UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended: September 30, 2008
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number: 000 - 53432
Highland Ridge, Inc.
(Name of small business issuer in its charter)
Delaware 13-4013027
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
330 Clematis Street, Suite 217, West Palm Beach, Florida, 33401
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code - (800) 341-2684
Securities registered under Section 12(b) of the Exchange Act: NONE
Securities registered under to Section 12(g) of the Exchange Act:
Common Stock, $.001 par value
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in rule 405 of the Securities Act. YES [ ] NO [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. [ ]
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the Registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90
days. YES [ ] NO [X]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained herein, and no disclosure will be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
Indicate by checkmark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. [X}
Smaller Reporting Company
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) YES [X] NO [ ]
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant's most recently completed second fiscal
year. $53,564 (107,131 shares at $.50).
Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE REGISTRANTS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. 987,131 as of December 3, 2008
DOCUMENTS INCORPORATED BY REFERENCE: None
Transitional Small Business Disclosure Format (check one) Yes No X
HIGHLAND RIDGE
TABLE OF CONTENTS
Page
Part I
Item 1. Business.......................................................... 2
Item 1A. Risk Factors...................................................... 7
Item 2. Properties........................................................ 10
Item 3. Legal Proceedings................................................. 10
Item 4. Submission of Matters to a Vote of Security Holders............... 10
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities............... 11
Item 6. Selected Financial Data........................................... 13
Item 7. Management's Discussion and Analysis.............................. 13
Item 8. Financial Statements and Supplementary Data....................... 15
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure........................................ 24
Item 9A(T). Controls and Procedures....................................... 25
Item 9B. Other Information................................................ 25
Part III
Item 10. Directors, Executive Officers, and Corporate Governance.......... 26
Item 11. Executive Compensation........................................... 27
Item 12. Security Ownership of Certain Beneficial Owners and Management... 28
Item 13. Certain Relationships and Related Transactions................... 28
Item 14. Principal Accountant fees and services........................... 28
PART IV
Item 15. Exhibits, Financial Statement Schedules.......................... 29
Signatures................................................................. 29
1
PART I
ITEM 1. BUSINESS
This annual report on Form 10-K contains forward-looking statements
that are based on current expectations, estimates, forecasts and projections
about the Company, us, our future performance, our beliefs and our Management's
assumptions. In addition, other written or oral statements that constitute
forward-looking statements may be made by us or on our behalf. Words such as
"expects," "anticipates," "targets," "goals," "projects," "intends," "plans,"
"believes," "seeks," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict or assess.
Therefore, actual outcomes and results may differ materially from what is
expressed or forecast in such forward-looking statements. Except as required
under the federal securities laws and the rules and regulations of the SEC, we
do not have any intention or obligation to update publicly any forward-looking
statements after the filing of this Form 10-K, whether as a result of new
information, future events, changes in assumptions or otherwise.
Readers are cautioned not to place undue reliance on the
forward-looking statements contained herein, which speak only as of the date
hereof. We believe the information contained in this Form 10-K to be accurate as
of the date hereof. Changes may occur after that date. We will not update that
information except as required by law in the normal course of its public
disclosure practices.
Additionally, the following discussion regarding our financial
condition and results of operations should be read in conjunction with the
financial statements and related notes.
History
Highland Ridge, Inc., (the "Company", "we", "us" or "Highland Ridge"),
was originally incorporated on July 22, 1988 in the State of Florida as Sea
Green, Inc. At the time of formation the Company was authorized to issue 7,500
shares of $1.00 par value common stock. The Company was originally formed for
the purpose of developing communication systems to market for use and resale.
In anticipation of the commencement of the trading of our common stock
on the over the counter market, we filed an amendment to our Articles of
Incorporation on May 5, 1998 increasing our authorized capital stock to
50,000,000 shares of $.001 par value common stock. In addition, we filed an
Amendment to our articles of incorporation on June 3, 1998, changing our name to
Americom Networks Corp. On July 10, 1998, we again changed our name to Americom
Networks International, Inc. During this time we engaged in the business of
developing telecommunications systems to market to high-volume users for use or
resale. In May 1999 we ceased operations and have not engaged in business
operations since that time.
On December 21, 1999 we filed a registration statement on Form SB-2
with the Securities and Exchange Commission for an offering by a blank check
Company pursuant to Rule 419 of the Securities Act of 1933. We filed three
amendments to the registration statement and then ultimately abandoned the
process prior to its effectiveness. In September, 2000 the Secretary of State of
Florida administratively dissolved our corporate charter for not maintaining
proper filings with the state and not paying our franchise tax fees.
Effective August 31, 2005, the Company approved and authorized a plan
of quasi reorganization and restatement of accounts to eliminate the accumulated
deficit and related capital accounts on the Company's balance sheet. The Company
concluded its period of reorganization after reaching a settlement agreement
with all of its significant creditors. The Company, as approved by its Board of
Directors, elected to state its October 31, 2005, balance sheet as a "quasi
reorganization", pursuant to ARB 43. These rules require the revaluation of all
assets and liabilities to their current values through a current charge to
earnings and the elimination of any deficit in retained earnings by charging
paid-in capital. From October 1, 2005 forward, the Company has recorded net
income (and net losses) to retained earnings and (and net losses) to retained
earnings and (accumulated deficit).
On September 14, 2007, in its Court Order, the Circuit Court for the
11th Judicial Circuit in and for Miami Dade County, Florida granted the
application of Century Capital Partners, LLC to have a receiver appointed. The
Court appointed Brian T. Scher, Esquire as receiver of the Company. The Court
Order appointing Receiver empowered Mr. Scher to evaluate our financial status,
to determine whether there are any options for corporate viability that could
benefit our shareholders, to reinstate our corporation with the Florida
Secretary of State, and to obtain copies of our shareholder records from our
transfer agent.
2
Mr. Michael Anthony is the sole member of Century Capital Partners.
Under Mr. Scher's receivership, and with funds supplied by Century
Capital Partners, the Company reinstated its corporate charter and paid all past
due franchise taxes; paid the outstanding debt with the transfer agent; and made
an analysis of the Company's debts and potential for viability as a merger
candidate. In addition, on October 13, 2007, Mr. Scher, as receiver, appointed
Michael Anthony as our sole Director, President, Secretary and Treasurer.
On December 6, 2007, following the submittal of detailed reports by Mr.
Scher, the Court discharged the receiver and returned the Company to the control
of its Board of Directors.
On January 30, 2008 after proper notice to all shareholders, the
Company held an annual meeting for the purposes of the election of directors. At
the meeting, Michael Anthony was elected the sole Director. Immediately
following the shareholder meeting, Michael Anthony was appointed President,
Secretary and Treasurer.
From May, 2007 through September, 2007 Century Capital Partners
invested $6,608.00 into our Company as paid in capital which funds were used to
pay ongoing administrative expenses, including but not limited to, outstanding
transfer agent fees, state reinstatement and filing fees and all costs
associated with conducting the shareholders meeting.
In exchange for the capital investment by Century Capital Partners, on
December 6, 2007, we issued forty four million (44,000,000) shares of restricted
$.001 par value common stock (880,000 shares post reverse).
On or near August 12, 2008, Corporate Services International Profit
Sharing Plan contributed $30,000 as paid in capital to Highland Ridge. Corporate
Services International Profit Sharing Plan is a Federally Sanctioned ERISA Trust
for which our director, Michael Anthony, is the sole beneficiary. This capital
contribution is separate from and in addition to the $6,608.00 capital
contribution by Century Capital Partners. Highland Ridge has used and shall
continue to use these funds to pay the costs and expenses necessary to revive
the Company's business and implement the Company's business plan. Such expenses
include, without limitation, fees to redomicile the Company to the state of
Delaware; payment of state filing fees; transfer agent fees; accounting and
legal fees; and costs associated with preparing and filing this Registration
Statement, etc.
In consideration of its capital contribution, Highland Ridge agreed to
issue to Corporate Services International Profit Sharing Plan 1,000,000 shares
of Series B Preferred Stock, which Series B Preferred Stock shall carry super
voting rights of ten (10) votes per share and shall be convertible into ten (10)
shares of common stock per share. The 1,000,000 shares of Series B Preferred
Stock were issued to Corporate Services International Profit Sharing Plan on
August 12, 2008. On November 20, 2008, Corporate Services International Profit
Sharing Plan converted the Series B Preferred Stock into 10,000,000 shares of
common stock.
Moreover, Michael Anthony, as officer and director has agreed to assist
the Company in its efforts to salvage value for the benefit of its shareholders.
Mr. Anthony's efforts include, but are not limited to, assistance in gathering
information, retaining counsel and working with counsel and the auditor for
purposes of preparation of this Registration Statement and corresponding audited
financial statements. Mr. Anthony and Highland Ridge do not have a written
agreement. Century Capital Partners has also agreed to advise Highland Ridge as
to potential business combinations. The agreement between Highland Ridge and
Century Capital Partners has not been reduced to writing.
Prior to changing our name to Highland Ridge, on January 31, 2008,
Americom Networks International, Inc. was incorporated in Delaware for the
purpose of merging with Americom Networks International, Inc. a Florida
Corporation so as to effect a re-domicile to Delaware. The Delaware Corporation
is authorized to issue 300,000,000 shares of $.001 par value common stock and
10,000,000 shares of $.001 par value preferred stock. On February 6, 2008 both
Americom Networks the Florida corporation and Americom Networks the Delaware
corporation signed and filed Articles of Merger with their respective states,
pursuant to which the Florida Corporation's shareholders received one share of
new (Delaware) common stock for every one share of old (Florida) common stock
they owned. All outstanding shares of the Florida Corporation's common stock
were effectively purchased by the new Delaware Corporation, effectively merging
the Florida Corporation into the Delaware Corporation, and making the Delaware
Corporation the surviving entity. The change of domicile from Florida to
Delaware was agreed to by the consent of the majority of our outstanding voting
stock.
