UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2008
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 000-52136
Aegean Earth & Marine Corporation
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Cayman Islands N/A
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Nautilus Global Partners
700 Gemini, Suite 100, Houston, TX 77056
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(281) 488-3883
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer
or a smaller reporting company. See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting
company" in Rule 12b-2 of the Exchange Act (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller Reporting Company [X]
(Do not check if a smaller
reporting company)
Indicate by check mark whether the registrant is a shell
company (as defined in rule 12b-2 of the Exchange Act).
YES [ ] NO [X]
At May 19, 2008, there were 7,003,033 shares of Registrant's
ordinary shares outstanding.
GENERAL INDEX
Page
Number
- --------------------------------------------------------------------
PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS............................... 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.............. 12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK...................................... 15
ITEM 4. CONTROLS AND PROCEDURES............................ 15
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.................................. 15
ITEM 1A. RISK FACTORS....................................... 15
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND
USE OF PROCEEDS.................................. 15
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.................... 15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.......................................... 15
ITEM 5. OTHER INFORMATION.................................. 16
ITEM 6. EXHIBITS........................................... 16
SIGNATURES................................................... 16
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Aegean Earth and Marine Corporation
(formerly Tiger Growth Corporation)
(A Development Stage Company)
Consolidated Condensed Balance Sheets
March 31, 2008 December 31, 2007
---------------- -----------------
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 5,758,664 $ 152,789
Short-term notes receivable - affiliate -- 85,025
Interest receivable -- 111
Other receivables 10,715 --
---------------- -----------------
Total current assets 5,769,379 237,925
---------------- -----------------
Goodwill 144,113 --
---------------- -----------------
Total assets $ 5,913,492 $ 237,925
================ =================
LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIT)
CURRENT LIABILITIES
Payable to affiliate $ 90,831 $ 6,497
Accounts payable 51,930 4,448
Interest payable - affiliate 7,410 2,910
Short-term note payable - affiliate 300,000 300,000
---------------- -----------------
Total current liabilities 450,171 313,855
---------------- -----------------
Commitments and Contingencies (Note 10) -- --
---------------- -----------------
SHAREHOLDERS' EQUITY (DEFICIT)
Preference shares, $0.00064 par
value, 20,000,000 shares
authorized, 1,908,675 and -0-
issued and outstanding as
of March 31, 2008 and
December 31, 2007, respectively 1,221 --
Ordinary shares, $0.00064 par
value; 78,125,000 shares
authorized; 4,441,366 and
2,002,691 issued and outstanding
as of March 31, 2008 and
December 31, 2007, respectively 2,824 1,282
Additional paid in capital 5,819,330 46,068
Cumulative translation adjustment (7,620) --
Deficit accumulated during
development stage (352,434) (123,280)
---------------- -----------------
Total shareholders' equity (deficit) 5,463,321 (75,930)
---------------- -----------------
Total liabilities and shareholders'
equity (deficit) $ 5,913,492 $ 237,925
================ =================
See accompanying notes to condensed consolidated financial statements.
3
Aegean Earth & Marine Corporation
(formerly Tiger Growth Corporation)
(A Development Stage Company)
Consolidated Condensed Statements of Operations
(Unaudited)
Cumulative During
Development Stage
Three Months Ended Three Months Ended (March 10, 2006 to
March 31, 2008 March 31, 2007 March 31, 2008)
------------------ ------------------ ------------------
Revenues $ -- $ -- $ --
Expenses
Formation, general and
administrative expenses 250,711 3,050 371,220
------------------ ------------------ ------------------
Total operating expenses 250,711 3,050 371,220
------------------ ------------------ ------------------
Operating loss (250,711) (3,050) (371,220)
------------------ ------------------ ------------------
Other income (expense)
Interest, dividend and other
income (expense) 21,557 -- 18,786
------------------ ------------------ ------------------
Total other income (expense) 21,557 -- 18,786
Net loss (229,154) (3,050) (352,434)
------------------ ------------------ ------------------
Preferred shares dividend accrued (28,630) -- (28,630)
------------------ ------------------ ------------------
Net loss attributable to
ordinary shares $ (257,784) $ (3,050) $ (381,064)
================== ================== ==================
Basic and diluted loss per share $ (0.09) $ (0.00)
================== ==================
Weighted average ordinary shares
outstanding - basic and diluted 2,849,698 2,002,691
================== ==================
See accompanying notes to consolidated condensed financial statements.
