiff.
C. Interests of Experts and Counsel
Not Applicable.
Item 8 Financial information
A. Consolidated Statements and Other Financial Information.
See Item 18.
Legal Proceedings
Except as described below, no legal proceedings are known to us to be
contemplated, or threatened by or against us, by any party including any
governmental authority.
In 1999, we commenced litigation in Bermuda against Colloquium, Brian McMillan
and Catherine Matherson (two former directors) in relation to the withdrawal of
$50,691 from our bank account and seeking the return of the approximately
$24,000 paid by us into Colloquium's treasury as part of the May 26, 1999
Agreement for the sale of Colloquium, a copy of which was filed as Exhibit 3.3
to our Form 20-F filed on December 16, 1999. We claimed that the withdrawal of
funds was unauthorized and that the $24,000 payment made to Colloquium under the
May 26, 1999 agreement was made in error after a material default under that
agreement by Brian McMillan and Colloquium. A default judgment was obtained in
Bermuda against the defendants for $74,691, plus interest and costs. On June 29,
1999, we initiated an interdict proceeding in the Court of Session in Scotland
seeking an injunction to prevent the disposal of assets and seeking the
repayment of $50,691. We initiated the interdict proceeding in Scotland because
the defendants and their assets are located in that country.
Colloquium, Brian McMillan and Catherine Matherson have appealed the judgment in
Bermuda, seeking to set aside the default judgment on the grounds that the
defendants were improperly served notice of the Bermuda proceedings and that the
default judgment was obtained in error.
In April 2002, the Bermuda court overturned our previous judgment against
Colloquium, and held that Scotland was the appropriate jurisdiction for such
litigation. The litigation in Scotland has presently ceased, and no additional
expenses for such matter are anticipated by Management.
In November, 2001 the amount of Pound Sterling 10,000 (equivalent to $15,000)
was deposited to a Special Deposit account held with the Royal Bank of Scotland,
in the name of the Accountant of Court, as security of Colloquium's judicial
expenses to await the outcome of the litigation. This amount was expensed in the
year ended February 28, 2002. At that time, Colloquium's judicial expenses were
estimated to be in the region of approximately Pound Sterling 15,000.
In 2004 we entered into negotiations for an out of court settlement with
Colloquium representatives who requested a payment towards their judicial
expenses; however, such negotiations proved unsuccessful.
In May 2006, Colloquium representatives requested payment from the Company in
the sum of Pound Sterling 150,000 (equivalent to approximately $300,000) for the
Reimbursement of judicial expenses on the full indemnity basis, compensation for
the management time and expense said to have been borne by their clients in
consequence of dealing with the litigations and damages for the adverse effect
on the business of Colloquium. According to our legal advisor there was a
reasonable possibility that we would be required to pay judicial expenses on the
full indemnity basis, while the possibility for the Company to pay compensation
for the time and expense said to have been borne by Colloquium Management in
consequence of dealing with both litigations and damages for the adverse effect
on the business of Colloquium was remote.
In a separate development, in late November 2006, the Company instructed its
legal counsel to seek the abandonment of the litigation. The case was dealt with
the Court in Scotland on December 21, 2006, and the Company was required to
settle the Defenders' Account of Expenses in the sum of Pound Sterling 10,000.
Such settlement was made in March 2007 using the amount previously deposited by
the Company in the name of the Accountant of Court, as discussed above.
Dividend policy
The Company has not paid dividends in any of the last five fiscal years and we
have no plans to pay dividends in the foreseeable future.
B. Significant Changes
Not Applicable.
Item 9 The offer and Listing
A. Offer and listing details
Three Most Recent Years - Annual Highs and Lows (1)
Low High
--- ----
2005 N/A N/A
2006 N/A N/A
2007 N/A N/A
- ----------
(1) Since the inception of the quoting of the Company's stock on the OTC
Bulletin Board, the only trade occurred on August 6, 2001 at a price of
$0.475.
B. Plan of Distribution
Not applicable.
C. Markets
Our common stock is eligible for trading on the pink sheets under the symbol
OMILF.PK. As of July 17, 2007, we had 30 stockholders of record, of which our
shareholder register indicates 3 have addresses in the United States. Our common
stock was first quoted on the OTC Bulletin Board on August 6, 2001. The last
quoted closing price of the common stock on the OTC Bulletin Board was $0.475
per share. There has been no trading activity in our stock other than the trade
on August 6, 2001.
