AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON __________, 2004
REGISTRATION NO. 333______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SOUTHWEST OLIVE GROWERS, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
ARIZONA 2000 20-1394991
------- ---- ----------
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION NUMBER) IDENTIFICATION NUMBER)
11053 LOPEZ RIDGE WAY
SAN DIEGO, CA 92121
(858) 663-8391
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER
OF PRINCIPAL EXECUTIVE OFFICES)
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ROBERT FENEZIANI
11053 LOPEZ RIDGE WAY
SAN DIEGO, CA 92121
(858) 663-8391
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE OF SERVICE)
APPROXIMATE DATE OF PROPOSED SALE OF THE SECURITIES TO PUBLIC: From time to time
after the Registration Statement becomes effective as determined by market
conditions and the needs of the Selling Shareholders. If any of the securities
being registered on this Form are to be offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment plans, check
the following box. /X/
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CALCULATION OF REGISTRATION FEE
- ------------------------------------- ------------------ --------------------- ---------------------------- ------------------
TITLE OF EACH CLASS OF SECURITY TO AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED OFFERING PRICE OFFERING PRICE REGISTRATION FEE
- ------------------------------------- ------------------ --------------------- ---------------------------- ------------------
Common Stock, $.001 par value 400,000 shares $1.00 $400,000 $100
- ------------------------------------- ------------------ --------------------- ---------------------------- ------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
SOUTHWEST OLIVE GROWERS, INC.
400,000 SHARES OF COMMON STOCK
This prospectus is part of a registration statement that covers 400,000
shares of our common stock to be sold by the efforts of the Officers & Directors
of the Company. Southwest Olive Growers, Inc., an Arizona corporation (the
"Company"), is hereby offering 400,000 shares (the "Shares") at a price of $1.00
per Share.
The Company intends to use most of the proceeds of this offering toward
(a) the acquisition of 80 acres of raw land in Southern Arizona, and (b) provide
capital for soil preparation, irrigation emplacement and seedling trees for 75
acres of olive orchards. The Company's initial business will be to own and
operate the Olive Orchard out of the Southern Arizona site, to build and operate
a new olive oil label at the proposed site and to seek other viable gourmet food
ventures in the Southwestern United States, defined as the States of California,
Arizona and New Mexico.
Our common stock is not currently listed or quoted on any quotation
medium. There can be no assurance that our common stock will ever be quoted on
any quotation medium or that any trading market for our common stock will ever
develop.
Unless the context otherwise requires "we," "our," "us," or the
"Company," refers to Southwest Olive Growers, Inc., an Arizona corporation. Our
principal executive offices are located at 11053 Lopez Ridge Way, San Diego, CA
92121, and our telephone number is (858) 663-8391.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF ALL MATERIAL
RISKS RELATED TO AN INVESTMENT IN OUR COMMON STOCK.
The date of this prospectus is _________, 2004
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY........................................................2
SELECTED COMBINED FINANCIAL DATA..........................................3
RISK FACTORS AND INVESTMENT CONSIDERATIONS................................4
USE OF PROCEEDS...........................................................6
DETERMINATION OF OFFERING PRICE...........................................7
PLAN OF DISTRIBUTION......................................................7
LEGAL PROCEEDINGS.........................................................8
MANAGEMENT................................................................8
DESCRIPTION OF SECURITIES.................................................9
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...........................10
BUSINESS.................................................................11
MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS...........17
DESCRIPTION OF PROPERTY..................................................18
MARKET FOR THE SHARES AND RELATED STOCKHOLDER MATTERS....................18
LEGAL MATTERS............................................................19
EXPERTS..................................................................19
PART II - INFORMATION NOT REQUIRED IN THE PROSPECTUS.....................20
i
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS APPEARING ELSEWHERE IN AND
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. THE SHARES OFFERED HEREBY ARE
SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. EACH PROSPECTIVE INVESTOR SHOULD
CAREFULLY REVIEW THE ENTIRE PROSPECTUS, THE FINANCIAL STATEMENTS AND ALL
EXHIBITS AND DOCUMENTS REFERRED TO THEREIN. SEE "RISK FACTORS."
SOUTHWEST OLIVE GROWERS, INC.
Southwest Olive Growers, Inc. (the "Company") was organized under the
laws of the state of Arizona on May 6, 2004. Our primary shareholders and sole
Officers and Directors, Robert Feneziani and Marla Martins, provided the
requisite capital for the formation of the Company, incidental operating
expenses and for all expenses associated with the preparation and filing of this
registration statement. Accordingly, Mr. Feneziani and Ms. Martins were issued
an amount of 150,000 and 50,000 shares respectively of the common stock of the
Company on May 6, 2004 at a rate of $.01 per share in return for the
incorporation capital and that each provided.
Our common stock is not listed on any recognized exchange or quoted on
any quotation medium. There are no plans, proposals, arrangements or
understandings with any persons concerning the development of a trading market
in our common stock.
Our principal executive offices are located at 11053 Lopez Ridge Way,
San Diego, CA 92121, and our telephone number is (858) 663-8391.
SUMMARY OF OUR BUSINESS
As a startup company we have previously had no assets or business
operations. We are now engaged in the business of planning olive orchards
including their planting, harvesting and pressing of olives for the purpose of
selling olive oil to wholesale outlets and providing table olives to the North
American market.
-1-
SUMMARY OF THE OFFERING
SECURITIES OFFERED........................................ 400,000 shares of common stock, par value $.001 per
share.
CAPITAL STOCK OUTSTANDING
Common Stock outstanding prior to the Offering. 200,000 shares (1)
Common Stock outstanding after the Offering 600,000 shares (2)
USE OF PROCEEDS........................................... Proceeds will be used for the purchase of
approximately 80 acres of real property in Southern
Arizona and for capital to prepare soil, purchase
olive seedlings and emplace irrigation systems for
the planned orchard. See "Use of Proceeds."
PLAN OF DISTRIBUTION...................................... The shares offered hereby may be sold by the efforts
of the Officers and Directors of the Company. Then
these shares may be offered from time to time in one
or more transactions any public market on which the
common stock trades at market prices prevailing at
the time of the sale, at prices related to such
prevailing market prices, or at negotiated prices.
The principal shareholders are paying all of the
expenses in connection with the preparation of this
Prospectus and the related Registration Statement,
estimated at $14,000. See "Plan of Distribution".
