UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-1
Registration Statement Under the Securities Act of 1933
PRIMCO MANAGEMENT INC.
(Exact Name of Registrant As Specified In Its Charter)
<s> <c> <c>
Delaware Applied For
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification
organization) Code Number) Number)
Neal Friedman
700 Rockaway Turnpike 700 Rockaway Turnpike
Suite #400 Suite #400
Lawrence, NY 11559 Lawrence, NY 11559
Telephone (855) 774-6261 Telephone (855) 774-6261
(Address, and telephone number (Name, address and telephone number
of principal executive offices) of agent for service)
Copies to:
Ms. Jody Walker ESQ.
7841 South Garfield Way
Centennial, CO 80122
Phone 303-850-7637 Fax 303-482-2731
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this registration statement becomes
effective.
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, check the following box [x]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering.
[ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
2
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerate filer, a non-accelerated filer, or a smaller
reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF AMOUNT PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE TO BE MAXIMUM MAXIMUM REGISTRATION
REGISTERED REGISTERED OFFERING PRICE AGGREGATE FEE
PER SHARE OFFER PRICE
<s> <c> <c> <c> <c>
Common Stock 4,000,000 $ .25 $1,000,000 $116.10
--------- ---------- -------
Total 4,000,000 $1,000,000 $116.10
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 hereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933, or until
the registration statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may
be changed. These securities may not be sold until the registration
statement filed with the U.S. Securities and Exchange Commission is
effective. This preliminary prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in
any jurisdiction where the offer or sale is not permitted.
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Preliminary Prospectus Dated March 28, 2011. SUBJECT TO COMPLETION
$1,000,000
Up to a maximum of 4,000,000 Common Shares at $.25 per Common Share
Primco Management Inc.
The registrant is registering 4,000,000 common shares at the purchase
price of $.25 per common share for the aggregate offering price of
$1,000,000.
The offering will commence on the effective date of this prospectus and
will terminate on or before March 31, 2012.
This constitutes the initial public offering of the registrant's common
stock. There is presently no public market for our common shares. We
anticipate applying for quoting of our common shares on the OTC
Bulletin Board or OTCQB upon the effectiveness of the registration
statement of which this prospectus forms a part. There can be no
assurance that a market maker will agree to file the necessary
documents with the Financial Industry Regulatory Authority, which
operates the OTCBB and OTCQB, nor can there be any assurance that such
application for quotation will be approved.
In their opinion on our financial statements as of and for the period
from inception to December 31, 2010, our auditors have indicated that
there is substantial doubt about our ability to continue as a going
concern.
We will sell the common shares ourselves and do not plan to use
underwriters or pay any commissions. We will be selling our common
shares using our best efforts and no one has agreed to buy any of our
common shares. There is no minimum amount of common shares we must
sell so no money raised from the sale of such common shares will go
into escrow, trust or another similar arrangement.
Investing in our common shares involves a high degree of risk. See
Risk Factors beginning on page 6 to read about factors you should
consider before buying our common shares.
Neither the SEC nor any state securities commission has approved these
common shares or determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
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TABLE OF CONTENTS
Prospectus Summary 5
Risk Factors 6
Forward Looking Statements 11
Use of Proceeds 12
Plan of Distribution 13
Business Operations 14
Dilution 23
Dividend Policy 24
Determination of Offering Price 24
Management's Discussion and Analysis of Financial
Condition and Results of Operations 24
Directors, Executive Officers and Control Persons 27
Security Ownership of Certain Beneficial Owners
and Management 29
Certain Relationships and Related Transactions 30
Description of Capital Stock 30
Disclosure of Commission Position on Indemnification 31
for Securities Act liabilities
Market for Common Stock and Related Stockholder
Matters 32
Experts 33
Legal Proceedings 33
Legal Matters 33
Where You Can Find More Information 33
Financial Statements 34
5
PROSPECTUS SUMMARY
To understand this offering fully, you should read the entire
prospectus carefully, including the risk factors beginning on page 6
and the financial statements.
General
------- The registrant was incorporated in the state of
Delaware on October 14, 2010. Our principal
executive offices are located at 700 Rockaway
Turnpike, Suite #400, Lawrence, NY 11559. Our
telephone number is (877) PRIMCO1 (774-261).
Operations
---------- The registrant will offer real estate
management services for their clients that
focus on cost-efficient operations and tenant
retention on a range of properties including
class A office space, industrial,
manufacturing, and warehousing facilities as
well as data centers and retail outlets for
real estate users.
Additionally, the registrant will offer
consulting services, including site selection,
feasibility studies, exit strategies, market
forecasts, strategic planning, and research
services. The Company is committed to
expanding the scope of products and services
offered, while ensuring that it can support
client relationships with best-in-class
service.
To date, we have completed our concepts and
require funds to complete the development and
marketing of our services. As of the date of
this prospectus, the registrant has not engaged
in any material operations nor generated any
revenues.
We have an accumulated deficit of $(12,000) as
of December 31, 2010. In their opinion on our
financial statements as of and for the period
from inception to December 31, 2010, our
auditors have indicated that there is
substantial doubt about our ability to continue
as a going concern.
Common stock
outstanding
------------ 8,000,000
6
Common shares being
sold in this offering
---------------------- 4,000,000
Termination of the
Offering
------------------ The offering will commence on the effective
date of this prospectus and will terminate on
or before March 31, 2012.
Market for our
common stock
-------------- There is presently no public market for our
common shares. We anticipate applying for
quoting of our common shares on the OTC
Bulletin Board or OTCQB upon the effectiveness
of the registration statement of which this
prospectus forms a part. There can be no
assurance that a market maker will agree to
file the necessary documents with the Financial
Industry Regulatory Authority, which operates
the OTCBB and OTCQB, nor can there be any
assurance that such application for quotation
will be approved.
Common Stock Control
-------------------- Neal Friedman, an officer and director,
currently owns and will continue to own
sufficient common shares to control the
operations of the registrant.
RISK FACTORS
The registrant's business is subject to numerous risk factors,
including the following.
1. We cannot offer any assurance as to our future financial results.
We have received a going concern opinion from our auditors. You may
lose your entire investment.
We have not generated any revenues from operations to date and future
financial results are uncertain. We cannot assure you that the
registrant can operate in a profitable manner. We have an accumulated
deficit of $(12,000) as of December 31, 2010. Even if we obtain future
revenues sufficient to expand operations, increased production or
marketing expenses would adversely affect liquidity of the registrant.
In their opinion on our financial statements as of and for the period
ended December 31, 2010, our auditors have indicated that there is
substantial doubt about our ability to continue as a going concern.
7
2. We do not have a public market in our securities. If our common
stock has no active trading market, you may not be able to sell your
common shares at all.
We do not have a public market for our common shares. Our securities
are not traded on any exchange. We cannot assure you that an active
public market will ever develop. Consequently, you may not be able to
liquidate your investment in the event of an emergency or for any other
reason.
3. We do not meet the requirements for our stock to be quoted on
NASDAQ, American Stock Exchange or any other senior exchange and the
tradability in our stock will be limited under the penny stock
regulation.
The liquidity of our common stock is restricted as the registrant's
common stock falls within the definition of a penny stock.
Under the rules of the Securities and Exchange Commission, if the price
of the registrant's common stock on the OTC Bulletin Board is below
$5.00 per share, the registrant's common stock will come within the
definition of a "penny stock." As a result, the registrant's common
stock is subject to the "penny stock" rules and regulations. Broker-
dealers who sell penny stocks to certain types of investors are
required to comply with the Commission's regulations concerning the
transfer of penny stock. These regulations require broker-dealers to:
- Make a suitability determination prior to selling penny stock to
the purchaser;
- Receive the purchaser's written consent to the transaction; and
- Provide certain written disclosures to the purchaser.
These requirements may restrict the ability of broker/dealers to sell
the registrant's common stock, and may affect the ability to resell the
registrant's common stock.
4. This is a best efforts, no minimum offering. We may not receive
sufficient proceeds to fund planned operations or even cover the costs
of the offering. We may never become profitable if we fail to raise
sufficient funds or obtain alternate financing to begin material
operations.