3
Effective August 15, 2008 the Company enacted a 1:50 reverse split of
our outstanding common stock and changed our name to our current name Highland
Ridge, Inc. Our new name, Highland Ridge, Inc. is not meant to be indicative of
a specific business plan or purpose, but rather was meant to be neutral in an
effort to further our plan of attracting a potential merger candidate or
acquiring a business. See "Current Business Plan".
In addition, on August 1, 2008 we designated 1,000,000 shares of Series
B Preferred Stock, which preferred stock has super voting rights of ten (10)
votes per share and is convertible into ten (10) shares of common stock per
share. On August 12, 2008 we issued the 1,000,000 shares of Series B Preferred
Stock to Corporate Services International Profit Sharing in exchange for its
$30,000 capital contribution. On November 20, 2008, Corporate Services
International Profit Sharing Plan converted the Series B Preferred Stock into
10,000,000 shares of common stock.
On August 5, 2008, we adopted Amended and Restated By-Laws.
Current Business Plan
Highland Ridge is a shell company in that it has no or nominal
operations and either no or nominal assets. At this time, Highland Ridge's
purpose is to seek, investigate and, if such investigation warrants, acquire an
interest in business opportunities presented to it by persons or firms who or
which desire to seek the perceived advantages of an Exchange Act registered
corporation. The Company will not restrict its search to any specific business,
industry, or geographical location and the Company may participate in a business
venture of virtually any kind or nature. This discussion of the proposed
business is purposefully general and is not meant to be restrictive of the
Company's virtually unlimited discretion to search for and enter into potential
business opportunities. Management anticipates that it may be able to
participate in only one potential business venture because the Company has
nominal assets and limited financial resources. This lack of diversification
should be considered a substantial risk to shareholders of the Company because
it will not permit the Company to offset potential losses from one venture
against gains from another.
Management has substantial flexibility in identifying and selecting a
prospective new business opportunity. Highland Ridge would not be obligated nor
does management intend to seek pre-approval by our shareholders.
Highland Ridge may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
Highland Ridge may acquire assets and establish wholly owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
Highland Ridge intends to promote itself privately. The Company has not
yet begun such promotional activities. The Company anticipates that the
selection of a business opportunity in which to participate will be complex and
risky. Due to general economic conditions, rapid technological advances being
made in some industries and shortages of available capital, management believes
that there are numerous firms seeking the perceived benefits of a publicly
registered corporation. Such perceived benefits may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of applicable statutes),
for all shareholders, and other factors. Potentially, available business
opportunities may occur in many different industries and at various stages of
development, all of which will make the task of comparative investigation and
analysis of such business opportunities difficult and complex.
Highland Ridge has, and will continue to have, little or no capital
with which to provide the owners of business opportunities with any significant
cash or other assets. On August 12, 2008, Corporate Services International
Profit Sharing Plan deposited $30,000 with the Company and accordingly the cash
balance on that date was $30,000. At year end September 30, 2007 Highland Ridge
had a cash balance of $0 and at year end September 30, 2008 the cash balance was
$29,419. Management believes the Company will be able to offer owners of
acquisition candidates the opportunity to acquire a controlling ownership
interest in a publicly registered company without incurring the cost and time
required to conduct an initial public offering. The owners of the business
opportunities will, however, incur significant legal and accounting costs in
connection with the acquisition of a business opportunity, including the costs
of preparing Form 8K's, 10K's, 10Q's and agreements and related reports and
documents. The Securities Exchange Act of 1934 (the "34 Act"), specifically
requires that any merger or acquisition candidate comply with all applicable
reporting requirements, which include providing audited financial statements to
be included within the numerous filings relevant to complying with the `34 Act.
Nevertheless, the officer and director of Highland Ridge has not conducted
market research and is not aware of statistical data which would support the
perceived benefits of a merger or acquisition transaction for the owners of a
business opportunity.
4
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the officer and director of the Company, or successor
management, with such outside assistance as he or they may deem appropriate. The
Company intends to concentrate on identifying preliminary prospective business
opportunities, which may be brought to its attention through present
associations of the Company's officer and director. In analyzing prospective
business opportunities, the Company will consider such matters as the available
technical, financial and managerial resources; working capital and other
financial requirements; history of operations, if any; prospects for the future;
nature of present and expected competition; the quality and experience of
management services which may be available and the depth of that management; the
potential for further research, development, or exploration; specific risk
factors not now foreseeable but which then may be anticipated to impact the
proposed activities of the Company; the potential for growth or expansion; the
potential for profit; the perceived public recognition or acceptance of
products, services, or trades; name identification; and other relevant factors.
The Company will not acquire or merge with any company for which audited
financial statements are not available.
The foregoing criteria are not intended to be exhaustive and there may
be other criteria that the Company may deem relevant. In connection with an
evaluation of a prospective or potential business opportunity, management may be
expected to conduct a due diligence review.
The Officer of Highland Ridge has some, but not extensive experience in
managing companies similar to the Company and shall mainly rely upon his own
efforts, in accomplishing the business purposes of the Company. The Company may
from time to time utilize outside consultants or advisors to effectuate its
business purposes described herein. No policies have been adopted regarding use
of such consultants or advisors, the criteria to be used in selecting such
consultants or advisors, the services to be provided, the term of service, or
regarding the total amount of fees that may be paid. However, because of the
limited resources of the Company, it is likely that any such fee the Company
agrees to pay would be paid in stock and not in cash.
The Company will not restrict its search for any specific kind of
business, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
corporate life. It is impossible to predict at this time the status of any
business in which the Company may become engaged, in that such business may need
to seek additional capital, may desire to have its shares publicly traded, or
may seek other perceived advantages which the Company may offer.
Highland Ridge does not intend to obtain funds in one or more private
placements to finance the operation of any acquired business opportunity until
such time as the Company has successfully consummated such a merger or
acquisition.
The time and costs required to pursue new business opportunities, which
includes due diligence investigations, negotiating and documenting relevant
agreements and preparing requisite documents for filing pursuant to applicable
securities laws, cannot be ascertained with any degree of certainty.
Management intends to devote such time as it deems necessary to carry
out the Company's affairs. The exact length of time required for the pursuit of
any new potential business opportunities is uncertain. No assurance can be made
that we will be successful in our efforts. We cannot project the amount of time
that our management will actually devote to our plan of operation.
Highland Ridge intends to conduct its activities so as to avoid being
classified as an "Investment Company" under the Investment Company Act of 1940,
and therefore avoid application of the costly and restrictive registration and
other provisions of the Investment Company Act of 1940 and the regulations
promulgated thereunder.
Management has not identified and is not currently negotiating a new
business opportunity for us. As of December 3, 2008, Highland Ridge is not in
negotiations with, nor does it have any agreements with any potential merger
candidate or any transaction that could result in a change of control of the
Company.
Highland Ridge is a Blank Check Company
At present, Highland Ridge is a development stage company with no
revenues and with no specific business plan or purpose. Highland Ridge's
business plan is to seek new business opportunities or to engage in a merger or
acquisition with an unidentified company. As a result, Highland Ridge is a blank
check company and any offerings of our securities would need to comply with Rule
419 under the Act. Highland Ridge has no current plans to engage in any such
offerings.
5
Highland Ridge's Common Stock is a Penny Stock
Highland Ridge's common stock is a "penny stock," as defined in Rule
3a51-1 under the Exchange Act. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules, to
deliver a standardized risk disclosure document that provides information about
penny stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
sales person in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
the penny stock rules require that the broker-dealer, not otherwise exempt from
such rules, must make a special written determination that the penny stock is
suitable for the purchaser and receive the purchaser's written agreement to the
transaction. These disclosure rules have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. So long as the common stock of Highland Ridge is subject to
the penny stock rules, it may be more difficult to sell our common stock.
Acquisition of Opportunities
Management beneficially owns 10,880,000 shares of common stock (post
split) or 99% of the voting rights of the total issued and outstanding capital
shares of Highland Ridge. As a result, management will have substantial
flexibility in identifying and selecting a prospective new business opportunity.
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. It may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is probable that the present management and shareholders of the Company will
no longer be in control of the Company. In addition, the Company's directors
may, as part of the terms of the acquisition transaction, resign and be replaced
by new directors without a vote of the Company's shareholders or may sell their
stock in the Company. Moreover, management may sell or otherwise transfer his
interest in the Company to new management who will then continue the Company
business plan of seeking new business opportunities. Any and all such sales will
only be made in compliance with the securities laws of the United States and any
applicable state.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon an exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has successfully consummated a merger or acquisition.
With respect to any merger or acquisition, negotiations with target
company management are expected to focus on the percentage of the Company which
the target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may be
subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's then shareholders.
Highland Ridge will participate in a business opportunity only after
the negotiation and execution of appropriate written agreements. Although the
terms of such agreements cannot be predicted, generally such agreements will
require some specific representations and warranties by all of the parties
thereto, will specify certain events of default, will detail the terms of
closing and the conditions which must be satisfied by each of the parties prior
to and after such closing, will outline the manner of bearing costs, including
costs associated with the Company's attorneys and accountants, will set forth
remedies on default and will include miscellaneous other terms.
Highland Ridge does not intend to provide its security holders with any
complete disclosure documents, including audited financial statements,
concerning an acquisition or merger candidate and its business prior to the
consummation of any acquisition or merger transaction.
Highland Ridge has not expended funds on and has no plans to expend
funds or time on product research or development.
6
On September 22, 2008, Highland Ridge filed a Registration Statement on
Form 10 with the Securities and Exchange Commission to become subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended.
Competition
Highland Ridge will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of Highland Ridge's combined extremely limited financial
resources and limited management availability, the Company will continue to be
at a significant competitive disadvantage compared to the Company's competitors
Employees
Highland Ridge currently has no employees. The business of the Company
will be managed by its sole officer and director and such officers or directors
which may join the Company in the future, and who may become employees of the
Company. The Company does not anticipate a need to engage any fulltime employees
at this time.