RISK FACTORS.............................................. An investment in our common stock involves a high
degree of risk. SEE "RISK FACTORS."
--------------------
(1) Indicates shares of common stock outstanding as of the date of this
Prospectus.
(2) Indicates shares of common stock outstanding after the offering closes and
assumes the entire offering was sold, which may not be the case.
-2-
SUMMARY FINANCIAL DATA
The following table summarizes certain of our selected financial data
and unaudited data is qualified in its entirety by the more detailed financial
statements contained elsewhere in this Prospectus. The summary financial
information contained in the following table is derived from and should be read
in conjunction with our audited financial statements the notes thereto appearing
elsewhere in this Prospectus.
SOUTHWEST OLIVE GROWERS, INC.
PERIOD ENDED
AUGUST 16, 2004
STATEMENT OF
OPERATION DATA:
Net sales
$ 0
Operating expenses 2200
Operating income (loss) (2200)
Other income (expense) 0
Net (loss) attributable (2200)
to common stockholders
Basic & Diluted (loss) per share $ 0.01
Weighted average number of 200,000
shares outstanding
BALANCE SHEET DATA: ACTUAL
--------------------------- ----------------
Working capital $ (200)
Total assets 2000
Short-term debt 2200
Long-term debt 0
Total stockholders' equity $ (200)
-3-
RISK FACTORS
Investment in our common stock involves a number of risks. The
following material factors should be carefully considered by anyone purchasing
shares of our common stock. Any of the following risks would adversely effect
our business, financial condition and results of operation.
GOVERNMENTAL ACTION AND REGULATION OF AGRICULTURAL PRODUCTS MAY IMPOSE
SIGNIFICANT BURDENS ON OUR BUSINESS.
There are business risks and potentially substantial cost exposures
associated with the regulation and oversight of agricultural ventures. These
risk factors include: (i) governmental actions at all levels that may seek to
restrict the development of orchards, (ii) regulations possibly requiring
demonstration of financial responsibility and conformance to prescribed or
changing standards and methods of operation, and (iii) judicial and
administrative proceedings regarding alleged possible adverse environmental and
health effects of any applied orchard treatments, such as fertilizers and
pesticides or herbicides, and waste disposal facilities.
MANAGEMENT WILL CONTROL APPROXIMATELY 33% OF OUR COMMON STOCK, AND THESE PERSONS
MAY HAVE CONFLICTS OF INTEREST.
Upon the sale of the securities offered herein, our management will own
approximately 33% of the outstanding common stock. Accordingly, Robert Feneziani
and Marla Martins are able to exert considerable influence over any stockholder
vote, including any vote on the election or removal of directors and any merger,
consolidation or sale of all or substantially all of our assets, and control our
management and affairs. Such control could discourage others from initiating
potential merger, takeover or other change in control transactions.
THERE IS NO MARKET FOR OUR SHARES AND YOU MAY NOT BE ABLE TO SELL THEM.
There has been no trading market for our common stock. Although we
intend to apply to list our common stock on the OTC Bulletin Board, there can be
no assurance that our application will be granted and there can be no assurance
that an active market will develop for our common stock. Therefore, it may be
difficult to sell your shares if you should desire or need to sell.
If we do become listed on the OTC Bulletin Board, we do not know how
our common stock will trade. The market price of our common stock may fluctuate
significantly due to a number of factors, some of which may be beyond our
control, including:
o the potential absence of securities analysts covering us and
distributing research and recommendations about us;
o the liquidity of our common stock will be low because only 400,000
shares will be in the hands of non-affiliates;
o changes in earnings estimates by securities analysts or our ability to
meet those estimates;
-4-
o the operating results and stock price performance of other comparable
companies;
o overall stock market fluctuations; and
o economic conditions generally and in the agriculture industry in
particular. Any of these factors could have a significant and adverse
impact on the market price of our common stock. In addition, the stock
market in general has experienced extreme volatility and rapid decline
that has often been unrelated or disproportionate to the operating
performance of particular companies. These broad market fluctuations
may adversely affect the trading price of our common stock, regardless
of our actual operating performance.
OUR COMMON STOCK WILL LIKELY BE CONSIDERED A PENNY STOCKS, WHOSE PURCHASE CAN BE
RISKY.
In the event that a public trading market develops for our shares, they
may be classified as a "penny stock" depending upon their market price and the
manner in which they are traded. Section 3(a)(51) of the Securities Exchange Act
of 1934 defines a "penny stock," for purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share and is not
admitted for quotation and does not trade on the Nasdaq Stock Market or on a
national securities exchange. For any transaction involving a penny stock,
unless exempt, the rules require delivery by the broker of a document to
investors stating the risks of investment in penny stocks, the possible lack of
liquidity, commissions to be paid, current quotations and investors' rights and
remedies, a special suitability inquiry, regular reporting to the investor and
other requirements. Prices for penny stocks are often not available and
investors are often unable to sell such stock. Thus an investor may lose his
entire investment in a penny stock and consequently should be cautious of any
purchase of penny stocks.
Our officers and directors control 200,000 shares of our common stock.
Those 200,000 shares of common stock held by our officers and directors are
"restricted securities" as that term is defined in Rule 144 promulgated under
the Securities Act, and may be sold only in compliance with Rule 144, pursuant
to registration under the Securities Act or pursuant to an exemption from such
registration. Generally, under Rule 144, each person holding restricted
securities for a period of one year may, every three months, sell in ordinary
brokerage transactions or to market makers an amount of shares up to (and
including) the greater of 1% of a company's then outstanding Common Stock or the
average weekly trading volume for the four weeks prior to the proposed sale.
None of such restricted securities were eligible for sale under Rule 144 as of
September 30, 2004. Sales of substantial amounts of common stock by our
shareholder(s) under Rule 144 or otherwise, or even the potential for such
sales, could have a depressive effect on the market price of the shares of our
common stock and could impair our ability to raise capital through the sale of
our equity securities.
LACK OF DIVIDENDS
Holders of common stock are entitled to receive such dividends as may
be declared by our board of directors. To date, we have paid no cash dividends
on our shares of common stock and we do not expect to pay cash dividends on our
common stock in the near term. We intend to retain future earnings, if any, to
provide funds for operations of our business. Investors who anticipate the need
for dividends from investments should refrain from purchasing the common stock
offered by this Prospectus.