There is no minimum offering amount and we have not engaged a
broker/dealer or underwriter to sell the common shares on our behalf.
As a result, we may not receive sufficient proceeds to fund planned
operations or even cover the costs of the offering. If we are unable
to raise sufficient funds or obtain alternate financing, we may never
complete development and become profitable.
5. The costs to meet our reporting and other requirements as a public
company subject to the Exchange Act of 1934 will be substantial and may
result in us having insufficient funds to complete the development of
our product line or even to meet routine business obligations.
8
If we become a public entity, subject to the reporting requirements of
the Exchange Act of 1934, we will incur ongoing expenses associated
with professional fees for accounting, legal and a host of other
expenses for annual reports and proxy statements. We estimate that
these costs could range up to $35,000 per year for the next few years
and will be higher if our business volume and activity increases but
lower during the first year of being public because we have not yet
completed development of our line of services, and we will not yet be
subject to the requirements of Section 404 of the Sarbanes-Oxley Act of
2002. As a result, we may not have sufficient funds to complete the
development of our line of services or even to meet routine business
obligations.
6. We are dependent on Neal Friedman and key management personnel.
The failure to attract and retain the necessary personnel could have a
materially adverse effect on our business, operations and financial
condition.
Our success is dependent upon, among other things, the services of Neal
Friedman, chief executive officer. The loss of Mr. Friedman's services
could have a material adverse effect on our business, operations and
financial condition. We do not have key-man life insurance policy for
Mr. Friedman. Mr. Friedman has had a broad spectrum of experience in
the business world, which includes working with an innovative dental
implant technology company where Mr. Friedman implemented innovative
quality control procedures. He was also a debt collection manager and
responsible for asset research for the law firm of Samuel & Stein.
The commencement of our business will place further demands on existing
management and future growth. Profitability will depend, in part, on
our ability to hire and retain the necessary personnel to operate our
business. There is no certainty that we will be able to identify,
attract, hire, train, retain and motivate other highly skilled
technical, administrative, managerial, marketing and customer service
personnel. Competition for such personnel is intense and there is no
certainty that we will be able to successfully attract, integrate or
retain sufficiently qualified personnel. The failure to attract and
retain the necessary personnel could have a materially adverse effect
on our business, operations and financial condition.
7. We have operated the registrant for a short period, so we have only
a limited operating history upon which you can evaluate our business
and prospects.
You should consider our prospects in light of the risks, expenses, and
difficulties those companies in their earlier stage of development
encounter. Our success depends upon our ability to address those risks
successfully, which includes, among other things:
- whether we will be able to assemble and maintain the necessary
resources, including financial resources, that we will need to
implement our business plan;
- whether we can continue to build and maintain a strong management
team that can develop and execute our business strategy;
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- whether we will be successful in establishing and maintaining the
strategic associations necessary to implement our business strategy;
and
- whether we will be successful in implementing our sales and
marketing strategy.
We forecast our future expense levels based on our operating plans and
our estimates of future revenues. If our revenues grow at a slower
rate than we anticipate, or if our spending levels exceed our
expectations or cannot be adjusted to reflect slower revenue growth, we
may not generate sufficient revenues to achieve or sustain
profitability. In this case, the value of your investment could be
reduced or lost. We expect to continue to incur losses for the
immediate future as we build our infrastructure, continue our sales and
marketing efforts, and continue development of our services. Even if
we do achieve profitability, we may not sustain or increase
profitability on a quarterly or annual basis. Failure to achieve or
maintain profitability will materially and adversely affect the market
price of our common stock.
8. The industry is highly competitive and there can be no assurance
that we will be able to compete effectively.
The market for integrated property and facility management in general
are highly competitive. The registrant expects competition to
intensify as competitors expand their product offerings, and new
competitors enter its targeted markets. The registrant believes that
it will compete based on a variety of factors, including:
- quality of services provided;
- price;
- adaptability and flexibility to customers' and target markets'
requirements;
- relevant market experience; and
- time-to-market.
The registrant believes that a number of its prospective customers will
also use services provided by its competitors. These relationships may
influence its prospective customer's decisions regarding the volume of
Services utilized from the registrant. In addition, because of these
relationships, some of its competitors may acquire information related
to its customers' new requirements before the registrant. The
registrant expects to face competition from these companies and
emerging companies developing new services that may meet the needs of
its clients.
A number of the registrant's potential competitors have longer
operating histories and substantially greater financial, technical,
sales, marketing, distribution and other resources, as well as greater
name recognition and a larger installed customer base than the
registrant. As a result, these competitors may be able to devote
greater resources to the development, promotion, sale, and support of
their services than the registrant. In addition, some of our potential
competitors operate their own facilities and have proprietary
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technology or licenses, and may have preexisting relationships with
industry clients or potential clients. As a result, these competitors
may be able to adapt more quickly to new or emerging products, develop
new technologies, or address changes in client requirements.
If the registrant is unable to compete efficiently, such failure could
harm its business, results of operations and financial condition.
9. Factors out of our control could result in fluctuating quarterly
operating results and negative effects on our financial situation. You
may lose your entire investment.
Our quarterly operating results in the future may vary significantly,
depending on factors such as:
- revenue from our programs and services,
- changes in our operating expenses,
- changes in our business strategy, and
- general economic factors.
We have limited or no control over many of these factors. Our
quarterly revenues will also be difficult to forecast because the
markets for our proposed programs and services are evolving and our
revenues in any period could be significantly affected by new product
announcements and product launches by our competitors, as well as by
alternative technologies. Variations in timing of sales may cause
significant fluctuations in future operating results. In addition,
because a significant portion of our business may be derived from
orders placed for services by a limited number of large customers, the
timing of such orders can also cause significant fluctuations in our
operating results. Anticipated orders from customers may fail to
materialize. Delivery schedules may be deferred or cancelled for a
number of reasons, including changes in specific customer or
international economic conditions. The adverse impact of a shortfall
in our revenues may be magnified by our inability to adjust spending to
compensate for such shortfall. As a result of these factors and other
factors, it is likely that in some future period our operating results
will be below the expectations of securities analysts or investors,
which would likely result in a significant reduction in the market
price of our stock. Period-to-period comparisons of our results of
operations will not necessarily be meaningful for the foreseeable
future.
10. Market acceptance of our proposed management services is
uncertain. We may never achieve profitable operations.
Based on our experience, we believe that there is a large market demand
for real estate management services. However, we have not yet begun to
receive revenues. There is no assurance that the markets will develop
as we anticipate. Further, there is no assurance that we will be able
to recoup our expenses out of these management services.
11
11. Our insurance may not cover all future liabilities.
We intend to carry commercial, general liability, and comprehensive
insurance on our operations, including fire, liability, extended
coverage, other casualty insurance and key man insurance. There may be
risks that are uninsurable on terms that we believe to be economic. In
addition, losses may exceed amounts on the policies.
12. If we are unable to manage future growth effectively, our
business, results of operations and financial condition could be
materially adversely affected.
We hope and expect to grow rapidly, both in the rate of our sales and
operations and the number and complexity of our proposed services , ,
and service development activities. Several members of our key
management team only recently joined us, and integration of those
persons into a cohesive management unit may be problematic. Our
growth, coupled with the rapid evolution of our markets, has placed,
and is likely to continue to place, significant strains on our
administrative, operational, technical, and financial resources and
increase demands on our internal management systems, procedures, and
controls. If we are unable to manage future growth effectively, our
business, results of operations and financial condition could be
materially adversely affected.
13. We will need to expand our management systems and hire and retain
key personnel to support our proposed service line.
The development and marketing of our services will continue to place a
significant strain on our limited personnel, management, and other
resources. Our ability to manage any future growth effectively will
require us to successfully attract, train, motivate, retain, and manage
employees, particularly key engineering and managerial personnel, to
effectively integrate new employees into our operations and to continue
to improve our operational, financial and management systems. Our
failure to manage growth and changes in our business effectively and to
attract and retain key personnel could limit our growth and the success
of our services and business. Further, we are highly dependent on the
continued service of and our ability to attract and retain qualified
technical, marketing, sales, and managerial personnel. The competition
for such personnel is intense. The loss of any key person or the
failure to recruit additional key technical and sales personnel in a
timely manner would have a material adverse effect on our business and
operating results. We currently do not maintain key person life
insurance policies on any of our employees.