ITEM 1A: RISK FACTORS
FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K contains forward-looking statements
that are based on current expectations, estimates, forecasts and projections
about us, our future performance, the market in which we operate, our beliefs
and our management's assumptions. In addition, other written or oral statements
that constitute forward-looking statements may be made by us or on our behalf.
Words such as "expects", "anticipates", "targets", "goals", "projects",
"intends", "plans", "believes", "seeks", "estimates", variations of such words
and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions that are difficult to
predict or assess. Therefore, actual outcomes and results may differ materially
from what is expressed or forecast in such forward-looking statements.
DEPENDENCE ON KEY PERSONNEL
Highland Ridge is dependent upon the continued services of its sole
officer and director, Michael Anthony. To the extent that his services become
unavailable, Highland Ridge will be required to obtain other qualified personnel
and there can be no assurance that it will be able to recruit and hire qualified
persons upon acceptable terms.
LIMITED RESOURCES; NO PRESENT SOURCE OF REVENUES.
At present, our business activities are limited to seeking potential
business opportunities. Due to our limited financial and personnel resources,
there is only a restricted basis upon which to evaluate our prospects for
achieving our intended business objectives. We have only limited resources and
have no operating income, revenues or cash flow from operations. Our management
is providing us with funding, on an as needed basis, necessary for us to
continue our corporate existence and our business objective to seek new business
opportunities, as well as funding the costs, including professional accounting
fees, of registering our securities under the Exchange Act and continuing to be
a reporting company under the Exchange Act. We have no written agreement with
our management to provide any interim financing for any period. In addition, we
will not generate any revenues unless and until we enter into a new business, of
which there can be no assurance. As of September 30, 2007 we had no cash,
however as of September 30 2008 we had cash of $29,419.
BROAD DISCRETION OF MANAGEMENT
Any person who invests in our securities will do so without an
opportunity to evaluate the specific merits or risks of any potential new
prospective business in which we may engage. As a result, investors will be
entirely dependent on the broad discretion and judgment of management in
connection with the selection of a prospective business. There can be no
assurance that determinations made by our management will permit us to achieve
our business objectives.
7
ABSENCE OF SUBSTANTIVE DISCLOSURE RELATING TO PROSPECTIVE BUSINESS
As of the date of this registration statement, we have not yet
identified any prospective business or industry in which we may seek to become
involved and at present we have no information concerning any prospective
business. There can be no assurance that any prospective business opportunity
will benefit shareholders or prove to be more favorable to shareholders than any
other investment that may be made by shareholders and investors.
THERE IS NO ACTIVE MARKET FOR OUR COMMON STOCK AND NONE MAY DEVELOP OR BE
SUSTAINED
Highland Ridge's common stock has been subject to quotation on the pink
sheets. There is not currently an active trading market in the Company's shares
nor do we believe that any active trading market has existed for the last 2
years. There can be no assurance that there will be an active trading market for
our securities following the effective date of this Registration Statement. In
the event that an active trading market commences, there can be no assurance as
to the market price of our shares of common stock, whether any trading market
will provide liquidity to investors, or whether any trading market will be
sustained.
UNSPECIFIED INDUSTRY FOR NEW PROSPECTIVE BUSINESS OPPORTUNITIES; UNASCERTAINABLE
RISKS
There is no basis for shareholders to evaluate the possible merits or
risks of potential new business opportunities or the particular industry in
which we may ultimately operate. To the extent that we effect a business
combination with a financially unstable entity or an entity that is in its early
stage of development or growth, including entities without established records
of revenues or income, we will become subject to numerous risks inherent in the
business and operations of that financially unstable company. In addition, to
the extent that we effect a business combination with an entity in an industry
characterized by a high degree of risk, we will become subject to the currently
unascertainable risks of that industry. A high level of risk frequently
characterizes certain industries that experience rapid growth. Although
management will endeavor to evaluate the risks inherent in a particular new
prospective business or industry, there can be no assurance that we will
properly ascertain or assess all such risks or that subsequent events may not
alter the risks that we perceive at the time of the consummation of any new
business opportunity.
CONFLICTS OF INTEREST
Our management is not required to nor will he commit his full time to
our affairs. As a result, pursuing new business opportunities may require a
greater period of time than if he would devote his full time to our affairs.
Management is not precluded from serving as an officer or director of any other
entity that is engaged in business activities similar to those of Highland
Ridge. Management is current an officer and director of Econometrics, Inc. and
Dover Glen, Inc., companies substantially similar to Highland Ridge.
Management may have conflicts of interest in determining to which
entity a particular business opportunity should be presented. In general,
officers and directors of a Delaware corporation are required to present certain
business opportunities to a corporation for which they serve as an officer of
director. In the event that our management has multiple business affiliations,
he may have similar legal obligations to present certain business opportunities
to multiple entities. In the event that a conflict of interest shall arise,
management will consider factors such as reporting status, availability of
audited financial statements, current capitalization and the laws of
jurisdictions. If several business opportunities or operating entities approach
management with respect to a business combination, management will consider the
foregoing factors as well as the preferences of the management of the operating
company. However, management will act in what he believes will be in the best
interests of the shareholders of Highland Ridge and other respective public
companies. Highland Ridge shall not enter into a transaction with a target
business that is affiliated with management.
COMPETITION
Highland Ridge expects to encounter intense competition from other
entities seeking to pursue new business opportunities. Many of these entities
are well-established and have extensive experience in identifying new
prospective business opportunities. Many of these competitors possess greater
financial, technical, human and other resources than we do and there can be no
assurance that we will have the ability to compete successfully. Based upon our
limited financial and personnel resources, we may lack the resources as compared
to those of many of our potential competitors.
8
ADDITIONAL FINANCING REQUIREMENTS
Highland Ridge has no revenues and is dependent upon the willingness of
management and management controlled entities to fund the costs associated with
the reporting obligations under the Exchange Act, and other administrative costs
associated with our corporate existence. As of September 30, 2007, Highland
Ridge had incurred $1,400 for general and administrative expenses. For the year
ended September 30, 2008, Highland Ridge incurred $55,158 for general and
administrative expenses, including accounting fees, reinstatement fees, and
other professional fees related to the preparation and filing of this
registration statement under the Exchange Act. In addition, as of September 30,
2007 Highland Ridge had current liabilities of $3,680 and as of September 30,
2008 Highland Ridge had current liabilities of $33,649; $21,508 of which was due
to related parties. We may not generate any revenues unless and until the
commencement of new business operations. We believe that management will
continue to provide sufficient funds to pay accounting and professional fees and
other expenses to fulfill our reporting obligations under the Exchange Act until
we commence business operations. Through the date of this 10-K management
related parties have made a total capital investment of $36,608.00 into the
Company. In the event that our available funds from our management and
affiliates prove to be insufficient, we will be required to seek additional
financing. Our failure to secure additional financing could have a material
adverse affect on our ability to pay the accounting and other fees in order to
continue to fulfill our reporting obligations and pursue our business plan. We
do not have any arrangements with any bank or financial institution to secure
additional financing and there can be no assurance that any such arrangement
would be available on terms acceptable and in our best interests. We do not have
any written agreement with our affiliates to provide funds for our operating
expenses.
STATE BLUE SKY REGISTRATION; POTENTIAL LIMITATIONS ON RESALE OF THE SECURITIES
The holders of our shares of common stock and those persons, who desire
to purchase our stock in any trading market that might develop, should be aware
that there may be state blue-sky law restrictions upon the ability of investors
to resell our securities. Accordingly, investors should consider the secondary
market for Highland Ridge's securities to be a limited one.
It is the present intention of Highland Ridge's management, after the
commencement of new business operations, to seek coverage and publication of
information regarding our Company in an accepted publication manual which
permits a manual exemption. The manual exemption permits a security to be
distributed in a particular state without being registered if the Company
issuing the security has a listing for that security in a securities manual
recognized by the state. However, it is not enough for the security to be listed
in a recognized manual. The listing entry must contain (1) the names of issuer's
officers, and directors, (2) an issuer's balance sheet, and (3) a profit and
loss statement for either the fiscal year preceding the balance sheet or for the
most recent fiscal year of operations. Furthermore, the manual exemption is a
non-issuer exemption restricted to secondary trading transactions, making it
unavailable for issuers selling newly issued securities.
Most of the accepted manuals are those published in Standard and
Poor's, Moody's Investor Service, Fitch's Investment Service, and Best's
Insurance Reports, and many states expressly recognize these manuals. A smaller
number of states declare that they "recognize securities manuals" but do not
specify the recognized manuals. The following states do not have any provisions
and therefore do not expressly recognize the manual exemption: Alabama, Georgia,
Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and
Wisconsin.
DIVIDENDS UNLIKELY
We do not expect to pay dividends for the foreseeable future because we
have no revenues. The payment of dividends will be contingent upon our future
revenues and earnings, if any, capital requirements and overall financial
condition. The payment of any future dividends will be within the discretion of
our board of directors. It is our expectation that after the commencement of new
business operations that future management will determine to retain any earnings
for use in business operations and accordingly, we do not anticipate declaring
any dividends in the foreseeable future.
9
POSSIBLE ISSUANCE OF ADDITIONAL SECURITIES
Our Articles of Incorporation, as amended, authorize the issuance of
300,000,000 shares of common stock, par value $0.001. As of December 3, 2008, we
have 10,987,131 (post split) shares issued and outstanding. In addition, our
Articles of Incorporation, as amended authorize the issuance of 10,000,000
shares of preferred stock, 9,000,000 of which remains undesignated. We may be
expected to issue additional shares in connection with our pursuit of new
business opportunities and new business operations. To the extent that
additional shares of common stock are issued, our shareholders would experience
dilution of their respective ownership interests. If we issue shares of common
stock in connection with our intent to pursue new business opportunities, a
change in control of our Company may be expected to occur. The issuance of
additional shares of common stock may adversely affect the market price of our
common stock, in the event that an active trading market commences.
COMPLIANCE WITH PENNY STOCK RULES
Our securities will be considered a "penny stock" as defined in the
Exchange Act and the rules thereunder, unless the price of our shares of common
stock is at least $5.00. We expect that our share price will be less than $5.00.
