U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 to FORM 10
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
CONSOLE ACQUISITION CORPORATION
-----------------------------
(Name of Small Business Issuer)
Delaware 20-5572741
- ------------------ ------------------------------
(State or Other Jurisdiction I.R.S. Employer Identification
of Incorporation or Organization) Number
1504 R Street, N.W., Washington, D.C. 20009
- ------------------------------------------------------------
(Address of Principal Executive Offices including Zip Code)
202/387-5400
_____________
(Issuer's Telephone Number)
Securities to be Registered Under
Section 12(b) of the Act: None
Securities to be Registered Under
Section 12(g) of the Act: Common Stock,
$.0001 Par Value
(Title of Class)
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of "large accelerated filer,"
"accelerated filer," and "smaller reporting company" in Rule 12b-2
of the Exchange Act.
Large accelerated filer Accelerated filed
Non-accelerated filed Smaller reporting company
(Do not check if a smaller reporting company)
PART I
ITEM 1. BUSINESS.
Console Acquisition Corporation ("Console") was incorporated on
September 13, 2006 under the laws of the State of Delaware to engage in
any lawful corporate undertaking, including, but not limited to, selected
mergers and acquisitions. Console has been in the developmental stage
since inception and its operations to date have been limited to issuing
shares to its original shareholders and filing this registration statement.
Console will attempt to locate and negotiate with a business entity for
the combination of that target company with Console. The combination
will normally take the form of a merger, stock-for-stock exchange or
stock-for-assets exchange. In most instances the target company will wish
to structure the business combination to be within the definition of a
tax-free reorganization under Section 351 or Section 368 of the Internal
Revenue Code of 1986, as amended.
No assurances can be given that Console will be successful in locating
or negotiating with any target company.
Console has been formed to provide a method for a foreign or domestic
private company to become a reporting company with a class of securities
registered under the Securities Exchange Act of 1934.
Aspects of a Reporting Company
There are certain perceived benefits to being a reporting company.
These are commonly thought to include the following:
+ increased visibility in the financial community;
+ provision of information required under Rule 144 for trading
of eligible securities;
+ compliance with a requirement for admission to quotation on
the OTC Bulletin Board or on the Nasdaq Capital Market;
+ the facilitation of borrowing from financial institutions;
+ increased valuation;
+ greater ease in raising capital;
+ compensation of key employees through stock options for
which there may be a market valuation;
+ enhanced corporate image.
There are also certain perceived disadvantages to being a reporting
company. These are commonly thought to include the following:
+ requirement for audited financial statements;
+ required publication of corporate information;
+ required filings of periodic and episodic reports with the
Securities and Exchange Commission;
+ increased rules and regulations governing management,
corporate activities and shareholder relations.
Comparison with Initial Public Offering
Certain private companies may find a business combination more
attractive than an initial public offering of their securities. Reasons for
this may include the following:
+ inability to obtain an underwriter;
+ possible larger costs, fees and expenses of a public offering;
+ possible delays in the public offering process;
+ greater dilution of outstanding securities.
Certain private companies may find a business combination less
attractive than an initial public offering of their securities. Reasons for
this may include the following:
+ no investment capital raised through a business combination;
+ no underwriter support of trading.
Potential Target Companies
Business entities, if any, which may be interested in a combination
with Console may include the following:
+ a company for which a primary purpose of becoming public is
the use of its securities for the acquisition of assets
or businesses;
+ a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of
securities on terms acceptable to it;
+ a company which wishes to become public with less dilution
of its securities than would occur upon an underwriting;
+ a company which believes that it will be able to obtain
investment capital on more favorable terms after it has
become public;
+ a foreign company which may wish an initial entry into the
United States securities market;
+ a special situation company, such as a company seeking a
public market to satisfy redemption requirements under
a qualified Employee Stock Option Plan;
+ a company seeking one or more of the other perceived
benefits of becoming a public company.
A business combination with a target company will normally involve
the transfer to the target company of the majority of the issued and
outstanding common stock of Console and the substitution by the target
company of its own management and board of directors.
No assurances can be given that Console will be able to enter into any
business combination, as to the terms of a business combination, or as to
the nature of a target company.
The proposed business activities described herein classify Console
as a "blank check" company. The Securities and Exchange Commission and
certain states have enacted statutes, rules and regulations limiting the
public sale of securities of blank check companies. Console will not make
any efforts to cause a market to develop in its securities until such time as
Console has successfully implemented its business plan and it is no longer
classified as a blank check company.
Console is voluntarily filing this registration statement with the
Securities and Exchange Commission and is under no obligation to do so
under the Exchange Act. Console will continue to file all reports required
of it under the Exchange Act until a business combination has occurred. A
business combination will normally result in a change in control and
management of Console. Since a principal benefit of a business
combination with Console would normally be considered its status as a
reporting company, it is anticipated that Console will continue to file
reports under the Exchange Act following a business combination. No
assurance can be given that this will occur or, if it does, for how long.
James M. Cassidy is the sole officer and director of Console and the
sole officer, director and shareholder of Tiber Creek Corporation, which is
a 50% shareholder of Console. Console has no employees nor are there any
other persons than Mr. Cassidy who devote any of their time to its affairs.
All references herein to management of Console are to Mr. Cassidy. The
inability at any time of Mr. Cassidy to devote sufficient attention to
Console could have a material adverse impact on its operations.
Glossary
"Blank check" company As used herein, a "blank check" company is
a development stage company that has no
specific business plan or purpose or has
indicated that its business plan is to
engage in a merger or acquisition with an
unidentified company or companies.
Business combination Normally a merger, stock-for-stock or
Stock-for-assets exchange with the target
company or the shareholders of the target
company.
Console or The corporation whose common stock is the
the Registrant subject of this registration statement.
Exchange Act The Securities Exchange Act of 1934, as
amended.
Securities Act The Securities Act of 1933, as amended.
Risk Factors
The business of Console is subject to numerous risk factors, including the
following:
Console has no operating history nor revenue and minimal assets and
operates at a loss. Console has had no operating history nor any revenues
or earnings from operations. Console has no significant assets or financial
resources. Console has sustained losses to date and will, in all likelihood,
continue to sustain expenses without corresponding revenues, at least until
the consummation of a business combination. See PART F/S "FINANCIAL
STATEMENTS". Tiber Creek Corporation, a company affiliated with management,
will pay all expenses incurred by Console until a business combination is
effected, without repayment. There is no assurance that Console will ever
be profitable.
Company has only one director and one officer. The sole officer and
director of Console is James M. Cassidy. Because management consists
of only one person, Console does not benefit from multiple judgments that
a greater number of directors or officers would provide and Console will
rely completely on the judgment of its sole officer and director when
selecting a target company. Mr. Cassidy anticipates devoting only a
limited amount of time to the business of Console. Mr. Cassidy has not
entered into a written employment agreement with Console and he is not
expected to do so. Console has not obtained key man life insurance on Mr.
Cassidy. The loss of the services of Mr. Cassidy would adversely affect
development of the business of Console and its likelihood of commencing
operations.
Conflicts of interest. Mr. Cassidy, the president of Console,
participates in other business ventures which may compete directly with
Console. Additional conflicts of interest and non-arms length transactions
may also arise in the future. The terms of a business combination may
include such terms as Tiber Creek Corporation providing services to Console
after a business combination. Such services may include the preparation
and filing of a registration statement to allow the public trading of
Console's securities and the introduction to brokers and market makers.
The terms of a business combination may provide for a payment by a target
company in cash or otherwise to the initial shareholders of Console for
the purchase or retirement of all or part of their stock in Console.