-5-
USE OF PROCEEDS
We are offering 400,000 Shares.
OFFERING
AMOUNT PERCENT
Gross Offering Proceeds (1) $400,000 100.0
Commissions (2) 20,000 5.0
Offering Expenses (3) 14,000 3.5
--------- ---
Net Proceeds 366,000 91.5
Acquisition of Real Property (4) 240,000 60.0
Working Capital (5) 92,000 23.0
Commissions, Registration and Offering
Expenses 34,000 8.5
--------- ---
Total Application of Net Proceeds
$400,000 100.0
(1) The offering is made on a "best efforts" basis for a total of 400,000
shares.
(2) We will pay commissions of up to ten percent (10%) on the price of the
Shares sold by broker-dealers licensed with the National Association of
Securities Dealers, Inc. ("NASD") or by broker-dealers licensed in a
foreign jurisdiction. To the extent permitted by law, we may pay third
parties, including shareholders who are not directors or officers, a
fee of up to ten percent (10%) of the price of the Shares sold as a
result of the assistance of such third parties. The table assumes that
the average of the commissions and fees paid will be five percent (5%),
which may not be the case. To the extent we do not pay such commissions
or fees, these funds will be applied to working capital. See "Plan of
Placement."
(3) We will pay offering expenses, which will be reimbursed to Directors
from the proceeds of the offering. The offering expenses include legal
and accounting fees, blue sky fees, printing, postage and any of our
general and administrative expenses directly related to the offer and
sale of our Shares. See "Plan of Placement."
(4) The Company plans to acquire 80 acres more or less of real property
that may be developed into an olive orchard. This location is planned
to be in Southern Arizona. It is postulated that with a lesser amount
of acreage purchased, that the price per acre will be higher. The
Company has not entered into negotiations to purchase with any
prospective Seller as of the date of this prospectus.
(5) Represents the estimated amounts that we will apply to working capital
to be used to prepare the orchard for planting, including irrigations
systems; for seedling trees to plant in the orchard, and for day-to-day
operation of our business, as described in this Memorandum.
-6-
The foregoing represents the best estimate of our allocations of the
proceeds of this offering based on our present plans and business conditions.
However, there can be no assurances that unforeseen events or changes in
business conditions will not result in the application of proceeds of this
offering in a manner other than is described in this Memorandum. Any such
reallocation of the net proceeds of the offering would be substantially limited
to the categories set forth above.
DETERMINATION OF OFFERING PRICE
We have determined the offering price of the Shares in this offering.
Because no underwriter or placement agent has sponsored this offering, the
investors will not have the benefit of an offering price that was determined by
negotiations between such party and us. The price of the Shares does not
necessarily bear any relationship to our asset value, net worth, earnings or any
other established criteria of value. See "Plan of Placement."
This Prospectus may be used to offer the common stock registered under
the Registration Statement of which this Prospectus is a part. The common stock
offered will be offered from at a fixed rate of $1.00 per share until such time
as the common stock is listed for quotation, and then from time to time in
transactions (which may include block transactions) on the OTC Bulletin Board or
other public market at the then prevailing prices.
PLAN OF PLACEMENT
The Company, through its directors and officers, is offering the Shares
on a "best efforts" basis with respect to the 400,000 Shares of Common Stock.
The Company will pay commissions of ten percent (10%) of the Offering Price per
share on any Shares sold by participating broker-dealers. To the extent
permitted by law, the Company may pay third parties, including shareholders who
are not directors or officers, a fee of up to five percent (5%) of the Offering
Price per share of any Shares sold as a result of their assistance.
Restricted Shares
Our officers and directors control 200,000 shares of our common stock.
The common stock controlled by our officers and directors are "restricted
securities" as that term is defined in Rule 144 promulgated under the Securities
Act, and may be sold only in compliance with Rule 144, pursuant to registration
under the Securities Act or pursuant to an exemption from such registration.
Generally, under Rule 144, each person holding restricted securities for a
period of one year may, every three months, sell in ordinary brokerage
transactions or to market makers an amount of shares up to (and including) the
greater of 1% of a company's then outstanding Common Stock or the average weekly
trading volume for the four weeks prior to the proposed sale. None of such
restricted securities were eligible for sale under Rule 144 as of September 30,
2004.
-7-
LEGAL PROCEEDINGS
We are not currently party to any legal proceedings.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth the names, positions and ages of the
individuals who serve as our directors and executive officers. All directors are
elected at each annual meeting and serve for one year and until their successors
are elected and qualify. Officers are elected by the Board of Directors and
their terms of office are at the discretion of the Board.
Name of Director/Officer Age Position(s) With Company
Robert Feneziani 43 President, Director
Marla Martins 28 Secretary, Treasurer, Director
Robert Feneziani
In addition to his duties with the Company, Robert Feneziani is
currently employed full time as a pilot with United Airlines. He is a retired
military fighter pilot instructor. He retired from military service in 2001 to
pursue other professional interests. Mr. Feneziani received his Undergraduate
degree in industrial technology from Buffalo State College in New York and his
Master's degree in Science Administration from Central Michigan University.
Marla Martins
Ms. Martins has been employed by Southwest Airlines since June 2000.
She has assisted Mr. Feneziani on several private ventures following the
completion of her education in Psychology at Oklahoma University.
-8-
PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT
NAME AND ADDRESS OF SHARES BENEFICIALLY PERCENT OF
BENEFICIAL OWNER (1) OWNED OR CONTROLLED BEFORE OFFERING COMMON STOCK (1)
-------------------- ----------------------------------- ----------------
Robert Feneziani
11053 Lopez Ridge Way
San Diego, CA 92121 150,000 75%
Marla Martins
35 Slate Creek Dr., Suite 1
South Cheektowaga, NY 14227 50,000 25%
(1) Applicable ownership percentages were based on 200,000 shares issued
and outstanding as of September 30, 2004.
DESCRIPTION OF SECURITIES
COMMON STOCK
We are authorized to issue 100,000,000 shares of Common Stock, $.001
par value per share, of which 200,000 shares are issued and outstanding at the
date of this prospectus, and 10,000,000 shares of Preferred Stock, $.001 par
value per share, of which no shares are issued and outstanding as of the date of
this prospectus.