Item 10 Additional Information
A. Share Capital
Not Applicable
B. Memorandum and articles of association
Company's Objects and Purposes
The objects for which the Company was formed and incorporated are: to carry on
the business of developing, designing, marketing, selling, researching and
dealing in information technology, office automation, electronic equipment,
computers and computer programs, data transmission products and systems and
related equipment and supplies of all kinds; to provide facility management
services by the accommodation, maintenance, supervision and management of
computer installations, computer hardware and software and all appurtenances
thereof, as agent for the buyer or hirer of such installations and equipment;
and to act as consultants, managers and advisors in connection with the business
described in objects (i) and (ii). The objects for which the Company was formed
also include paragraphs (b) to (n) and (p) to (u) inclusive of the Second
Schedule to the Bermuda Companies Act, 1981 (the "Companies Act") which such
items include: the business of: packaging of goods of all kinds; buying, selling
and dealing in goods of all kinds; designing and manufacturing of goods of all
kinds; mining and quarrying and exploration for metals, minerals, fossil fuels
and precious stones of all kinds and their preparation for sale or use;
exploring for, the drilling for, the moving, transporting and refining petroleum
and hydro carbon products including oil and oil products; scientific research
including the improvement, discovery and development or processes, inventions,
patents and designs and the construction, maintenance and operation of
laboratories and research centres; land, sea and air undertakings including the
land, ship and air carriage of passengers, mails and goods of all kinds; ships
and aircraft owners, managers, operators, agents, builders and repairers;
acquiring owning, selling, chartering, repairing or dealing in ships and
aircraft; travel agents, freight contractors and forwarding agents; dock owners,
wharfingers, warehousemen; ship chandlers and dealing in rope, canvas oil and
ship stores of all kinds; all forms of engineering; farmers, livestock breeders
and keepers, graziers, butchers, tanners and processors of and dealers in all
kinds of live and dead stock, wool, hides, tallow, grain, vegetables and other
produce; acquiring by purchase or otherwise and holding as an investment
inventions, patents, trade marks, trade names, trade secrets, designs and the
like; buying, selling, hiring, letting and dealing in conveyances of any sort;
employing, providing, hiring out and acting as agent for artists, actors,
entertainers of all sorts, authors, composers, producers, directors, engineers
and experts or specialists of any kind; to acquire by purchase or otherwise and
hold, sell, dispose of and deal in real property situated outside Bermuda and in
personal property of all kinds wheresoever situated; and to enter into any
guarantee, contract of indemnity or suretyship and to assure, support or secure
with or without consideration or benefit the performance of any obligation of
any person or persons and to guarantee the fidelity of individuals filling or
about to fill situations or trust or confidence. The Company also has the powers
as set out in clause no. 7 of the memorandum of association.
Modification of Rights
Subject to the Companies Acts, all or any of the special rights for the time
being attached to any class of shares for the time being issued may from time to
time (whether or not the Company is being wound up) be altered or abrogated with
the consent in writing of the holders of not less than seventy-five percent of
the issued shares of that class or with the sanction of a resolution passed at a
separate general meeting of the holders of such shares voting in person or by
proxy. To any such separate general meeting, all the provisions of our bye-laws
as to general meetings of the Company shall apply, but so that the necessary
quorum shall be two or more persons holding or representing by proxy any of the
shares of the relevant class, that every holder of shares of the relevant class
shall be entitled on a poll to one vote for every such share held by him and
that any holder of shares of the relevant class present in person or by proxy
may demand a poll.
Directors
Our directors are elected by a majority of the votes cast by stockholders
entitled to vote. There is no provision for cumulative voting. Our board of
directors shall be such number not less than two as the Company in general
meeting from time to time determines.
Each director shall be elected to serve until re-elected or his successor is
appointed at the next annual general meeting, except in the event of his death,
resignation, removal, or the earlier termination of his term of office. The
Company, in general meeting, has the authority to fix the amounts which shall be
payable to the members of the board of directors for attendance at any meeting
or for services rendered.
Stockholder Meetings
Under our bye-laws, annual stockholder meetings will be held at a time and place
selected by our board of directors. The meetings may be held in or outside of
Bermuda. The Company in a general meeting or the Board may fix any date as the
record date for any dividend, distribution, allotment or issue or for the
purpose of identifying the persons entitled to receive notices of general
meetings.