Mr. Cassidy would directly benefit from such payment. Such benefits may
influence Mr. Cassidy's choice of a target company. The certificate of
incorporation of Console provides that Console may indemnify officers and/or
directors of Console for liabilities, which can include liabilities arising
under the securities laws. Assets of Console could be used or attached to
satisfy any liabilities subject to such indemnification. See "ITEM 5.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS--Conflicts
of Interest."
The proposed operations of Console are speculative. The success of
the proposed business plan of Console will depend to a great extent on the
operations, financial condition and management of the identified target
company. While business combinations with entities having established
operating histories are preferred, there can be no assurance that Console
will be successful in locating candidates meeting such criteria. The
decision to enter into a business combination will likely be made without
detailed feasibility studies, independent analysis, market surveys or similar
information which, if Console had more funds available to it, would be
desirable. In the event Console completes a business combination the
success of its operations will be dependent upon management of the target
company and numerous other factors beyond the control of Console. There
is no assurance that Console can identify a target company and
consummate a business combination.
Possible classification as a penny stock. In the event that a public
market develops for the securities of Console following a business
combination, such securities may be classified as a penny stock depending
upon their market price and the manner in which they are traded. The
Securities and Exchange Commission has adopted Rule15g-9 which establishes
the definition of a "penny stock", for purposes relevant to Console, as any
equity security that has a market price of less than $5.00 per share or with
an exercise price of less than $5.00 per share whose securities are admitted
to quotation but do not trade on the Nasdaq Capital Market or on a national
securities exchange. For any transaction involving a penny stock, unless
exempt, the rules require delivery by the broker of a document to investors
stating the risks of investment in penny stocks, the possible lack of
liquidity, commissions to be paid, current quotation and investors' rights
and remedies, a special suitability inquiry, regular reporting to the
investor and other requirements.
There is a scarcity of and competition for business opportunities and
combinations. Console is and will continue to be an insignificant
participant in the business of seeking mergers with and acquisitions of
business entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers and
acquisitions of companies which may be merger or acquisition target
candidates for Console. Nearly all such entities have significantly greater
financial resources, technical expertise and managerial capabilities than
Console and, consequently, Console will be at a competitive disadvantage
in identifying possible business opportunities and successfully completing
a business combination. Moreover, Console will also compete with
numerous other small public companies in seeking merger or acquisition
candidates.
There is no agreement for a business combination and no minimum
requirements for business combination. As of the original filing date of
this registration statement, Console had no current arrangement, agreement
or understanding with respect to engaging in a business combination with
a specific entity. When, if at all, Console enters into a business
combination it will file the required reports with the Securities and
Exchange Commission. There can be no assurance that Console will be
successful in identifying and evaluating suitable business opportunities or
in concluding a business combination. No particular industry or specific
business within an industry has been selected for a target company.
Console has not established a specific length of operating history or a
specified level of earnings, assets, net worth or other criteria which it
will require a target company to have achieved, or without which Console
would not consider a business combination with such business entity.
Accordingly, Console may enter into a business combination with a
business entity having no significant operating history, losses, limited or
no potential for immediate earnings, limited assets, negative net worth or
other negative characteristics. There is no assurance that Console will be
able to negotiate a business combination on terms favorable to Console.
Reporting requirements may delay or preclude acquisition. Pursuant to
the requirements of Section 13 of the Exchange Act, Console is required to
provide certain information about significant acquisitions including
audited financial statements of the acquired company. Obtaining audited
financial statements is the economic responsibility of the target company.
The additional time and costs that may be incurred by some potential
target companies to prepare such financial statements may significantly
delay or essentially preclude consummation of an otherwise desirable
acquisition by Console. Acquisition prospects that do not have or are
unable to obtain the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the Exchange Act are
applicable. Notwithstanding a target company's agreement to obtain
audited financial statements within the required time frame, such audited
financial statements may not be available to Console at the time of entering
into an agreement for a business combination. In cases where audited
financial statements are unavailable, Console will have to rely upon
information that has not been verified by outside auditors in making its
decision to engage in a transaction with the business entity. This risk
increases the prospect that a business combination with such a target
company might prove to be an unfavorable one for Console.
Regulation under Investment Company Act. In the event Console
engages in business combinations which result in Console holding passive
investment interests in a number of entities, Console could be subject to
regulation under the Investment Company Act of 1940. Passive
investment interests, as used in the Investment Company Act, essentially
means investments held by entities which do not provide management or
consulting services or are not involved in the business whose securities
are held. In such event, Console would be required to register as an
investment company and could be expected to incur significant registration
and compliance costs. Console has obtained no formal determination from
the Securities and Exchange Commission as to the status of Console under
the Investment Company Act of 1940. Any violation of such Act could
subject Console to material adverse consequences.
Probable change in control and management. A business combination
involving the issuance of the common stock of Console will, in all
likelihood, result in shareholders of a target company obtaining a
controlling interest in Console. As a condition of the business combination
agreement, the shareholders of Console may agree to sell, transfer or retire
all or a portion of their stock of Console to provide the target company
with all or majority control. The resulting change in control of Console
will likely result in removal of the present officer and director of Console
and a corresponding reduction in or elimination of his participation in the
future affairs of Console.
Possible change in value of shares upon business combination. A
business combination normally will involve the issuance of a significant
number of additional shares. Depending upon the value of the assets
acquired in such business combination, the per share value of the common
stock of Console may increase or decrease, perhaps significantly.
Taxation. Federal and state tax consequences will, in all likelihood,
be major considerations in any business combination Console may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions. Console intends to structure any business combination so as
to minimize the federal and state tax consequences to both Console and the
target company; however, there can be no assurance that such business
combination will meet the statutory requirements of a tax-free
reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. Anon-qualifying
reorganization could result in the imposition of both federal and state
taxes which may have an adverse effect on both parties to the transaction.
Any potential acquisition or merger with a foreign company may create
additional risks. If Console enters into a business combination with a
foreign concern it will be subject to risks inherent in business operations
outside of the United States. These risks include, for example, currency
fluctuations, regulatory problems, punitive tariffs, unstable local tax
policies, trade embargoes, risks related to shipment of raw materials and
finished goods across national borders and cultural and language
differences. Foreign economies may differ favorably or unfavorably from
the United States economy in growth of gross national product, rate of
inflation, market development, rate of savings, capital investment,
resource self-sufficiency, balance of payments positions, and in other
respects. Any business combination with a foreign company may result in
control of Console by individuals who are not resident in the United States
and in assets which are located outside the United States, either of which
could significantly reduce the ability of the shareholders to seek or
enforce legal remedies against Console.
ITEM 2. FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
PLAN OF OPERATION.
Console has no operations nor does it currently engage in any business
activities generating revenues. Console's principal business objective
for the following 12 months is to achieve a business combination with a
target company.
Console anticipates that during the 12 months following the date of
this registration statement, it will incur costs related to (i) filing
reports as required by the Securities Exchange Acct of 1934 and
(ii) consummating an acquisition or merger. Console has no full time
employees. James M. Cassidy is the sole officer of Console and its
sole director. Mr. Cassidy is also the sole shareholder of Tiber
Creek Corporation , a shareholder of Console. Mr. Cassidy, as president
of Console, will allocate a limited portion of his time to the
activities of Console without compensation. Potential conflicts may arise
with respect to the limited time commitment by Mr. Cassidy and the
potential demands of the activities of Console.
Search for Target Company
Tiber Creek Corporation will supervise the search for target companies
as potential candidates for a business combination. Tiber Creek Corporation
will pay all expenses of Console until such time as a business combination
is effected, without repayment. James M. Cassidy, who is the sole officer
and director of Console, is the sole officer and director and sole
shareholder of Tiber Creek Corporation.