4
Aegean Earth and Marine Corporation
(formerly Tiger Growth Corporation)
(A Development Stage Company)
Consolidated Condensed Statements of Cash Flows
(Unaudited)
Cumulative During
Development Stage
Three Months Ended Three Months Ended (March 10, 2006 to
March 31, 2008 March 31, 2007 March 31, 2008)
------------------ ------------------ ------------------
Cash flows from operating activities
Net loss $ (229,154) $ (3,050) $ (352,434)
Adjustments to reconcile net loss to cash
used in operating activities:
Shares issued to Founder for payment
of formation costs -- -- 1,050
Changes in operating assets and
liabilities
Interest payable 4,500 -- 7,410
Interest and other receivables (5,778) -- (5,889)
Payable to affiliate 21,320 (1,785) 27,817
Accounts payable 46,026 (4,680) 50,474
------------------ ------------------ ------------------
Net cash used in operating activities (163,086) (9,515) (271,572)
------------------ ------------------ ------------------
Cash flows from investing activities
Net cash acquired of Aegean Earth S.A. 51,452 -- 51,452
Notes receivable-affiliate -- -- (85,025)
------------------ ------------------ ------------------
Net cash used in investing activities 51,452 -- (33,573)
------------------ ------------------ ------------------
Cash flows from financing activities
Proceeds from issuance of equity 5,726,025 -- 5,772,325
Proceeds from note payable-affiliate -- -- 300,000
------------------ ------------------ ------------------
Net cash provided by financing activities 5,726,025 -- 6,072,325
------------------ ------------------ ------------------
Net increase in cash and cash equivalents 5,614,391 (9,515) 5,767,736
------------------ ------------------ ------------------
Effect of exchange rates on cash and
cash equivalents (8,516) -- (8,516)
------------------ ------------------ ------------------
Cash and cash equivalents at beginning
of the period 152,789 35,972 --
------------------ ------------------ ------------------
Cash and cash equivalents at end of the period $ 5,758,664 $ 26,457 $ 5,758,664
================== ================== ==================
Supplemental disclosures of cash
flow information:
Interest paid $ -- $ -- $ --
================== ================== ==================
Income taxes paid $ -- $ -- $ --
================== ================== ==================
Stock issued in acquisition of
Aegean Earth, S.A. $ 50,000 $ -- $ 50,000
================== ================== ==================
See accompanying notes to consolidated condensed financial statements.
5
Aegean Earth & Marine Corporation
(A Development Stage Company)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
March 31, 2008
(Unaudited)
NOTE 1 - Organization, Business and Operations
On March 10, 2006, Aegean Earth and Marine Corporation, formerly
Tiger Growth Corporation ("we", "us", "our" or the "Company"),
was formed in the Cayman Islands with the objective to acquire,
or merge with, a foreign operating business. On February 29,
2008, the Company acquired Aegean Earth S.A., a Greek company
formed with the intention of operating in the construction and
development sectors in Greece and the surrounding areas.
Through our wholly owned subsidiary, Aegean Earth S.A., we intend
to engage in the business of construction and development of real
estate projects, roads, utility structures, commercial buildings,
and other related facilities in Greece, the Mediterranean and
Balkan countries and other parts of Southern and Eastern Europe,
either alone or by forming joint ventures with other companies.
We also intend to actively pursue the acquisition of
complimentary construction companies to increase construction
project opportunities and revenue. We are actively pursuing
construction opportunities both in the private and public sectors
throughout the Mediterranean, Middle East, and Northern Africa
regions. We are also actively pursuing the acquisition of one
company which we believe will be completed in the second or third
quarter of 2008, provided, however, that no assurance can be
given that such acquisition will be completed by then or at all.
On January 8, 2008, the Company amended its Memorandum and
Articles of Association to increase its authorized share capital
from 50,000,000 Ordinary Shares and 1,000,000 Preference Shares
to 78,125,000 Ordinary Shares and 20,000,000 Preference Shares.
In addition, our issued and outstanding Ordinary Shares increased
from 1,281,500 Ordinary Shares immediately prior to the stock
split to 2,002,691 Ordinary Shares immediately after the stock
split. All share and per share data give effect to this split
applied retroactively as if it occurred at the date of inception.
The Company also changed its corporate name in January 2008 to
Aegean Earth and Marine Corporation in anticipation of a proposed
transaction.
On January 15, 2008, the Company designated 5 million of our
Preference Shares as Series A Preference Shares. The Series A
Preference Shares shall rank senior as to the payment of
dividends and in liquidation as to the Ordinary Shares. The
Series A Preference Shares have a stated value of $3.00 per
share, which is subject to adjustment (the "Stated Value"). The
Series A Preference Shares have the right to vote only with
respect to matters relating to amendments of any of the
preferences, rights or limitations of the Series A Preference
Share or the issuance by the Company of Preference Shares having
rights equal to and/or superior to the Series A Preference
Shares.
On February 29, 2008, the Company acquired all of the outstanding
capital stock of Aegean Earth, S.A., a company organized under
the laws of Greece ("Aegean Earth"), from Joseph Clancy and
Konstantinos Polites, the sole stockholders of Aegean Earth (the
"Aegean Earth Shareholders") pursuant to an Acquisition Agreement
dated as of February 29, 2008 for 500,000 of the Company's
ordinary shares. Effective at the closing of the Acquisition
(the "Acquisition Closing") Aegean Earth became a wholly-owned
subsidiary of the Company. The focus of Aegean Earth S.A. is to
participate in the construction and development business for,
among other projects, the direct contracting or joint venturing
in the construction and development of real estate projects,
roads, utility structures, commercial buildings, and other
related facilities. Based on a prior transaction involving the
sale of the Company's ordinary shares, the Company values the
purchase at $50,000.
