UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
to
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Liquid Financial Engines, Inc
-----------------------------
(Exact name of registrant as specified in its charter)
Florida
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(State or other jurisdiction of incorporation or organization)
7372
----
(Primary Standard Industrial Classification Code Number)
26-3439890
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(I.R.S. Employer Identification Number)
Daniel McKelvey
250 Montgomery Street, Suite 1200, San Francisco, CA 94104
415.296.8510
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(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
As soon as practicable after the effective date of this registration statement
-----------------------------------------------------------------
(Approximate date of commencement of proposed sale to the public)
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting Company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting Company" in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting Company [X]
(Do not check if a smaller reporting Company)
CALCULATION OF REGISTRATION FEE
Title of Each Proposed Proposed
Class of Amount Maximum Maximum Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered Per Unit(1) Offering Price Fee(2)
- ------------- ---------- -------------- -------------- ------------
Common Stock
by Company 4,000,000 $0.01 $40,000 $1.57
(1) The offering price has been arbitrarily determined by the Company and bears
no relationship to assets, earnings, or any other valuation criteria. No
assurance can be given that the shares offered hereby will have a market value
or that they may be sold at this, or at any price.
(2) Estimated solely for the purpose of calculating the registration fee based
on Rule 457 (o).
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Liquid Financial Engines, Inc.
4,000,000 SHARES OF COMMON STOCK
PRIOR TO THIS OFFERING, THERE HAS BEEN NO PUBLIC TRADING MARKET FOR THE COMMON
STOCK OF Liquid Financial Engines, Inc. ("Liquid Financial Engines, Inc.").
Liquid Financial Engines, Inc IS REGISTERING UP TO 4,000,000 SHARES OF COMMON
STOCK AT AN OFFERING PRICE OF $0.01. THE MAXIMUM AMOUNT TO BE RAISED IS $ 40,000
THERE WILL BE NO UNDERWRITING OR BROKER/DEALERS INVOLVED IN THE TRANSACTION AND
THERE WILL BE NO COMMISSIONS PAID TO ANY INDIVIDUALS FROM THE PROCEEDS OF THIS
SALE. THE SHARES ARE BEING OFFERED BY Liquid Financial Engines, Inc. THROUGH ITS
SOLE OFFICER AND DIRECTOR. WE ARE SELLING THE SHARES ON A "BEST EFFORTS, NO
MINIMUM" BASIS. THERE WILL BE NO MINIMUM AMOUNT OF SHARES SOLD AND Liquid
Financial Engines, Inc.' WILL NOT CREATE AN ESCROW ACCOUNT INTO WHICH THE
PROCEEDS FROM ANY SHARES WILL BE PLACED. THE PROCEEDS FROM ALL SHARES SOLD BY
Liquid Financial Engines, Inc WILL BE PLACED INTO THE CORPORATE ACCOUNT AND SUCH
FUNDS SHALL BE NON-REFUNDABLE TO SUBSCRIBERS, EXCEPT AS MAY BE REQUIRED BY
APPLICABLE LAWS.' Liquid Financial Engines, Inc' WILL PAY ALL EXPENSES INCURRED
IN THIS OFFERING
Our common stock is presently not traded on any market or securities exchange.
The offering price may not reflect the market price of our shares after the
offering.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY
IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS" BEGINNING ON PAGE 9.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
This offering is self-underwritten. No underwriter or person has been engaged to
facilitate the sale of shares of common stock in this offering. There are no
underwriting commissions involved in this offering.
The Company is not required to sell any specific number or dollar amount of
securities but will use its best efforts to sell the securities offered.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
The date of this prospectus is _______________, 2009
TABLE OF CONTENTS
Page No.