Tiber Creek Corporation may provide assistance to target companies
incident to and following a business combination, and receive payment for
such assistance from target companies.
Tiber Creek Corporation owns 500,000 of the 1,000,000 outstanding
shares of the common stock of Console, for which it paid $250.
Tiber Creek Corporation has entered, and anticipates that it will enter,
into agreements with consultants to assist it in locating a target company
and may share stock received by it or an affiliate in Console with, or grant
options on such stock to, such referring consultants and may make payment to
such consultants from its own resources. There is no minimum or maximum
amount of stock, options, or cash that Tiber Creek Corporation may grant
or pay to such consultants. Tiber Creek Corporation is solely responsible
for the costs and expenses of its activities in seeking a potential target
company, including any agreements with consultants, and Console has no
obligation to pay any costs incurred or negotiated by Tiber Creek
Corporation.
Tiber Creek Corporation may seek to locate a target company through
solicitation. Such solicitation may include newspaper or magazine
advertisements, mailings and other distributions to law firms, accounting
firms, investment bankers, financial advisors and similar persons, the use
of one or more web sites and similar methods. Tiber Creek Corporation
may utilize consultants in the business and financial communities for
referrals of potential target companies. However, there is no assurance
that Tiber Creek Corporation will locate a target company for a business
combination.
Management of Console
Console has no full time employees. James M. Cassidy is the sole officer
of Console and its sole director. Mr. Cassidy is also the sole shareholder
of Tiber Creek Corporation , a shareholder of Console. Mr. Cassidy, as
president of Console, will allocate a limited portion of his time to the
activities of Console without compensation. Potential conflicts may arise
with respect to the limited time commitment by Mr. Cassidy and the
potential demands of the activities of Console.
The amount of time spent by Mr. Cassidy on the activities of Console is
not predictable. Such time may vary widely from an extensive amount
when reviewing a target company and effecting a business combination to
an essentially quiet time when activities of management focus elsewhere.
It is impossible to predict the amount of time Mr. Cassidy will actually be
required to spend to review suitable target companies.
General Business Plan
The purpose of Console is to seek, investigate and, if such investigation
warrants, acquire an interest in a business entity which desires to seek the
perceived advantages of a corporation which has a class of securities
registered under the Exchange Act. Console will not restrict its search to
any specific business, industry, or geographical location and Console may
participate in a business venture of virtually any kind or nature.
Management anticipates that it will be able to participate in only one
potential business venture because Console has nominal assets and limited
financial resources. See PART F/S, "FINANCIAL STATEMENTS."
This lack of diversification should be considered a substantial risk to the
shareholders of Console because it will not permit Console to offset
potential losses from one venture against gains from another.
Console 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.
The most likely target companies are those seeking the perceived
benefits of a reporting 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, increasing the opportunity to use securities for
acquisitions, providing liquidity for shareholders and other factors.
Business opportunities may be available 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.
Console has, and will continue to have, no capital with which to provide
the owners of business entities with any cash or other assets. However,
Console offers owners of acquisition candidates the opportunity to acquire
a controlling ownership interest in a reporting company without the time
required to become a reporting company by other means.
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the officer and director of Console. In analyzing
prospective business opportunities, Console may 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 may be anticipated; 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. This discussion of the proposed criteria is not meant to be
restrictive of the virtually unlimited discretion of Console to search for
and enter into potential business opportunities.
Console is subject to the reporting requirements of the Exchange Act.
Included in these requirements is the duty of Console to file audited
financial statements reporting a business combination which is required to
be filed with the Securities and Exchange Commission upon completion of
the combination.
Because of the time required to prepare financial statements, a target
company which has entered into a business combination agreement may
wish to take control of Console before the target company has completed
its audit. Among other things, this will allow the target company to
announce the pending combination through filings with the Securities and
Exchange Commission which will then be available to the financial
community, potential investors, and others. In such case, Console will only
have access to unaudited and possibly limited financial information about
the target company in making a decision to combine with that company.
Console will not restrict its search for any specific kind of business
entities, 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 business life. It is impossible to predict at this time the
status of any business in which Console may become engaged, whether such
business may need to seek additional capital, may desire to have its shares
publicly traded, or may seek other perceived advantages which Console may
offer.
Following a business combination Console may require the services of
others in regard to accounting, legal services, underwritings and corporate
public relations. If requested by a target company, Tiber Creek Corporation
may recommend one or more underwriters, financial advisors, accountants,
public relations firms or other consultants to provide such services.
Terms of a Business Combination
In implementing a structure for a particular business acquisition, Console
may become a party to a merger, consolidation, reorganization, joint venture,
licensing agreement or other arrangement with another corporation or entity.
On the consummation of a transaction, it is likely that the present
management and shareholders of Console will no longer be in control of
Console. In addition, it is likely that the officer and director of Console
will, as part of the terms of the business combination, resign and be
replaced by one or more new officers and directors.
It is anticipated that any securities issued in any such business
combination would be issued in reliance upon exemption from registration
under applicable federal and state securities laws. In many circumstances,
Console may wish to register all or a part of such securities for public
trading after the transaction is consummated. If such registration occurs,
it will be undertaken by the surviving entity after Console has entered into
an agreement for a business combination or has consummated a business
combination and Console is no longer considered a blank check company.
The issuance of additional securities and their potential sale into any
trading market which may develop in the securities of Console may depress
the market value of the securities of Console in the future if such a market
develops, of which there is no assurance.
While the terms of a business transaction to which Console may be a
party cannot be predicted, it is expected that the parties to the business
transaction will desire to avoid the creation of a taxable event and thereby
structure the acquisition in a tax-free reorganization under Sections 351 or
368 of the Internal Revenue Code of 1986, as amended.
Console will participate in a business combination only after the
negotiation and execution of appropriate agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will
require certain representations and warranties of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by the parties prior to and after such
closing and will include miscellaneous other terms.
Tiber Creek Corporation will pay all expenses in regard to its search for
a suitable target company. James M. Cassidy, the officer and director of
Console, will provide his services without charge or repayment by Console.
If Tiber Creek Corporation stops or becomes unable to continue to pay the
operating expenses of Console, Console may not be able to timely make its
periodic reports required under the Exchange Act nor to continue to search
for an acquisition target.
Undertakings and Understandings Required of Target Companies
As part of a business combination agreement, Console intends to obtain
certain representations and warranties from a target company as to its
conduct following the business combination. Such representations and
warranties may include (i) the agreement of the target company to make all
necessary filings and to take all other steps necessary to remain a
reporting company under the Exchange Act for at least a specified period of
time; (ii) imposing certain restrictions on the timing and amount of the
issuance of additional free-trading stock, including stock registered on
Form S-8 or issued pursuant to Regulation S and (iii) giving assurances of
ongoing compliance with the Securities Act, the Exchange Act, the General
Rules and Regulations of the Securities and Exchange Commission, and other
applicable laws, rules and regulations.
A potential target company should be aware that the market price and
trading volume of the securities of Console, when and if listed for
secondary trading, may depend in great measure upon the willingness and
efforts of successor management to encourage interest in Console within
the United States financial community. Console does not have the market
support of an underwriter that would normally follow a public offering of
its securities. Initial market makers are likely to simply post bid and
asked prices and are unlikely to take positions in Console's securities for
their own account or customers without active encouragement and a basis for
doing so. In addition, certain market makers may take short positions in
Console's securities, which may result in a significant pressure on their
market price. Console may consider the ability and commitment of a target
company to actively encourage interest in Console's securities following a
business combination in deciding whether to enter into a transaction with
such company.