Simultaneously with the Acquisition Closing, the Company in a
private offering made solely to accredited investors sold
1,908,675 ordinary shares and 1,908,675 Series A Preference
Shares for aggregate gross proceeds of approximately $5,726,025.
On April 8, 2008 the Company sold an additional 91,667 Ordinary
Shares and 91,667 Series A Preference Shares for aggregate gross
proceeds of approximately $275,001.
6
NOTE 2 - Summary of Significant Accounting Policies
Basis of Presentation
These financial statements are presented on the accrual basis of
accounting in accordance with generally accepted accounting
principles in the United State of America, whereby revenues are
recognized in the period earned and expenses when incurred. The
Company also follows Statement of Financial Accounting Standards
("SFAS") No. 7, "Accounting and Reporting for Development Stage
Enterprises" in preparing its financial statements.
Statement of Cash Flows
For purposes of the statement of cash flows, we consider all
highly liquid investments (i.e., investments which, when
purchased, have original maturities of three months or less) to
be cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America 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 reported amounts of revenue and
expenses during the reporting period. Actual results could differ
from those estimates.
Loss Per Ordinary Share
Basic loss per ordinary share is based on the weighted effect of
ordinary shares issued and outstanding, and is calculated by
dividing net loss by the weighted average shares outstanding
during the period. Diluted loss per ordinary share is calculated
by dividing net loss by the weighted average number of ordinary
shares used in the basic loss per share calculation plus the
number of ordinary shares that would be issued assuming exercise
or conversion of all potentially dilutive ordinary shares
outstanding. The Company does not present diluted earnings per
share for years in which it incurred net losses as the effect is
antidilutive.
At March 31, 2008, there were 2,500,000 potentially dilutive
ordinary shares outstanding based on the potential conversion of
the note payable (See Note 6).
On January 8, 2008, the Company divided and increased the
authorized ordinary share capital of the Company from 50,000,000
Ordinary Shares of $0.001 par value each to 78,125,000 Ordinary
Shares of $0.00064 par value each by the division (split) of
50,000,000 Ordinary Shares of US$0.001 par value each into
78,125,000 Ordinary Shares of US$0.00064 par value each. This
resulted in every shareholder as of January 8, 2008 receiving 100
Ordinary shares for every 64 Ordinary shares previously held.
This was treated as a stock split for U.S. GAAP purposes, and all
share and per share data is presented as if the division took
place as of the date of inception, March 10, 2006. On January 8,
2008, the Company also divided and increased the authorized
preference share capital of the Company from 1,000,000 Preference
Shares of $0.001 par value each to 20,000,000 Preference Shares
of $0.00064 par value by the division of 1,000,000 Preference
Shares of US$0.001 par value each into 1,562,500 Preference
Shares of US$0.00064 par value each, and the authorization of an
additional 18,437,500 Preference Shares with a par value of
US$0.00064 each.
Income Taxes
Aegean Earth and Marine Corporation was registered as an Exempted
Company in the Cayman Islands, and therefore, is not subject to
Cayman Island income taxes for 20 years from the Date of
Inception. While the Company has no intention of conducting any
business activities in the United States, the Company would be
subject to United States income taxes based on such activities
that would occur in the United States. The Company's wholly
owned subsidiary, Aegean Earth S.A. may be subject to income and
other taxes in Greece. The statutory corporate income tax rate
in Greece is 25%.
7
The Company accounts for income taxes in accordance with SFAS No.
109, "Accounting for Income Taxes." This statement prescribes the
use of the liability method whereby deferred tax asset and
liability account balances are determined based on differences
between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to
reverse. In assessing the realization of deferred tax assets,
management considers whether it is likely that some portion or
all of the deferred tax assets will be realized. The ultimate
realization of deferred tax assets is dependent upon the Company
attaining future taxable income during periods in which those
temporary differences become deductible.
Fair Value of Financial Instruments
The Company's financial instruments consist of cash and cash
equivalents, a note receivable from an affiliate, payables to an
affiliate, and a note payable to an affiliate. The fair value of
cash and cash equivalents approximates the recorded amounts
because of the liquidity and short-term nature of these items.
The fair value of the note receivable, and payable to an
affiliate, and note payable approximate the recorded amounts.
The Company adopted SFAS No. 157 effective January 1, 2008. SFAS
157 established a framework for measuring fair value in GAAP and
clarified the definition of fair value within that framework.