Limitations on Liability and Indemnification of Officers and Directors
The Companies Acts authorize corporations to limit or eliminate the personal
liability of directors and officers to corporations and their stockholders for
monetary damages for breaches of directors' fiduciary duties.
Our bye-laws provide that we must indemnify our directors, officers and members
of committees to the fullest extent authorized by law. We are also expressly
authorized to advance certain expenses, including but not limited to an amount
paid to settle an action, satisfy a judgment, liabilities under contract, tort
and statute or any applicable foreign law or regulations and all reasonable
legal and other costs and expenses properly payable to our directors, officers
and members of committees. We believe that these indemnification provisions are
useful to attract and retain qualified directors and executive offices.
The indemnification provisions in our amended memorandum of association and
bye-laws may discourage stockholders from bringing a lawsuit against directors
for breach of their fiduciary duty. These provisions may also have the effect of
reducing the likelihood of derivative litigation against directors, officers and
members of committees, even though such an action, if successful, might
otherwise benefit us and our stockholders. In addition, your investment may be
adversely affected to the extent we pay the costs of settlement and damage
awards against directors, officers and members of committees pursuant to these
indemnification provisions.
There is currently no pending material litigation or proceeding involving any of
our directors, officers, members of committees or employees for which
indemnification is sought.
Election and Removal of Directors
The Company may in a special general meeting called for that purpose remove a
director provided notice of any such meeting shall be served upon the director
concerned not less than 14 days before the meeting and he shall be entitled to
be heard at that meeting. This provision may discourage, delay or prevent the
removal of incumbent officers and directors.
Limited Actions by Stockholders
Anything which may be done by resolution of the Company in general meetings or
by resolution of a meeting of any class of shareholders of the Company, may,
without a meeting and without any previous notice being required, be done by
resolution in writing signed by all shareholders who at the date of the
resolution would be entitled to attend the meeting and vote on the resolution.
The Board shall convene and the Company shall hold general meetings as annual
general meetings in accordance with the requirements of the Companies Acts at
such times and places as the Board shall appoint. The Board may, whenever it
thinks fit, and shall, when required by the Companies Acts, convene general
meetings other than annual general meetings which shall be called special
general meetings.
C. Material Contracts
We have no material contracts, as currently we do not have any operations.
D. Exchange Controls
Under Bermudan law, there are currently no restrictions on the export or import
of capital, including foreign exchange controls or restrictions that affect the
remittance of dividends, interest or other payments to non-resident holders of
our common stock.
E. Taxation
United States Taxation
Not Applicable.
Bermuda Tax Considerations
We are a Bermuda exempted company. A Bermuda exempted company is legislatively
exempt from Bermuda's usual requirement that Bermuda-formed businesses be 60%
owned by Bermuda citizens. There is no income tax, withholding tax, capital
gains tax, capital transfer tax, estate duty or inheritance tax payable by a
Bermuda exempted company or its shareholders to the Bermuda Government.
F. Dividends and paying agents
Not Applicable.
G. Statement by experts
Not Applicable.
H. Documents on display
We file reports and other information with the SEC. These materials, including
this annual report and the accompanying exhibits, may be inspected and copied at
the public reference facilities maintained by the Commission at 100 F Street,
N.E., Washington, D.C. 20549, or from the SEC's website http://www.sec.gov. You
may obtain information on the operation of the public reference room by calling
1 (800) SEC-0330 and you may obtain copies at prescribed rates.
I. Subsidiary information
Not Applicable.
Item 11 Quantitative and Qualitative Disclosures about Market Risk
Not Applicable.
Item 12 Description of Securities Other than Equity Securities
Not Applicable.
PART II
Item 13 Defaults, Dividend Arrearages and Delinquencies
None.
Item 14 Material Modifications to the Rights of Security Holders and Use of
Proceeds
None.
Item 15 Controls and Procedures
(a) Disclosure Controls and Procedures
Pursuant to Rules 13a-15(e) of the Securities Exchange Act of 1934 (the
"Exchange Act"), the Company's management, under the supervision and with the
participation of the Principal Executive Officer and Principal Financial
Officer, evaluated the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of February 28, 2007. The term
disclosure controls and procedures means controls and other procedures of an
issuer that are designed to ensure that information required to be disclosed by
the issuer in the reports that it files or submits under the Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits
under the Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.