A business combination with Console separates the process of becoming
a public company from the raising of investment capital. As a result, a
business combination with Console normally will not be a beneficial
transaction for a target company whose primary reason for becoming a
public company is the immediate infusion of capital. Console may require
assurances from the target company that it has or that it has a reasonable
belief that it will have sufficient sources of capital to continue operations
following the business combination. However, it is possible that a target
company may give such assurances in error, or that the basis for such
belief may change as a result of circumstances beyond the control of the
target company.
Competition
Console 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
Console. In view of Console's combined extremely limited financial
resources and limited management availability, Console will continue to be
at a significant competitive disadvantage compared to Console's
competitors.
ITEM 3. PROPERTIES.
Console has no properties and at this time has no agreements to acquire
any properties. Console currently uses the offices of Tiber Creek
Corporation in Washington, D.C. and Beverly Hills, California, at no cost
to Console. Tiber Creek Corporation will continue this arrangement until
Console completes a business combination.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth each person known by Console to be the
beneficial owner of five percent or more of the common stock of Console,
all directors individually and all directors and officers of Console as a
group. Except as noted, each person has sole voting and investment power
with respect to the shares shown.
Name and Address Amount of Beneficial
of Beneficial Owner Ownership Percentage of Class
- ------------------------ -------------------- -------------------
James M. Cassidy (1) 500,000 50%
1504 R Street, N.W.
Washington, D.C. 20009
James K. McKillop (2) 500,000 50%
9454 Wilshire Boulevard
Beverly Hills, California 90212
All Executive Officers and 500,000 50%
Directors as a Group (1 Person)
(1) As the sole shareholder, officer and director of Tiber Creek
Corporation, a Delaware corporation, Mr. Cassidy is deemed to be the
beneficial owner of the 500,000 shares of common stock of Console owned
by Tiber Creek Corporation
(2) As the sole principal of IRAA Fin Serv, an unincorporated California
business entity, Mr. McKillop is deemed to be the beneficial owner of the
500,000 shares of Console owned by IRAA Fin Serv.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Console has one director and officer as follows:
Name Age Positions and Offices Held
James M. Cassidy 73 President, Secretary, Director
Set forth below is the name of the director and officer of Console, all
positions and offices with Console held, the period during which he has
served as such, and the business experience during at least the last five
years:
James Michael Cassidy, Esq., LL.B., LL.M., has served as the director,
president and secretary of Console since its inception. Mr. Cassidy
received a Bachelor of Science in Languages and Linguistics from
Georgetown University in 1960, a Bachelor of Laws from The Catholic
University School of Law in 1963, and a Master of Laws in Taxation from
The Georgetown University School of Law in 1968. From 1963-1964,
Mr. Cassidy was law clerk to the Honorable Inzer B. Wyatt of the United
States District Court for the Southern District of New York. From
1964-1965, Mr. Cassidy was law clerk to the Honorable Wilbur K. Miller
of the United States Court of Appeals for the District of Columbia. From
1969-1975, Mr. Cassidy was an associate of the law firm of Kieffer &
Moroney and a principal in the law firm of Kieffer & Cassidy, Washington,
D.C. From 1975 to date, Mr. Cassidy has been a principal in the law firm
of Cassidy & Associates, Washington, D.C. and its predecessors, specializing
in securities law and related corporate and federal taxation matters.
Mr. Cassidy is a member of the bars of the District of Columbia and the
State of New York, and is admitted to practice before the United States
Tax Court and the United States Supreme Court.
There are no agreements or understandings for the above-named officer
or director to resign at the request of another person and the above-named
officer and director is not acting on behalf of nor will act at the direction
of any other person.
Conflicts of Interest
James M. Cassidy, the sole officer and director of Console, has organized
and expects to organize other companies of a similar nature and with a
similar purpose as Console. Consequently, there are potential inherent
conflicts of interest in acting as an officer and director of Console. In
addition, insofar as Mr. Cassidy is engaged in other business activities,
he may devote only a portion of his time to the affairs of Console.
Mr. Cassidy is the director and beneficial sole shareholder of Cabinet
Acquisition Corporation, a corporation with a class of securities registered
pursuant to the Securities Exchange Act. Mr. Cassidy is also the director
of, and 50% beneficial shareholder of the following companies which are
filing registration statements on Form 10 for the registration of their
common stock pursuant to the Securities Exchange Act concurrently with the
filing of this registration statement:
Greenmark Acquisition Corporation
Canistel Acquisition Corporation
Spinnet Acquisition Corporation
Hightower Acquisition Corporation
A conflict may arise in the event that another blank check company with
which Mr. Cassidy is affiliated also seeks a target company. It is
anticipated that target companies will be located for Console and other
blank check companies in chronological order of the date of formation of
such blank check companies or, in the case of blank check companies
formed on the same date, alphabetically. However, other blank check
companies may differ from Console in certain items such as place of
incorporation, number of shares and shareholders, working capital, types
of authorized securities, or other items. It may be that a target company
may be more suitable for or may prefer a certain blank check company
other than Console. In such case, a business combination might be
negotiated on behalf of the more suitable or preferred blank check
company.
Mr. Cassidy is the principal of Cassidy & Associates, a securities law
firm located in Washington, D.C. As such, demands may be placed on the
time of Mr. Cassidy which will detract from the amount of time he is able
to devote to Console. Mr. Cassidy intends to devote as much time to the
activities of Console as required. However, should such a conflict arise,
there is no assurance that Mr. Cassidy would not attend to other matters
prior to those of Console.
Mr. Cassidy is the president, director and sole shareholder of Tiber
Creek Corporation, which is a shareholder of Console. At the time of a
business combination, some or all of the shares of common stock owned
by Tiber Creek Corporation may be purchased by the target company or
retired by Console. The amount of common stock which may be sold or
continued to be owned by Tiber Creek Corporation cannot be determined
at this time.
The terms of a business combination may provide for a payment by cash
or otherwise to Tiber Creek Corporation for the purchase or retirement of
all or part of the common stock of Console owned by it by a target
company or for services rendered by Tiber Creek Corporation incident to
or following a business combination. Mr. Cassidy would directly benefit
from such employment or payment. Such benefits may influence Mr.
Cassidy's choice of a target company.
Investment Company Act of 1940
Although Console will be subject to regulation under the Securities Act
and the Exchange Act, management believes Console will not be subject to
regulation under the Investment Company Act of 1940 insofar as Console
will not be engaged in the business of investing or trading in securities.
In the event Console engages in business combinations which result in
Console holding passive investment interests in a number of entities,
Console could be subject to regulation under the Investment Company Act
of 1940. In such event, Console would be required to register as an
investment company and could be expected to incur significant registration
and compliance costs. Console has obtained no formal determination from
the Securities and Exchange Commission as to the status of Console under
the Investment Company Act of 1940. Any violation of such Act would
subject Console to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
The officer and director of Console does not receive any compensation
for his services rendered to Console, has not received such compensation in
the past, and is not accruing any compensation. However, the officer and
director of Console anticipates receiving benefits as a beneficial
shareholder of Console, as the officer and director and sole shareholder of
Tiber Creek Corporation and, possibly, as principal of Cassidy &
Associates, which may perform legal services for Console after the
business combination. See "ITEM 5. DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS Conflicts of
Interest".
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by Console for the
benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE.
Console has issued a total of 1,000,000 shares of common stock pursuant
to Section 4(2) of the Securities Act for a total of $500 in cash.
James M. Cassidy is the sole officer and director of Console and the
sole officer, director and shareholder of Tiber Creek Corporation, which is
a 50% shareholder of Console.