SFAS 157 does not require assets and liabilities that were
previously recorded at cost to be recorded at fair value or for
assets and liabilities that are already required to be disclosed
at fair value, SFAS 157 introduced, or reiterated, a number of
key concepts which form the foundation of the fair value
measurement approach to be used for financial reporting purposes.
The fair value of the Company's financial instruments reflects
the amounts that the Company estimates to receive in connection
with the sale of an asset or paid in connection with the transfer
of a liability in an orderly transaction between market
participants at the measurement date (exit price). SFAS 157 also
established a fair value hierarchy that prioritizes the use of
inputs used in valuation techniques into the following three
levels:
Level 1- quoted prices in active markets for identical assets and
liabilities.
Level 2- observable inputs other than quoted prices in active
markets for identical assets and liabilities.
Level 3 - unobservable inputs.
The adoption of FAS 157 did not have an effect on the Company's
financial condition or results of operations, but SFAS 157
introduced new disclosures about how we value certain assets and
liabilities. Much of the disclosure is focused on the inputs used
to measure fair value, particularly in instances where the
measurement uses significant unobservable (Level 3) inputs. As of
March 31, 2008, the Company did not have financial assets or
liabilities that would require measurement on a recurring basis
based on the guidance in SFAS 157. At March 31, 2008 all
financial assets consisted of cash and cash equivalents.
Foreign Currency Translations and Transactions
The Company uses the "Current rate method" to translate the
financial statements of Aegean Earth, S.A. from EUR into U.S.
Dollars, as required under the Statement of Financial Accounting
Standard ("SFAS") No. 52, "Foreign Currency Translation" issued
by the Financial Accounting Standard Board ("FASB"). The
Company's assets and liabilities are translated into U.S. Dollars
using the rate of exchange prevailing at the balance sheet date.
Additional paid-in capital is translated at the historical rate.
Adjustments resulting from the translation of the Company's
balance sheets from EUR into U.S. Dollars are recorded in
stockholders' equity as part of accumulated comprehensive income.
The statement of operations is translated at average rates during
the reporting period. Gains or losses resulting from transactions
in currencies other than the functional currencies are reflected
in the statement of operations for the reporting periods.
Recently Issued Accounting Pronouncements
Effective January 1, 2008, the Company adopted SFAS No. 159, "The
Fair Value Option for Financial Assets and Financial Liabilities
- - including an amendment of FASB Statement No. 115." SFAS No.
159 allows an entity the irrevocable option to elect fair value
for the initial and subsequent measurement of certain financial
8
assets and liabilities under an instrument-by-instrument
election. Subsequent measurements for the financial assets and
liabilities an entity elects to fair value will be recognized in
the results of operations. SFAS No. 159 also establishes
additional disclosure requirements. The Company did not elect
the fair value option under SFAS No. 159 for any of its financial
assets or liabilities upon adoption. The adoption of SFAS No.
159 did not have a material impact on the Company's results of
operations or financial position.
In December 2007, the FASB issued SFAS No. 141 (Revised 2007),
Business Combinations - Revised 2007. SFAS 141 R provides
guidance on improving the relevance, representational
faithfulness, and comparability of information that a reporting
entity provides in its financial reports about a business
combination and its effects. SFAS 141R applies to business
combinations where the acquisition date is on or after the
beginning of the first annual reporting period beginning on or
after December 15, 2008. Management is evaluating what effect the
adoption of this pronouncement will have on its future financial
statements, if any.
In December 2007, the FASB also issued SFAS No. 160,
Noncontrolling Interests in Consolidated Financial Statements,
which establishes accounting and reporting standards to improve
the relevance, comparability, and transparency of financial
information in its consolidated financial statements that include
an outstanding noncontrolling interest in one or more
subsidiaries. SFAS 160 is effective for fiscal years, and the
interim periods within those fiscal years, beginning on or after
December 15, 2008. Management of the Company does not expect the
adoption of this pronouncement to have a material impact on its
consolidated financial statements.
NOTE 3 - Liquidity and Capital Resources
The Company has no revenues for the period from inception through
March 31, 2008. On February 29, 2008, simultaneously with the
acquisition of Aegean Earth S.A. for 500,000 of the Company's
ordinary shares, the Company raised $5.7 million in a private
placement for a potential acquisition and for the operations of
the Company. The Company believes that this will be sufficient
for the next 12 months to achieve its business objectives. There
can be no assurances that the Company will ever consummate
another business combination; achieve or sustain profitability or
positive cash flows from its operations, reduce expenses or sell
additional ordinary shares.
NOTE 4 - Note Receivable - Affiliate
In December 2007, the Company entered into two notes receivable
with Aegean Earth, S.A., a Greek Company, for $85,025. These
notes bear interest at the rate of 6% per year and are payable on
demand. These notes were written primarily to provide working
capital to Aegean Earth S.A. prior to a contemplated acquisition
of Aegean Earth S.A. and funding from additional investors. In
February 29, 2008, the Company acquired all of the outstanding
shares of Aegean Earth S.A.