Based on that evaluation, our Principal Executive Officer and Principal
Financial Officer have concluded that our disclosure controls and procedures are
effective, as of the end of the period covered by this report, in timely
alerting them to material information required to be disclosed in our periodic
filings with the Securities and Exchange Commission ("SEC"), and in ensuring
that the information required to be disclosed in those filings is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms.
(b) Management's Report on Internal Control over Financial Reporting
Although the Company is not required to file the report required by Item
15(b) of Form 20-F for its fiscal years ended February 28, 2005, 2006, or 2007,
the Company's management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in Rule 13a-15(f)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")).
Internal control over financial reporting cannot provide absolute assurance of
achieving financial reporting objectives because of its inherent limitations.
Effective internal control over financial reporting can only provide reasonable
assurance that the objectives of the control process are met. Internal control
over financial reporting is a process that involves human diligence and
compliance and is subject to lapses in judgment and breakdowns resulting from
human failures. Internal control over financial reporting also can be
circumvented by collusion or improper management override. Because of such
limitations, there is a risk that material misstatements may not be prevented or
detected on a timely basis by internal control over financial reporting.
However, these inherent limitations are known features of the financial
reporting process. Therefore it is possible to design into the process
safeguards to reduce, though not eliminate, this risk. Further, the design of
internal control over financial reporting includes the consideration of the
benefits of each control relative to the cost of the control.
(c) Attestation Report of Independent Registered Public Accounting Firm
Not applicable
(d) Changes in Internal Controls
During the period covered by this annual report, procedures have been put
in place to ensure the timely transmittal of correspondence received by the
corporate secretary to the Company and to improve the understanding of the SEC
rules and regulations in relation with filing requirements.
Item 16A Audit Committee Financial Expert
The Company has not appointed an Audit Committee or an Audit Committee financial
expert because the Company is not currently an operating company and the Board
has determined that the full Board of Directors is able to more efficiently
perform the Audit Committee functions.
Item 16B Code of Ethics
The Company has not adopted a code of ethics because the Company is not an
operating company.
Item 16C Principal Accountant Fees and Services.
Audit Fees
Ernst and Young (Hellas), Certified Auditors Accountants S.A, or Ernst & Young,
has audited our annual financial statements acting as our independent auditor
for the fiscal years ended February 28, 2007, 2006 and 2005. For the audit of
the years ended February 27, 2007 and 2006, our audit fees were Euro 42,000 and
Euro 68,250, respectively. In addition during the year ended February 28, 2007
Ernst & Young billed us Euro 63,000 in connection with the re-filing of our 2005
annual report on Form 20-F. There were no tax, audit related, or other fees
billed in 2007 and 2006.
All fees paid to our Accountants are approved in advance by our Board of
Directors.
Item 16D Exemptions from the Listing Standards for Audit Committees
Not Applicable.
Item 16E Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Not Applicable.
PART III
Item 17 Financial Statements
See Item 18
Item 18 Financial Statements
The financial statements beginning on page F-1, together with the report of
Ernst & Young (Hellas) Certified Auditors Accountants S.A. thereon, are filed as
a part of this annual report.
ALLSHIPS LTD.
Index To Financial Statements
Page
----
Report of Independent Registered Public Accounting Firm F-2
Balance Sheets as of February 28, 2006 and 2007 F-3
Statements of Loss for the years ended February 28, 2005, 2006 and 2007 F-4
Statements of Stockholders' Equity / (Deficit) for the years ended
February 28, 2005, 2006 and 2007 F-5
Statements of Cash Flows for the years ended February 28, 2005, 2006
and 2007 F-6
Notes to Financial Statements F-7
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders of
AllShips Ltd.
We have audited the accompanying balance sheets of AllShips Ltd. as of February
28, 2006 and 2007 and the related statements of loss, stockholders' equity /
(deficit) and cash flows for each of the three years in the period ended
February 28, 2007. 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 audits.
We conducted our audits 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. We were not engaged to perform an
audit of the Company's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
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 AllShips Ltd. at February 28,
2006 and 2007 and the results of its operations and its cash flows for each of
the three years in the period ended February 28, 2007, in conformity with U.S.
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As more fully described in Note 3, the Company
has no source of revenue, has continued to incur losses, and has a working
capital deficiency and stockholders' deficit. These conditions raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to this matter are also described in Note 3. The financial
statements do not include any adjustments relating to the recoverability of
assets or the amounts of liabilities that may result from the outcome of this
uncertainty.
/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.