Unless our common stock is otherwise excluded from the definition of "penny
stock", the penny stock rules apply. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its sales person in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that the broker-dealer, not otherwise
exempt from such rules, must make a special written determination that the penny
stock is suitable for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure rules have the effect of reducing
the level of trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. So long as the common stock is subject to the
penny stock rules, it may become more difficult to sell such securities. Such
requirements could limit the level of trading activity for our common stock and
could make it more difficult for investors to sell our common stock.
GENERAL ECONOMIC RISKS
Highland Ridge's current and future business plans are dependent, in
large part, on the state of the general economy. Adverse changes in economic
conditions may adversely affect our plan of operation.
ITEM 2. PROPERTIES
Highland Ridge shares office space with its officer and director at 330
Clematis Street, Suite 217, West Palm Beach, Florida 33401. The Company does not
have a lease and the Company pays no rent for the leased space. The Company does
not own any properties nor does it lease any other properties. The Company does
not believe it will need to maintain an office at any time in the foreseeable
future in order to carry out its plan of operations as described herein.
ITEM 3. LEGAL PROCEEDINGS
On September 14, 2007, in its Court Order, the Circuit Court for the
11th Judicial Circuit in and for Miami Dade County, Florida granted the
application of Century Capital Partners, LLC to appoint a receiver. The Court
appointed Brian T. Scher, Esquire as receiver of the Company. The Court Order
appointing Receiver empowered Mr. Scher to evaluate our financial status, to
determine whether there are any options for corporate viability that could
benefit our shareholders, to reinstate our corporation with the Florida
Secretary of State, and to obtain copies of our shareholder records from our
transfer agent.
Highland Ridge's officers and directors are not aware of any
threatened or pending litigation to which the Company is a party or which any of
its property is the subject and which would have any material, adverse effect on
the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On January 30, 2008 after proper notice to all shareholders, the
Company held an annual meeting for the purposes of the election of directors. At
the meeting, Michael Anthony was elected the sole Director. Immediately
following the shareholder meeting, Michael Anthony was appointed President,
Secretary and Treasurer. The total votes, in pre-split numbers in favor of Mr.
Anthony's election were 44,022,100; those against were 0; and those abstaining
were 5,334,127.
10
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
The Company's common stock is traded on the "Pink Sheets" under the
symbol "HGHN". Such trading of our common stock is limited and sporadic. To the
best knowledge of the Company, there has been no active trading activity for
approximately the past two years.
According to records of the Company's transfer agent, the Company had
approximately 62 holders of Common Stock of record as of December 3, 2008. This
number does not include an indeterminate number of shareholders whose shares are
held by brokers in street name. The following table sets forth the high and the
low sale prices of the Company's equity securities during the fiscal quarters in
the years ended September 30, 2008 and 2007. The quotations below reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions:
2008 HIGH LOW
Quarter ended September 30, 2008 $1.05 $0.50
Quarter ended June 30, 2008 $2.00 $1.00
Quarter ended March 31, 2008 $1.50 $ .80
Quarter ended December 31, 2007 $2.25 $0.45
2007
Quarter ended September 30, 2007 $1.50 $0.50
Quarter ended June 30, 2007 $1.50 $0.50
Quarter ended March 31, 2007 $0.30 $0.30
Quarter ended December 31, 2006 $0.55 $0.50
At the time of filing of this Form 10-K, there is no common stock that
is subject to outstanding options or warrants to purchase common equity or
rights of conversion of the Company.
It is the position of the Securities and Exchange Commission, in a No
Action Letter to OTC Compliance at the NASD, dated January 21, 2000, that Rule
144 is not available for resale transactions involving securities sold by
promoters and affiliates of a blank check company, and their transferees, and
anyone else who has been issued securities from a blank check company, and that
securities issued by a blank check company to promoters and affiliates, and
their transferees, can only be resold through registration under the Act.
Promoters and affiliates of a blank check company will be considered
underwriters under the Securities Act when reselling the securities of a blank
check company. At present, the Company is a development stage company with no
revenues and has no specific business plan or purpose. The Company's business
plan is to seek new business opportunities or to engage in a merger or
acquisition with an unidentified company. As a result, the Company is a blank
check company.
Effective February 15, 2008, the Securities and Exchange Commission
codified this position in new Rule 144(i). Rule 144(i) provides that the safe
harbor found in Rule 144 is not available for the resale of securities initially
issued by an issuer that has no or nominal operations and no or nominal assets
or assets consisting solely of cash or cash equivalents or any amount of assets
consisting of cash or cash equivalents and nominal other assets. In accordance
with Rule 144(i), Rule 144 is not available for the re-sale of our securities
initially issued while we were a shell company.
At the time of filing of this annual report, there are approximately
987,131 shares of common stock that have been held in access of one year and
could be sold pursuant to Rule 144(b) without restriction.
The ability of individual shareholders to trade their shares in a
particular state may be subject to various rules and regulations of that state.
A number of states require that an issuer's securities be registered in their
state or appropriately exempted from registration before the securities are
permitted to trade in that state.
Highland Ridge is not and is not proposing to publicly offer any
securities at this time.
From time-to-time the Company may grant options or warrants, or promise
registration rights to certain shareholders. The Company has no control over the
number of shares of its common stock that its shareholders sell. The price of
the Company's stock may be adversely affected if large amounts are sold in a
short period.
11
The Company's shares most likely will be subject to the provisions of
Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the
"penny stock" rule. Section 15(g) sets forth certain requirements for
transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of
penny stock as that term is used in Rule 3a51-1 of the Exchange Act.
The SEC generally defines penny stock to be any equity security that
has a market price less than $5.00 per share, subject to certain exceptions.
Rule 3a51-1 provides that any equity security is considered to be a penny stock
unless that security is: registered and traded on a national securities exchange
meeting specified criteria set by the SEC; authorized for quotation on The
NASDAQ Stock Market; issued by a registered investment company; excluded from
the definition on the basis of price (at least $5.00 per share) or the issuer's
net tangible assets; or exempted from the definition by the SEC. Broker-dealers
who sell penny stocks to persons other than established customers and accredited
investors (generally persons with assets in excess of $1,000,000 or annual
income exceeding $200,000, or $300,000 together with their spouse), are subject
to additional sales practice requirements.
For transactions covered by these rules, broker-dealers must make a
special suitability determination for the purchase of such securities and must
have received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
monthly statements must be sent to clients disclosing recent price information
for the penny stocks held in the account and information on the limited market
in penny stocks. Consequently, these rules may restrict the ability of
broker-dealers to trade and/or maintain a market in our common stock and may
affect the ability of shareholders to sell their shares.
Dividends
The Company has not declared any dividends since inception and does not
anticipate paying any dividends in the foreseeable future. The payment of
dividends is within the discretion of the Board of Directors and will depend on
the Company's earnings, capital requirements, financial condition, and other
relevant factors. There are no restrictions that currently limit the Company's
ability to pay dividends on its Common Stock other than those generally imposed
by applicable state law.
Equity Compensation Plans
We have no equity compensation plans.
Recent Sales of Unregistered Securities
The following is a list of unregistered securities sold by the Company
within the last three years including the date sold, the title of the
securities, the amount sold, the identity of the person who purchased the
securities, the price or other consideration paid for the securities, and the
section of the Securities Act of 1933 under which the sale was exempt from
registration as well as the factual basis for claiming such exemption.
From May, 2007 through August, 2008 Century Capital Partners invested
$6,608.00 into our Company as paid in capital which funds were used to pay
ongoing administrative expenses, including but not limited to, outstanding
transfer agent fees, state reinstatement and filing fees and all costs
associated with conducting the shareholders meeting.
In exchange for the capital investment by Century Capital Partners, on
December 6, 2007, we issued forty four million (44,000,000) shares of restricted
$.001 par value common stock (880,000 shares post reverse).
On or near August 12, 2008, Corporate Services International Profit
Sharing Plan contributed $30,000 as paid in capital to Highland Ridge in
exchange for 1,000,000 shares of our Series B Preferred Stock. Corporate
Services International Profit Sharing Plan is a private profit sharing plan for
which our director, Michael Anthony, is the sole beneficiary. Highland Ridge has
used and shall continue to use these funds to pay the costs and expenses
necessary to revive the Company's business and implement the Company's business
plan. Such expenses include, without limitation, fees to redomicile the Company
to the state of Delaware; payment of state filing fees; transfer agent fees;
accounting and legal fees; and costs associated with preparing and filing this
Registration Statement, etc. On November 20, 2008, Corporate Services
International Profit Sharing Plan converted the Series B Preferred Stock into
10,000,000 shares of common stock.
12
The Company believes that the issuance and sale of the restricted
shares was exempt from registration pursuant to Section 4(2) of the Act as
privately negotiated, isolated, non-recurring transactions not involving any
public solicitation. An appropriate restrictive legend is affixed to the stock
certificates issued in such transactions.
ITEM 6. SELECTED FINANCIAL DATA
This Item is not applicable to Highland Ridge as it is a smaller
reporting company.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following presentation of management's discussion and analysis of
the Company's financial condition and results of operations should be read in
conjunction with the Company's consolidated financial statements, the
accompanying notes thereto and other financial information appearing elsewhere
in this report. This section and other parts of this report contain
forward-looking statements that involve risks and uncertainties. The Company's
actual results may differ significantly from the results discussed in the
forward-looking statements.
OVERVIEW
Effective August 31, 2005, the Company approved and authorized a plan
of quasi reorganization and restatement of accounts to eliminate the accumulated
deficit and related capital accounts on the Company's balance sheet. The Company
concluded its period of reorganization after reaching a settlement agreement
with all of its significant creditors. The Company, as approved by its Board of
Directors, elected to state its October 1, 2005, balance sheet as a "quasi
reorganization", pursuant to ARB 43. These rules require the revaluation of all
assets and liabilities to their current values through a current charge to
earnings and the elimination of any deficit in retained earnings by charging
paid-in capital. From October 1, 2005 forward, the Company has recorded net
income (and net losses) to retained earnings and (and net losses) to retained
earnings and (accumulated deficit).