NOTE 5 - Payable to Affiliate and Accounts Payable
The Company has a payable to affiliate of $9,866 to a Founder of
the Company as of March 31, 2008. The payable is non-interest
bearing and payable on demand. As of March 31, 2008, the Company
also has a payable to one of the founders of Aegean Earth S.A.
for consulting expenses of $80,965. (See Note 7). As of March
31, 2008, the Company also has accounts payable related to the
general and administrative expenses for $51,930.
NOTE 6 - Note Payable - Affiliate
In November 2007, the Company entered into a Note Payable with
Access America Fund, LP for $300,000 at an annual interest rate
of 6%, payable on demand. These notes are convertible at the
option of the holder at any time for 2,500,000 ordinary shares of
the Company. Access America Fund, LP holds the majority of the
shares in the Company. On April 21, 2008 these notes were
converted into 2,500,000 shares of the Company.
9
NOTE 7 - Other Related Party Transactions
During 2008 Aegean Earth S.A. retained the services of Ergo
Systems S.A. to provide general consulting and additional
services. Ergo Systems S.A. is owned by one of the founders of
Aegean Earth S.A. and one of the shareholders of the Company. As
of March 31, 2008, Aegean Earth S.A. owed Ergo Systems S.A.
$80,965 for these services (including out-of-pocket expenses) and
incurred approximately $58,000 in consulting fees since the
acquisition of Aegean Earth S.A.
NOTE 8 - Ordinary Shares
On April 10, 2006, the Company was capitalized with 1,640,625
shares of its restricted ordinary shares issued at par value of
$0.00064 per share, for consideration of $1,050 to its founding
shareholders. These shares, along with a payable issued to the
founder of $5,548, were the basis of the funding of the Company's
$6,598 in formation costs. On May 31, 2006, the Company sold
277,610 shares of its restricted ordinary shares for $35,500. The
restricted ordinary shares were sold to 355 offshore private
investors pursuant to a Private Placement Offering in lots of 782
shares each at $0.1279 per share. On July 18, 2006, the Company
sold an additional 84,456 shares of its restricted ordinary
shares for $10,800. The restricted ordinary shares were sold to
108 offshore private investors pursuant to a Private Placement
Offering in lots of 782 shares each at $0.1279 per share. No
underwriting discounts or commissions were paid with respect to
such sales. On February 29, 2008, the Company issued 1,908,675
ordinary shares in conjunction with its raising of approximately
$5.7 million in financing.
NOTE 9 - Preference Shares
At formation, the Company was authorized to issue 1,562,500
shares of preference shares with such designations, voting and
other rights and preferences as may be determined from time to
time by the Board of Directors. In January 2008, the Company
increased the number of authorized preference shares to 20
million, and designated 5,000,000 as Series A Preference Shares.
On February 29, 2008, the Company issued 1,908,675 Series A
Preference Shares in conjunction with its raising of
approximately $5.7 million in financing.
The Series A Preference Shares rank senior as to the payment of
dividends and in liquidation to the ordinary shares. The Series
A Preference Shares have a stated value of $3.00 per share, which
is subject to adjustment (the "Stated Value"). The Series A
Preference Shares have the right to vote only with respect to
matters relating to amendments of any of the preferences, rights
or limitations of the Series A Preference Share or the issuance
by the Company of Preference Shares having rights equal to and/or
superior to the Series A Preference Shares. Each Series A
Preference Share may be redeemed by us at our sole option at any
time and from time to time commencing six months after the date
of issuance (the "Redemption Date") at a redemption price equal
to the sum of (i) the Stated Value, and (ii) all accrued but
unpaid dividends thereon.
Unredeemed Series A Preference Shares are eligible to be
converted into ordinary shares (the "Conversion Shares") at the
then applicable Conversion Ratio (as defined below) thirty months
after the date of issuance. Each Series A Preference Share is
convertible into six (6) ordinary shares (the "Conversion
Ratio"), with each date of conversion being referred to as the
"Conversion Date". Upon conversion, all accrued and unpaid
(undeclared) dividends on the Series A Preference Shares through
the Conversion Date shall be paid in additional ordinary shares
as if such dividends had been paid in additional shares of Series
A Preference Shares rounded up to the nearest whole number, and
then automatically converted into additional ordinary shares at
the then applicable Conversion Ratio. The Conversion Ratio is
subject to adjustment in the event of share splits, share
dividends, combinations, reclassifications and the like and to
weighted average anti-dilution protection for sales of ordinary
shares at a purchase price below $0.50 per share.