Athens, Greece,
July 16, 2007
ALLSHIPS LTD.
Balance Sheets
February 28, 2006 and 2007
(Expressed in U.S. Dollars)
2006 2007
----------- -----------
ASSETS
- ------
CURRENT ASSETS
Cash $ 117,408 $ 686
Prepaid expenses 3,029 3,509
Due from a related party 5,249 --
----------- -----------
Total current assets $ 125,686 $ 4,195
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
- -------------------------------------
CURRENT LIABILITIES
Accounts payable $ 28,500 $ 9,625
Accrued liabilities 159,692 72,557
Due to a related party -- 277,986
----------- -----------
Total current liabilities 188,192 360,168
----------- -----------
STOCKHOLDERS' DEFICIT
Common stock, $0.000167 par value;
150,000,000 shares authorized;
45,230,693 issued and outstanding 7,555 7,555
Additional paid-in capital 3,327,108 3,327,108
Accumulated deficit (3,397,169) (3,690,636)
----------- -----------
Total stockholders' deficit (62,506) (355,973)
----------- -----------
Total liabilities and stockholders' deficit $ 125,686 $ 4,195
=========== ===========
The accompanying notes are an integral part of these financial statements.
ALLSHIPS LTD.
Statements of Loss
For the years ended February 28, 2005, 2006 and 2007
(Expressed in U.S. Dollars)
2005 2006 2007
------------ ------------ ------------
General and administrative expenses $ (183,875) $ (216,377) $ (293,467)
General and administrative expenses
- - related party (5,142) -- --
------------ ------------ ------------
Net loss $ (189,017) $ (216,377) $ (293,467)
============ ============ ============
Preferential deemed dividend (Note 5) $ (1,500,000) $ -- $ --
------------ ------------ ------------
Net loss attributable to common
stockholders $ (1,689,017) $ (216,377) $ (293,467)
============ ============ ============
Loss per common share, basic and
diluted $ (0.06) $ (0.00) $ (0.01)
============ ============ ============
Weighted average number of common
shares, basic and diluted 27,095,500 45,230,693 45,230,693
============ ============ ============
The accompanying notes are an integral part of these financial statements.
ALLSHIPS Ltd.
Statements of Stockholders' Equity / (Deficit)
For the years ended February 28, 2005, 2006 and 2007
(Expressed in U.S. Dollars)
Common Stock
--------------------------
Additional
Comprehensive Paid-in Accumulated
Loss # of Shares Par Value Capital Deficit Total
------------- ------------ ------------ ------------ ----------- ------------
Balance, February 29, 2004 13,174,258 $ 2,201 $ 1,426,072 $(1,491,775) $ (63,502)
Common stock issued in settlement of
stockholders' advances 645,832 108 32,184 -- 32,292
Common stock issued in settlement of
stockholders' advances 1,053,807 176 52,514 -- 52,690
Issuance of common stock 30,000,000 5,010 294,990 -- 300,000
Preferential deemed dividend -- 1,500,000 (1,500,000) --
Stock-based compensation expense -- -- 21,408 -- 21,408
Net loss (189,017) -- -- -- (189,017) (189,017)
------------
Comprehensive loss (189,017) -- -- -- -- --
============ ------------ ------------ ------------ ------------ ------------
Balance, February 28, 2005 44,873,897 $ 7,495 $ 3,327,168 $(3,180,792) $ 153,871
Common stock issued in settlement of
directors' stock-based compensation 356,796 60 (60) -- --
Net loss (216,377) -- -- -- (216,377) (216,377)
------------ ------------ ------------ ------------ ------------ ------------
Comprehensive loss (216,377) --
============
Balance, February 28, 2006 45,230,693 7,555 3,327,108 (3,397,169) (62,506)
Net loss (293,467) (293,467) (293,467)
------------ ------------ ------------ ------------ ------------ ------------
Comprehensive loss (293,467)
============
Balance, February 28, 2007 45,230,693 $ 7,555 $ 3,327,108 $(3,690,636) $ (355,973)
============ ============ ============ ============ ============
ALLSHIPS LTD.