Part I
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SUMMARY OF OUR OFFERING................................................. 2
SUMMARY OF FINANCIAL INFORMATION........................................ 5
DESCRIPTION OF PROPERTY................................................. 6
RISK FACTORS............................................................ 6
USE OF PROCEEDS......................................................... 16
DETERMINATION OF OFFERING PRICE......................................... 17
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES........................... 17
THE OFFERING BY THE COMPANY............................................. 18
PLAN OF DISTRIBUTION.................................................... 18
LEGAL PROCEEDINGS....................................................... 20
BUSINESS................................................................ 20
STRATEGY................................................................ 21
THE MARKET.............................................................. 21
MANAGEMENT.............................................................. 24
SALES AND MARKETING..................................................... 24
COMPETITION............................................................. 25
STAFFING................................................................ 26
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............... 26
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL.................. 26
CODE OF BUSINESS CONDUCT AND ETHICS..................................... 30
BACKGROUND OF OFFICERS AND DIRECTORS.................................... 31
EXECUTIVE COMPENSATION.................................................. 31
PRINCIPAL STOCKHOLDERS.................................................. 33
DESCRIPTION OF SECURITIES............................................... 34
REPORTING............................................................... 35
STOCK TRANSFER AGENT.................................................... 35
STOCK OPTION PLAN....................................................... 35
LITIGATION.............................................................. 35
EXPERTS................................................................. 35
FINANCIAL STATEMENTS.................................................... F-1
Part II
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OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION ............................ II-1
RECENT SALES OF UNREGISTERED SECURITIES ................................ II-1
EXHIBITS ............................................................... II-1
UNDERTAKINGS ........................................................... II-2
SIGNATURES ............................................................. II-4
DEALER PROSPECTUS DELIVERY OBLIGATION
Until _______________, (90 days after the effective date of this prospectus) all
dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
SUMMARY OF OUR OFFERING
LIQUID FINANCIAL ENGINES, INC has 12,000,000 shares of common stock issued and
outstanding and is registering an additional 4,000,000 shares of common stock
for offering to the public. The company may endeavor to sell all 4,000,000
shares of common stock after this registration becomes effective. The price at
which the company offers these shares is fixed at $0.01 per share for the
duration of the offering. There is no arrangement to address the possible effect
of the offering on the price of the stock. LIQUID FINANCIAL ENGINES, INC will
receive all proceeds from the sale of the common stock.
4,000,000 shares of common stock are offered by the company.
Offering price per share by the A price, if and when the company sells
company the shares of common stock is set at
$0.01.
Number of shares outstanding before 12,000,000 common shares are currently
the offering of common shares issued and outstanding.
Number of shares outstanding after 16,000,000 common shares will be issued
the offering of common shares and outstanding after this offering is
completed.
The minimum number of shares to be None.
sold in this offering
Market for the common shares There is no public market for the common
shares. The price per share is $0.01. In
addition, the offering price for the
shares will remain $0.01 per share until
such a time the shares are quoted on the
Over-The-Counter (OTC) Bulletin Board or
an exchange. The company may sell at
prevailing market prices only after the
shares are quoted on either the OTC
Bulletin Board or an exchange.
LIQUID FINANCIAL ENGINES, INC. may not
be able to meet the requirement for a
public listing or quotation of its
common stock. Further, even if LIQUID
FINANCIAL ENGINES, INC. common stock is
quoted or granted listing, a market for
the common shares may not develop. If a
market develops, the price of the shares
in the market may not be greater than or
equal to the price in this offering.
Use of proceeds The company intends to use the proceeds
from this offering to develop and
complete the business and marketing
plan, and for other general corporate
and working capital purposes. The
expenses of this offering, including the
preparation of this prospectus and the
filing of this registration statement,
estimated at $5,000 are being paid for
by Liquid financial engine, Inc.
2
Termination of the offering The offering will conclude when all
4,000,000 shares of common stock have
been sold, or 90 days after this
registration statement becomes effective
with the Securities and Exchange
Commission. Liquid financial Engines,
Inc. may at its discretion extend the
offering May, at its discretion extend
the offering for an additional 90 days.
Terms of the offering The company will determine when and how
it will sell the common stock offered in
this prospectus.
You should rely only upon the information contained in this prospectus. LIQUID
FINANCIAL ENGINES, INC has not authorized anyone to provide you with information
different from that which is contained in this prospectus. The selling security
holder is offering to sell shares of common stock and seeking offers to buy
shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus, or of any sale of the common stock.
This summary provides an overview of selected information contained in this
prospectus. It does not contain all the information that you should consider
before making a decision to purchase the shares offered by the selling security
holders. You should very carefully and thoroughly read the more detailed
information in this prospectus and review our financial statements.
SUMMARY INFORMATION ABOUT LIQUID FINANCIAL ENGINES, INC
Liquid Financial Engines, Inc. ("Liquid Financial Engines, Inc." or "LFE") is a
development stage company, incorporated in the State of Florida on, 09/29/2008,
to develop and market financial software systems for banks, brokerage firms,
pension funds, family offices, and hedge funds.
LFE's targeted client base includes some of the most innovative money managers
in the hedge fund and fund of funds sectors. LFE's product suites, FundSprint
and LiquidEquity, are intended to be vertically focused in the Customer
Relationship Management (CRM) space with wide application across the broader
financial markets industry.
LFE intends to combine domain expertise with tested, stable software modules to
satisfy demanding requirements. Founded by an experienced investment and IT
professional, LFE intends to provide a combination of technical aptitude,
creative professionalism, high-touch with the target audience, and knowledge of
compliance issues. LFE's product suites hope to effectively bridge the
communication gap between investment managers and their investors. The company
intends to provide software, services and web applications under the FundSprint,
and LiquidEquity brands.