Holders of our common stock are entitled to one vote for each share
owned for all matters to be voted on by the shareholders, including the election
of directors. Holders of common stock are entitled to receive such dividends as
may be declared from time to time by our board of directors out of funds legally
available therefore and, in the event of liquidation, dissolution or winding up,
to share ratably in all assets remaining after payment of liabilities. The
holders of common stock have no preemptive or conversion rights. The holders of
common stock are not subject to further calls or assessments. There are no
redemption or sinking fund provisions applicable to the common stock.
DIVIDEND POLICY
Holders of common stock are entitled to receive such dividends as may
be declared by our board of directors. We have not declared or paid cash
dividends on our common stock and we do not anticipate that we will pay such
dividends in the foreseeable future. Rather, we intend to apply any earnings to
the development of our business. Any payment of future dividends on our common
stock and the amount of any dividends will be determined by our board of
directors and will depend, among other factors, upon our earnings, financial
condition and cash requirements, and any other factors our board of directors
may deem relevant.
TRANSFER AGENT
Our transfer agent is First American Stock Transfer located at 706 E.
Bell Road, Suite 202, Phoenix, AZ 85022. All inquiries may be made at (602)
485-1346.
-9-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Southwest Olive Growers has entered into a lease agreement with its
president and director Robert Feneziani on September 30, 2004 for its 800 square
foot office facilities. The rental charges are approximately $400 per month and
this lease expires December 31, 2004.
BUSINESS
We were incorporated May 10, 2004 in the State of Arizona. We are in
the business of developing olive groves and providing olive oil and table olives
to the North American market.
PLAN OF OPERATION
Southwest Olive Growers plans to initially purchase and develop 80
acres of raw land using 78 acres of it to plant to olive trees and 2 acres to
construct facilities to house the offices and pressing mill required for the
processing of the olive fruit and operation of the business. Follow on stages of
business development include plans to (a) secure a secondary financing to
provide adequate funding for two years of operating expenses estimated at
$140,000 per year, and (b) for the purchase and planting to olive trees of an
additional 325 acres of suitable land which will require additional funding
contemplated but not yet secured by the Company.
LAND ACQUISITION
Olive trees grow in a variety of climatic conditions but are especially
suited to dryer climates with adequate soil drainage and warm, sunny days
throughout the growing season. Accordingly, the Company has determined that the
land in the lower latitudes, specifically below the 40th parallel in the
southern United States is best suited for olive growth. With the higher
populations of Southern California and Southern and Central Arizona, the Company
believes that the initial market for our products will have the highest chance
for success if targeted therein.
The principals of the Company have, after independent research,
determined that the Company will initially seek to acquire property in Cochise
County or Santa Cruz County in Southern Arizona. The per-acre land costs, water
availabilities, climate and soil compositions in these areas provide the best
value to the Company.
More specifically, the Company's first choice will be to acquire
property in Elgin, Arizona which is located in the northeast part of Santa Cruz
County approximately 9 miles to the west of the town of Sierra Vista. The
Company has located parcels that appear to be suitable and is performing
detailed due diligence prior to entering into contract with any Seller.
The range of per-acre land asking price that the Company has
encountered is from $2,500 to $6,000.
-10-
The independent research for Olive Orchard suitability includes a
confidential consultants report to the Company from Dr. Alexander Tereschenko of
Turlock, California who specializes in Olive Orchards and has provided
consulting services to locations and producers worldwide. Dr. Tereschenko
traveled to Southern Arizona and using site survey techniques to include soil
and water samples, historical climate data and personal observations, has
concluded that the area surrounding Elgin, Arizona should provide an "excellent"
growing condition for the planned orchards.
MARKET
Southwest Grower's target market will ultimately be the gourmet and
health food consumers throughout North America but initially focused in the
Southern California and Southern & Central Arizona cities.
Southwest Olive Growers intends to market its olive oils and table olives to:
o Restaurants
o Annual food and beverage festivals
o Warehouse outlets such as Costco, Sam's Club, Price Club, etc..
o Retail grocery store chains, and
o On site at the mill and pressing building.
We intend to sell a line of oils consisting of flavored, blended oils
and two pure varietal oils in our product line. We also plan to press oil at
different times of the year to produce an "early" and "late" oil with different
characteristics. While blended oils have traditionally gotten the highest
ratings and appeal to the broadest market, single varietals are interesting and
can increase sales out of curiosity and appeal to individual tastes. In late
2005 we also intend to include pickled olives and olive tapenades in our product
line. We will market the products in different types of packaging, including
standard and custom blown glass containers as well as in stainless fustis and
gift baskets. Our products will be marketed as condiments, staples and as gifts
and souvenirs.
Additionally, the Company intends to construct and distribute to
supermarkets, deli's and gourmet food suppliers, unique point of sale displays
to highlight the origin and high-quality processing of our oils and olive
products.
CUSTOMERS
Our primary customers are expected to be those who already consume
olive oils on a regular basis and those who will exhibit a certain faithfulness
to any local product and are willing to try the product simply because of its
packaging and marketing slogans.
Buyers in Italy were asked what characteristics they were looking for
in an olive oil. Results of the survey are below. This provides additional
support for our belief that a quality local product, competitively priced should
garner repeat sales from our customers in Arizona, California and other Western
States. (from Olivae no 90, Feb 2002)
-11-
Reason for buying % responding
Geographical Origin 39
Delicate Taste 36.9
Brand name on pack 33.4
Right price 33.4
Intense Taste 29.1
Deep Color 26.2
Promotion or Discount 23.2
Certified Organic 16.2
Pack type (color of glass, tin) 11.1
Pack size 8.8
Advice of family 8.2
Pack date 6.7
Low acidity .5
COMPETITION
Competition in the olive oil market is strong with many domestic and
foreign producers and bottlers vying for market share. Most olive growers in the
States of Arizona and California are simply farmers which grow the olives and
sell them as a commodity rather than press and bottle their own fruit. The
Company believes that the production and marketing success of the Company will
be greatest if done with a "boutique" representation, garnering support from
local buyers with a quality, fairly priced product.
INTELLECTUAL PROPERTY
We intend to apply for a federal trademark for "Southwest Olive
Growers." We do not own any other intellectual property.
EMPLOYEES
We have 1 full time employee, and one part time employee which also
serve as Officers and Directors. Our employees are not represented by a union.