Our current activities are related to seeking new business
opportunities. We will use our limited personnel and financial resources in
connection with such activities. It may be expected that pursuing a new business
opportunity will involve the issuance of restricted shares of common stock. At
September 30, 2008 and 2007, we had $29,419 and $0 of cash assets respectively.
At September 30, 2007 the Company had current liabilities of $3,680 and as of
September 30, 2008 we had current liabilities of $33,649, $21,508 of which was
due to related parties.
We have had no revenues in either the year end September 30, 2008 or
2007. Our operating expenses for the year end September 30, 2007 were $1,400 and
for the year end September 30, 2008 were $55,158, comprised of general and
administrative expenses. Accordingly, we had a net loss of $1,400 and a net loss
per share of $0.01 for the year end September 30, 2007 and a net loss of $55,158
and a net loss per share of $0.07 for the year end September 30, 2008.
CONTINUING OPERATIONS, LIQUIDITY AND CAPITAL RESOURCES
We have received a total of $36,608.00 from management related parties
as capital investments in exchange for 44,000,000 (880,000 post split) shares of
common stock and 1,000,000 shares of Series B Preferred Stock. On November 20,
2008, Corporate Services International Profit Sharing Plan converted the Series
B Preferred Stock into 10,000,000 shares of common stock. While we are dependent
upon interim funding provided by management to pay professional fees and
expenses, we have no written finance agreement with management to provide any
continued funding. As of September 30, 2007 the Company had current liabilities
of $3,680 and as of September 30, 2008 the Company had current liabilities of
$33,649. All of the current liabilities as of September 30, 2008 are owed to
related parties. Although we believe management will continue to fund the
Company on an as needed basis, we do not have a written agreement requiring such
funding. In addition, future management funding, will more than likely be in the
form of loans, for which the Company will be liable to pay back.
Through the date of this Registration Statement management related
parties have made a capital investment of $36,608.00.
13
Management provided, without cost to the Company, his services, valued
at $1,800 per month through September 30, 2008, which totaled $16,200 for the
annual period then ended. The principal stockholder also provided, without cost
to the Company, office space valued at $200 per month, which totaled $1,800 for
the annual period ended September 30, 2008. The total of these expenses was
$18,000 and was reflected in the statement of operations as general and
administrative expenses with a corresponding contribution of paid-in capital.
The company was inactive in 2007.
The Board of Directors of the Company has determined that the best
course of action for the Company is to complete a business combination with an
existing business. The Company has limited liquidity or capital resources. As of
September 30, 2007 and 2008, the Company had a cash balance of $0 and $29,419
respectively. In the event that the Company cannot complete a merger or
acquisition and cannot obtain capital needs for ongoing expenses, including
expenses related to maintaining compliance with the securities laws and filing
requirements of the Securities Exchange Act of 1934, the Company could be forced
to cease operations.
Highland Ridge currently plans to satisfy its cash requirements for the
next 12 months though it's current cash and by borrowing from its officer and
director or companies affiliated with its officer and director and believes it
can satisfy its cash requirements so long as it is able to obtain financing from
these affiliated entities. Highland Ridge currently expects that money borrowed
will be used during the next 12 months to satisfy the Company's operating costs,
professional fees and for general corporate purposes. The Company may explore
alternative financing sources, although it currently has not done so.
Highland Ridge will use its limited personnel and financial resources
in connection with seeking new business opportunities, including seeking an
acquisition or merger with an operating company. It may be expected that
entering into a new business opportunity or business combination will involve
the issuance of a substantial number of restricted shares of common stock. If
such additional restricted shares of common stock are issued, the shareholders
will experience a dilution in their ownership interest in the Company. If a
substantial number of restricted shares are issued in connection with a business
combination, a change in control may be expected to occur.
In connection with the plan to seek new business opportunities and/or
effecting a business combination, the Company may determine to seek to raise
funds from the sale of restricted stock or debt securities. The Company has no
agreements to issue any debt or equity securities and cannot predict whether
equity or debt financing will become available at acceptable terms, if at all.
There are no limitations in the certificate of incorporation on the
Company's ability to borrow funds or raise funds through the issuance of
restricted common stock to effect a business combination. The Company's limited
resources and lack of recent operating history may make it difficult to borrow
funds or raise capital. Such inability to borrow funds or raise funds through
the issuance of restricted common stock required to effect or facilitate a
business combination may have a material adverse effect on the Company's
financial condition and future prospects, including the ability to complete a
business combination. To the extent that debt financing ultimately proves to be
available, any borrowing will subject the Company to various risks traditionally
associated with indebtedness, including the risks of interest rate fluctuations
and insufficiency of cash flow to pay principal and interest, including debt of
an acquired business.
The Company currently has no plans to conduct any research and
development or to purchase or sell any significant equipment. The Company does
not expect to hire any employees during the next 12 months.
OFF BALANCE SHEET ARRANGEMENTS
None.
14
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
MICHAEL F. CRONIN
CERTIFIED PUBLIC ACCOUNTANT
ORLANDO, FL 32708
Board of Directors and Shareholders
Highland Ridge, Inc, (f/k/a Americom Networks International, Inc.)
West Palm Beach, Florida
I have audited the accompanying balance sheets of Highland Ridge, Inc, (f/k/a
Americom Networks International, Inc.) as of September 30, 2008 and 2007 and the
related statements of operations, stockholders' deficiency and cash flows for
the years then ended. The financial statements are the responsibility of the
directors. My responsibility is to express an opinion on these financial
statements based on my audits.
I conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (UNITED STATES). Those standards require that I plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor was I engaged to perform, an audit of its internal control
over financial reporting. My 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, I express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. I believe that my audits provide a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Highland Ridge, Inc, (f/k/a
Americom Networks International, Inc.) as of September 30, 2008 and 2007 and the
results of its operations, its cash flows and changes in stockholders'
deficiency for the years then ended in conformity with accounting principles
generally accepted in the United States.
Discussed in the notes and effective August 31, 2005, the Company executed a
plan of quasi-reorganization and restatement of accounts to eliminate the
accumulated deficit and related capital accounts on the Company's balance sheet.
November 25, 2008
/s/ Michael F. Cronin
- ------------------------
Michael F. Cronin
Certified Public Accountant
NY, FL
15
Highland Ridge, Inc.
(f/k/a Americom Networks International, Inc.)
Balance Sheet
Sept 30, Sept 30,
- --------------------------------------------------------------------------------------------------
2008 2007
-------- --------
ASSETS
Current assets
Cash $ 29,419 $ 0
Prepaid expenses 0 0
-------- --------
Total current assets 29,419 0
- --------------------------------------------------------------------------------------------------
Total Assets $ 29,419 $ 0
- --------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable-trade $ 12,141 $ 2,780
Accrued expenses 0 0
Due to related parties 21,508 900
----------------------
Total current liabilities 33,649 3,680
Stockholders' Deficiency:
Preferred "B" stock-1,000,000 issued & outstanding 30,000 0
Common stock-300,000,000 authorized $001 par value
987,131 shares issued & outstanding 987 107
Additional paid-in capital 28,977 5,249
Deficit accumulated since quasi reorganization Aug 31, 2005 (64,194) (9,036)
----------------------
Total Stockholders' Deficiency (4,230) (3,680)
- --------------------------------------------------------------------------------------------------
Total Liabilities & Stockholders' Deficiency $ 29,419 $ 0
- --------------------------------------------------------------------------------------------------
See Summary of Significant Accounting Policies and Notes to Financial Statements.
16
Highland Ridge, Inc.
(f/k/a Americom Networks International, Inc.)
Statement of Operations
Fiscal Years Ended Sept. 30
------------------------
2008 2007
------------------------
Revenue $ 0 $ 0
Costs & Expenses:
General & administrative 55,158 1,400
Interest 0 0
------------------------
Total Costs & Expenses 55,158 1,400
Loss from continuing operations before income taxes (55,158) (1,400)
Income taxes 0 0
- ---------------------------------------------------------------------------------------
Net Loss ($ 55,158) ($ 1,400)
- ---------------------------------------------------------------------------------------
Basic and diluted per share amounts:
Continuing operations ($ 0.07) ($ 0.01)
- ---------------------------------------------------------------------------------------
Basic and diluted net loss ($ 0.07) ($ 0.01)
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Weighted average shares outstanding (basic & diluted) 826,032 107,125
- ---------------------------------------------------------------------------------------
See Summary of Significant Accounting Policies and Notes to Financial Statements.
17
Highland Ridge, Inc.
(f/k/a Americom Networks International, Inc.)
Statement of Cash Flows
Fiscal Years Ended Sept 30,
----------------------
2008 2007
----------------------
Cash flows from operating activities:
Net Loss ($55,158) ($ 1,400)
Adjustments required to reconcile net loss
to cash used in operating activities:
Fair value of services provided by related parties 38,000 0
Expenses paid by related parties 6,880 900
Increase (decrease) in accounts payable & accrued expenses 9,697 500
- -------------------------------------------------------------------------------------------
Cash used by operating activities: (581) 0
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Cash used in investing activities 0 0
- -------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from issuance of preferred stock 30,000 0
- -------------------------------------------------------------------------------------------
Cash generated by financing activities 30,000 0
- -------------------------------------------------------------------------------------------
Change in cash 29,419 0
Cash-beginning of period 0 0
- -------------------------------------------------------------------------------------------
Cash-end of period $ 29,419 $ 0
- -------------------------------------------------------------------------------------------
See Summary of Significant Accounting Policies and Notes to Financial Statements.
18
Highland Ridge, Inc.
(f/k/a Americom Networks International, Inc.)