Founded in 09/29/2008, Liquid Financial Engines, Inc. intends to develop
interactive customer management software targeted specifically at the capital
markets. The software provides the professional the ability to combine web based
LFE solutions enable funds to combine qualitative research with quantitative
analysis to effectively market, sell, and manage client relationships. LFE
allows a manager to market, sell and manage client relationships throughout the
life of a fund. LFE products intend to be scalable, customizable, industrial
strength and easy to use.
3
Our business and registered office is located at 250 Montgomery Street, Suite
1200, San Francisco, CA 94104. Our contact number is 415.296.8510.
As of October 31, 2008, Liquid Financial Engines, Inc. had raised $9,000 through
the sale of its common stock. There is $8,988 of cash on hand in the corporate
bank account. The Company currently has liabilities of $0 represented by
expenses accrued during its start-up. In addition, the Company anticipates
incurring costs associated with this offering totaling approximately $5,000. As
of the date of this prospectus, we have not generated any revenue from our
business operations. The following financial information summarizes the more
complete historical financial information found in the audited financial
statements of the Company filed with this prospectus.
SUMMARY OF THE OFFERING BY THE COMPANY
Liquid Financial Engines, Inc. has 12,000,000 shares of common stock issued and
outstanding and is registering an additional 4,000,000 shares for offering to
the public. The Company will endeavor to sell all 4,000,000 shares of common
stock after this registration statement becomes effective. The price at which
the Company is offering these shares is fixed at $0.01 per share for the
duration of the offering. There is no arrangement to address the possible effect
of the offering on the price of the stock. Liquid Financial Engines, Inc. will
receive all proceeds from the sale of the common stock.
- --------------------------------------------------------------------------------
Securities being offered by 4,000,000 shares of common stock are
the Company, common stock, offered by the Company.
par value $0.01
- --------------------------------------------------------------------------------
Offering price per share by A price, if and when the Company sells
the Company. the shares of common stock, is set at
$0.01.
- --------------------------------------------------------------------------------
Number of shares outstanding 12,000,000 common shares are currently
before the offering of common issued and outstanding.
shares.
- --------------------------------------------------------------------------------
Number of shares outstanding 16,000,000 common shares will be issued
after the offering of common and outstanding after this offering is
shares. completed.
- --------------------------------------------------------------------------------
Minimum number of shares to None.
be sold in this offering
- --------------------------------------------------------------------------------
Market for the common shares There is no public market for the common
shares. The price per share is $0.01.
Liquid Financial Engines, Inc. may not
be able to meet the requirement for a
public listing or quotation of its
common stock. Further, even if Liquid
Financial Engines, Inc.'s common stock
is quoted or granted a listing, a market
for the common shares may not develop.
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
Use of proceeds Liquid Financial Engines, Inc. will
receive all proceeds from the sale of
the common stock. If all 4,000,000
common shares being offered are sold,
the total gross proceeds to the Company
would be $40,000. The company intends to
use the proceeds from this offering to
develop and complete the business and
marketing plan, and for other general
corporate and working capital purposes.
The expenses of this offering, including
the preparation of this prospectus and
the filing of this registration
statement, estimated at $5,000.00 are
being paid for by Liquid Financial
Engines, Inc.
- --------------------------------------------------------------------------------
Termination of the offering The offering will conclude when all
4,000,000 shares of common stock have
been sold, or 90 days after this
registration statement becomes effective
with the Securities and Exchange
Commission. Liquid Financial Engines,
Inc. may at its discretion extend the
offering for an additional 90 days.
- --------------------------------------------------------------------------------
Terms of the offering The Company's president and sole
director will sell the common stock upon
effectiveness of this registration
statement.
- --------------------------------------------------------------------------------
You should rely only upon the information contained in this prospectus. Liquid
Financial Engines, Inc. has not authorized anyone to provide you with
information different from that which is contained in this prospectus. The
Company is offering to sell shares of common stock and seeking offers only in
jurisdictions where offers and sales are permitted. The information contained
herein is accurate only as of the date of this prospectus, regardless of the
time of delivery of this prospectus or of any sale of the common stock.
SUMMARY OF FINANCIAL INFORMATION
The following summary financial information for the periods stated summarizes
certain information from our financial statements included elsewhere in this
prospectus. You should read this information in conjunction with Management's
Plan of Operations, the financial statements and the related notes thereto
included elsewhere in this prospectus.