Statements of Cash Flows
For the years ended February 28, 2005, 2006 and 2007
(Expressed in U.S. Dollars)
2005 2006 2007
--------- --------- ---------
Cash flows from operating activities
Net Loss $(189,017) $(216,377) $(293,467)
Non cash items:
Stock-based compensation expense 21,408 -- --
Changes in operating assets and liabilities:
Prepaid expenses 3,278 (3,029) (480)
Accounts payable 6,756 20,737 (18,875)
Accrued liabilities 105,656 38,703 (87,135)
Due to/from related parties 30,219 (30,219) --
---------- ---------- ----------
Net cash used in operating activities $ (21,700) $(190,185) $(399,957)
---------- ---------- ----------
Cash flows from investing activities
Advances to related parties -- (5,249) 5,249
---------- ---------- ----------
Net cash used in investing activities -- (5,249) 5,249
---------- ---------- ----------
Cash flows from financing activities
Proceeds from issuance of common stock 300,000 -- --
Advances from stockholder and related parties 32,292 -- 277,986
---------- ---------- ----------
Net cash provided by financing activities $ 332,292 $ -- $ 277,986
---------- ---------- ----------
Net (decrease) / increase in cash 310,592 (195,434) (116,722)
Cash, beginning of year 2,250 312,842 117,408
---------- ---------- ----------
Cash, end of year $ 312,842 $ 117,408 $ 686
========== ========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash financing activities:
Settlement of advances from stockholder
with shares of common stock $ 84,982 $ -- $ --
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
AllShips Ltd.
Notes to Financial Statements February 28, 2006 and 2007
(Expressed in United States Dollars)
1. Basis of Presentation and General Information:
The accompanying financial statements include the accounts of AllShips Ltd.
(the "Company") which was incorporated in Bermuda on March 24, 1998 under
the name of Omninet International Ltd. On August 20, 2004, the Company's
then major stockholder (Mr. Eric Kohn) sold his shares in the Company
(representing approximately 69% of the Company's then outstanding common
stock) to 8 Marshall Island companies beneficially owned by Mr. George
Economou and members of his family (the "New Majority Stockholders"), at a
price of $ 0.06 per share. The Company was renamed to AllShips Ltd. on
March 18, 2005. The Company has no source of revenues.
2. Significant Accounting Policies:
(a) Basis of Preparation: The accompanying financial statements have been
prepared in accordance with U.S. generally accepted accounting
principles.
(b) Use of Estimates: The preparation of financial statements in
conformity with U.S. 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.
(c) Foreign Currency Translation: The functional currency of the Company
is the U.S. dollar. The Company's books of accounts are maintained in
U.S. dollars. Transactions involving other currencies during the year
are converted into U.S. dollars using the exchange rates in effect at
the time of the transactions. At the balance sheet dates, monetary
assets and liabilities, which are denominated in other currencies, are
translated to reflect the reporting date exchange rates. Resulting
gains or losses are included in General and administrative expenses in
the accompanying statements of loss. There were no material gains or
losses during any of the periods presented.
(d) Share-Based Compensation: The Company adopted Statement 123(R) on
March 1, 2006, which requires all share-based payments to employees,
including grants of employee stock options, to be recognized in the
income statement based on their fair values, using the
modified-prospective method. Historically, the Company has limited its
share-based payments activity to grants of Company shares with no
future vesting conditions to non-employee directors for their services
as directors (a practice that has been discontinued since November
2004) and, as such, there is no material impact on its results of
operations, financial position or cash flows.
(e) Loss Per Common Share: Basic loss per common share is computed by
dividing the net loss attributable to common stockholders by the
weighted average number of common shares outstanding during the year.
Diluted loss per common share reflects the potential dilution that
could occur if securities or other contracts to issue common stock
result in the issuance of such stock. The Company had no dilutive
securities during the periods presented. For purposes of computing
basic and diluted loss per common share, shares without vesting
conditions committed to be issued under stock-based compensation
arrangements or in settlement of stockholders' advances are considered
outstanding on the grant date or the date the shares were actually
issued in settlement of the outstanding advances due to stockholders,
respectively. Net loss attributable to common stockholders for the
year ended February 28, 2005 includes a preferential deemed dividend
of $1,500,000, as further discussed in Note 5.
(e) Recent Accounting Pronouncements
On September 13, 2006, with the release of Staff Accounting Bulletin
No. 108 ("SAB 108") "Considering the effects of prior year
misstatements when quantifying misstatements in current year financial
statement" the SEC staff provided interpretative guidance on the
consideration of the effects of prior year misstatments in quantifying
current year misstatements for the purposes of a materiality
assessment. The adoption of this SEC release did not have an effect on
the Company's financial position or results of operations.