Statement of Stockholders' Deficiency
Preferred Stock Common Stock
--------------------------- -------------------------------------------
Deficit
Accumulated
Additional since quasi
Common paid-in reorganization
Shares Amount Shares Stock capital Aug 31, 2005
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 2006 107,131 $ 107 $ 5,249 $ (7,636)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Loss (1,400)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 2007 107,131 107 5,249 (9,036)
- -----------------------------------------------------------------------------------------------------------------------------------
Issuance of Preferred "B" shares 1,000,000 30,000
Stock issued as reimbursement of
reinstatement expenses
paid by related party 880,000 880 5,728
Fair value of services provided by
related party 18,000
Net Loss (55,158)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 2008 1,000,000 $ 30,000 987,131 $ 987 $ 28,977 $ (64,194)
- -----------------------------------------------------------------------------------------------------------------------------------
See Summary of Significant Accounting Policies and Notes to Financial Statements.
19
HIGHLAND RIDGE, INC.
(F/K/A AMERICOM NETWORKS INTERNATIONAL, INC.)
BACKGROUND AND
SIGNIFICANT ACCOUNTING POLICIES
September 30, 2008
THE COMPANY
ORGANIZATIONAL BACKGROUND: Highland Ridge, Inc., (the "Company", "we", "us" or
"Highland Ridge"), was originally incorporated on July 22, 1988 in the State of
Florida as Sea Green, Inc. We filed an Amendment to our articles of
incorporation on June 3, 1998, changing our name to Americom Networks Corp. On
July 10, 1998, we again changed our name to Americom Networks International,
Inc. During this time we engaged in the business of developing
telecommunications systems to market to high-volume users for use or resale. In
May 1999 we ceased operations and have not engaged in business operations since
that time. On August 1, 2008 we changed our name to Highland Ridge, Inc. and
re-domiciled to Delaware.
11TH JUDICIAL CIRCUIT COURT DADE COUNTY, FLORIDA PROCEEDINGS: On September 14,
2007, in its Court Order, the Circuit Court for the 11th Judicial Circuit in and
for Miami Dade County, Florida granted the application of Century Capital
Partners, LLC to appoint a receiver. The Court Order appointing Receiver
empowered the receiver to evaluate our financial status, to determine whether
there are any options for corporate viability that could benefit our
shareholders, to reinstate our corporation with the Florida Secretary of State,
and to obtain copies of our shareholder records from our transfer agent. Under
the receivership, and with funds supplied by Century Capital Partners, the
Company reinstated its corporate charter; paid all past due franchise taxes and
settled all outstanding debts with the transfer agent. In addition, on October
17, 2007, the receiver, appointed Michael Anthony as our sole Director,
President, Secretary and Treasurer.
On December 6, 2007, following the submittal of detailed reports by the
receiver, the Court discharged the receiver and returned the Company to the
control of its Board of Directors.
BASIS OF PRESENTATION: Effective August 31, 2005, the Company approved and
authorized a plan of quasi reorganization and restatement of accounts to
eliminate the accumulated deficit and related capital accounts on the Company's
balance sheet. The Company concluded its period of reorganization after reaching
a settlement agreement with all of its significant creditors. The Company, as
approved by its Board of Directors, elected to state its August 31, 2005,
balance sheet as a "quasi reorganization", pursuant to ARB 43. These rules
require the revaluation of all assets and liabilities to their current values
through a current charge to earnings and the elimination of any deficit in
retained earnings by charging paid-in capital. From October 1, 2005 forward, the
Company has recorded net income (and net losses) to retained earnings and (and
net losses) to retained earnings and (accumulated deficit).
The accounts of any former subsidiaries were not included and have not been
carried forward.
SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statement and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from the estimates.
CASH AND CASH EQUIVALENTS: For financial statement presentation purposes, the
Company considers those short-term, highly liquid investments with original
maturities of three months or less to be cash or cash equivalents.
PROPERTY AND EQUIPMENT New property and equipment are recorded at cost. Property
and equipment included in the bankruptcy proceedings and transferred to the
Trustee had been valued at liquidation value. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets, generally 5
years. Expenditures for renewals and betterments are capitalized. Expenditures
for minor items, repairs and maintenance are charged to operations as incurred.
Gain or loss upon sale or retirement due to obsolescence is reflected in the
operating results in the period the event takes place.
20
VALUATION OF LONG-LIVED ASSETS: We review the recoverability of our long-lived
assets including equipment, goodwill and other intangible assets, when events or
changes in circumstances occur that indicate that the carrying value of the
asset may not be recoverable. The assessment of possible impairment is based on
our ability to recover the carrying value of the asset from the expected future
pre-tax cash flows (undiscounted and without interest charges) of the related
operations. If these cash flows are less than the carrying value of such asset,
an impairment loss is recognized for the difference between estimated fair value
and carrying value. Our primary measure of fair value is based on discounted
cash flows. The measurement of impairment requires management to make estimates
of these cash flows related to long-lived assets, as well as other fair value
determinations.
STOCK BASED COMPENSATION: Stock-based awards to non-employees are accounted for
using the fair value method in accordance with SFAS No. 123R, ACCOUNTING FOR
STOCK-BASED COMPENSATION, and EITF Issue No. 96-18, ACCOUNTING FOR EQUITY
INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN
CONJUNCTION WITH SELLING GOODS OR SERVICES.
On January 1, 2006, we adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") 123R, "Share-Based Payment" ("SFAS 123(R)"), which
requires that companies measure and recognize compensation expense at an amount
equal to the fair value of share-based payments granted under compensation
arrangements. Prior to January 1, 2006, we accounted for our stock-based
compensation plans under the recognition and measurement principles of
Accounting Principles Board ("APB") Opinion 25, "Accounting for Stock Issued to
Employees," and related interpretations, and would typically recognize no
compensation expense for stock option grants if options granted had an exercise
price equal to the market value of the underlying common stock on the date of
grant.
We adopted SFAS 123(R) using the "modified prospective" method, which results in
no restatement of prior period amounts. Under this method, the provisions of
SFAS 123(R) apply to all awards granted or modified after the date of adoption.
In addition, compensation expense must be recognized for any unvested stock
option awards outstanding as of the date of adoption on a straight-line basis
over the remaining vesting period. We calculate the fair value of options using
a Black-Scholes option pricing model. We do not currently have any outstanding
options subject to future vesting therefore no charge is required for the years
ended September 30, 2008 or 2007. SFAS 123(R) also requires the benefits of tax
deductions in excess of recognized compensation expense to be reported in the
Statement of Cash Flows as a financing cash inflow rather than an operating cash
inflow. In addition, SFAS 123(R) required a modification to the Company's
calculation of the dilutive effect of stock option awards on earnings per share.
For companies that adopt SFAS 123(R) using the "modified prospective" method,
disclosure of pro forma information for periods prior to adoption must continue
to be made.
ACCOUNTING FOR OBLIGATIONS AND INSTRUMENTS POTENTIALLY TO BE SETTLED IN THE
COMPANY'S OWN Stock: We account for obligations and instruments potentially to
be settled in the Company's stock in accordance with EITF Issue No. 00-19,
ACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS INDEXED TO, AND POTENTIALLY
SETTLED IN A COMPANY'S OWN STOCK. This issue addresses the initial balance sheet
classification and measurement of contracts that are indexed to, and potentially
settled in, the Company's own stock.
FAIR VALUE OF FINANCIAL INSTRUMENTS: Statements of Financial Accounting
Standards No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosure of fair value information about financial instruments. Fair
value estimates discussed herein are based upon certain market assumptions and
pertinent information available to management as of December 31 2007. The
respective carrying value of certain on-balance sheet financial instruments
approximated their fair values.
These financial instruments include cash and cash equivalents, accounts payable
and accrued expenses. Fair values were assumed to approximate carrying values
for these financial instruments since they are short-term in nature and their
carrying amounts approximate fair values or they are receivable or payable on
demand.
EARNINGS PER COMMON SHARE: Basic net loss per share is computed using the
weighted average number of common shares outstanding during the period. Diluted
net loss per common share is computed using the weighted average number of
common and dilutive equivalent shares outstanding during the period. Dilutive
common equivalent shares consist of options to purchase common stock (only if
those options are exercisable and at prices below the average share price for
the period) and shares issueable upon the conversion of our Preferred Stock. Due
to the net losses reported, dilutive common equivalent shares were excluded from
the computation of diluted loss per share, as inclusion would be anti-dilutive
for the periods presented. Except as otherwise noted, all share, option and
warrant numbers have been restated to give retroactive effect to our reverse
split. All per share disclosures retroactively reflect shares outstanding or
issuable as though the reverse split had occurred October 1, 2006.
21
There were no common equivalent shares required to be added to the basic
weighted average shares outstanding to arrive at diluted weighted average shares
outstanding in 2007 or 2006.
INCOME TAXES: We must make certain estimates and judgments in determining income
tax expense for financial statement purposes. These estimates and judgments
occur in the calculation of certain tax assets and liabilities, which arise from
differences in the timing of recognition of revenue and expense for tax and
financial statement purposes.
Deferred income taxes are recorded in accordance with SFAS No. 109, "ACCOUNTING
FOR INCOME TAXES," or SFAS 109. Under SFAS No. 109, deferred tax assets and
liabilities are determined based on the differences between financial reporting
and the tax basis of assets and liabilities using the tax rates and laws in
effect when the differences are expected to reverse. SFAS 109 provides for the
recognition of deferred tax assets if realization of such assets is more likely
than not to occur. Realization of our net deferred tax assets is dependent upon
our generating sufficient taxable income in future years in appropriate tax
jurisdictions to realize benefit from the reversal of temporary differences and
from net operating loss, or NOL, carryforwards. We have determined it more
likely than not that these timing differences will not materialize and have
provided a valuation allowance against substantially all of our net deferred tax
asset. Management will continue to evaluate the realizability of the deferred
tax asset and its related valuation allowance. If our assessment of the deferred
tax assets or the corresponding valuation allowance were to change, we would
record the related adjustment to income during the period in which we make the
determination. Our tax rate may also vary based on our results and the mix of
income or loss in domestic and foreign tax jurisdictions in which we operate.