BALANCE SHEET AS OF OCTOBER 31, 2008
------------- ----------------------
Total Assets $8,988
Total Liabilities $ 0
Shareholder's Equity $8,988
OPERATING DATA SEPTEMBER 29 2008 THROUGH OCTOBER 31, 2008
-------------- ------------------------------------------
Revenue $ 0.00
Net Loss $ 0.00
Net Loss Per Share $ 0.00
5
As indicated in the financial statements accompanying this prospectus, Liquid
Financial Engines, Inc. has had no revenue to date and has incurred only losses
since its inception. The Company has had no operations and has been issued a
"going concern" opinion from their auditors, based upon the Company's reliance
upon the sale of our common stock as the sole source of funds for our future
operations.
DESCRIPTION OF PROPERTY
The company does not own any real estate or other properties. The company's
office is located at 250 Montgomery Street, Suite 1200, San Francisco, CA
94104.. The business office is located at the office of Daniel McKelvey, the CEO
of the company at no charge.
SUMMARY OF OUR FINANCIAL INFORMATION
Balance Sheet
As of October 31, 2008
------------------------------------
Total Assets ............ $8,988
Total Liabilities ....... $ 0
Equity .................. $8,988
Operating Data
For the Year ended October 31, 2008
------------------------------------
Revenue ................. Nil
Net Loss ................ $ 12
Net Loss Per Share ...... $ 0
Liquid Financial Engines, Inc. has no revenues and has lost $12 since inception.
Liquid Financial Engines, Inc. has had no operations (and has been issued a
"going concern" opinion by its auditor.
RISK FACTORS
Please consider the following risk factors and other information in this
prospectus relating to our business and prospects before deciding to invest in
our common stock.
This offering and any investment in our common stock involves a high degree of
risk. You should carefully consider the risks described below and all of the
information contained in this prospectus before deciding whether to purchase our
common stock. If any of the following risks actually occur, our business,
financial condition and results of operations could be harmed. The trading price
of our common stock could decline due to any of these risks, and you may lose
all or part of your investment.
The Company considers the following to be the material risks for an investor
regarding this offering. Secure Window should be viewed as a high-risk
investment and speculative in nature. An investment in our common stock may
result in a complete loss of the invested amount. Please consider the following
risk factors before deciding to invest in our common stock.
6
AUDITOR'S GOING CONCERN
- -----------------------
THERE IS SUBSTANTIAL UNCERTAINTY ABOUT THE ABILITY OF LIQUID FINANCIAL ENGINES,
INC. TO CONTINUE ITS OPERATIONS AS A GOING CONCERN
In their audit report dated December 8, 2008; our auditors have expressed an
opinion that substantial doubt exists as to whether we can continue as an
ongoing business. Because our officers may be unwilling or unable to loan or
advance any additional capital to Liquid Financial Engines, Inc. we believe that
if we do not raise additional capital within 12 months of the effective date of
this registration statement, we may be required to suspend or cease the
implementation of our business plans. Due to the fact that there is no minimum
investment and no refunds on sold shares, you may be investing in a Company that
will not have the funds necessary to develop its business strategies. As such we
may have to cease operations and you could lose your entire investment. See the
"October 31, 2008 Audited Financial Statements - Auditors Report". Because the
Company has been issued an opinion by its auditors that substantial doubt exists
as to whether it can continue as a going concern it may be more difficult to
attract investors.
RISKS RELATED TO OUR FINANCIAL CONDITION
- ----------------------------------------
SINCE LIQUID FINANCIAL ENGINES, INC. ANTICIPATES OPERATING EXPENSES WILL
INCREASE PRIOR TO EARNING REVENUE, IT MAY NEVER ACHIEVE PROFITABILITY
The Company anticipates an increase in its operating expenses, without realizing
any revenues from the sale of its products. Within the next 12 months, the
Company will have costs related to (i) the development of products (prototypes),
(ii) initiation of the Company's sales and marketing campaign, (iii) purchase of
equipment, materials and storage, (iv) administrative expenses and (v) the
expenses of this offering.
There is no history upon which to base any assumption as to the likelihood that
the Company will prove successful. We cannot provide investors with any
assurance that our products will attract customers; generate any operating
revenue or ever achieve profitable operations. If we are unable to address these
risks, there is a high probability that our business can fail, which will result
in the loss of your entire investment.
OUR BUSINESS WILL FAIL IF WE DO NOT OBTAIN ADEQUATE FINANCING, RESULTING IN THE
COMPLETE LOSS OF YOUR INVESTMENT
If we are not successful in earning revenue once we have started our sale
activities, we may require additional financing to sustain our business
operations. Currently, we do not have any arrangements for financing and can
provide no assurances to investors that we will be able to obtain any when
required. Obtaining additional financing would be subject to a number of
factors, including the Company's sales results. These factors may have an affect
on the timing, amount, terms or conditions of additional financing and make such
additional financing unavailable to us. See "Description of Business."