We considers our relations with our employees to be satisfactory.
The Company plans to hire an additional 2 employees when required to
aid in processing, bottling, marketing, accounting and orchard maintenance.
Until that time the current officers have committed to provide the time
necessary to operate the Company.
REGULATION
Our business relating to the fertilization and processing of olive is
regulated by the EPA and the Clean Water Act as well as several State
regulations. The packaging and sale of the oils and table olives is regulated by
the Food and Drug Administration.
-12-
Although we believe that the systems and procedures we intend to
implement to ensure compliance in all material respects with applicable federal,
state and local laws, rules, regulations, there can be no assurance of full
compliance with current laws, regulations and rules, that more restrictive laws,
regulations and rules will not be adopted in the future, or that existing laws,
regulations and rules. The occurrence of any such event could make compliance
substantially more difficult or expensive, expose us to claims and
administrative enforcement actions, or otherwise materially and adversely affect
our business, financial condition and prospects.
INDEMNIFICATION
The Arizona Revised Statutes (Title 10, Chapter 8, Article 5) permits
the inclusion in the articles of incorporation, provisions limiting or
eliminating the personal monetary liability of directors to a corporation or its
shareholders by reason of their conduct as directors. The Articles of
Incorporation of Southwest Olive Growers, Inc, contain the provision that
require mandatory indemnification in all circumstances where it is permit by
Arizona law. Our bylaws allow for the elimination of personal monetary liability
on the part of a director to the fullest extent permitted by Arizona law. A
shareholder is able to prosecute an action against a director for monetary
damages for any action taken, or any failure to take any action, as a director,
for the amount of financial benefit received by a director for which he is not
entitled, an intentional infliction of harm on the corporation or shareholders,
a violation of the Arizona corporation law or an intentional violation of
criminal law.
MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS
Southwest Olive Growers, Inc. may make certain statements in this
Prospectus, including, without limitation statements that contain the words
"believes," "anticipates," "estimates," "expects," and words of similar import,
constitute "forward-looking statements." Forward-looking statements may relate
to our future growth and profitability; the anticipated trends in our industry;
our competitive strengths and business strategies. Further, forward-looking
statements are based on our current expectations and are subject to a number of
risks, uncertainties and assumptions relating to our operations, financial
condition and results of operations. For a discussion of factors that may affect
the outcome projected in such statements, see "Risk Factors and Investment
Considerations." If any of these risks or uncertainties materialize, or if any
of the underlying assumptions prove incorrect, actual results could differ
materially from results expressed or implied in any of our forward-looking
statements. We do not undertake any obligation to revise these forward-looking
statements to reflect events or circumstances arising after the date of this
Prospectus.
RESULTS OF OPERATIONS AND ANALYSIS OF FINANCIAL CONDITION
Revenues
The Company is in the development stage and as such has had no revenues
as of the date of this prospectus. We anticipate no revenues to be derived from
operations nor investment until the fourth quarter of fiscal year 2004. The
anticipated revenues are expected to consist primarily of wholesale olive oil
sales from fruit that the Company intends to buy, press and bottle in the latter
half of the fourth quarter of 2004.
Costs and Expenses
Southwest Olive Growers had costs and expenses for the period ended
August 16, 2004 in the amount of $ 2,200. Our costs are anticipated to
significantly increase in the third and fourth quarters of 2004 due to the costs
-13-
of the offering memorandum and registration expenses, travel, purchase of real
property and equipment and for general and administrative expenses.
Net Income
Southwest Olive Growers had no net income for the period ended August
16, 2004 and anticipates that it will incur a net loss for 2004 due to the costs
and expenses incurred in the development stage of the Company.
Liquidity and Capital Resources
For the period ended August 16, 2004, the Company had no cash flow from
operating activities.
At period ended August 16, 2004, the Company had total current assets
of $ 2,000 and a net working capital deficit of $ 200.
Net stockholders' deficit in the Company was $ 200 as at August 16,
2004.
The Company will not have sufficient funds (unless it is able to raise
funds in a private placement) to undertake any further significant acquisitions
or developments, other than contemplated herein, and there are no assurances
that such financing will be available on terms acceptable or favorable to the
Company. There are no known material trends, events or uncertainties that have
or are reasonably likely to have a material impact on our short-term or
long-term liquidity.
DESCRIPTION OF PROPERTY
Southwest Olive Growers has entered into a lease agreement with its
president and director Robert Feneziani on September 30, 2004 for its 800 square
foot office facilities. The rental charges are approximately $400 per month on a
deferred basis and this lease expires December 31, 2004.
MARKET FOR THE SHARES AND RELATED STOCKHOLDER MATTERS
Our common stock is not listed or quoted at the present time, and there
is no public market for our common stock. There can be no assurance that a
public market for our common stock will ever develop. We intend to qualify our
common stock for trading on the OTC Bulletin Board or other public market after
the Registration Statement, of which this Prospectus is a part, becomes
effective.
We have no options or warrants outstanding at the current time.
-14-
EXECUTIVE COMPENSATION
The following table sets forth all compensation paid by us to the chief
executive officer and the chief financial officer for services rendered since
inception. It also displays what the Company intends to provide for compensation
in 2005.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION AWARDS
ANNUAL RESTRICTED SECURITIES
COMPENSATION STOCK UNDERLYING ALL OTHER
AWARDS ($) OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)
--------------------------- ---- ---------- ---------
Robert Feneziani 2004 nil - - - -
President, Chairman 2005 36,000 - - - -
Marla Martins 2004 nil - - - -
Secretary, Treasurer 2005 18,000 - - - -
DIRECTOR COMPENSATION
Directors currently receive no cash compensation for their services in
that capacity. Reasonable out-of-pocket expenses may be reimbursed to directors
in connection with attendance at meetings.
LEGAL MATTERS
The legality of the securities offered hereby has been passed upon for
Southwest Olive Growers, Inc. by Kevin M. Sherlock, Esq., Tucson, Arizona.
EXPERTS
The Consolidated Financial Statements and Related Financial Statement
Schedules incorporated in this Prospectus have been audited by Robison, Hill &
Co., independent auditors, as stated in their reports, and have been included in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form SB-2 under the
Securities Act of 1933, with respect to 400,000 of our shares of common stock.