In addition, the calculation of our tax liabilities involves dealing with
uncertainties in the application of complex tax regulations. We recognize
liabilities for anticipated tax audit issues in the U.S. and other tax
jurisdictions based on our estimate of whether, and to the extent to which,
additional taxes will be due. If we ultimately determine that payment of these
amounts is unnecessary, we will reverse the liability and recognize a tax
benefit during the period in which we determine that the liability is no longer
necessary. We will record an additional charge in our provision for taxes in the
period in which we determine that the recorded tax liability is less than we
expect the ultimate assessment to be.
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," ("SFAS 109") which
requires recognition of estimated income taxes payable or refundable on income
tax returns for the current year and for the estimated future tax effect
attributable to temporary differences and carry-forwards. Measurement of
deferred income tax is based on enacted tax laws including tax rates, with the
measurement of deferred income tax assets being reduced by available tax
benefits not expected to be realized.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 2007, FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities Including an Amendment of FASB Statement No.
115 (" SFAS 159"). SFAS 159 permits entities to choose to measure many financial
instruments and certain other items at fair values. SFAS 159 is effective for
fiscal years after November 15, 2007. The Company is currently evaluating the
impact of adopting SFAS 159 on our financial statements.
In December 2007, the Financial Accounting Standards Board issued FASB Statement
No. 141 (Revised 2007), Business Combinations ("SFAS 141R"). SFAS 141R provides
additional guidance on improving the relevance, representational faithfulness,
and comparability of the financial information that a reporting entity provides
in its financial reports about a business combination and its effects. This
Statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008.
In December 2007, the Financial Accounting Standards Board issued FASB Statement
No. 160, NONCONTROLLING INTERESTS IN CONSOLIDATED FINANCIAL STATEMENTS--AN
AMENDMENT OF ARB NO. 51 ("SFAS 160"). SFAS 160 amends ARB No. 51 to establish
accounting and reporting standards for the noncontrolling interest in a
subsidiary and for the deconsolidation of a subsidiary. This Statement is
effective for fiscal years and interim periods within those fiscal years,
beginning on or after December 15, 2008. The Company is currently evaluating the
impact of adopting SFAS 160 on our financial statements.
In May 2008, the FASB issued SFAS No. 162, "THE HIERARCHY OF GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES." SFAS 162 identifies the sources of accounting principles
and the framework for selecting the principles used in the preparation of
financial statements of nongovernmental entities that are presented in
conformity with generally accepted accounting principles (GAAP) in the United
States. SFAS 162 is effective 60 days following the SEC's approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, THE MEANING OF
PRESENT FAIRLY IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Our
Company is currently evaluating the impact of SFAS 162 on its financial
statements but does not expect it to have a material effect.
Management does not anticipate that the adoption of these standards will have a
material impact on the financial statements.
22
HIGHLAND RIDGE, INC.
(F/K/A AMERICOM NETWORKS INTERNATIONAL, INC.)
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
1. RECENT COURT PROCEEDINGS:
On September 14, 2007, in its Court Order, the Circuit Court for the 11th
Judicial Circuit in and for Miami Dade County, Florida granted the application
of Century Capital Partners, LLC to appoint a receiver. On December 6, 2007,
following the submittal of detailed reports by the receiver the Court discharged
the receiver and returned the Company to the control of its Board of Directors.
On January 30, 2008 after proper notice to all shareholders, the Company held an
annual meeting for the purposes of the election of directors. At the meeting,
Michael Anthony was elected the sole Director. Immediately following the
shareholder meeting, Michael Anthony was appointed President, Secretary and
Treasurer.
RESULTANT CHANGE IN CONTROL: In connection with the Order and subsequent
shareholder meeting, Michael Anthony became our sole director and President on
January 30, 2008. As sole officer and director, Michael Anthony entered into an
agreement with Corporate Services International Profit Sharing Plan (CSIPSP)
whereby CSIPSP agreed to make an investment of paid in capital of $30,000 to be
used to pay for costs and expenses necessary to bring the Company back into
compliance with state and federal securities laws and bring current all
Securities and Exchange disclosure obligations. In exchange for the $30,000
CSIPSP was issued 1,000,000 shares of preferred stock on August 12, 2008.
Mr. Anthony is the managing member of Century Capital partners and has sole
voting and dispositive control. Corporate Services International Profit Sharing
Plan is a private profit sharing plan for which our director, Michael Anthony,
is the sole beneficiary.
2. INCOME TAXES:
We have adopted SFAS 109 which provides for the recognition of a deferred tax
asset based upon the value the loss carry-forwards will have to reduce future
income taxes and management's estimate of the probability of the realization of
these tax benefits. Our net operating loss carryovers incurred prior to 2005
considered available to reduce future income taxes were reduced or eliminated
through our recent change of control (I.R.C. Section 382(a)) and the continuity
of business limitation of I.R.C. Section 382(c).
We have a current operating loss carry-forward of $ 1,400 resulting in deferred
tax assets of $500. We have determined it more likely than not that these timing
differences will not materialize and have provided a valuation allowance against
substantially all our net deferred tax asset.
Future utilization of currently generated federal and state NOL and tax credit
carry forwards may be subject to a substantial annual limitation due to the
ownership change limitations provided by the Internal Revenue Code of 1986, as
amended and similar state provisions. The annual limitation may result in the
expiration of NOL and tax credit carry forwards before full utilization.
3. COMMITMENTS:
The Company is not a party to any leases and does not have any commitments
4. STOCKHOLDERS' EQUITY:
REVERSE STOCK SPLIT
On July 28, 2008 we declared a reverse split of our common stock. The formula
provided that every fifty (50) issued and outstanding shares of common stock of
the Corporation be automatically split into 1 share of common stock. Any
resulting share ownership interest of fractional shares was rounded up to the
first whole integer in such a manner that all rounding was done to the next
single share and each and every shareholder would own at least 1 share. The
reverse stock split was effective August 15, 2008 for holders of record at
August 15, 2008. Except as otherwise noted, all share, option and warrant
numbers have been restated to give retroactive effect to this reverse split. All
per share disclosures retroactively reflect shares outstanding or issuable as
though the reverse split had occurred October 1, 2006.
23
COMMON STOCK
We are currently authorized to issue up to 300,000,000 shares of $ 0.001 par
value common stock. All issued shares of common stock are entitled to vote on a
1 share/1 vote basis. Subsequent to September 30, 2007, in exchange for
approximately $6,600 capital investment by Century Capital Partners, on December
6, 2007, we issued forty four million (44,000,000) shares of restricted $.001
par value common stock (880,000 shares post reverse). Mr. Anthony is the
managing member of CCP and has sole voting and dispositive control.
PREFERRED STOCK
We are currently authorized to issue up to 10,000,000 shares of $ 0.001
preferred stock. On August 26, 2008 the board of directors approved (with the
exception of 1,000,000 preferred shares issued to CSIPS described below) the
cancellation of all previously issued preferred shares and approved the
cancellation and extinguishment of all common and preferred share conversion
rights of any kind, including without limitation, warrants, options, convertible
debt instruments and convertible preferred stock of every series and
accompanying conversion rights of any kind.
On August 1, 2008 we designated 1,000,000 shares of Series "B" preferred stock.
The Series B allows voting rights in a ratio of 10:1 over the common. Each share
of the Series B is convertible in to 10 shares of common at the discretion of
the holder. On August 12, 2008 Corporate Services International Profit Sharing
Plan agreed to contribute a total of $30,000 as paid in capital in exchange for
1,000,000 shares of the Series B preferred stock. Corporate Services
International Profit Sharing Plan is a private profit sharing plan for which our
director, Michael Anthony, is the sole beneficiary. The company is to use these
funds to pay the costs and expenses necessary to revive business operations.
Such expenses include fees to reinstate the corporate charter; payment of all
past due franchise taxes; settling all past due accounts with the transfer
agent; accounting and legal fees; costs associated with bringing current its
filings with the Securities and Exchange Commission, etc. In August, 2008 the
full subscription of $30,000 was received.
FAIR VALUE OF SERVICES:
The principal stockholder provided, without cost to the Company, his services,
valued at $1,800 per month for January through September 2008, which totaled
$16,200 for the year ended September 30, 2008. The principal stockholder also
provided, without cost to the Company, office space valued at $200 per month,
which totaled $1,800 for the year ended September 30, 2008. The total of these
expenses was $18,000 and was reflected in the statement of operations as general
and administrative expenses with a corresponding contribution of paid-in
capital. No such services were provided in 2007
There are no employee or non-employee options grants.
5. RELATED PARTY TRANSACTIONS NOT DISCLOSED ELSEWHERE:
DUE RELATED PARTIES: Amounts due related parties consist of corporate
reinstatement expenses paid by affiliates prior to establishing a bank account.
Such items totaled $1,508 and $900 at September 30, 2008 and 2007 respectively.
Legal services provided to the company by Laura Anthony through Legal &
Compliance, LLC (Michael Anthony's spouse) were valued at $20,000 and was unpaid
at September 30, 2008.
6. SUBSEQUENT EVENTS:
On November 20, 2008, Corporate Services International Profit Sharing Plan
converted the Series B Preferred Stock into 10,000,000 shares of common stock.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
In its two most recent fiscal years or any later interim period, the Company has
had no disagreements with its independent accountants.
24
ITEM 9A(T). CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed by our
company is recorded, processed, summarized and reported, within the time periods
specified in the rules and forms of the SEC. Michael Anthony, our Chief
Executive Officer and our Principal Accounting Officer, is responsible for
establishing and maintaining disclosure controls and procedures for our company.