No assurance can be given that the Company will obtain access to capital markets
in the future or that adequate financing to satisfy the cash requirements of
implementing our business strategies will be available on acceptable terms. The
inability of the Company to gain access to capital markets or obtain acceptable
financing could have a material adverse effect upon the results of its
operations and its financial conditions.
7
RISKS RELATED TO THIS OFFERING
- ------------------------------
BECAUSE THERE IS NO PUBLIC TRADING MARKET FOR OUR COMMON STOCK, YOU MAY NOT BE
ABLE TO RESELL YOUR STOCK
There is currently no public trading market for our common stock. Therefore,
there is no central place, such as a stock exchange or electronic trading
system, to resell your shares. If you do want to resell your shares, you will
have to locate a buyer and negotiate your own sale. The offering price and other
terms and conditions relative to the Company's shares have been arbitrarily
determined by the Company and do not bear any relationship to assets, earnings,
book value or any other objective criteria of value. Additionally, as the
Company was formed recently and has only a limited operating history and no
earnings, the price of the offered shares is not based on its past earnings and
no investment banker, appraiser or other independent third party has been
consulted concerning the offering price for the shares or the fairness of the
offering price used for the shares.
INVESTING IN THE COMPANY IS HIGHLY SPECULATIVE AND COULD RESULT IN THE ENTIRE
LOSS OF YOUR INVESTMENT
Purchasing the offered shares is highly speculative and involves significant
risk. The offered shares should not be purchased by any person who cannot afford
to lose their entire investment. The business objectives of the Company are also
speculative, and it is possible that we would be unable to accomplish them. The
Company's shareholders may be unable to realize a substantial or any return on
their purchase of the offered shares and may lose their entire investment. For
this reason, each prospective purchaser of the offered shares should read this
prospectus and all of its exhibits carefully and consult with their attorney,
business and/or investment advisor.
INVESTING IN OUR COMPANY MAY RESULT IN AN IMMEDIATE LOSS BECAUSE BUYERS WILL PAY
MORE FOR OUR COMMON STOCK THAN THE PRO RATA PORTION OF THE ASSETS ARE WORTH
The Company has only been recently formed and has only a limited operating
history and no earnings, therefore, the price of the offered shares is not based
on any data. The offering price and other terms and conditions regarding the
Company's shares have been arbitrarily determined and do not bear any
relationship to assets, earnings, book value or any other objective criteria of
value. No investment banker, appraiser or other independent third party has been
consulted concerning the offering price for the shares or the fairness of the
offering price used for the shares.
The arbitrary offering price of $0.01 per common share as determined herein is
substantially higher than the net tangible book value per share of the Company's
common stock. Liquid Financial Engines, Inc.' assets do not substantiate a share
price of $0.01. This premium in share price applies to the terms of this
offering and does not attempt to reflect any forward looking share price
subsequent to the Company obtaining a listing on any exchange, or becoming
quoted on the OTC Bulletin Board.
8
BECAUSE THE COMPANY HAS 250,000,000 AUTHORIZED SHARES, MANAGEMENT COULD ISSUE
ADDITIONAL SHARES, DILUTING THE CURRENT SHARE HOLDERS' EQUITY
The Company has 250,000,000 authorized shares, of which only 12,000,000 are
currently issued and outstanding and only 16,000,000 will be issued and
outstanding after this offering terminates. The Company's management could,
without the consent of the existing shareholders, issue substantially more
shares, causing a large dilution in the equity position of the Company's current
shareholders. Additionally, large share issuances would generally have a
negative impact on the Company's share price. It is possible that, due to
additional share issuance, you could lose a substantial amount, or all, of your
investment.
AS WE DO NOT HAVE AN ESCROW OR TRUST ACCOUNT WITH SUBSCRIPTIONS FOR INVESTORS,
IF WE FILE FOR OR ARE FORCED INTO BANKRUPTCY PROTECTION, THEY WILL LOSE THE
ENTIRE INVESTMENT
Invested funds for this offering will not be placed in an escrow or trust
account and if we file for bankruptcy protection or a petition for involuntary
bankruptcy is filed by creditors against us, your funds will become part of the
bankruptcy estate and administered according to the bankruptcy laws. As such,
you will lose your investment and your funds will be used to pay creditors.
THE COMPANY DOES NOT ANTICIPATE PAYING DIVIDENDS IN THE FORESEEABLE FUTURE, SO
THERE WILL BE FEWER WAYS IN WHICH YOU CAN MAKE A GAIN ON ANY INVESTMENT IN THIS
COMPANY
We do not anticipate paying dividends on our common stock in the foreseeable
future, but plan rather to retain earnings, if any, for the operation growth and
expansion of our business.