Pursuant to Rule 4200 of The NASDAQ Stock Market describing an
independent director as a person other than an executive officer or
employee of the company or any other individual having a relationship
which, in the opinion of the issuer's board of directors, would interfere
with the exercise of independent judgement in carrying out the
responsibilities of a director. In pertinent part, the rule states the
following persons are not independent directors:
A director who is, or at any time during the past three years was, employed
by the company or by any parent or subsidiary of the Company;
A director who accepted any compensation from the company in excess of
$100,000 during any period of twelve consecutive months other than as
compensation for board or board committee service;
A director who is a partner in, or a controlling shareholder or an executive
officer of, any organization to which the company made, or from which
the company received, payments for property or services in the
current or any of the past three fiscal years that exceed 5% of the
recipient's consolidated gross revenues for that year,
A director who is, or has a family member who is, a current partner of the C
Company's outside auditor.
Console is not currently required to maintain an independent director nor
does it anticipate that it will be applying for listing of its securities on
an exchange in which an independent directorship is required. It is likely
that Mr. Cassidy would not be considered an independent director.
ITEM 8. LEGAL PROCEEDINGS
There is no litigation pending or threatened by or against Console.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON STOCK
AND RELATED STOCKHOLDER MATTERS
(a) Market Price. There is no trading market for Console' common
stock and there has been no trading market to date. There is no assurance
that a trading market will ever develop or, if such a market does
develop, that it will continue.
The Securities and Exchange Commission has adopted Rule 15g-9
which establishes the definition of a "penny stock," for purposes relevant
to Console, as any equity security that has a market price of less than $5.00
per share or with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock, unless
exempt, the rules require:
(i) that a broker or dealer approve a person's account for
transactions in penny stocks and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased.
In order to approve a person's account for transactions in penny
stocks, the broker or dealer must
(i) obtain financial information and investment experience and
objectives of the person; and
(ii) make a reasonable determination that the transactions in penny
stocks are suitable for that person and that person has sufficient knowledge
and experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a
penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlight form,
(i) sets forth the basis on which the broker or dealer made the
suitability determination and
(ii) that the broker or dealer received a signed, written agreement
from the investor prior to the transaction. Disclosure also has to be made
about the risks of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions.
Finally, monthly statements have to be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks.
(b) Holders. The issued and outstanding shares of the common stock
of Console were issued in accordance with the exemptions from
registration afforded by Section 4(2) of the Securities Act of 1933.
(c) Dividends. Console has not paid any dividends to date, and
has no plans to do so in the immediate future. Console presently intends
to retain all earnings, if any, for use in its business operations and
accordingly, the Board of Directors does not anticipate declaring any
dividends prior to a business combination. Dividends, if any, would be
contingent upon Console's revenues and earnings, if any, capital requirements
and financial conditions. The payment of dividends would be within the
discretion of Console's Board of Directors.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, Console has issued 1,000,000 common
shares pursuant to Section 4(2) of the Securities Act of 1933 for an
aggregate purchase price of $100.
ITEM 11. DESCRIPTION OF SECURITIES.
The authorized capital stock of Console consists of 100,000,000 shares of
common stock, par value $.0001 per share, of which there are 1,000,000
issued and outstanding and 20,000,000 shares of preferred stock, par value
$.0001 per share, of which none have been designated or issued. The
following statements relating to the capital stock set forth the material
terms of the securities of Console; however, reference is made to the more
detailed provisions of, and such statements are qualified in their entirety
by reference to, the certificate of incorporation and the by-laws, copies of
which are filed as exhibits to this registration statement.
Common Stock
Holders of shares of common stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of
common stock do not have cumulative voting rights. Holders of common
stock are entitled to share ratably in dividends, if any, as may be declared
from time to time by the Board of Directors in its discretion from funds
legally available therefor. In the event of a liquidation, dissolution or
winding up of Console, the holders of common stock are entitled to share
pro rata all assets remaining after payment in full of all liabilities. All
of the outstanding shares of common stock are fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the
common stock of Console. There are no conversion or redemption rights
or sinking fund provisions with respect to the common stock.
Preferred Stock
The Board of Directors is authorized to provide for the issuance of
shares of preferred stock in series and, by filing a certificate pursuant
to the applicable law of Delaware, to establish from time to time the number
of shares to be included in each such series, and to fix the designation,
powers, preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof without any further vote
or action by the shareholders. Any shares of preferred stock so issued
would have priority over the common stock with respect to dividend or
liquidation rights. Any future issuance of preferred stock may have the
effect of delaying, deferring or preventing a change in control of Console
without further action by the shareholders and may adversely affect the
voting and other rights of the holders of common stock. At present,
Console has no plans to issue any preferred stock nor adopt any series,
preferences or other classification of preferred stock.
The issuance of shares of preferred stock, or the issuance of rights to
purchase such shares, could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of preferred stock might
impede a business combination by including class voting rights that would
enable the holder to block such a transaction, or facilitate a business
combination by including voting rights that would provide a required
percentage vote of the stockholders. In addition, under certain
circumstances, the issuance of preferred stock could adversely affect the
voting power of the holders of the common stock. Although the Board of
Directors is required to make any determination to issue such stock based
on its judgment as to the best interests of the stockholders of Console, the
Board of Directors could act in a manner that would discourage an
acquisition attempt or other transaction that some, or a majority, of the
stockholders might believe to be in their best interests or in which
stockholders might receive a premium for their stock over the then market
price of such stock. The Board of Directors does not at present intend to
seek stockholder approval prior to any issuance of currently authorized
stock, unless otherwise required by law or otherwise. Console has no
present plans to issue any preferred stock.
Trading of Securities in Secondary Market
Following a business combination, a target company will normally wish
to cause Console's common stock to trade in one or more United States
securities markets. The target company may elect to take the steps
required for such admission to quotation following the business
combination or at some later time. Such steps will normally involve filing
a registration statement under the Securities Act. Such registration
statement may include securities held by current shareholders or offered by
Console, including warrants, shares underlying warrants, and debt
securities.
In order to qualify for listing on the Nasdaq Capital Market, a company
must have at least (i) net tangible assets of $4,000,000 or market
capitalization of $50,000,000 or net income for two of the last three years
of $750,000; (ii) public float of 1,000,000 shares with a market value of
$5,000,000; (iii) a bid price of $4.00; (iv) three market makers; (v) 300
round-lot shareholders and (vi) an operating history of one year or, if less
than one year, $50,000,000 in market capitalization. For continued listing
on the Nasdaq Capital Market, a company must have at least (i) net
tangible assets of $2,000,000 or market capitalization of $35,000,000 or
net income for two of the last three years of $500,000; (ii) a public float
of 500,000 shares with a market value of $1,000,000; (iii) a bid price of
$1.00; (iv) two market makers; and (v) 300 round-lot shareholders.
If, after a business combination and qualification of its securities for
trading, Console does not meet the qualifications for listing on the Nasdaq
Capital Market, Console may apply for quotation of its securities on the
OTC Bulletin Board.
In order to have its securities quoted on the OTC Bulletin Board a
company must (i) be a company that reports its current financial
information to the Securities and Exchange Commission, banking
regulators or insurance regulators; and (ii) have at least one market maker
who completes and files a Form 211 with Regulation, Inc.
The OTC Bulletin Board is a dealer-driven quotation service. Unlike the
Nasdaq Stock Market, companies cannot directly apply to be quoted on the
OTC Bulletin Board, only market makers can initiate quotes, and quoted
companies do not have to meet any quantitative financial requirements.
Any equity security of a reporting company not listed on the Nasdaq Stock
Market or on a national securities exchange is eligible.
In certain cases Console may elect to have its securities initially
quoted in the Pink Sheets published by Pink OTC Markets Inc.