This prospectus, which forms a part of the registration statement, does not
contain all of the information set forth in the registration statement as
permitted by applicable SEC rules and regulations. Statements in this prospectus
about any contract, agreement or other document are not necessarily complete.
With respect to each such contract, agreement, or document filed as an exhibit
to the registration statement, reference is made to the exhibit for a more
complete description of the matter involved, and the validity of each such
statement is limited by this reference.
Copies of our reports, proxy statements and other information may be inspected
and copied, and can also be obtained by mail at prescribed rates from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, or
-15-
by calling the SEC at 1-800-SEC-0330. The SEC maintains a Web site that include
reports, proxy statements and other information. The address of the SEC Web site
is http://www.sec.gov.
We will furnish to our shareholders annual reports containing audited financial
statements reported on by independent public accountants for each fiscal year
and make available quarterly reports containing unaudited financial information
for the first three quarters of each fiscal year.
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SOUTHWEST OLIVE GROWERS, INC.
(A DEVELOPMENT STAGE COMPANY)
-:-
INDEPENDENT ACCOUNTANTS' REPORT
AUGUST 16, 2004
CONTENTS
Page
Independent Auditor's Report.............................................F - 1
Balance Sheet
August 16, 2004.........................................................F - 2
Statements of Operations for the
Period from May 10, 2004 (inception) to August 16, 2004................F - 3
Statement of Stockholders' Equity
Since May 10, 2004 (inception) to August 16, 2004......................F - 4
Statements of Cash Flows for the
Period from May 10, 2004 (inception) to August 16, 2004................F - 5
Notes to Financial Statements............................................F - 6
INDEPENDENT AUDITOR'S REPORT
Southwest Olive Growers, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Southwest Olive
Growers, Inc. (a development stage company) as of August 16, 2004 and the
related statements of operations and cash flows for the period from May 10, 2004
(inception) to August 16, 2004 and the statement of stockholders' equity from
May 10, 2004 (inception) to August 16, 2004. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Southwest Olive
Growers, Inc. (a development stage company) as of August 16, 2004 and the
results of its operations and its cash flows for the period from May 10, 2004 to
August 16, 2004 in conformity with accounting principles generally accepted in
the United States of America.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered losses from operation and has a
deficit in stockholders' equity as of August 16, 2004 that together raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters also are described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Respectfully submitted,
/s/Robison, Hill, & Co
Certified Public Accountants
Salt Lake City, Utah
August 18, 2004
F - 1
SOUTHWEST OLIVE GROWERS, INC.
(A Development Stage Company)
BALANCE SHEET
August 16,
2004
-----------------
Assets:
Cash and cash equivalents $ 2,000
-----------------
Total Current Assets 2,000
-----------------
Total Assets $ 2,000
=================
Liabilities:
Accounts payable $ 2,200
-----------------
Total Liabilities 2,200
-----------------
Stockholders' Equity:
Preferred Stock, par value $.001, authorized
10,000,000 shares, issued 0 at August 16, 2004 -
Common Stock, par value $.001, authorized
100,000,000 shares, issued 200,000 at August 16, 2004 200
Paid-In Capital 1,800
Deficit accumulated during the development stage (2,200)
-----------------
Total Stockholders' Equity (200)
-----------------
Total Liabilities and Stockholders' Equity $ 2,000
=================
The accompanying notes are an integral part of these financial statements.
F - 2
SOUTHWEST OLIVE GROWERS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Cumulative
Since
For the Period May 10,
May 10, 2004 2004
to Inception of
August 16, Development
2004 Stage
----------------- -----------------
Revenues: $ - $ -
----------------- -----------------
Expenses:
General and administrative 2,200 2,200
----------------- -----------------
Total expenses 2,200 2,200
----------------- -----------------
Net Loss $ (2,200) $ (2,200)
================= =================
Earnings per Share, Basic & Diluted
Loss Per Share $ (0.01)
=================
Weighted Average Shares Outstanding 200,000
=================
The accompanying notes are an integral part of these financial statements.
F - 3
SOUTHWEST OLIVE GROWERS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
SINCE MAY 10, 2004 (INCEPTION) TO AUGUST 16, 2004
Deficit
Accumulated
Since May 10,
2004
Inception of
Common Stock Paid-In Development
Shares Par Value Capital Stage
--------------- ---------------- ------------------ ------------------
May 10, 2004, Shares Issued for
Cash 200,000 $ 200 $ 1,800 $ -
Net Loss - - - (2,200)
--------------- ---------------- ------------------ ------------------
Balance at August 16, 2004 200,000 $ 200 $ 1,800 $ (2,200)
=============== ================ ================== ==================
The accompanying notes are an integral part of these financial statements
F - 4
SOUTHWEST OLIVE GROWERS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Cumulative
Since
For the Period May 10,
May 10, 2004 2004
to Inception of
August 16, Development
2004 Stage
------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss for the period $ (2,200) $ (2,200)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Changes in Operating Assets and Liabilities
Increase (Decrease) in accounts payable 2,200 2,200
------------------ ------------------
Net Cash Used in operating activities - -
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by investing activities - -
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shareholders 2,000 2,000
------------------ ------------------
Net Cash Provided by Financing Activities 2,000 2,000
------------------ ------------------
Net (Decrease) Increase in cash 2,000 2,000
Cash at Beginning of Period - -
------------------ ------------------
Cash at End of Period $ 2,000 $ 2,000
================== ==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
================== ==================
Cash paid during the year for:
Interest $ - $ -
Franchise and income taxes $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: None
The accompanying notes are an integral part of these financial statements.
F - 5
SOUTHWEST OLIVE GROWERS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN
The accompanying financial statements have been prepared on the basis
of accounting principles applicable to a "going concern", which assume that the
Company will continue in operation for at least one year and will be able to
realize its assets and discharge its liabilities in the normal course of
operations.
Several conditions and events cast doubt about the Company's ability to
continue as a "going concern". The Company has incurred net losses of $2,200 for
the period from May 10, 2004 (inception) to August 16, 2004, has a liquidity
problem, and requires additional financing in order to finance its business
activities on an ongoing basis. The Company is actively pursuing alternative
financing and has had discussions with various third parties, although no firm
commitments have been obtained.