AS WE MAY BE UNABLE TO CREATE OR SUSTAIN A MARKET FOR OUR SHARES, THEY MAY BE
EXTREMELY ILLIQUID
If no market develops, the holders of our common stock may find it difficult or
impossible to sell their shares. Further, even if a market develops, our common
stock will be subject to fluctuations and volatility and the Company cannot
apply directly to be quoted on the NASD Over-The-Counter Bulletin Board (OTC).
Additionally, the stock may be listed or traded only to the extent that there is
interest by broker-dealers in acting as a market maker in the Company's stock.
Despite the Company's best efforts, it may not be able to convince any
broker/dealers to act as market-makers and make quotations on the OTC Bulletin
Board. The Company may consider pursuing a listing on the OTCBB after this
registration becomes effective and the Company has completed its offering.
IN THE EVENT THAT THE COMPANY'S SHARES ARE TRADED, THEY MAY TRADE UNDER $5.00
PER SHARE AND THUS WILL BE A PENNY STOCK. TRADING IN PENNY STOCKS HAS MANY
RESTRICTIONS AND THESE RESTRICTIONS COULD SEVERELY AFFECT THE PRICE AND
LIQUIDITY OF THE COMPANY'S SHARES
In the event that our shares are traded, and our stock trades below $5.00 per
share, our stock would be known as a "penny stock", which is subject to various
regulations involving disclosures to be given to you prior to the purchase of
any penny stock. The U.S. Securities and Exchange Commission (the "SEC") has
adopted regulations which generally define a "penny stock" to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. Depending on market fluctuations, our common stock could be
considered to be a "penny stock". A penny stock is subject to rules that impose
additional sales practice requirements on broker/dealers who sell these
9
securities to persons other than established customers and accredited investors.
For transactions covered by these rules, the broker/dealer must make a special
suitability determination for the purchase of these securities. In addition, he
must receive the purchaser's written consent to the transaction prior to the
purchase. He must also provide certain written disclosures to the purchaser.
Consequently, the "penny stock" rules may restrict the ability of broker/dealers
to sell our securities, and may negatively affect the ability of holders of
shares of our common stock to resell them. These disclosures require you to
acknowledge that you understand the risks associated with buying penny stocks
and that you can absorb the loss of your entire investment. Penny stocks are low
priced securities that do not have a very high trading volume. Consequently, the
price of the stock is often volatile and you may not be able to buy or sell the
stock when you want to.
SINCE OUR SOLE OFFICER AND DIRECTOR CURRENTLY OWNS 100% OF THE OUTSTANDING
COMMON STOCK, INVESTORS MAY FEEL THAT HIS DECISIONS ARE CONTRARY TO THEIR
INTERESTS
The Company's sole officer and director own 100% of the outstanding shares and
will own 75 % after this offering is completed. As a result, he may have control
of the Company and be able to choose all of our directors. His interests may
differ from those of other stockholders. Factors that could cause his interests
to differ from the other stockholders include the impact of corporate
transactions on the timing of business operations and his ability to continue to
manage the business given the amount of time he is able to devote to the
Company.
All decisions regarding the management of the Company's affairs will be made
exclusively by him. Purchasers of the offered shares may not participate in the
management of the Company and, therefore, are dependent upon his management
abilities. The only assurance that the shareholders of the Company, including
purchasers of the offered shares, have that the Company's sole officer and
director will not abuse his discretion in executing the Company's business
affairs, is his fiduciary obligation and business integrity. Such discretionary
powers include, but are not limited to, decisions regarding all aspects of
business operations, corporate transactions and financing. Accordingly, no
person should purchase the offered shares unless willing to entrust all aspects
of management to the sole officer and director, or his successors. Potential
purchasers of the offered shares must carefully evaluate the personal experience
and business performance of the Company's management.
RISKS RELATED TO INVESTING IN OUR COMPANY
- -----------------------------------------
OUR LACK OF AN OPERATING HISTORY GIVES NO ASSURANCE THAT OUR FUTURE OPERATIONS
WILL RESULT IN PROFITABLE REVENUES, WHICH COULD RESULT IN THE SUSPENSION OR
TERMINATION OF OUR OPERATIONS
We were incorporated on September 29, 2008 and we have not realized any revenues
to date. We have very little operating history upon which an evaluation of our
future success or failure can be made. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon the completion of this
offering and our ability to generate revenues through sales of our products.
Based upon current plans, we expect to incur operating losses in future periods
because we will be incurring expenses and not generating revenues. We cannot
guarantee that we will be successful in generating revenues in the future.
Failure to generate revenues will cause us to go out of business.