In general there is greatest liquidity for traded securities on the
Nasdaq Capital Market, less on the OTC Bulletin Board, and least through
quotation on the Pink Sheets. It is not possible to predict where, if at
all, the securities of Console will be traded following a business
combination and qualification of its securities for trading.
The National Securities Market Improvement Act of 1996 limited the
authority of states to impose restrictions upon resales of securities
made pursuant to Sections 4(1) and 4(3) of the Securities Act of companies
which file reports under Sections 13 or 15(d) of the Exchange Act. Upon
effectiveness of this registration statement, Console will be required to,
and will, file reports under Section 13 of the Exchange Act. As a result,
sales of Console's common stock in the secondary market by the holders
thereof may then be made pursuant to Section 4(1) of the Securities Act
(sales other than by an issuer, underwriter or broker) without qualification
under state securities acts in certain circumstances, the resale of such
shares may be subject to the holding period and other requirements of Rule
144 of the General Rules and Regulations of the Securities and Exchange
Commission.
Transfer Agent
It is anticipated that StockTrans, Inc., Ardmore, Pennsylvania will
act as transfer agent for the common stock of Console.
Additional Information
This registration statement and all other filings of Console when
made with the Securities and Exchange Commission may be viewed and
downloaded at the Securities and Exchange Commission's website at
www.sec.gov.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision
eliminating the personal liability of a director to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 (relating to liability for unauthorized
acquisitions or redemptions of, or dividends on, capital stock) of the
General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit.
Console' certificate of incorporation contains such a provision.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers or persons
controlling the company pursuant to the foregoing provisions, it is the
opinion of the Securities and Exchange Commission that such indemnification
is against public policy as expressed in the Act and is therefore
unenforceable.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Console is a smaller reporting company in accordance with
Regulation S-X.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Console has not changed accountants since its formation and there are
no disagreements with the findings of its accountants.
ITEM 15. FINANCIAL STATEMENTS.
Set forth below are the audited financial statements for Console
for the period ended December 31, 2007 and the unaudited financial
statements for the period ended June 30, 2008. The following financial
statements are attached to this report and filed as a part thereof.
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEET
AS OF June 30, 2008
(Unaudited)
-----------------------
ASSETS
------
Cash $ 500
------
TOTAL ASSETS $ 500
------
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
LIABILITIES
TOTAL LIABILITIES $ --
------
STOCKHOLDER'S EQUITY
Preferred Stock, $.0001 par value,
20,000,000 shares authorized,
none issued and outstanding -
Common Stock, $.0001 par value,
100,000,000 shares authorized,
1,000,000 issued and outstanding 100
Additional paid-in capital 1,050
Deficit accumulated during
development stage (650)
--------
Total Stockholder's Equity 500
--------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $ 500
========
See accompanying notes to condensed financial statements
2
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
-----------------------
For the For the September 13,
6-Months 6-Months 2006
Ended Ended (Inception)
June 30, June 30, to June 30,
2008 2007 2008
Income $ - $ - $ -
Expenses
Organization
expense - - 650
------ ------- -------
Total expenses - - 650
------ ------- -------
NET LOSS $ - $ - $ (650)
========= ====== ======== =======
Basic and diluted--
loss per share $ - $ -
====== ========
Weighted average
number of shares
outstanding;
basic and diluted 1,000,000 1,000,000
========= =========
See accompanying notes to condensed financial statements
3
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE PERIOD FROM SEPTEMBER 13, 2006 (INCEPTION)
THROUGH JUNE 30, 2008
(Unaudited)
--------------------
Deficit
Accumulated
Additional During
Common Stock Issued Paid-In Development
Shares Amount Capital Stage Total
- ----------- ------ ----- ------ -------- --------
BALANCE, SEPTEMBER 13,2006
(Date of Inception)
Common Stock Issuance 1,000,000 $ 100 $ 400 $ - $ 500
Fair value of expense 535
contributed
Net Loss - - 535 (535) (535)
- ----------- --------- ----- ------ ------- --------
Balance as of
December 31, 2006 1,000,000 100 935 (535) 500
Fair Value of expense
contributed 115 115
Net Loss (115) (115)
- ----------- --------- ----- ------ ------- -------
BALANCE AS OF
December 31, 2007 1,000,000 100 1,050 (650) 500
- ----------- --------- ----- ------ ------- -------
Net Loss - - - - -
- ----------- --------- ----- ------ ------- -------
BALANCE AS OF
June 30, 2008 1,000,000 $ 100 $1,050 $ (650) $ 500
============ ========== ======= ======= ======== =======
See accompanying notes to condensed financial statements
4
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
------------------------
For the Six For the Six September 13, 2006
Months Ended Months Ended (Inception) to
June 30, 2008 June 30, 2007 June 30, 2008
----------- ----------- ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ - $ - $ (650)
Adjustment to reconcile
net loss to net cash used by
operating activities
Contributed expenses - - 650
------- ------ --------
Net Cash Used In Operating
Activities - - -
------- ------ --------
CASH FLOWS FROM
INVESTING ACTIVITIES - - -
------- ------ --------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance of
common stock - - 500
------- ------- --------
Net Cash Provided By Financing
Activities - - 500
------- ------- --------
INCREASE IN CASH AND
CASH EQUIVALENTS - - 500
CASH AND CASH EQUIVALENTS
- BEGINNING OF PERIOD 500 - -
------- ------- --------
CASH AND CASH EQUIVALENTS
- END OF PERIOD $ 500 $ - $ 500
=============== ======== ======= ========
See accompanying notes to condensed financial statements
5
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2008
(Unaudited)
--------------------------------
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and Business Operations
Console Acquisition Corporation (a development stage company) ("the
Company") was incorporated in Delaware on September 13, 2006 to serve as a
vehicle to effect a merger, exchange of capital stock, asset acquisition
or other business combination with a domestic or foreign private business.
As of June 30, 2008, the Company had not yet commenced any formal
business operations, and all activity to date relates to the Company's
formation. The Company's fiscal year end is December 31.
The Company's ability to commence operations is contingent upon its
ability to identify a prospective target business.
(B) Interim Financial Statements
The accompanying unaudited condensed financial statements have been
prepared by the Company and reflect all adjustments, consisting only
of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair presentation of the financial position as of
June 30, 2008, and the period September 13, 2006 (inception) through
June 30, 2008, in accordance with accounting principles generally
accepted in the United States of America for interim financial
statements and pursuant to Form 10 and Regulation S-K.
Certain information and footnote disclosures normally included in the
Company's annual audited financial statements have been condensed or
omitted pursuant to such rules and regulations. The results of
operations for the three and six months ended June 30, 2008, are not
necessarily indicative of the results of operations to be expected
for a full fiscal year. These interim condensed financial statements
should be read in conjunction with the financial statements for the
year ended December 31, 2007 contained elsewhere in this amended
Form 10.
(C) Use of Estimates
The preparation of the condensed financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the condensed financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
(D) Cash and Cash Equivalents
For purposes of the condensed statement of cash flows, the Company
considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
(E) Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequence attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to be applied to taxable income in the years in which
those temporary differences are expected to reverse. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in the
statement of operations in the period that includes the enactment date. A
valuation allowance is provided for deferred tax assets if it is more
likely than not these items will either expire before the Company is able
to realize their benefits, or that future deductibility is uncertain.
There were no current or deferred income tax expense or benefits due to
the Company not having any material operations for the periods ended
June 30, 2008 and 2007.