Our management has evaluated the effectiveness of our disclosure
controls and procedures as of September 30, 2008 (under the supervision and with
the participation of the Chief Executive Officer and the Principal Accounting
Officer), pursuant to Rule 13a-15(b) promulgated under the Exchange Act. As part
of such evaluation, management considered the items discussed below relating to
internal control over financial reporting.
o The Company is a shell company with no or nominal business operations,
The term "internal control over financial reporting" is defined as a
process designed by, or under the supervision of, the registrant's principal
executive and principal financial officers, or persons performing similar
functions, and effected by the registrant's board of directors, management and
other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:
o pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
assets of the registrant;
o provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with U.S. generally accepted accounting principles, and that receipts
and expenditures of the registrant are being made only in accordance
with authorizations of management and directors of the registrant; and
o provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the registrant's
assets that could have a material effect on the financial statements.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rule 13a-15(f) under
the Exchange Act). Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance of achieving
their control objectives.
Our management, with the participation of the Chief Executive Officer,
evaluated the effectiveness of the Company's internal control over financial
reporting as of September 30, 2008. In making this assessment, our management
used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO") in Internal Control -- Integrated Framework. Based
on this evaluation, our Company's Chief Executive Officer and Principal
Accounting Officer have concluded that our Company's disclosure controls and
procedures were effective as of September 30, 2008.
This annual report does not include an attestation report of the
Company's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management's report in this annual report.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
In connection with the evaluation of the Company's internal controls
during the Company's last fiscal year, the Company's Principal Executive Officer
and Principal Accounting Officer have determined that there are no changes to
the Company's internal controls over financial reporting that have materially
affected, or are reasonably likely to materially effect, the Company's internal
controls over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
25
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth the name, age and position held with respect to
our present directors and executive officers:
EXECUTIVE OFFICER
NAME AGE POSITION AND DIRECTOR SINCE
Michael Anthony 42 Chief Executive Officer, October 13, 2007
President, Secretary,
Treasurer, Director
Our directors are elected to serve until the next annual meeting of
shareholders and until their respective successors will have been elected and
will have qualified. Officers are not elected for a fixed term of office but
hold office until their successors have been elected. Mr. Anthony is not a party
to any arrangement or understanding pursuant to which he was or is to be elected
as a director.
Mr. Anthony, age 42, has been an officer and director of the Company
since October 13, 2007. Mr. Anthony is the sole officer and director of
Corporate Services International, Inc. a personal use business consulting
company. Mr. Anthony is the sole member of Century Capital Partners, LLC, a
personal use business consulting company.
In addition, since November 2004, Mr. Anthony has been President and
CEO of Union Equity, Inc. and its wholly owned subsidiary Home Sales 24/7, Inc.
Union Equity, Inc. is an Internet based real estate marketing firm.
On or about July 15, 2005 Mr. Anthony became an officer and director of
Ubrandit.com, Inc. a reporting blank check company and resigned his position on
October 31, 2006. On or about July 30, 2006 Mr. Anthony became an officer and
director of Standard Commerce, Inc. a reporting blank check company and resigned
his position on August 24, 2007. On or about March 15, 2007, Mr. Anthony became
an officer and director Apogee Robotics, Inc. a reporting blank check company
and resigned his position on March 31, 2008. On or about May 25, 2007, Mr.
Anthony became an officer and director or Aim Smart Corporation, a reporting
blank check company and resigned his position on April 24, 2008. On or about
July 2, 2007, Mr. Anthony became an officer and director of Diversified
Opportunities, Inc., a reporting blank check company and resigned his position
on May 30, 2008.
In addition, Mr. Anthony is currently an officer and director of Dover
Glen, Inc., Econometrics, Inc., and Hygenics Pharmaceuticals, Inc., all
reporting blank check companies.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the registrant's officers and directors, and persons who own more than
10% of a registered class of the registrant's equity securities, to file reports
of ownership and changes in ownership of equity securities of the Registrant
with the Securities and Exchange Commission. Officers, directors and
greater-than 10% shareholders are required by the Securities and Exchange
Commission regulation to furnish the registrant with copies of all Section 16(a)
forms that they file. Based solely on a review of Forms 3 and 4 and amendments
thereto filed with the Commission during the fiscal year end September 30, 2008,
all Section 16(a) forms were filed.
CODE OF ETHICS
Highland Ridge has not adopted a code of ethics. Highland Ridge is a
shell company with one officer and director and no employees. The primary
functions of a code of ethics include internal reporting and adherence to the
code, compliance with government rules and regulations including the reporting
requirements under the Exchange Act and the honest and ethical handling of
actual or apparent conflicts of interest. As a shell company, with one officer
and director, the functions of the code of ethics are properly met without the
need of a formal document.
26
ITEM 11. EXECUTIVE COMPENSATION
No executive compensation was paid during the fiscal period ended
September 30, 2007 or 2008 by Highland Ridge. Highland Ridge has no employment
agreement with any of its officers and directors. Highland Ridge has no
employees and no compensation committee.
The following tables show, as to the named executive officers, certain
information concerning stock options:
OPTION GRANTS DURING 2008
PERCENT OF
NUMBER OF TOTAL OPTIONS
SECURITIES GRANTED TO EXERCISE OR
UNDERLYING EMPLOYEES IN BASE PRICE EXPIRATION
NAME OPTIONS FISCAL YEAR ($/SH) DATE
- ---- ------- ----------- ------ ----
NONE
AGGREGATED OPTIONS EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
NUMBER OF SECURITIES
ACQUIRED VALUE UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN
NAME ON EXERICSE REALIZED OPTIONS AT FY-END (#) THE MONEY OPTIONS
- ---- ----------- -------- --------------------- -----------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
NONE
COMPENSATION OF DIRECTORS
Highland Ridge's directors are not compensated for their services as
directors of the Company.
EMPLOYMENT CONTRACTS
We do not have an employment contract with any executive officers. Any
obligation to provide any compensation to any executive officer in the event of
his resignation, retirement or termination, or a change in control of the
Company, or a change in any named Executive Officers' responsibilities following
a change in control would be negotiated at the time of the event.
We may in the future create retirement, pension, profit sharing and
medical reimbursement plans covering our Executive Officers and Directors.
The company has made no Long Term Compensation payouts (LTIP or other)
27
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Highland Ridge does not have an equity compensation plan.
The following table sets forth, as of December 3, 2008 the number and
percentage of outstanding shares of common and preferred stock which, according
to the information supplied to the Company, were beneficially owned by (i) each
current director of the Company, (ii) each current executive officer of the
Company, (iii) all current directors and executive officers of the Company as a
group, and (iv) each person who, to the knowledge of the Company, is the
beneficial owner of more than 5% of the Company's outstanding capital stock.
Except as otherwise indicated, the persons named in the table below have sole
voting and dispositive power with respect to all shares beneficially owned,
subject to community property laws (where applicable).
Owner Common Shares Percentage(1)
- -----------------------------------------------------------
Michael Anthony(2) 10,880,000 99%
- -----------------------------------------------------------
Officers and directors 10,880,000 99%
as a group (1 persons)
5% Shareholders
None
- -----------------------------------------------------------
(1) Based on 10,987,131 shares of common stock outstanding as of December 3,
2008.
(2) Held by Century Capital Partners, LLC, an entity for which Michael Anthony
is the sole managing member.
There are no arrangements which may result in a change in control of
Highland Ridge.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the last three years, to the knowledge of the Company, there was
no person who had or has a direct or indirect material interest in any
transaction or proposed transaction to which the Company was or is a party.
Transactions in this context relate to any transaction which exceeds $120,000 or
one percent of the average of the Company's total assets at year end for the
last three completed fiscal years.
Laura Anthony, Esquire is corporate and securities counsel to the
Company. Laura Anthony is Michael Anthony's wife. Ms. Anthony's total legal fees
for the year ending September 30, 2007 totaled $0 and for the year ending
September 30, 2008 were $20,000.
Highland Ridge does not have any outside directors.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
AUDIT FEES
The Company was billed a total of $________ for the fiscal years ended
September 30, 2007 and 2008 inclusive for professional services rendered by the
principal accountant for the audit of the Company's annual financial statements,
the review of our quarterly financial statements, and other services performed
in connection with our statutory and regulatory filings. These services also
included updating the audits for our annual report.
AUDIT RELATED FEES
There were $0 in audit related fees for the fiscal years ended
September 30, 2007 and 2008. Audit related fees include fees for assurance and
related services rendered by the principal accountant related to the audit or
review of our financial statements, not included in the foregoing paragraph.
TAX FEES
There were no tax fees for the fiscal year ended September 30, 2008.
Tax fees include fees for professional services rendered by the principal
accountant for tax compliance, tax advice and tax planning.
ALL OTHER FEES
There were no other professional services rendered by our principal
accountant during the last two fiscal years that were not included in the above
paragraphs.
The Company's Board of Directors reviews and approves audit and
permissible non-audit services performed by its independent accountants, as well
as the fees charged for such services. In its review of non-audit service fees
and its appointment of Michael F. Cronin, CPA as the Company's independent
accountants, the Board of Directors considered whether the provision of such
services is compatible with maintaining independence.
28
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
The Company's financial statements for the fiscal years ended September 30, 2008
and 2007 are attached hereto as F-1 through F-
EXHIBITS
NUMBER DESCRIPTION
- ------ -----------
3.1.1 Original Articles of Incorporation dated July 22, 1988*
3.1.2 Articles of Amendment dated May 5, 1998*
3.1.3 Articles of Amendment dated June 3, 1998*
3.1.4 Articles of Amendment dated July 10, 1998*
3.1.5 Articles of Incorporation - Delaware - dated January 31, 2008*
3.1.6 Certificate of Amendment to Articles of Incorporation dated
August 1, 2008*
2.1.1 Agreement of Merger dated February 6, 2008*
2.1.2 Certificate of Merger - Delaware - dated February 6, 2008*
2.1.3 Article of Merger - Florida - dated February 15, 2008*
3.2 Amended and Restated By-Laws*
31.1 Certification of the Chief Executive Officer and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of the Chief Executive Officer and Chief Financial
Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002
______________
* Previously filed with the Company Form 10 filed on September 22, 2008
REPORTS ON 8-K
None
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: December 3, 2008 HIGHLAND RIDGE
By: /s/ Michael Anthony
------------------------------
Name: Michael Anthony
Title: Chief Executive Officer
29