10
OUR OPERATING RESULTS MAY PROVE UNPREDICTABLE
Our operating results are likely to fluctuate significantly in the future due to
a variety of factors, many of which we have no control over. Factors that may
cause our operating results to fluctuate significantly include: our inability to
generate enough working capital from future equity sales; the level of
commercial acceptance by the public of our products; fluctuations in the demand
for our product and capital expenditures relating to expansion of our business,
operations and infrastructure and general economic conditions. If realized, any
of these risks could have a materially adverse effect on our business, financial
condition and operating results.
BECAUSE WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MUST LIMIT OUR MARKETING
ACTIVITIES. AS A RESULT, OUR SALES MAY NOT BE ENOUGH TO OPERATE PROFITABLY. IF
WE DO NOT MAKE A PROFIT, WE MAY HAVE TO SUSPEND OR CEASE OPERATIONS.
Due to the fact we are small and do not have much capital, we must limit our
marketing activities to potential customers having the likelihood of purchasing
our products. We intend to generate revenue through the sale of our products.
Because we will be limiting the scope of our marketing activities, we may not be
able to generate enough sales to operate profitably. If we cannot operate
profitably, we may have to suspend or cease operations.
THE COMPANY'S SOLE OFFICER AND DIRECTOR MAY NOT BE IN A POSITION TO DEVOTE A
MAJORITY OF HIS TIME TO THE COMPANY, WHICH MAY RESULT IN PERIODIC INTERRUPTIONS
AND EVEN BUSINESS FAILURE.
Mr. McKelvey, our sole officer and director, has other business interests and
currently devotes approximately 20 to 25 hours per week to our operations. Our
operations may be sporadic and occur at times which are not convenient to Mr.
McKelvey, which may result in periodic interruptions or suspensions of our
business plan. If the demands of the Company's business require the full
business time of our sole officer and director, he is prepared to adjust his
timetable to devote more time to the Company. However, he may not be able to
devote sufficient time to the management of the business, which may result in
periodic interruptions in implementing the Company's plans in a timely manner.
Such delays could have a significant negative effect on the success of the
business.
KEY MANAGEMENT PERSONNEL MAY LEAVE THE COMPANY WHICH COULD ADVERSELY AFFECT THE
ABILITY OF THE COMPANY TO CONTINUE OPERATIONS.
Because the Company is entirely dependent on the efforts of its sole officer and
director, his departure or the loss of other key personnel in the future, could
have a materially adverse effect on the business. The Company believes that all
commercially reasonable efforts have been made to minimize the risks associated
with the departure by key personnel from service. However, there is no guarantee
that replacement personnel, if any, will help the Company to operate profitably.
The Company does not maintain key person life insurance on its sole officer and
director.
IF THE COMPANY IS DISSOLVED, IT IS UNLIKELY THAT THERE WILL BE SUFFICIENT ASSETS
REMAINING TO DISTRIBUTE TO THE SHAREHOLDERS.
11
In the event of the dissolution of the Company, the proceeds realized from the
liquidation of its assets, if any, will be used primarily to pay the claims of
the Company's creditors, if any, before there can be any distribution to the
shareholders. In that case, the ability of purchasers of the offered shares to
recover all or any portion of the purchase price for the offered shares will
depend on the amount of funds realized and the claims to be satisfied there
from.
RISKS RELATED TO THE COMPANY'S MARKET AND STRATEGY
- --------------------------------------------------
WE ARE A NEW COMPANY WITH NO OPERATING HISTORY AND WE FACE A HIGH RISK OF
BUSINESS FAILURE WHICH WOULD RESULT IN THE LOSS OF YOUR INVESTMENT.
We are a development stage Company formed recently to carry out the activities
described in this prospectus and thus have only a limited operating history upon
which an evaluation of its prospects can be made. We were incorporated on
September 29, 2008 and to date have been involved primarily in the design of our
business plan and we have no business operations. Thus, there is no internal or
industry-based historical financial data upon which to estimate our planned
operating expenses.
The Company expects that its results of operations may also fluctuate
significantly in the future as a result of a variety of market factors
including, among others, the entry of new competitors offering a similar
product; the availability of motivated and qualified personnel; the initiation,
renewal or expiration of our customer base; pricing changes by the Company or
its competitors, specific economic conditions in the financial markets.
Accordingly, our future sales and operating results are difficult to forecast.
As of the date of this prospectus, we have earned no revenue. Failure to
generate revenue will cause us to go out of business, which could result in the
complete loss of your investment.
WE MAY BE UNABLE TO GAIN ANY SIGNIFICANT MARKET ACCEPTANCE FOR OUR PRODUCTS OR
ESTABLISH A SIGNIFICANT MARKET PRESENCE.