Each Series A Preference Share accrues dividends at the rate of
six (6%) percent per annum of the Stated Value ($0.18 per share
per annum) and is payable on the Redemption Date. Dividends
payable will be prorated from the date each Series A Preference
Share was issued based on the number of days each such Series A
Preference Share was outstanding. Dividends on the Series A
Preference Shares are cumulative. No dividends or other
distributions may be paid or otherwise made with respect to the
ordinary shares and no ordinary shares may be repurchased by the
Company during any fiscal year of the Company until dividends on
the Series A Preference Shares have been declared, paid or set
apart during that fiscal year. In addition, the Company reserves
the right to declare and pay optional dividends to the holders of
10
Series A Preference Shares in such amounts, form (securities
and/or cash) and at such time as determined by the Company' s
Board of Directors.
The Series A Preference Shares have a liquidation preference
over the ordinary shares equal to the then stated value, plus all
accrued but unpaid dividends.
NOTE 10 - Business Combination
On February 29, 2008, the Company acquired all of the
outstanding capital stock of Aegean Earth, S.A., a company
organized under the laws of Greece pursuant to an Acquisition
Agreement dated as of February 29, 2008 for 500,000 of the
Company's ordinary shares. Effective at the closing of the
Acquisition, Aegean Earth S.A. became a wholly-owned subsidiary of
the Company. Based on a prior transaction involving the sale of
the Company's ordinary shares, the Company values the purchase at
$50,000 plus the elimination of the note receivable plus accrued
interest, resulting in a total purchase price of $135,986.
The Merger has been accounted for under the purchase method of
accounting in accordance with Statement of Financial Accounting
Standard (SFAS) No. 141, "Business Combinations." After
considering all the relevant factors in determining the acquiring
enterprise, including, but not limited to, relative voting
rights, composition of the board of directors and senior
management, and the relative size of the companies, the merger
was deemed a acquisition and the Company was treated as the
"acquiring" company for accounting and financial reporting
purposes.
A summary of the components of the estimated purchase price for
the acquisition, is as follows:
Fair value of the Company's share capital....... $ 50,000
Elimination of Note Receivable from Aegean
Earth, S.A. plus accrued interest............. 85,986
--------------
Total...................................... $ 135,986
==============
The fair value of Company's common stock was estimated by
management of the Company.
The purchase price was allocated based on a determination of
the value of the tangible and intangible assets acquired and
liabilities assumed. The goodwill recorded as a result of the
acquisition will not be amortized, but will be included in the
Company's annual review of goodwill for impairment. The following
represents the allocation of the purchase price to the acquired
assets and liabilities of Aegean Earth, SA. This allocation was
based on the fair value of the assets and liabilities of Aegean
Earth S.A. as of February 29, 2008. The excess of the purchase
price over the fair value of net identifiable assets acquired is
reflected as goodwill:
Net tangible assets, excluding cash............. $ 4,891
Cash acquired................................... 51,452
Liabilities assumed............................. (64,470)
Identifiable intangible assets:................. --
Goodwill........................................ 144,113
--------------
Total...................................... $ 135,986
==============
11
Pro forma information for the Company reflecting the acquisition
of Aegean Earth S.A, has not been provided because, historically
the Company has had no operations and, therefore, a pro forma
presentation of the Company's financial information would for the
most part be a presentation of Aegean Earth S.A.'s financial
statements. Further, the Company believes that given the limited
operating history of Aegean Earth S.A. and the Company's lack of
operations prior to its acquisition, a pro-forma presentation of
the Company's financial statements would provide little
information to the reader of these financial statements and could
potentially be misleading.
NOTE 11 - Commitments and Contingencies
The Company may become subject to various claims and litigation.
The Company vigorously defends its legal position when these
matters arise. The Company is not a party to, nor the subject
of, any material pending legal proceeding nor to the knowledge of
the Company, are any such legal proceedings threatened against
the Company.
NOTE 12 - Subsequent Events
On April 8, 2008, the Company issued 91,667 ordinary shares and
91,667 Series A Preference shares in conjunction with raising an
additional $275,001 in financing.
On April 21, 2008, the note payable of $300,000 Access America
Fund, LP (See Note 6 - Note Payable - Affiliate) plus accrued
interest was converted to 2,500,000 ordinary shares of the
Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Disclosure Regarding Forward Looking Statements
Statements, other than historical facts, contained in this
Quarterly Report on Form 10-Q, including statements of potential
acquisitions and our strategies, plans and objectives, are
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Although we believe that our
forward looking statements are based on reasonable assumptions,
we caution that such statements are subject to a wide range of
risks, trends and uncertainties that could cause actual results
to differ materially from those projected. Among those risks,
trends and uncertainties are important factors that could cause
actual results to differ materially from the forward looking
statements, including, but not limited to; the effect of existing
and future laws, governmental regulations and the political and
economic climate of the United States; the effect of derivative
activities; and conditions in the capital markets. We undertake
no duty to update or revise these forward-looking statements.
When used in this Form 10-Q, the words, "expect,"
"anticipate," "intend," "plan," "believe," "seek," "estimate" and
similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. Because these forward-looking statements
involve risks and uncertainties, actual results could differ
materially from those expressed or implied by these forward-
looking statements for a number of important reasons.