FORWARD LOOKING STATEMENTS
The statements contained in this prospectus that are not historical
fact are forward-looking statements which can be identified by the
use of forward-looking terminology such as "believes," "expects,"
"may," "should," or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of
12
strategy that involve risks and uncertainties. We have made the
forward-looking statements with management's best estimates prepared
in good faith.
Because of the number and range of the assumptions underlying our
projections and forward-looking statements, many of which are
subject to significant uncertainties and contingencies that are
beyond our reasonable control, some of the assumptions inevitably
will not materialize and unanticipated events and circumstances may
occur subsequent to the date of this prospectus.
These forward-looking statements are based on current expectations,
and we will not update this information other than required by law.
Therefore, the actual experience of the registrant, and results
achieved during the period covered by any particular projections and
other forward-looking statements should not be regarded as a
representation by the registrant, or any other person, that we will
realize these estimates and projections, and actual results may vary
materially. We cannot assure you that any of these expectations
will be realized or that any of the forward-looking statements
contained herein will prove to be accurate.
USE OF PROCEEDS
Any proceeds received from the sale of our common shares will be
deposited directly into the operating account of the registrant. We
will be attempting to raise up to $1,000,000, minus expenses of
$34,116, from the sale of our common shares. These proceeds will be
used as follows:
<s> <c> <c> <c> <c>
Gross Proceeds $1,000,000 $500,000 $250,000 $125,000
Expenses 34,116 34,116 34,116 34,116
---------- -------- -------- --------
Net Proceeds $965,884 $465,884 $215,884 $ 90,884
Use of Net Proceeds:
Start-Up/Expansion Costs 418,000 209,000 100,000 50,000
Marketing & Sales 162,000 81,000 40,500 20,000
Capital Equipment 70,000 35,000 17,500 -
Working Capital 315,884 140,884 57,884 20,884
-------- -------- -------- --------
Net Proceeds Expended $965,884 $465,884 $215,884 $ 90,884
In the event we are not successful in selling all of the securities to
raise at least $125,000, we would utilize any available funds raised in
the following order of priority:
- for general and administrative expenses, including legal and
accounting fees and administrative support expenses incurred in
connection with our reporting obligations with the SEC.
- for sales and marketing; and
- for development of new services.
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PLAN OF DISTRIBUTION
This prospectus relates to the sale of 4,000,000 common shares.
We will sell the common shares ourselves and do not plan to use
underwriters or pay any commissions. We will be selling our common
shares using our best efforts and no one has agreed to buy any of our
common shares. This prospectus permits our officers and directors to
sell the common shares directly to the public, with no commission or
other remuneration payable to them for any common shares they may sell.
There is no plan or arrangement to enter into any contracts or
agreements to sell the common shares with a broker or dealer. Our
officers and directors will sell the common shares and intend to offer
them to friends, family members and business acquaintances. There is
no minimum amount of common shares we must sell so no money raised from
the sale of our common shares will go into escrow, trust or another
similar arrangement.
The common shares are being offered by Neal Friedman, an officer and
director of the registrant. Mr. Friedman will be relying on the safe
harbor in Rule 3a4-1 of the Securities Exchange Act of 1934 to sell the
common shares. No sales commission will be paid for common shares sold
by Mr. Friedman. Mr. Friedman is not subject to a statutory
disqualification and is not associated persons of a broker or dealer.
Additionally, Mr. Friedman primarily performs substantial duties on
behalf of the registrant otherwise than in connection with transactions
in securities. Mr. Friedman has not been a broker or dealer or an
associated person of a broker or dealer within the preceding 12 months
and they have not participated in selling an offering of securities for
any issuer more than once every 12 months other than in reliance on
paragraph (a)4(i) or (a)4(iii) of Rule 3a4-1 of the Securities Exchange
Act of 1934.
The offering will commence on the effective date of this prospectus and
will terminate on or before March 31, 2012.
These are no finders.
Under the rules of the Securities and Exchange Commission, our common
stock will come within the definition of a "penny stock" because the
price of our common stock is below $5.00 per share. As a result, our
common stock will be subject to the "penny stock" rules and
regulations. Broker-dealers who sell penny stocks to certain types of
investors are required to comply with the Commission's regulations
concerning the transfer of penny stock. These regulations require
broker-dealers to:
- Make a suitability determination prior to selling penny stock to
the purchaser;
- Receive the purchaser's written consent to the transaction; and
- Provide certain written disclosures to the purchaser.
14
These requirements may restrict the ability of broker/dealers to sell
our common stock, and may affect the ability to resell our common
stock.
BUSINESS OPERATIONS
The registrant was incorporated on October 14, 2010 in the state of
Delaware.
Services
--------
The registrant will offer real estate management services for their
clients that focus on cost-efficient operations and tenant retention on
a range of properties including class A office space, industrial,
manufacturing, and warehousing facilities as well as data centers and
retail outlets for real estate users.
Additionally, the registrant will offer consulting services, including
site selection, feasibility studies, exit strategies, market forecasts,
strategic planning, and research services. The registrant is committed
to expanding the scope of services offered, while ensuring that it can
support client relationships with best-in-class service.
Public Relations Program
------------------------
The primary objective of the registrant's public relations program will
be to establish the registrant as a leader in providing of real estate
management services. This objective will be accomplished through a
comprehensive PR approach that includes, but is not limited to the
following:
- media relations;
- conference and trade shows;
- bylined articles and white papers; and
- proactive media outreach.
The PR program will use every opportunity to garner media coverage,
increase visibility, and heighten awareness of the registrant and the
its services, technologies, and executives. The registrant will be
presented to national and regional business, technology, and vertical-
industry press. The goals of the registrant's public relations program
are:
- Brand Primco Management
- Clearly establish the registrant as a leading provider of real
estate management services
- Differentiate the registrant and its services from perceived
competitors
- Create a greater awareness of the registrant with potential
customers and partners
- Identify the registrant as strong, trusted, and progressive
through its partnerships and services
15
Advertising
-----------
The registrant plans to implement strategic advertising campaigns
focused on brand name recognition. Advertising campaigns will
generally focus on print, using industry publications, although other
means of advertising will also be considered and implemented. The
registrant also plans to create a website as a means of advertising and
as an electronic brochure for generating sales leads and increasing
market awareness.
The registrant is implementing policies and procedures to control
advertising or promotions that will be utilized in its strategic
alliances. These policies and procedures are necessary to assure the
proper representation of the registrant at all times and include the
pre-approval of all advertising material and restrictions on how
strategic alliances can advertise using the Primco Management brand.
Pricing
-------
Costs associated with the customer acquisition, retention, continued
product development, overhead and management and continued servicing
are budgeted individually for each projects. Contingencies are allowed
for as deemed necessary. Then market pricing will be reviewed based on
current competitors' prices, along with a market survey of the
satisfaction with these prices and the associated services. Management
is of the opinion that the pricing of our services, will represent a
savings to the customer, and yet still provide better-than-market
returns on sales.
Business Strategy
-----------------
The registrant intends to provide real estate management services to
meet our clients' needs supported by highly qualified and experienced
team of professionals. The registrant's strategy is to leverage broad
geographic reach, long-term client relationships, and full-range and
service offerings to become a larger, more robust real estate services
firm. The registrant's growth plan is focused on the achievement of
four primary objectives:
- Expanding business from existing relationships. A
principal component of our strategy is to secure management
contracts from existing relationships. We believe that the
amount of revenue we will receive from many of our clients will
represent a relatively small percentage of the amount they spend
on real estate management services. We believe that by
continuing to deliver high quality services and by leveraging our
existing relationships, we can capture a significant share of
clients' expenditures for these real estate management services.
- Growing our client base. We will continue to focus on
attracting clients. We plan to develop new client relationships
primarily by leveraging the significant contact networks of our
management team through referrals. In addition, we believe we
will attract new clients by building our brand name and
16
reputation and through our marketing efforts. We anticipate that
our growth efforts will continue to focus on identifying
strategic target accounts that tend to be large companies.
- Expanding geographically. We will expand geographically to
meet the demand for real estate management services in a given
locality.