The Company's ability to survive will depend on numerous factors
including, but not limited to, the Company's receiving continued financial
support, completing public equity financing, or generating profitable operations
in the future.
These financial statements do not reflect adjustments that would be
necessary if the Company were unable to continue as a "going concern". While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial statements, there can be
no assurance that these actions will be successful.
If the Company were unable to continue as a "going concern", then
substantial adjustments would be necessary to the carrying values of assets, the
reported amounts of its liabilities, the reported revenues and expenses, and the
balance sheet classifications used.
NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Southwest Olive Growers, Inc.
is presented to assist in understanding the Company's financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Arizona on
May 10, 2004.
F - 6
SOUTHWEST OLIVE GROWERS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Nature of Business
The Company is in the business of site selection and development of
olive groves, and in milling olives to produce gourmet oils for wholesale and
retail sales. As of August 16, 2004, the Company is still in the planning
stages.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required 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.
Loss per Share
Basic loss per share has been computed by dividing the loss for the
year applicable to the common stockholders by the weighted average number of
common shares outstanding during the years. There were no common equivalent
shares outstanding at August 16, 2004.
Income Taxes
The Company has a net operating loss for income taxes. Due to the
regulatory limitations in utilizing the loss, it is uncertain whether the
Company will be able to realize a benefit from these losses. Therefore, a
deferred tax asset has not been recorded. There are no significant tax
differences requiring deferral.
Concentrations of Credit Risk
The Company has no significant off-balance-sheet concentrations of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements.
F - 7
SOUTHWEST OLIVE GROWERS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 3 - DEVELOPMENT STAGE COMPANY/ GOING CONCERN
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage. Continuation of the Company as a going concern is dependent
upon obtaining the additional working capital necessary to be successful in its
planned activity, and the management of the Company has developed a strategy,
which it believes will accomplish this objective through additional equity
funding and long term financing, which will enable the Company to operate for
the coming year.
NOTE 4 - INCOME TAXES
As of August 16, 2004, the Company had a net operating loss
carryforward for income tax reporting purposes of approximately $2,200 that may
be offset against future taxable income through 2024. Current tax laws limit the
amount of loss available to be offset against future taxable income when a
substantial change in ownership occurs. Therefore, the amount available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the carryforwards will expire unused. Accordingly, the potential tax
benefits of the loss carryforwards are offset by a valuation allowance of the
same amount.
NOTE 5 - COMMITMENTS
As of August 16, 2004, all activities of the Company have been
conducted by corporate officers from either their homes or business offices.
Currently, there are no outstanding debts owed by the company for the use of
these facilities and there are no commitments for future use of the facilities.
NOTE 6 - COMMON STOCK TRANSACTIONS
On May 10, 2004, the Company issued 200,000 shares of common stock for
$0.01 per share for cash.
F - 8
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Arizona Revised Statutes (Title 10, Chapter 8, Article 5) permits
the inclusion in the articles of incorporation, provisions limiting or
eliminating the personal monetary liability of directors to a corporation or its
shareholders by reason of their conduct as directors. The Articles of
Incorporation of Southwest Olive Growers, Inc, contain the provision that
require mandatory indemnification in all circumstances where it is permit by
Arizona law. Our bylaws allow for the elimination of personal monetary liability
on the part of a director to the fullest extent permitted by Arizona law. A
shareholder is able to prosecute an action against a director for monetary
damages for any action taken, or any failure to take any action, as a director,
for the amount of financial benefit received by a director for which he is not
entitled, an intentional infliction of harm on the corporation or shareholders,
a violation of the Arizona corporation law or an intentional violation of
criminal law.
ARTICLE XI of the Bylaws of the Registrant provide as follows:
SECTION 43. INDEMNIFICATION OF DIRECTORS, EXECUTIVE OFFICERS, OTHER
OFFICERS, EMPLOYEES AND OTHER AGENTS.
(a.) DIRECTORS OFFICERS. The corporation shall indemnify its directors
and officers to the fullest extent not prohibited by the Arizona General
Corporation Law; provided, however, that the corporation may modify the extent
of such indemnification by individual contracts with its directors and officers;
and, provided, further, that the corporation shall not be required to indemnify
any director or officer in connection with any proceeding (or part thereof)
initiated by such person unless (i) such indemnification is expressly required
to be made by law, (ii) the proceeding was authorized by the Board of Directors
of the corporation, (iii) such indemnification is provided by the corporation,
in its sole discretion, pursuant to the powers vested in the corporation under
the Arizona General Corporation Law or (iv) such indemnification is required to
be made under subsection (d).
(b.) EMPLOYEES AND OTHER AGENTS. The corporation shall have power to
indemnify its employees and other agents as set forth in the Arizona General
Corporation Law.
(c.) EXPENSE. The corporation shall advance to any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer, of
the corporation, or is or was serving at the request of the corporation as a
director or executive officer of another corporation, partnership, joint
venture, trust or other enterprise, prior to the final disposition of the
II-1
proceeding, promptly following request therefor, all expenses incurred by any
director or officer in connection with such proceeding upon receipt of an
undertaking by or on behalf of such person to repay said mounts if it should be
determined ultimately that such person is not entitled to be indemnified under
this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to
paragraph (e) of this Bylaw, no advance shall be made by the corporation to an
officer of the corporation (except by reason of the fact that such officer is or
was a director of the corporation in which event this paragraph shall not apply)
in any action, suit or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made (i) by the
Board of Directors by a majority vote of a quorum consisting of directors who
were not parties to the proceeding, or (ii) if such quorum is not obtainable,
or, even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision-making party at the time such determination is made demonstrate clearly
and convincingly that such person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of the
corporation.
(d.) ENFORCEMENT. Without the necessity of entering into an express
contract, all rights to indemnification and advances to directors and officers
under this Bylaw shall be deemed to be contractual rights and be effective to
the same extent and as if provided for in a contract between the corporation and
the director or officer. Any right to indemnification or advances granted by
this Bylaw to a director or officer shall be enforceable by or on behalf of the
person holding such right in any court of competent jurisdiction if (i) the
claim for indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within ninety (90) days of request therefor.