General
Aegean Earth & Marine Corporation (formerly known as Tiger
Growth Corporation) ("we", "us", "our", the "Company" or
"Aegean") was organized under the laws of the Cayman Islands on
March 10, 2006. Since inception, through February 2008, our
operations consisted solely of attempting to identify,
investigate and conduct due diligence on potential businesses for
acquisition.
12
On February 29, 2008, we acquired (the "Acquisition") all of
the outstanding capital stock of Aegean Earth, S.A., a company
organized under the laws of Greece ("Aegean Earth"), from Joseph
Clancy and Konstantinos Polites, the sole stockholders of Aegean
Earth (the "Aegean Earth Shareholders") pursuant to an
Acquisition Agreement dated as of February 29, 2008 (the
"Acquisition Agreement"), by and among the Company, Aegean Earth
and the Aegean Earth Shareholders. Aegean Earth was formed in
July 2007, for the purpose of engaging in construction in Greece
and surrounding countries. Upon completion of the Acquisition,
Aegean Earth became our wholly-owned subsidiary and our business
became that of Aegean Earth.
In the Acquisition and pursuant to the Acquisition
Agreement, we issued to each of the Aegean Earth Shareholders
250,000 (500,000 in the aggregate) ordinary shares, $0.00064 par
value per share (the "Ordinary Shares"), in exchange for all of
their capital stock in Aegean Earth. The Ordinary Shares issued
in the Acquisition were issued pursuant to the exemptions from
the registration requirements of the Securities Act provided
under Section 4(2) of the Act and Rule 506 promulgated
thereunder.
Simultaneously with the Acquisition Closing, the Company
sold (the "Offering") in a private offering made solely to
accredited investors approximately three thousand eight hundred
and seventeen (3,817) units (the "Units") at a purchase price of
$1,500 per Unit for aggregate gross proceeds of approximately
$5,726,025. Each Unit consisted of 500 shares of the Company's
Series A Convertible Preference Shares, par value $0.00064
("Series A Preference Shares") and 500 Ordinary Shares (1,908,675
Series A Preference Shares and 1,908,675 Ordinary Shares in the
aggregate). The Series A Preference Shares and Ordinary Shares
sold in the Offering were issued pursuant to the exemptions from
the registration requirements of the Securities Act provided
under Section 4(2) of the Securities Act and Rule 506 promulgated
thereunder.
In January 2008, shareholders of the Registrant approved a
name change of the Registrant from "Tiger Growth Corporation" to
"Aegean Earth & Marine Corporation."
Proposed Business Plan
The focus of the Company is to participate in the
construction and development business for, among other projects,
the direct contracting or joint venturing in the construction and
development of real estate projects, roads, utility structures,
commercial buildings, and other related facilities in Greece and
other parts of Southern and Eastern Europe. The Company also
intends to be active in acquiring complimentary companies to
increase project opportunities and revenue. The Company is
actively pursuing construction opportunities both in the private
and public sectors throughout the Mediterranean, Middle East, and
Northern Africa regions. The Company is actively pursuing the
acquisition of one company which the Company believes will be
completed in the second or third quarter of 2008, provided,
however, that no assurance can be given that such acquisition
will be completed by then or at all.
The Company intends to take advantage of what it perceives
to be an increase in the demand for construction in the
Mediterranean and Balkan countries. The Company has entered into
a consulting contract with a former president of a Greek
construction company who has over 25 years of experience in the
construction industry, and has experience in performing a variety
of types of construction projects, including highways, commercial
buildings, bridges and tunnels, airports and marinas. In
addition, Mr. Clancy, the Managing Director of Aegean Earth who
became an officer of the Company following the Acquisition, has
prior experience in the negotiation and development of
construction projects in the residential, commercial, and
industrial sectors over the past 30 years.
The Company believes that there is strong opportunity in
construction in the Mediterranean and Balkan countries. In
Greece, where Aegean Earth is headquartered, a number of
governmental initiatives have been announced that the Company
believes will increase potential construction and development in
Greece. In 2007, it was announced by the European Union that a
series of infrastructure improvements have been planned,
including the development of further upgrades of highways and the
rail network, that are partially being financed by EUR24 billion
funding which has been allocated to Greece from the European
Union for the period from 2007 to 2013. The Company intends to
focus a significant portion of its efforts in obtaining contracts
and thereafter providing the construction and other services for
these projects. The Greek government has made an effort to
promote tourism, spending over $55 million in the promotion of
tourism in 2006 alone, which resulted in an increase in tourism
13
of over 10% in 2006 as compared to the previous year. The
Company believes that this increase in tourism will continue, and
could result in the need for additional hotels and marinas to be
built, resulting in additional opportunities for the Company. In
the surrounding states of Bulgaria and Romania, the European
Union has designated over EUR22 billion in grant money for the
purpose of structural improvements, primarily in the
environmental and infrastructure areas. The Company is actively
working with existing suppliers, managers, operators and property
owners in pursuing this lucrative area of business. The Company
has identified four (4) areas in which current market indicators
support additional marina development which includes attendant
commercial support facilities such as hotels, casinos,
restaurants and luxury shopping areas.