- Providing additional professional service offerings. We
will continue to develop and consider entry into new professional
service offerings centered on real estate. Our considerations
when evaluating new professional service offerings include
cultural fit, growth potential, profitability, cross-marketing
opportunities, and competition.
We have developed the following business strategies to achieve these
objectives:
- Hire and retain highly qualified, experienced third party
associates. We believe our highly qualified, experienced third
party associates will provide us with a distinct competitive
advantage. Therefore, one of our priorities is to attract and
retain high-caliber real estate management professionals. We
believe we will attract and retain qualified professionals by
providing challenging work assignments, competitive compensation
and benefits, and continuing education and training
opportunities, while offering flexible work schedules and more
control over choosing client engagements.
- Build consultative relationships with clients. We will
emphasize a relationship-oriented approach to business rather
than a transaction-oriented or assignment-oriented approach. We
believe the real estate professional services experience of our
management and third party associates will enable us to
understand the needs of our clients and to deliver an integrated,
relationship-oriented approach to meeting their needs. We will
regularly meet with our existing and prospective clients to
understand their business issues and help them define their
project needs. Once a project is defined, we will identify third
party associates with the appropriate skills and experience to
meet the client's needs. We believe that by establishing
relationships with our clients to solve their needs, we are more
likely to generate new opportunities to serve them.
- Provide technology recommendations, methods, and practices
that drive tangible results. Our technology recommendations
will provide an integrated approach to identifying, acquiring,
and retaining customers in order to help organizations maximize
the value of customer interactions and improve corporate
performance. The registrant's computer systems will be designed
to help organizations perform and coordinate their operations
across multiple communication channels (i.e. Internet, telephone,
fax, e-mail, and in person) while providing their customers with
a single, consistently high standard of service.
17
- Build the Primco Management brand. Our objective is to build
the Primco Management brand as the premier provider of real
estate management services. Our primary means of building our
brand is by consistently providing high quality, value-added
services to our clients. In addition, we will have ongoing
marketing efforts that will reinforce the Primco Management
brand.
Market Analysis
---------------
In order to determine and evaluate potential management contracts, the
registrant will obtain reports from local and regional commissions,
Economic Development Counsels, and through public resources. The
registrant will also rely on statistics provided by the U.S. Census
Bureau to obtain information pertaining to population shifts and number
of total people in a specific area. In addition, we plan to utilize
economic, housing and population data available. Most of the reports
available through these organizations are free of charge and will
provide detailed information that we will then study to determine the
areas with good growth rates.
Prior to accepting a management agreement, the registrant will perform
market and financial analysis to determine whether the location
provides adequate revenue opportunity. That detailed information will
include the following:
- Number of properties on the market.
- Total square footage and acreage per property
- Total number of units per property.
- Total number of vacancies per property.
We will obtain the following documents from the seller during our due
diligence on the property:
- General maps;
- Environmental reports
- Copies of existing zoning maps and regulations;
- Conduct land inspection procedures;
- Proposed zoning regulations;
- Deeds;
- Title insurance; and
- Tax bills
- financial information
- plus all the other due diligence information to assess aproperty.
We then verify the accuracy of these documents and determine how the
information contained in the documents impacts the property that we are
considering to manage.
18
Sales Objectives
----------------
The registrant intends to introduce its services to the marketplace in
several phases, formulated to capture revenue streams from clients that
they currently have existing relationships with and attempt to bring
these clients on board to the registrant, and obtain new revenues as
the market matures.
The registrant's path to revenue and growth will be through acquiring
clients from:
- organizations which management has strategic relationships;
- obtaining clients from competitors by demonstrating superior
technology, quality, and reliability at a lower cost;
- implementation of our marketing plan; and through
- possibly purchasing underperforming competitors.
Given the several month lag attendant to major implementations at the
larger institutions, the registrant will pursue dual-paths in its
marketing. While targeting the existing relationships, the registrant
will also continue to do marketing and advertising.
Sales and Marketing
-------------------
The registrant intends to introduce and penetrate the market by
offering a per unit, flat rate charge for its services as opposed to a
traditional percentage of revenue. This change in compensation from
traditional means represents a savings to the customers and a profit to
the registrant delivering superior services through economies of scale.
The registrant plans to penetrate the marketplace by demonstrating a
cost savings model emphasizing:
- Increased customer satisfaction, which leads to an increase in
reoccurring sales; and
- Additional revenues through sales of complimentary products
and/or services.
Marketing activities will include customer market analysis, service
marketing, brand awareness, advertising, public relations, and
educating organizations in our target markets.
The registrant will target the following industry segments:
- Apartment buildings
- Class A office space;
- Industrial;
- Manufacturing and warehousing facilities;
- Data centers; and
- Retail outlets for real estate users
The registrant's target markets within the before mentioned segments
will include, among others:
Real Estate Investment Trusts;
Real Estate Holding Companies; and
Individual Real Estate Investors.
19
Strategic Partners and Alliances
--------------------------------
The registrant will leverage sales and delivery alliances with
companies whose capabilities complement its own, either by enhancing
the registrant's services, or by helping extend offerings to new
geographies. By combining alliance partners' products and services
with the registrant's capabilities and expertise, the registrant
intends to create innovative, high-value business solutions for its
clients. Some alliances will be specifically aligned with the
registrant's offerings, thereby adding skills, technology and insights
that are applicable across the Real Estate industry.
The registrant also plans to work with strategic partners to promote
the implementation of the registrant's solutions in the real estate
industry. In addition, the registrant plans to continue to develop
organizational change solutions that address specific market needs, are
affordable, and can be easily integrated with the products and services
that will be in place. The registrant intends to continue to explore
new market opportunities through strategic partnering, acquisitions,
the creation of new companies or divisions, and the use of partnership
relationships that will provide increased market penetration.
Intellectual Property
---------------------
At present, we do not have any patents, trademarks, licenses,
franchises, concessions, and royalty agreements, labor contracts or
other proprietary interests.
Research and Development
------------------------
We have not spent any funds on research and development.
Governmental Regulation
-----------------------
Federal, state, and local laws and regulations impose environmental
zoning restrictions, use controls, disclosure obligations, and other
restrictions that affect the management, development, use, and/or sale
of real estate. Such laws and regulations tend to discourage sales and
leasing activities, as well as the willingness of mortgage lenders to
provide financing, with respect to some properties. If transactions in
which the registrant is involved are delayed or abandoned as a result
of these restrictions, the brokerage business could be adversely
affected. In addition, a failure by the registrant to disclose known
environmental concerns in connection with a real estate transaction may
subject the registrant to liability to a buyer or lessee of property.
The registrant will undertake a third-party Phase I investigation of
potential environmental risks when evaluating an acquisition for a
sponsored program. A Phase I investigation is an investigation for the
presence or likely presence of hazardous substances or petroleum
products under conditions that indicate an existing release, a post
release or a material threat of a release. A Phase I investigation
does not typically include any sampling. The registrant may acquire a
property with environmental contamination, subject to a determination
of the level of risk and potential cost of remediation.
20
Various environmental laws and regulations also can impose liability
for the costs of investigating or remediation of hazardous or toxic
substances at sites currently or formerly owned or operated by a party,
or at off-site locations to which such party sent wastes for disposal.
In addition, an increasing number of federal, state, local, and foreign
governments have enacted various treaties, laws and regulations that
apply to environmental and climate change, in particular seeking to
limit or penalize the discharge of materials such as green house gas
into the environment or otherwise relating to the protection of the
environment. As a property manager, the registrant could be held
liable as an operator for any such contamination or discharges, even if
the original activity was legal and the registrant had no knowledge of,
or did not cause, the release or contamination. Further, because
liability under some of these laws is joint and several, the registrant
could be held responsible for more than its share, or even all, of the
costs for such contaminated site if the other responsible parties are
unable to pay. The registrant could also incur liability for property
damage or personal injury claims alleged to result from environmental
contamination or discharges, or from asbestos-containing materials or
lead-based paint present at the properties that it manages. Insurance
for such matters may not always be available, or sufficient to cover
the registrant's losses. Certain requirements governing the removal or
encapsulation of asbestos-containing materials, as well as recently
enacted local ordinances obligating property managers to inspect for
and remove lead-based paint in certain buildings, could increase the
registrant's could subject the registrant to violations or claims.