The claimant in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting his claim. In
connection with any claim for indemnification, the corporation shall be entitled
to raise as a defense to any such action that the claimant has not met the
standard of conduct that make it permissible under the Arizona General
Corporation Law for the corporation to indemnify the claimant for the amount
claimed. In connection with any claim by an officer of the corporation (except
in any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such officer is or was a director of
the corporation) for advances, the corporation shall be entitled to raise a
defense as to any such action clear and convincing evidence that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed in the best interests of the corporation, or with respect to any
criminal action or proceeding that such person acted without reasonable cause to
believe that his conduct was lawful. Neither the failure of the corporation
(including its Board of Directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in the Arizona
General Corporation Law, nor an actual determination by the corporation
(including its Board of Directors, independent legal counsel or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that claimant has not
met the applicable standard of conduct. In any suit brought by a director or
officer to enforce a right to indemnification or to an advancement of expenses
hereunder, the burden of proving that the director or officer is not entitled to
be indemnified, or to such advancement of expenses, under this Article XI or
otherwise shall be on the corporation.
(e.) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by
this Bylaw shall not be exclusive of any other right which such person may have
or hereafter acquire under any statute, provision of the Articles of
Incorporation, Bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
II-2
action in another capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of its directors,
officers, employees or agents respecting indemnification and advances, to the
fullest extent not prohibited by the Arizona General Corporation Law.
(f.) SURVIVAL OF RIGHTS. The rights conferred on any person by this
Bylaw shall continue as to a person who has ceased to be a director, officer,
employee or other agent and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(g.) INSURANCE. To the fullest extent permitted by the Arizona General
Corporation Law, the corporation, upon approval by the Board of Directors, may
purchase insurance on behalf of any person required or permitted to be
indemnified pursuant to this Bylaw.
(h.) AMENDMENTS. Any repeal or modification of this Bylaw shall only be
prospective and shall not affect the rights under this Bylaw in effect at the
time of the alleged occurrence of any action or omission to act that is the
cause of any proceeding against any agent of the corporation.
(i.) SAVING CLAUSE. If this Bylaw or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each director and officer to the full
extent not prohibited by any applicable portion of this Bylaw that shall not
have been invalidated, or by any other applicable law.
(j.) CERTAIN DEFINITIONS. For the purposes of this Bylaw, the following
definitions shall apply:
(i.) The term "proceeding" shall be broadly construed and shall
include, without limitation, the investigation, preparation,
prosecution, defense, settlement, arbitration and appeal of, and the
giving of testimony in, any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative.
(ii.) The term "expenses" shall be broadly construed and shall include,
without limitation, court costs, attorneys' fees, witness fees, fines,
amounts paid in settlement or judgment and any other costs and expenses
of any nature or kind incurred in connection with any proceeding.
(iii.) The term the "corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
which, if its separate existence had continued, would have had power
and authority to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer, employee
or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer,
employee or agent or another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the
provisions of this Bylaw with respect to the resulting or surviving
corporation as he would have with respect to such constituent
corporation if its separate existence had continued.
(iv.) References to a "director," "executive officer," "officer,"
"employee," or "agent" of the corporation shall include, without
limitation, situations where such person is serving at the request of
the corporation as, respectively, a director, executive officer,
officer, employee, trustee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
II-3
(v.) References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to
"serving at the request of the corporation" shall include any service
as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer,
employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith
and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this Bylaw.
Section 17-16-202 of the Arizona Business Corporation Law allows a
corporation to eliminate the personal liability of directors of a corporation to
the corporation or its stockholders for monetary damages for any action taken,
or any failure to take any action, as a director, except for the amount of
financial benefit received by a director for which he is not entitled, an
intentional infliction of harm on the corporation or shareholders, a violation
of 17-16-833 or an intentional violation of criminal law.
Section 17-16-850, et seq. of the Arizona Business Corporation Law
provides that a corporation has the power to indemnify a director, officer,
employee or agent of the corporation and certain other persons serving at the
request of the corporation in related capacities against amounts paid and
expenses incurred in connection with an action or proceeding to which he is or
is threatened to be made a party by reason of such position, if such person
shall have acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, in any criminal
proceeding, if such person had no reasonable cause to believe his conduct was
unlawful; provided that, in the case of actions brought by or in the right of
the corporation, no indemnification shall be made with respect to any matter as
to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated costs and expenses of
Southwest Olive Growers, Inc. in connection with the offering described in the
Registration Statement.
Securities and Exchange Commission Registration Fee $ 100
Legal Fees and Expenses 10,000
Accounting Fees and Expenses 2,000
Other Expenses 1,900
-----
Total Expenses $14,000
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ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
On May 10, 2004, pursuant to the resolution set forth by the Board of
Directors, Southwest Olive Growers, Inc., issued a total of 200,000 shares to
Robert Feneziani and Marla Martins in reliance on Section 4(2) of the Securities
Act as no public offering was involved.
ITEM 27. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION REFERENCE
-------------- ------------------------------------------------------------------------------- --------------
3.1 Articles of Incorporation of Registrant, dated May 6, 2004 *
3.2 By-laws of Registrant *
4.1 Form of Common Stock Certificate *
5.1 Opinion of Kevin M. Sherlock, Esq. as to the legality of securities being *
registered (includes consent)
23.2 Consent of Auditors Robison Hill & Co. *
----------
* Filed herewith
ITEM 28. UNDERTAKINGS
(a) Rule 415 Offering. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
which, individually or together, represent a
fundamental change in the information in the
registration statement; and notwithstanding the
forgoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation From the low or high
end of the estimated maximum offering range May be
reflected in the form of prospects filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement; and
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(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
(2) For determining any liability under the Securities Act of 1933
(the "Securities Act"), to treat each such post-effective
amendment as a new registration statement of the securities
offered, and the offering of the securities at the time to be
the initial bona fide offering.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) Imdemnification:
Insofar as indemnification for liabilities arising under the Securities
Act May be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the small business
issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the small business issuer will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Tucson, Arizona on October 8, 2004.
SOUTHWEST OLIVE GROWERS, INC.
an Arizona corporation
/s/ Robert Feneziani
Robert Feneziani, Chairman of the Board and President
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature and Title Date
/s/ Robert Feneziani October 25 2004
- -----------------------------------------------------
Robert Feneziani, Chairman of the Board,
President and Director
/s/ Marla Martins October 25 2004
- -----------------------------------------------------
Marla Martins, Director, Principal Financial
Officer, Principal Accounting Officer, Secretary
and Treasurer
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