Proposed Acquisition
One of the Company's intended methods of growth is through
the acquisition of complimentary construction, engineering, or
development companies in Greece and elsewhere in Europe. The
Company has begun the process of identifying a number of
acquisition targets that will potentially allow it to generate
immediate revenue through existing projects.
The Company has identified and entered into a Memorandum of
Understanding (the "Memorandum") with one such potential
acquisition candidate, a Greek construction company that is
currently the subject of a bankruptcy proceeding under the laws
of Greece. The proposed acquisition and the Memorandum are both
subject to, among other conditions, the prior approval of the
Greek courts and there can be no assurances when, if ever, such
proposed acquisition will be completed.
Employees
As of April 13, 2008, the Company had four employees, two of
which are full time.
Competition
The real estate, construction, engineering and development
business in the regions in which the Company contemplates doing
business is highly competitive and the Company believes that
competition will increase substantially as more grant money from
Greece, the European Union and/or other countries becomes
available for infrastructure and development in the Mediterranean
and Balkan countries. The Company is aware of a number of larger
international construction companies along with well established
local construction and engineering firms that are currently
contemplating developments (and others that are actively engaged
in construction). Such competitors have greater financial,
personnel and other resources and more extensive experience in
the development/engineering/construction business than the
Company.
Properties
The Company does not own or rent any property. The Company
utilizes office space and office equipment of its officers and
directors at no cost.
Comparison of the three months ending March 31, 2008 and 2007
Because we acquired Aegean Earth at the end of February
2008, and prior thereto we did not have any business operations,
we have not had any revenues during the three months ended March
31, 2008 or March 31, 2007. Total expenses for the three months
ended March 31, 2008 were $250,710, compared with $3,050 for the
three months ended March 31, 2007. The increase is primarily
related to legal and professional fees related to the acquisition
of Aegean Earth S.A. and the addition of the operating activity
in Aegean Earth S.A.
Liquidity and Capital Resources
As of March 31, 2008, we had working capital of $5.3 million
and a cash balance of $5.8 million. We believe that we will be
able to meet all of our funding needs in the next twelve months,
including additional planned acquisitions. No assurances can be
14
given, however, that our business plan will succeed and that we
will be not need to seek additional external financing.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Not applicable
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Our Chief
Executive and Financial Officer has reviewed and evaluated the
effectiveness of our disclosure controls and procedures (as
defined in Exchange Act Rules 240.13a-15(e) or 15d-15(e)) as of
the end of the period covered by this report. Based on that
evaluation, the Chief Executive and Financial Officer has
concluded that our current disclosure controls and procedures
provide him with reasonable assurance that they are effective to
provide him with timely material information relating to us
required to be disclosed in the reports we file or submit under
the Exchange Act.
Changes in Internal Control over Financial Reporting. Our
management has evaluated whether any change in our internal
control over financial reporting occurred during the last fiscal
quarter. Based on that evaluation, management concluded that
there has been no change in our internal control over financial
reporting during the relevant period that has materially
affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
There have been no material changes to the risk factors
previously disclosed under Item 1A of the Company's Report on
Form 10-K for the fiscal year ended December 31, 2007.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
There were no unregistered sales of the Company's equity
securities during the three months ended March 31, 2008 that were
not previously disclosed in a Form 8-K. There were no purchases
of common stock of the Company by the Company or its affiliates
during the three months ended March 31, 2008.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On January 9, 2008, the Company filed an Information
Statement on Schedule 14C relating to the amendment to its
Memorandum and Articles of Association to increase its authorized
share capital from 50,000,000 Ordinary Shares and 1,000,000
Preference Shares to 78,125,000 Ordinary Shares and 20,000,000
Preference Shares and a stock split pursuant to which the
Company's issued and outstanding Ordinary Shares increased from
1,281,500 Ordinary Shares immediately prior to the stock split to
2,002,691 Ordinary Shares immediately after the stock split. The
amendment and stock split were approved by the written consent of
the holders of a majority of the outstanding ordinary shares.
15
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
Exhibit Description
Number
31.1 Certification of Principal Executive Officer pursuant to
Rule 13a-14(a) or 15d-14(a) of the Securities and
Exchange Act of 1934, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Principal Financial Officer pursuant to
Rule 13a-14(a) or 15d-14(a) of the Securities and
Exchange Act of 1934, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32 Certification of Principal Executive Officer and
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 the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Aegean Earth & Marine Corporation
(Registrant)
By: /s/ Rizos P. Krikos
--------------------------------
Rizos P. Krikos
Chief Financial Officer
Date: May 20, 2008
16