6
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2008
(Unaudited)
--------------------------------
(F) Earnings (loss) Per Share
Basic earnings (loss) per share is computed by dividing income (loss)
available to common shareholders by the weighted-average number of
common shares outstanding during the period. Diluted earnings (loss)
per share is computed similar to basic earnings (loss) per share except
that the denominator is increased to include the number of additional
common shares that would have been outstanding if the potential common
shares had been issued and if the additional common shares were
dilutive. There were no potentially dilutive securities for the
periods ended June 30, 2008 and 2007.
(G) Recent Accounting Pronouncements
In December 2007, the FASB issued SFAS No. 141 (R), Business Combinations,
and SFAS No. 160, Non-controlling Interests in Consolidated Financial
Statements. SFAS No. 141 (R) requires an acquirer to measure the
identifiable assets acquired, the liabilities assumed, and any non-
controlling interest in the acquiree at their fair values on the
acquisition date, with goodwill being the excess value over the net
identifiable assets acquired. SFAS No. 160 clarifies that a non-controlling
interest in a subsidiary should be reported as equity in the consolidated
financial statement. The calculation of earnings per share will continue
to be based on income amounts attributable to the parent. SFAS No. 141 (R)
and SFAS No. 160 are effective for financial statements issued for fiscal
years beginning after December 15, 2008. Early adoption is prohibited. The
Company has not yet determined the effect on our financial statements, if
any, upon adoption of SFAS No. 141 (R) or SFAS No. 160.
Except for the aforementioned accounting standards, management does not
believe that any other recently issued, but not yet effective, accounting
standards, if currently adopted, would have a material effect on the
Company's financial statements.
In May 2008, the FASB issued Statement of Financial Accounting Standards
No. 162, "The Hierarchy of Generally Accepted Accounting Principles,"
or SFAS 162. This standard reorganizes the GAAP hierarchy in order to
improve financial reporting by providing a consistent framework for
determining what accounting principles should be used when preparing
U.S. GAAP financial statements. SFAS 162 is scheduled to become effective
60 days after the SEC's approval of the Public Company Accounting Oversight
Board's amendments to Interim Auditing Standard, AU Section 411, "The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles." We are currently evaluating the impact, if any, this new
standard will have on our financial position and results of operations.
7
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2008
(Unaudited)
--------------------------------
NOTE 2 STOCKHOLDER'S EQUITY
(A) Preferred Stock
The Company is authorized to issue 20,000,000 shares of preferred stock
at $.0001 par value, with such designations, voting and other rights
and preferences as may be determined from time to time by the Board of
Directors.
(B) Common Stock
The Company is authorized to issue 100,000,000 shares of common stock
at $.0001 par value. The Company issued 1,000,000 shares of its common
stock to Pierce Mill Associates, Inc. pursuant to Section 4(2) of the
Securities Act of 1933 for an aggregate consideration of $500.
(C) Additional Paid-In Capital
Additional paid-in capital as of June 30, 2008 represents the fair
value of the amount of organization and professional costs incurred by
related parties on behalf of the Company (See Note 3).
NOTE 3 RELATED PARTIES
Legal counsel to the Company is a firm owned by a director of the
Company who also own 100% of the outstanding stock of Tiber Creek
Corporation, a shareholder of the Company.
8
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2007 AND 2006
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PAGE 2 BALANCE SHEETS AS OF DECEMBER 31, 2007 AND 2006
PAGE 3 STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2007
AND FOR THE PERIOD FROM SEPTEMBER 13, 2006 (INCEPTION)
THROUGH DECEMBER 31, 2006, and for the period from September
13, 2006 (inception) through December 31, 2007
PAGE 4 STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE PERIOD
FROM SEPTEMBER 13, 2006 (INCEPTION) THROUGH DECEMBER 31, 2007
PAGE 5 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31,
2007
AND FOR THE PERIOD FROM SEPTEMBER 13, 2006 (INCEPTION) THROUGH
DECEMBER 31, 2006 and for the period from September 13, 2006
(inception) through December 31, 2007
PAGES 6 - 9 NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007 AND 2006
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of:
Console Acquisition Corporation
We have audited the accompanying balance sheets of Console Acquisition
Corporation (a development stage company) (the "Company") as of December 31,
2007 and 2006 the related statements of operations, changes in stockholders'
equity and cash flows for the years ended December 31, 2007 and for the
period September 13, 2006 (inception) through December 31, 2006. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
We were not engaged to examine management's assertion about the effectiveness
of the Company's internal control over financial reporting as of December 31,
2007 and, accordingly, we do not express an opinion thereon.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Console Acquisition
Corporation as of December 31, 2007 and 2006 and the results of its
operations and its cash flows for the year ended December 31, 2007 and for
the period from September 13, 2006 (inception) through December 31, 2007 in
conformity with accounting principles generally accepted in the United States
of America.
Weinberg & Company, P.A.
Boca Raton, Florida
May 22, 2008
2
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF DECEMBER 31, 2007 AND 2006
-------------------------------
ASSETS
------
2007 2006
---- ----
Cash $ 500 $ 500
------- ------
TOTAL ASSETS $ 500 $ 500
======= ======
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
LIABILITIES $ - $ -
------ -------
STOCKHOLDER'S EQUITY
Preferred stock, $.0001 par value,
20,000,000 shares authorized,
none issued and outstanding - -
Common stock, $.0001 par value,
100,000,000 shares authorized,
1,000,000 issued and outstanding 100 100
Additional paid-in capital 1,050 935
Deficit accumulated during
development stage (650) (535)
------ ------
Total Stockholder's Equity 500 500
------ ------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $ 500 $ 500
====== ======
See accompanying notes to financial statements
3
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
-----------------------
For the Period
For the Period From
For the Year September 13, September 13,
Ended 2006 (Inception) 2006 (Inception)
December 31, to December 31, through December
2007 2006 31, 2007
----------- ------------ --------------
Income $ - $ - $ -
----------- ------------ --------------
Expenses
Organization expense 115 535 650
----------- ------------ --------------
Total expenses 115 535 650
----------- ------------ --------------
NET LOSS $ (115) $ (535) $ (650)
========== ========== =========== ==============
Basic and diluted-- $ - $ -
loss per share ========== ===========
Weighted average
number of shares
outstanding,basic
and diluted 1,000,000 1,000,000
========== ==========
See accompanying notes to financial statements
4
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM SEPTEMBER 13, 2006 (INCEPTION)
THROUGH DECEMBER 31, 2007
-------------------------
Deficit
Accumulated
Additional During
Common Stock Issued Paid-In Development
Shares Amount Capital Stage Total
------- ------ ------- ---------- ------
BALANCE, SEPTEMBER 13,
2006 (Date of
Inception) - - - - -
Common stock issuance 1,000,000 $ 100 $ 400 $ - $ 500
Fair value of expenses
contributed 535 - 0
Net loss (535)
--------- ------ ------- ------- ------
BALANCE AS OF
DECEMBER 31, 2006 1,000,000 $ 100 $ 935 $(535) $ 650
Fair value of expenses
contributed 115 -
Net loss (115)
--------- ------ ------- ------- ------
BALANCE AS OF
DECEMBER 31, 2007 1,000,000 $ 100 $1,050 $(650) $ 500
=================== ========= ===== ======= ========= ======
See accompanying notes to financial statements
5
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
------------------------
For The
For the Period From
Period September 13,
September 13, 2006
For the Year 2006 (Inception)
Ended (Inception) to through
December 31, December 31, December 31,
2007 2006 2007
----------- ----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (115) $ (535) $ (650)
Adjustment to reconcile
net loss to net cash used by
operating activities
Contributed expenses 115 535 650
------- ------- --------
Net Cash Used In Operating Activities - - -
------- ------- --------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
------- ------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock - 500 500
------- -------- --------
Net Cash Provided By Financing
Activities - 500 500
------- ------- -------
INCREASE IN CASH AND CASH EQUIVALENTS - 500 500
CASH AND CASH EQUIVALENTS - BEGINNING
OF PERIOD 500 - -
------- ------- -------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 500 $ 500 $ 500
========================= ======== ======= =======
See accompanying notes to financial statements
6
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2007 AND 2006
--------------------------------
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and Business Operations
Console Acquisition Corporation (a development stage company) ("the Company")
was incorporated in Delaware on September 13, 2006, to serve as a vehicle
to effect a merger, exchange of capital stock, asset acquisition or other
business combination with a domestic or foreign private business. As of
December 31, 2007, the Company had not yet commenced any formal business
operations, and all activity to date relates to the Company's formation.