The registrant and its brokers, salespersons and, in some instances,
property managers are regulated by the states in which it does
business. These regulations may include licensing procedures,
prescribed professional responsibilities, and anti-fraud provisions.
The registrant's activities are also subject to various local, state,
national, and international jurisdictions' fair advertising, trade,
housing and real estate settlement laws, and regulations and are
affected by laws and regulations relating to real estate and real
estate finance and development.
Competition
-----------
The U.S. commercial real estate services industry is large and highly
fragmented, with thousands of companies providing asset management,
investment management and brokerage sales and leasing transaction
services. In recent years, the industry has experienced substantial
consolidation, a trend that is expected to continue.
The registrant competes in a variety of service businesses within the
commercial real estate industry. Each of these business areas is
highly competitive on a national as well as local level. The
registrant faces competition not only from other regional and national
service providers, but also from global real estate providers, boutique
real estate advisory firms and appraisal firms. Although many of the
21
registrant's competitors are local or regional firms that are
substantially larger such as CB Richard Ellis, Jones Lang LaSalle, and
Cushman & Wakefield, all of which have global platforms.
The top 25-brokerage companies collectively completed nearly $644.5
billion in investment sales and leasing transactions globally in 2008,
according to the latest available survey published by National Real
Estate Investor.
Within the management services business, according to a recent survey
published in 2009 by National Real Estate Investor, the top 25
companies in the industry manage over 9.1 billion square feet of
commercial property. The largest company in the survey had 2.2 billion
square feet under management.
While there can be no assurances that the registrant will ever be able
to compete effectively, maintain current fee levels or margins, or
maintain or increase its market share, based on its competitive
strengths, the registrant believes that it can develop the
infrastructure and personnel to operate in this highly competitive
industry. The ability to do so, however, depends upon the registrant's
ability to, among other things; successfully manage through the
disruption and dislocation of the credit markets and the weak national
and global economies.
Our end-to-end customer service begins before a sale is made and
continues throughout implementation and deployment. Executive
sponsorship, implementation effectiveness reviews, satisfaction
surveys, global support programs, and rigorous management of customer
satisfaction are key elements of our customer service process.
The registrant will provide a flexible, responsive and customer focused
service program through its potential distributors to provide
thoughtful analysis to create solutions for their customers that create
lifetime value.
The registrant intends to design a user-friendly website organized to
exceed the needs of our customers. The purpose of our website is not
to replace our customer intelligence staff, but rather to enhance the
response time and quality of service we are able to offer. After
completing our support forms, our customers will be assigned a unique
support ticket that is monitored 24/7.
Strategic Positioning
---------------------
Market Opportunity
The registrant intends to capitalize on the opportunity the real
estate market presents through its competitive advantages.
Competitive Advantage
1. cost;
2. reliability; and
3. Quality of Service.
22
Sales Objectives
The registrant intends to introduce its products and services to the
marketplace in several phases, formulated to capture revenue streams
from new clients as well as utilizing existing relationships, and
obtain new revenues as the market matures.
The registrant's path to revenue and growth will be through acquiring
clients from:
4. organizations which management has strategic relationships;
5. obtaining clients from competitors by demonstrating superior,
quality, and reliability at a lower cost;
6. implementation of our marketing plan; and through
7. possible purchasing of underperforming competitors.
Strategic Partners and Alliances
--------------------------------
The registrant will leverage sales and delivery alliances with
companies whose capabilities complement its own, either by enhancing
the registrant's services, or by helping extend offerings to new
geographies. By combining alliance partners' products and services
with the registrant's capabilities and expertise, the registrant
intends to create innovative, high-value business solutions for its
clients. Some alliances will be specifically aligned with the
registrant's offerings, thereby adding skills, technology and insights
that are applicable across the Real Estate industry. Other alliances
will extend and enhance offerings specific to a single industry group.
The registrant also plans to work with strategic partners to promote
the implementation of the registrant's solutions in the real estate
industry.
In addition, the registrant plans to continue to develop organizational
change solutions that address specific market needs, are affordable,
and can be easily integrated with the services currently in place. The
registrant intends to continue to explore new market opportunities
through strategic partnering, acquisitions, the creation of new
companies or divisions, and the use of partnership relationships that
will provide increased market penetration.
Employees
---------
With the exception of Neal Friedman and Alexander Spira, we have no
employees. We have no employment agreements with any of our
management. We do not anticipate hiring any additional employees in
the next twelve months.
Reports to Security Holders
---------------------------
Through the filing of Form 8-A under the Exchange Act within 30-60 days
following the effective date of the registration statement, we intend
to become a fully reporting company under the requirements of the
Exchange Act, and will file the necessary quarterly and other reports
with the Securities and Exchange Commission. Although we will not be
required to deliver our annual or quarterly reports to security
23
holders, we intend to forward this information to security holders upon
receiving a written request to receive such information. The reports
and other information filed by us will be available for inspection and
copying at the public reference facilities of the Securities and
Exchange Commission located at 100 F Street N.E., Washington, D.C.
20549.
Copies of such material may be obtained by mail from the Public
Reference Section of the Securities and Exchange Commission at 100 F.
Street N.E., Washington, D.C. 20549, at prescribed rates. Information
on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-800-SEC-0330. In addition, the Commission
maintains a World Wide Website on the Internet at http://www.sec.gov
that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the
Securities and Exchange Commission.
Properties
-----------
Our corporate and manufacturing offices are located at 700 Rockaway
Turnpike, Suite #400, Lawrence, NY 11559. Our telephone number is
(855) PRIMCO1 (774-6261). These offices are provided free of charge by
Neal Friedman, an officer and director.
DILUTION
Assuming completion of the offering, there will be up to 12,000,000
common shares outstanding. The following table illustrates the per
common share dilution that may be experienced by investors at various
funding levels.
Funding Level $1,000,000 $500,000 $250,000 $125,000
---------- -------- -------- --------
<s> <c> <c> <c> <c>
Offering price $0.25 $0.25 $0.25 $0.25
Net tangible book
value per common
share before offering .00 .00 .00 .00
Increase per common
share attributable to
investors .08 .05 .02 .01
----- ----- ----- -----
Pro forma net tangible
book value per
common share after
offering .08 .05 .02 .01
----- ----- ----- ------
Dilution to investors .17 .20 .23 .24
Dilution as a
percentage of
offering price 68.0% 80.0% 92.0% 96.0%
24
Based on 8,000,000 common shares outstanding as of December 31, 2010
and total stockholder's equity of $100 utilizing audited December 31,
2010 financial statements.
Since inception, the sole shareholder has paid an aggregate average
price of $.001 per common share in comparison to the offering price of
$0.25 per common share.
Further Dilution
----------------
The registrant may issue equity and debt securities in the future.
These issuances and any sales of additional common shares may have a
depressive effect upon the market price of the registrant's common
shares and investors in this offering.
DIVIDEND POLICY
We have never declared or paid any dividends. In addition, we
anticipate that we will not declare dividends at any time in the
foreseeable future.
Instead, we will retain any earnings for use in our business. This
policy will be reviewed by our board of directors from time to time in
light of, among other things, our earnings and financial position.
No distribution may be made if, after giving it effect, we would not be
able to pay its debts as they become due in the usual course of
business; or the corporation's total assets would be less than the sum
of its total liabilities plus (unless the articles of incorporation
permit otherwise) the amount that would be needed, if we were to be
dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of shareholders whose preferential rights are
superior to those receiving the distribution. The board of directors
may base a determination that a distribution is not prohibitive either
on financial statements prepared on the basis of accounting practices
and principles that are reasonable in the circumstances or on a fair
valuation of other method that is reasonable in the circumstances.
DETERMINATION OF OFFERING PRICE
The offering price of the common shares was arbitrarily determined by
the registrant based on the financial needs of the registrant without
regard to the book value or market value, if any, of our common shares.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The registrant will offer real estate management services. Our
performance will be significantly affected by changes in general
economic conditions and, specifically, shifts in consumer confidence
and spending. Additionally, our performance will be affected by
competition. Management believes that as the industry continues to
25
consolidate, competition with respect to price will intensify. Such a
heightened competitive pricing environment will make it increasingly
important for us to successfully distinguish ourselves from
competitors based on quality and superior service and operating
efficiency.