3. Liquidity:
The Company has no source of revenues and has continued to incur losses. As
of February 28, 2007, the Company had negative working capital of $355,973
and stockholders' deficit of an equal amount. In order for the Company to
continue as a going concern it will require additional funding from its
stockholders or borrowings from related parties and/or lending
institutions. Management's intention is to seek such funding; however,
there can be no assurance that the Company will be able to raise such
funding.
4. Related Party Transactions:
General and administrative expenses in the accompanying statements of loss
for 2005, 2006 and 2007 include $2,000, $0 and $0, respectively, paid to
Barons S.A. and Barons Financial Services S.A. in respect of financial
services provided to the Company. Both companies were controlled by Mr.
Eric Kohn, the Company's controlling shareholder and director until August
23, 2004. As of February 28, 2006 and 2007, there were no amounts due to
these two companies.
On September 9, 2003 and February 28, 2004, the Board of Directors resolved
to issue 4,889,855 shares and 1,053,807 shares, respectively, to settle
advances from Mr. Eric Kohn in the amounts of $244,493 and $52,690,
respectively. The 4,889,855 shares and the 1,053,807 shares were issued on
October 7, 2003 and on May 28, 2004, respectively. Further, on August 3,
2004, the Board of Directors resolved to issue 645,832 shares to settle
advances from Mr. Eric Kohn in the amount of $32,292. The 645,832 shares
were issued on August 11, 2004 (Note 5).
During the year ended February 28, 2005, Cardiff Marine Inc. ("Cardiff"), a
related through common control company, made, on behalf of the Company,
direct payments to third parties of certain of the Company's operating
expenses, of $30,219. Cardiff is beneficially owned by the Company's New
Majority Stockholders and its General Manager is also the Company's Chief
Financial Officer and one of its directors. The above amount was fully
settled in January 2006.
The amount of $5,249 included in the accompanying 2006 balance sheet
represents amounts due from Cardiff as a result of the Company's direct
payments to third parties, on behalf of Cardiff. The account with Cardiff
as of February 28, 2006 was settled in July 2006.
During the year ended February 28, 2007, Cardiff made cash advances to the
Company and direct payments to certain of the Company's creditors, on its
behalf, totaling $291,298. Of this amount, $13,312 were refunded to Cardiff
during the same period and the balance of $277,986 was outstanding at
February 28, 2007 and is separately reflected in the accompanying 2007
balance sheet.
5. Common Stock:
Under the Company's Articles of Incorporation the Company's authorized
capital stock consists of 150,000,000 shares of common stock, par value
$0.000167 per share. The Board of Directors shall have the authority to
establish series of preferred stock and to designate preferences and
relative, participating, optional or special rights and qualifications,
limitations or restrictions.
During the year ended February 28, 2005 the following issuances of common
stock took place:
o On May 28, 2004 and on August 11, 2004, 1,053,807 shares and 645,832
shares, respectively, to Mr. Eric Kohn at a price of $0.05 per share
in settlement of cash advances received from Mr. Kohn; and
o On October 6, 2004, 30,000,000 shares to the Company's New Majority
Stockholders at a price of $0.01 per share for a total cash
consideration of $300,000. The difference between the fair value of $
0.06 per share as evidenced by the share purchase which occurred in
August 2004 between unrelated parties (as discussed in Note 1, above)
and the issuance at $ 0.01 per share, is accounted for and reflected
as preferential deemed dividend, increasing the 2005 loss attributable
to common stockholders and the accumulated deficit by $ 1,500,000.
During the year ended February 28, 2006 the following issuances of common
stock took place:
o On January 18, 2006, the Company issued 90,000 shares, 88,932 shares,
88,932 shares and 88,932 shares to its former directors Messrs Eric
Kohn, Jeffrey Conyers, Michael Schroter and Martin Horst,
respectively. These shares were granted to the former directors as
compensation for their services rendered for the year ended February
29, 2004 and for the period from March 1, 2004 to August 23, 2004, the
date they resigned and as approved at the annual general meeting held
on November 12, 2004. These shares were valued at a price of $0.06 per
share, the estimated fair market value at the grant date as determined
by the management and the related expense is included in General and
administrative expenses in the accompanying 2005 statement of loss.
During the year ended February 28, 2007 no issuances of common stock took
place.