The Company's fiscal year end is December 31.
The Company's ability to commence operations is contingent upon its ability
to identify a prospective target business.
(B) Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(C) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.
(D) Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequence attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to be applied to taxable income in the years in which
those temporary differences are expected to reverse. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in the
statement of income in the period that includes the enactment date. A
valuation allowance is provided for deferred tax assets if it is more likely
than not these items will either expire before the Company is able to realize
their benefits, or that future deductibility is uncertain. There were no
current or deferred income tax expense or benefits due to the Company not
having any material operations for the years ended December 31, 2007 and 2006.
7
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2007 AND 2006
--------------------------------
(E) Loss Per Share
Basic loss per share is computed by dividing loss available to common
shareholders by the weighted-average number of common shares outstanding
during the period. Diluted loss per share is computed similar to basic
loss per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common shares
were dilutive. There were no potentially dilutive securities for 2007 and
2006.
(F) Recent Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 157, "Fair Value
Measurements" ("SFAS 157"), which establishes a formal framework for
measuring fair value under Generally Accepted Accounting Principles
("GAAP"). SFAS 157 defines and codifies the many definitions of fair
value included among various other authoritative literature, clarifies and,
in some instances, expands on the guidance for implementing fair value
measurements, and increases the level of disclosure required for fair value
measurements. Although SFAS 157 applies to and amends the provisions of
existing FASB and American. Institute of Certified Public Accountants
("AICPA") pronouncements, it does not, of itself, require any new fair
value measurements, nor does it establish valuation standards. SFAS 157
applies to all other accounting pronouncements requiring or permitting
fair value measurements, except for: SFAS 123R, share-based payment and
related pronouncements, the practicability exceptions to fair value
determinations allowed by various other authoritative pronouncements,
and AICPA Statements of Position 97-2 and 98-9 that deal with software
revenue recognition. SFAS 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years. The Company is currently assessing the potential
effect of SFAS 157 on its financial statements.
In February 2007, the FASB issued Statement of Financial Accounting
Standards No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities" ("SFAS 159"), which provides companies with an option to report
selected financial assets and liabilities at fair value. SFAS 159's
objective is to reduce both complexity in accounting for financial
instruments and the volatility in earnings caused by measuring related
assets and liabilities differently. Generally accepted account principles
have required different measurement attributes for different assets and
liabilities that can create artificial volatility in earnings. SFAS 159
helps to mitigate this type of accounting-induced volatility by enabling
companies to report related assets and liabilities at fair value, which
would likely reduce the need for companies to comply with detailed rules
for hedge accounting. SFAS 159 also establishes presentation and disclosure
requirements designed to facilitate comparisons between companies that
choose different measurement attributes for similar types of assets
8
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2007 AND 2006
--------------------------------
and liabilities. SFAS 159 requires companies to provide additional
information that will help investors and other users of financial statements
to more easily understand the effect of the Company's choice to use fair
value on its earnings. SFAS 159 also requires companies to display the fair
value of those assets and liabilities for which the Company has chosen to
use fair value on the face of the balance sheet. SFAS 159 does not eliminate
disclosure requirements included in other accounting standards, including
requirements for disclosures about fair value measurements included in
SFAS 157 and SFAS 107. SFAS 159 is effective as of the beginning of a
Company's first fiscal year beginning after November 15, 2007. Early
adoption is permitted as of the beginning of the previous fiscal year
provided the Company makes that choice in the first 120 days of that fiscal
year and also elects to apply the provisions of SFAS 159. The Company is
currently assessing the potential effect of SFAS 159 on its financial
statements.
In December 2007, the FASB issued SFAS No. 141 (R), Business Combinations,
and SFAS No. 160, Non-controlling Interests in Consolidated Financial
Statements. SFAS No. 141 (R) requires an acquirer to measure the
identifiable assets acquired, the liabilities assumed, and any non-
controlling interest in the acquiree at their fair values on the
acquisition date, with goodwill being the excess value over the net
identifiable assets acquired. SFAS No. 160 clarifies that a non-controlling
interest in a subsidiary should be reported as equity in the consolidated
financial statement. The calculation of earnings per share will continue
to be based on income amounts attributable to the parent. SFAS No. 141 (R)
and SFAS No. 160 are effective for financial statements issued for fiscal
years beginning after December 15, 2008. Early adoption is prohibited. The
Company has not yet determined the effect on our financial statements, if
any, upon adoption of SFAS No. 141 (R) or SFAS No. 160.
Except for the aforementioned accounting standards, management does not
believe that any other recently issued, but not yet effective, accounting
standards, if currently adopted, would have a material effect on the
Company's financial statements.
In May 2008, the FASB issued Statement of Financial Accounting Standards
No. 162, "The Hierarchy of Generally Accepted Accounting Principles,"
or SFAS 162. This standard reorganizes the GAAP hierarchy in order to
improve financial reporting by providing a consistent framework for
determining what accounting principles should be used when preparing
U.S. GAAP financial statements. SFAS 162 is scheduled to become effective
60 days after the SEC's approval of the Public Company Accounting Oversight
Board's amendments to Interim Auditing Standard, AU Section 411, "The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles." We are currently evaluating the impact, if any, this new
standard will have on our financial position and results of operations.
NOTE 2 STOCKHOLDERS' EQUITY
(A) Preferred Stock
The Company is authorized to issue 20,000,000 shares of preferred stock
at $.0001 par value, with such designations, voting and other rights and
preferences as may be determined from time to time by the Board of Directors.
(B) Common Stock
The Company is authorized to issue 100,000,000 shares of common stock at
$.0001 par value. The Company issued 500,000 shares of its common stock to
Tiber Creek Corporation, a Delaware corporation, and 500,000 shares of its
common stock to IRAA Fin Serv, an unincorporated California business entity,
pursuant to Section 4(2) of the Securities Act of 1933 for an aggregate
consideration of $500.
9
CONSOLE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2007 AND 2006
--------------------------------
NOTE 3 RELATED PARTIES
Legal counsel to the Company is a firm owned by the President of the Company
who also owns 100% of the outstanding stock of Tiber Creek Corporation, a 50%
shareholder. Tiber Creek Corporation will perform consulting services for the
Company in the future. Additional paid-in capital as of December 31, 2007
includes $650 the fair value of organization and professional costs incurred
by related parties on behalf of the Company.
PART III
ITEM 1. INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
3.1+ Certificate of Incorporation of Console
Acquisition Corporation
3.2+ By-Laws of Console Acquisition Corporation
3.3+ Specimen stock certificate of Console
Acquisition Corporation
23.1 Consent of Accountants
+ Filed May 23, 2008
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the Registrant caused this registration statement to be signed on its
behalf by the undersigned thereunto duly authorized.
CONSOLE ACQUISITION CORPORATION
By: /s/ James M. Cassidy, President
Date: October 2, 2008