We have neither engaged in any material operations nor generated any
revenues to date. Our only activities since inception have been
organizational activities and those necessary to prepare for this
offering.
We are currently not aware of any other known material trends, demands,
commitments, events or uncertainties that will have, or are reasonable
likely to have, a material impact on our financial condition, operating
performance, revenues and/or income, or results in our liquidity
decreasing or increasing in any material way.
Results of Operations
---------------------
For the period from inception (October 14, 2010) through December 31,
2010, we did not receive any revenue and had operating expenses of
$12,000 resulting in an operating loss of $(12,000). Operating expenses
consisted of legal fees of $12,000. Operating expenses will continue
to increase as we pursue this offering and implement sales and
marketing initiatives.
Liquidity and Capital Resources
-------------------------------
We have not received any revenues to date. Until we are able to raise
funds to pursue our business plan and generate material revenues, our
activities will be restricted.
During the period from inception through December 31, 2010, we did not
pursue any investing activities.
During the period from inception through December 31, 2010, we received
proceeds of $12,100 from the sale of common stock to Neal Friedman, an
officer and director, resulting in net cash provided by financing
activities of $12,100.
If we become a public entity, subject to the reporting requirements of
the Exchange Act of 1934, we will incur ongoing expenses associated
with professional fees for accounting, legal and a host of other
expenses for annual reports and proxy statements. We estimate that
these costs could range up to $35,000 per year for the next few years
and will be higher if our business volume and activity increases but
lower during the first year of being public because we have not yet
completed development of our product line, and we will not yet be
subject to the requirements of Section 404 of the Sarbanes-Oxley Act of
2002.
Plan of Operations
------------------
The registrant has not yet developed its real estate programs.
26
In addition to raising the funds in this offering, over the next twelve
months, we intend to:
Step Timeframe Estimated Cost
---- --------- --------------
Complete management programs 1-3 months $100,000
Market to existing relationships
and referrals 3-6 months $10,000
Network at industry trade shows and
sponsored events 3-9 months $10,000
Advertise in industry journals 1 month $40,000
Internet advertising 1 month $40,000
Pursue Strategic alliances 3-6 months $10,000
The main uncertainties or obstacles involved before planned operations
can commence include
- raising sufficient funds to market and advertise, hire key
employees, sales staff and implementing services.
If we are unable to raise sufficient funds or obtain alternate
financing, we may never complete development and become profitable.
Our current cash balance is estimated not to be sufficient to fund our
current operations. Mr. Friedman has verbally agreed to personally
loan any amounts up to the $50,000 needed to run operations. Any loan
provided by Mr. Friedman shall be binding, with an interest rate of
five percent per annum and a term of one year. However, we still need
raise sufficient funds to complete the development of our service line.
No other financing plans are in place. We may never obtain the
necessary financing to complete product development and begin
operations.
In the event we are not successful in selling all of the securities to
raise $1,000,000, we would give priority to allocating capital to sales
and marketing, development of our services, and to develop sales in the
industry. Any remaining capital would be used to fund our working
capital needs.
In the event we are not successful in selling all of the securities to
raise at least $125,000, we would utilize any available funds raised
the following order of priority:
- for general and administrative expenses, including legal and
accounting fees and administrative support expenses incurred in
connection with our reporting obligations with the SEC.
- for sales and marketing; and
- for service development.
Controls and Procedures
-----------------------
We are not currently required to maintain an effective system of
internal controls. We will be required to comply with the internal
control requirements of the Sarbanes-Oxley Act for the fiscal year
27
ended December 31, 2011. As of the date of this prospectus, we have
not completed an assessment, nor have our auditors tested our systems
of internal controls.
Because it will take time, management involvement and perhaps outside
resources to determine what internal control improvements are necessary
for us to meet regulatory requirements and market expectations for our
operations, we may incur significant expense in meeting our public
reporting responsibilities, particularly in the areas of designing,
enhancing, or remediating internal and disclosure controls. Doing so
effectively may also take longer than we expect, thus increasing our
exposure to financial fraud or erroneous financing reporting.
Once our management's report on internal controls is complete, we will
retain our independent auditors to audit and render an opinion on such
report when required under Section 404 of the Sarbanes-Oxley Act. The
independent auditors may identify additional issues concerning our
operations while performing their audit of internal control over
financial reporting.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations
-----------------------------------------------------------------------
As of March 28, 2011, we did not have any off-balance sheet
arrangements and did not have any commitments or contractual
obligations.
DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS
Our bylaws provide that the number of directors who shall constitute
the whole board shall be such number as the board of directors shall at
the time have designated. We confirm that the number of authorized
directors has been set at five pursuant to our bylaws. Each director
shall be selected for a term of one year and until his successor is
elected and qualified. Vacancies are filled by a majority vote of the
remaining directors then in office with the successor elected for the
unexpired term and until the successor is elected and qualified. The
directors, officers and significant employees are as follows:
NAME AGE POSITIONS HELD SINCE
---- --- -------------- -----
Neal Friedman 23 President, CEO, CFO Inception
Director to present
Alexander Spira 30 Secretary Inception
To present
Neal Friedman and Alexander Spira would also be deemed to be promoters
of the registrant.
28
Business Experience
-------------------
Neal Friedman, President, Chief Executive Officer, Chief Financial
Office and Director
From 2006-2007, Mr. Friedman has had a broad spectrum of experience in
the business world, which includes consulting with a dental implant
technology company where Mr. Friedman implemented quality control
procedures.
In 2008, Mr. Friedman was also a debt collection manager and
responsible for asset research for the law firm of Samuel & Stein.
Mr. Friedman was a consultant at Sapphire Capital Ventures, a private
real estate venture fund and management firm from 2008 to 2010. He was
responsible for the management of large scale commercial and
residential real estate development projects. His expertise in
financial analysis and due diligence will be instrumental in the
registrant's success.
Mr. Friedman earned a bachelor of arts degree from Israel Torah
Research Institute in 2008 and attended the Zicklin School of Business
from September 2010 to present.
Alexander Spira, Secretary
Mr. Spira has worked as an organization development and business
management consultant for the last six years. He has also worked with
Sunny Sports since 2009 to develop customer loyalty programs and
enhance the effectiveness of marketing campaigns. Mr. Spira's
experience in the retail industry includes improvements to inventory
management, customer service, business communications, and employee
performance management for a variety of companies. Mr. Spira has also
served as a consultant for educational institutions where he has helped
reorganize employee services, improve internal communications, develop,
and implement new administrative procedures.
Mr. Spira graduated from Beth Medrash Godol in New Jersey.
Mr. Friedman will serve in his capacity as sole director until our next
annual shareholder meeting to be held within six months of our fiscal
year's close. Directors are elected for one-year terms.
Code of Ethics Policy
---------------------
We have not yet adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
Corporate Governance
--------------------
There have been no changes in any state law or other procedures by
which security holders may recommend nominees to our board of
directors. In addition to having no nominating committee for this
purpose, we currently have no specific audit committee and no audit
29
committee financial expert. Based on the fact that our current
business affairs are simple, any such committees are excessive and
beyond the scope of our business and needs.
Family Relationships
--------------------
None
Involvement in Certain Legal Proceedings
----------------------------------------
None of our directors, executive officers and control persons have been
involved in any of the following events during the past ten years:
- Any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time,
- Any conviction in a criminal proceeding or being subject to any
pending criminal proceeding (excluding traffic violations and other
minor offenses);
- Being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his or her involvement in any type of business, securities or
banking activities,; or
- Being found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated.
Executive Compensation
----------------------
Since inception, we have not paid any compensation to our officers.
Mr. Friedman purchased his 8,000,000 common shares for $12,100 in cash
from personal funds.
We may elect to award a cash bonus to key employees, directors,
officers and consultants based on meeting individual and corporate
planned objectives.