6. Taxation:
Under Bermuda law the Company is not required to pay any taxes in Bermuda
on either income or capital gains. The Company has received Tax Assurance
from the Minister of Finance in Bermuda indicating that in event of any
subsequent legislation imposing such taxes, the Company will be exempted
from resulting taxation until the year 2016.
7. Stock Option Plans:
On June 5, 2000, the Company's stockholders approved the 2000 Outside
Directors' Stock Option Plan and set aside 100,000 shares of the Company's
common stock for issuance there under. Under the terms of the Outside
Directors' Plan, each non-employee director will automatically be eligible
to receive an option, which option may be granted by a committee of our
board of directors, to purchase 5,000 shares of our common stock for each
year that he serves as our director.
The Company's stockholders also approved the 2000 Stock Incentive Plan and
set aside 1,100,000 shares of our common stock for issuance thereunder. The
Stock Incentive Plan allows the Board of Directors to grant certain of the
Company's key employees options to purchase Company's common stock, and is
intended to enhance the Company's ability to attract and retain key
personnel. The Stock Incentive Plan allows a committee of the Board of
Directors to make awards of a variety of equity-based incentives to
employees including stock awards, options to purchase shares of Company
common stock, stock appreciation rights, phantom shares, dividend
equivalent rights and similar rights.
As of February 28, 2007 no options, shares or rights have been issued or
granted under either of the above plans.
8. Settlement of Long-Outstanding Litigation:
In 1999 the Company initiated, in Bermuda, litigation against two former
directors of Colloquium Ltd. ("Colloquium"), a former subsidiary of the
Company, and an entity related to these directors. The litigation was in
relation to the withdrawal of $50,691 from Colloquium's bank account and
the return of approximately $24,000 paid by the Company to Colloquium in
1999 within the context of an agreement to sell Colloquium back to its
original shareholders. The Company claimed that the withdrawal of funds was
unauthorized and that the $24,000 was paid after a material default under
the agreement with the former shareholders of Colloquium and accordingly
was seeking the return of these funds from these individuals. A default
judgment obtained in Bermuda against the defendants for $74,691, plus
interest and costs was appealed by Colloquium on the grounds that the
defendants were improperly served notice of the Bermuda proceedings and
that the default judgment was obtained in error. In November 2001, the
amount of Pound Sterling 10,000 (equivalent to $15,000) was deposited to a
Special Deposit account held with the Royal Bank of Scotland, in the name
of the Accountant of Court, as security of Colloquium's judicial expenses
to await the outcome of the litigation. This amount was expensed in the
year ended February 28, 2002. In April 2002, the Bermuda court overturned
the previous judgment against Colloquium, and held that Scotland was the
appropriate jurisdiction for such litigation. Since then negotiations held
for an out of court settlement proved unsuccessful, until November 2006
when the Company instructed its legal counsel to seek the abandonment of
the litigation. The case was dealt with by the Court in Scotland on
December 21, 2006 and the Company was required to settle the defenders'
Account of Expenses in the sum of Pound Sterling 10,000. Such settlement
was made in March 2007 using the amount previously deposited by the Company
in the name of the Accountant of Court, as discussed above.
Item 19 Exhibits
Exhibit Number Description
- -------------- -----------
1.1 Memorandum of Association of the Company, as amended by that
certain Certificate of Deposit of Memorandum of Increase of
Share Capital dated June 30, 1998 (filed as Exhibit 1.1 to
the Company's Form 20FR12G filed as of March 14, 2000, No.
001-15559, and incorporated herein by reference).
1.2 Bye-laws of the Company (filed as Exhibit 1.2 to the
Company's Form 20FR12G filed as of December 1, 1999, No.
001-15559, and incorporated herein by reference).
2.1 Form of Share Certificate (filed as Exhibit 2.1 to the
Company's Form 20FR12G filed as of December 1, 1999, No.
001-15559, and incorporated herein by reference).
12.1 Rule 13a-14(a) / 15d-14(a) Certification of Principal
Executive Officer
12.2 Rule 13a-14(a) / 15d-14(a) Certification of Principal
Financial Officer
13.1 Certification of Principal Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
13.2 Certification of Principal Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of Sections 12 of the Securities Exchange Act of
1934, the registrant certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused this amended annual report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AllShips Ltd.
---------------------------------
(Registrant)
Dated: July 17, 2007
/s/ Aristeidis Ioannidis
----------------------------------
Aristeidis Ioannidis
Chief Financial Officer
SK 23113 0001 788720