We do not have any standard arrangements by which directors are
compensated for any services provided as a director. No cash has been
paid to the directors in their capacity as such.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 28, 2011, the number and
percentage of outstanding shares of the registrant's common stock owned
by (i) each person known to us to beneficially own more than 5% of its
outstanding common stock, (ii) each director, (iii) each named
executive officer and significant employee, and (iv) all officers and
directors as a group.
30
Percentage
Name Amount Percentage After Offering
---- ------ ---------- --------------
Neal Friedman 8,000,000 100.00% 66.67%
700 Rockaway Turnpike
Suite #400
Lawrence, NY 11559
Alexander Spira 0 0.00% 0.00%
700 Rockaway Turnpike
Suite #400
Lawrence, NY 11559
Officers and Directors
As a group (2 persons) 8,000,000 100.00% 66.67%
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Director Independence
---------------------
The registrant's board of directors consists of Neal Friedman. He is
not independent as such term is defined by a national securities
exchange or an inter-dealer quotation system.
Related party lease
-------------------
The registrant leases office space from a director at no cost to the
registrant.
From inception (October 14) through December 31, 2010, there were no
other transactions with related persons.
DESCRIPTION OF CAPITAL STOCK
The following statements constitute brief summaries of the registrant's
certificate of incorporation and bylaws.
Common Shares
-------------
The registrant's articles of incorporation authorize it to issue up to
25,000,000 common shares and no preferred shares, $0.001 par value per
common share.
Liquidation Rights
------------------
Upon liquidation or dissolution, each outstanding common share will be
entitled to share equally in the assets of the registrant legally
available for distribution to shareholders after the payment of all
debts and other liabilities.
31
Dividend Rights
---------------
There are no limitations or restrictions upon the rights of the board
of directors to declare dividends out of any funds legally available
therefore. The registrant has not paid dividends to date and it is not
anticipated that any dividends will be paid in the foreseeable future.
The board of directors initially may follow a policy of retaining
earnings, if any, to finance the future growth of the registrant.
Accordingly, future dividends, if any, will depend upon, among other
considerations, the registrant's need for working capital and its
financial conditions at the time.
Voting Rights
-------------
Holders of common shares of the registrant are entitled to voting
rights of one hundred percent. Holders may cast one vote for each
share held at all shareholders meetings for all purposes.
Other Rights
------------
Common shares are not redeemable, have no conversion rights and carry
no preemptive or other rights to subscribe to or purchase additional
common shares. Common Shares do not have cumulative voting features.
Our bylaws allow action to be taken by written consent rather than at a
meeting of stockholders with the consent of the holders of a majority
of shares entitled to vote.
Transfer Agent
--------------
Upon completion of the offering, Olde Monmouth Stock Transfer will act
as the registrant's transfer agent.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the small business issuer as provided in the foregoing provisions, or
otherwise, the small business issuer has been advised that in the
opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
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.
32
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
------------------
There is presently no public market for our common shares. We
anticipate applying for quoting of our common shares on the OTC
Bulletin Board or OTCQB upon the effectiveness of the registration
statement of which this prospectus forms a part. There can be no
assurance that a market maker will agree to file the necessary
documents with the Financial Industry Regulatory Authority, which
operates the OTCBB and OTCQB, nor can there be any assurance that such
application for quotation will be approved.
Holders
-------
As of March 28, 2011, there was only one shareholder of the registrant.
Dividends
---------
We have not declared any cash dividends on our common stock since our
inception and do not anticipate paying any dividends in the foreseeable
future. We plan to retain any future earnings for use in our business.
Any decisions as to future payment of dividends will depend on our
earnings and financial position and such other factors as the board of
directors deems relevant.
Shares Eligible for Future Sale
------------------------------
Upon the date of this prospectus, there are 8,000,000 shares of our
common stock outstanding of which no common shares may be freely traded
without restriction.
Upon the effectiveness of this registration statement, up to an
additional 4,000,000 common shares may be issued and will be eligible
for immediate resale in the public market. The remaining common shares
will be restricted within the meaning of Rule 144 under the Securities
Act, and are subject to the resale provisions of Rule 144.
Pursuant to Rule 144, a person who has beneficially owned restricted
shares of our common stock for at least six months would be entitled to
sell their securities provided that:
- such person is not deemed to have been one of our affiliates at
the time of, or at any time during the three months preceding, a sale;
and
- we are subject to the Exchange Act periodic reporting
requirements for at least three months before the sale and have filed
all required reports under Section 13 or 15(d) of the Exchange during
the 12 months (or such shorter period as we were required to file
reports) preceding the sale.
Persons who have beneficially owned restricted shares of our common
stock for at least six months but who are our affiliates at the time
of, or at any time during the three months preceding, a sale, would be
33
subject to additional restrictions, by which such person would be
entitled to sell within any three-month period only a number of
securities that does not exceed the greater of:
- 1% of the total number of shares of common stock then
outstanding, which will equal approximately 120,000 shares immediately
after this offering.
Sales by our affiliates under Rule 144 are also limited by manner of
sale provisions and notice requirements and to the availability of
current public information about us.
No predictions can be made of the effect, if any, that market sales of
shares of common stock or the availability of such shares for sale will
have on the market price prevailing from time to time. Nevertheless,
sales of significant amounts of our common stock could adversely affect
the prevailing market price of the common stock, as well as impair our
ability to raise capital through the issuance of additional equity
securities.
EXPERTS
The financial statements of the registrant appearing in this
registration statement have been audited by Gumbiner Savett Inc.,
independent registered public accountants and are included in reliance
upon such report given upon the authority of such firm as experts in
accounting and auditing.
LEGAL PROCEEDINGS
We are not a party to any legal proceedings the outcome of which, in
the opinion of our management, would have a material adverse effect on
our business, financial condition, or results of operation.
LEGAL MATTERS
The validity of the common shares being offered hereby will be passed
upon by Jody M. Walker, Attorney At Law, Centennial Colorado.
WHERE YOU CAN FIND MORE INFORMATION
At your request, we will provide you, without charge, a copy of any
document filed as exhibits in this prospectus. If you want more
information, write or call us at:
700 Rockaway Turnpike
Suite #400
Lawrence, NY 11559
(855) PRIMCO1
Attention: Neal Friedman, Chief Executive Officer
34
Our fiscal year ends on December 31st. Upon completion of this
offering, we will be a reporting company and file annual, quarterly and
current reports with the SEC. You may read and copy any reports,
statements, or other information we file at the SEC's public reference
room at 100 F Street, N.E., Washington D.C. 20549. You can request
copies of these documents, upon payment of a duplicating fee by writing
to the SEC. Please call the SEC at 1-800- SEC-0330 for further
information on the operation of the public reference rooms. Our SEC
filings are also available to the public on the SEC Internet site at
http:\\www.sec.gov.
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Balance Sheet as of December 31, 2010
Statement of Operations for the period from October 14, 2010
(inception) through December 31, 2010
Statement of Stockholder's Equity for the period from October 14, 2010
(inception) through December 31, 2010
Statement of Cash Flows for the period from October 14, 2010
(inception) through December 31, 2010
Notes to Financial Statements
35
Report of Independent Registered Public Accounting Firm
To the Board of Directors and
Stockholder of Primco Management Inc.
We have audited the accompanying balance sheet of Primco Management
Inc. (a corporation in the development stage) (the "Company") as of
December 31, 2010, and the related statements of operations,
stockholder's equity, and cash flows for the period from October 14,
2010 (inception) through December 31, 2010. The Company's management
is responsible for these financial statements. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company
as of December 31, 2010, and the results of its operations and its cash
flows for the period from October 14, 2010 (inception) through December
31, 2010, in conformity with accounting principles generally accepted
in the United States of America.
As discussed in Note 2, certain conditions indicate that the Company
may be unable to continue as a going concern. The Company has an
accumulated deficit of $12,000. The Company has not generated any
revenues from operations and has no assurance of any future revenues.
The ability of the Company to continue as a going concern is dependent
on its ability to raise capital to meet its operating requirements. The
accompanying financial statements do not include any adjustments that
might be necessary should the Company be unable to continue as a going
concern.
/s/Gumbiner Savett Inc.
----------------------------
Gumbiner Savett Inc.
Santa Monica, California
March 21, 2011
36
PRIMCO MANAGEMENT INC.
(a corporation in the development stage)
BALANCE SHEET
DECEMBER 31, 2010
ASSETS
Current Assets
Cash $ 100
---------
Total assets $ 100
=========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Total liabilities $ -
---------
Stockholder's equity:
Common stock, 25,000,000 shares authorized;
8,000,000 shares issued and outstanding;
$.001 par value 8,000
Additional paid-in capital 4,100
Accumulated deficit (12,000)
---------
Total stockholder's equity 100
---------
Total liabilities and stockholder's equity $ 100
=========
The accompanying notes are an integral
part of this financial statement
37
PRIMCO MANAGEMENT INC.
(a corporation in the development stage)
STATEMENT OF OPERATIONS
FOR THE PERIOD OCTOBER 14, 2010 (INCEPTION) THROUGH DECEMBER 31, 2010
Expenses
Legal fees $ 12,000
---------
Total expenses $ 12,000
---------
Net loss $ (12,000)
=========
Net loss per share - Basic and Diluted -
=========
Weighted average number of common shares outstanding 3,076,923
=========
The accompanying notes are an integral
part of this financial statement
38
PRIMCO MANAGEMENT INC.
(a corporation in the development stage)
STATEMENT OF STOCKHOLDER EQUITY
FOR THE PERIOD OCTOBER 14, 2010 (INCEPTION) THROUGH DECEMBER 31, 2010
Additional Total
Common Stock Paid-in Accumulated Stockholder
Shares Amount Capital Deficit Equity
------ ------ ---------- ----------- -----------
<s> <c> <c> <c> <c> <c>
Balance at inception - $ - $ - $ - $ -
Issuance of common stock 8,000,000 8,000 4,100 - 12,100
Net loss - - - (12,000) (12,000)
--------- ------- -------- -------- --------
Balance at December 31,
2010 8,000,000 $ 8,000 $ 4,100 $(12,000) $ 100
========= ======= ======== ======== ========
The accompanying notes are an integral
part of this financial statement
39
PRIMCO MANAGEMENT INC.
(a corporation in the development stage)
STATEMENT OF CASH FLOWS
FOR THE PERIOD OCTOBER 14, 2010 (INCEPTION) THROUGH DECEMBER 31, 2010
Cash flows from operating activities:
Net loss $(12,000)
--------
Net cash used in operating activities (12,000)
--------
Cash flows from financing activities:
Proceeds from issuance of common stock 12,100
--------
Net cash provided by financing activities 12,100
--------
Net increase in cash 100
--------
Cash at beginning of period -
--------
Cash at end of period $ 100
========
The accompanying notes are an integral
part of this financial statement
40
PRIMCO MANAGEMENT INC.
(a corporation in the development stage)
NOTES TO FINANCIAL STATEMENTS
1. Summary of significant accounting policies
This summary of significant accounting policies of Primco Management,
Inc. (the Company) is presented to assist in understanding the
Company's financial statements.
Nature of the Company
Primco Management, Inc. is a real estate management company. The
Company plans to raise capital in the coming year to fund operations.
Basis of presentation
The accounting and reporting policies of the Company are in accordance
with accounting principles generally accepted in the United States of
America.
Estimates
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of estimates
and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Actual results may differ from estimated
amounts.
Income Taxes
Income tax expense is based on pretax financial accounting
income. Deferred tax assets and liabilities are recognized for
the expected tax consequences of temporary differences between
the tax bases of assets and liabilities and their reported
amounts. Financial Accounting Standards Board Accounting
Standards Codification, "Income Tax," requires the recognition of
the impact of a tax position in the financial statements only if
that position is more likely than not of being sustained on a tax
return upon examination by the relevant taxing authority, based
on the technical merits of the position. At December 31, 2010,
the Company had no unrecognized tax benefits. The Company
recognizes interest and penalties related to income tax matters
in interest expense and operating expenses, respectively. As of
December 31, 2010, the Company had no accrued interest or
penalties related to uncertain tax positions.
Net Loss Per Share Basic
Net loss per share includes no dilution and is computed by
dividing net loss available to common stockholders by the
weighted average number of common stock outstanding for the
period. Diluted net loss per share does not differ from basic
net loss per share as the Company did not have dilutive items
during the reporting period.
41
New Accounting Pronouncements
The Company does not believe newly issued accounting
pronouncements will have any material impact on its financial
statements.
Subsequent events
The Company has evaluated subsequent events through March 28, 2011, the
date which the financial statements were available to be issued. There
were no subsequent events noted that would require adjustment to or
disclosure in those financial statements.
2. Going concern
The Company's financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and
the settlement of liabilities and commitments in the normal
course of business. In the near term, the Company expects
operating costs to continue to exceed funds generated from
operations. As a result, the Company expects to continue to
incur operating losses, and the operations in the near future are
expected to continue to use working capital.
The Company is a development stage company and management of the
Company is devoting substantially all of its present efforts to
establish new customized real estate management programs for
their clients. As such, the Company has not generated any
revenues from operations and has no assurance of any future
revenues. The ability of the Company to continue as a going
concern is dependent on its ability to raise capital to meet its
operating requirements. The financial statements do not include
any adjustments that might be necessary if the Company is unable
to continue as a going concern.
3. Related party lease
The Company leases office space from a director at no cost to the
Company.
42
Up to a Maximum of 4,000,000 Common Shares at $.25 per Common Share
$1,000,000
Prospectus
Primco Management Inc.
March 28, 2011
YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT
FROM THAT CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND
SEEKING OFFERS TO BUY, COMMON SHARES ONLY IN JURISDICTIONS WHERE OFFERS
AND SALES ARE PERMITTED.
Until __________________2011, all dealers that effect transactions in
these securities, whether or not participating in this offering, may be
required to deliver a prospectus. This is in addition to the dealers'
obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
43
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
-----------------------------------------------------
The following table sets forth the estimated expenses to be incurred in
connection with the distribution of the securities being registered.
The registrant shall pay the expenses.
SEC Registration Fee . . . . . . $ 116
Printing and Engraving Expenses 1,500
Legal Fees and Expenses . . . . 25,000
Accounting Fees and Expenses. . 5,000
Miscellaneous . . . . . . . . . 2,500
-------
TOTAL . . . . . . . . . . . . . $34,116
=======
Item 14. Indemnification of Directors and Officers
---------------------------------------------------
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the small business issuer as provided in the foregoing provisions, or
otherwise, the small business issuer has been advised that in the
opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
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.
Item 15. Recent Sales of Unregistered Securities
-------------------------------------------------
On December 1, 2010, the registrant issued Neal Friedman, an officer
and director, 8,000,000 common shares for cash of $12,100.
The above securities were issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933 to
sophisticated investors.
44
Item 16. Exhibits and Financial Statement Schedules
---------------------------------------------------
INDEX TO EXHIBITS
Exhibit Number and Identification of Exhibit
3-1 Articles of Incorporation
3-2 By-Laws
3-3 Common Stock Certificate
5 Consent and opinion of Jody M. Walker, Attorney At Law
11 Statement of Computation of Per Share Earnings
This Computation appears in the Financial Statements.
23 Consent of Independent Registered Public Accounting Firm
Item 17. Undertakings
----------------------
(A) 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 arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment of the Registration Statement) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(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) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
45
(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.
(4) For the purpose of determining liability under the Securities Act
of 1933 to any purchaser, if the registrant is subject to Rule 430C,
each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of
the registration statement will, as to the purchaser with a time of
contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such
document immediately prior to such date of first use.
(B) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions
described under Item 14 above or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant 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 registrant 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 Act and will be
governed by the final adjudication of such issue.
(6) That, for the purpose of determining liability of the registrant
under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: The undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant
pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to
such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to
Rule 424;
46
ii. Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
iii. The portion of any other free writing prospectus relating to
the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
iv. Any other communication that is an offer in the offering made by
the undersigned registrant to the purchaser.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of
Lawrence, State of New York, on March 28, 2011.
Primco Management, Inc.
By: /s/Neal Friedman
-----------------------
Neal Friedman, CEO
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
By: /s/Neal Friedman
-------------------
Neal Friedman
CEO, Principal Financial Officer,
Controller and Director Dated: March 28, 2011