The Company's growth strategy is substantially dependent upon its ability to
market its products successfully to prospective clients. However, its planned
services may not achieve significant acceptance. Such acceptance, if achieved,
may not be sustained for any significant period of time. Failure of the
Company's services to achieve or sustain market acceptance could have a
materially adverse effect on our business, financial conditions and the results
of our operations.
MANAGEMENT'S ABILITY TO IMPLEMENT THE BUSINESS STRATEGY
Although the Company intends to pursue a strategy of marketing its products
throughout North America, our business success depends on a number of factors.
These include: our ability to establish a significant customer base and maintain
favorable relationships with customers and partners; obtain adequate business
financing on favorable terms in order to buy all the necessary equipment and
materials; development and maintenance of appropriate operating procedures,
policies and systems; hire, train and retain skilled employees. The inability of
the Company to manage any or all of these factors could impair its ability to
implement its business strategy successfully, which could have a materially
adverse effect on the results of its operations and its financial condition.
12
LIQUID FINANCIAL ENGINES, INC. MAY BE UNABLE TO MANAGE ITS FUTURE GROWTH
The Company expects to experience continuous growth for the foreseeable future.
Its growth may place a significant strain on management, financial, operating
and technical resources. Failure to manage this growth effectively could have a
materially adverse effect on the Company's financial condition or the results of
its operations.
RISKS RELATED TO INVESTING IN OUR BUSINESS
- ------------------------------------------
THE COMPANY MAY BE UNABLE TO MAKE NECESSARY ARRANGEMENTS AT ACCEPTABLE COSTS
Because we are a small business, with limited assets, we are not in a position
to assume unanticipated costs and expenses. If we have to make changes in the
Company structure or are faced with circumstances that are beyond our ability to
afford, we may have to suspend operations or cease operations entirely which
could result in a total loss of your investment.
BECAUSE WE HAVEN'T BUILT A PROTOTYPE, OUR PRODUCTS MAY NOT WORK PROPERLY AND/OR
THE PRODUCTION COST CAN EXCEED EXPECTATIONS
We have not built a prototype of our software yet; therefore, we don't know the
exact cost of production. In the case of a higher than expected cost of
production, we won't be able to offer our products at a reasonable price.
Furthermore, we may find problems in the development process and/or product
functionality. If we are unable to develop our products, we will have to cease
our operations, resulting in the complete loss of your investment.
GENERAL COMPETITION
The Company has identified a market opportunity for our products. Competitors
may enter this sector with superior products, services, conditions and/or
benefits. This would infringe on our customer base, have an adverse affect upon
our business and the results of our operations
The financial software industry is a highly competitive market. We will compete
with both large and small corporations. Most of these companies have greater
financial and personnel resources than we do.
IF WE CANNOT PRODUCE FINANCIAL SOFTWARE THAT MEETS PRICE AND/OR PERFORMANCE
CRITERIA, THE BUSINESS WILL FAIL.
IF, AFTER DEMONSTRATING PROOF-OF-CONCEPT, WE ARE UNABLE TO ESTABLISH
RELATIONSHIPS WITH DEVELOPMENT PARTNERS AND/OR CUSTOMERS, THE BUSINESS WILL
FAIL.
13
Because there may be a substantial delay between the completion of this offering
and the execution of the business plan, our expenses may be increased and it may
take us longer to generate revenues. We have no way to predict when we will
begin our service.
There is No Minimum Number of Shares we have to sell in this Offering. We are
making this offering on a "best efforts, no minimum basis." What this means is
that all the net proceeds from this Offering will be immediately available for
use by us and we don't have to wait until a minimum number of Shares have been
sold to keep the proceeds from any sales. We can't assure you that subscriptions
for the entire Offering will be obtained. We have the right to terminate the
offering of the Shares at any time, regardless of the number of Shares we have
sold since there is no minimum subscription requirement. Our ability to meet our
financial obligations and cash needs, and to achieve our objectives, could be
adversely affected if the entire offering of Shares is not fully subscribed for.
State Blue Sky laws may limit resale of the Shares. The holders of our shares of
common stock and persons who desire to purchase them in any trading market that
might develop in the future should be aware that there may be significant state
law restrictions upon the ability of investors to resell our shares.
Accordingly, even if we are successful in having the Shares available for
trading on the OTCBB, investors should consider any secondary market for the
Company's securities to be a limited one. We intend to seek coverage and
publication of information regarding the Company in an accepted publication
which permits a "manual exemption". This 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 issuers,
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. If we do not execute
our business plan on schedule or within budget, our ability to generate revenue
may be diminished or delayed. Our ability to adhere to our schedule and budget
face many uncertainties.
WE DO NOT MAINTAIN PRODUCT LIABILITY COVERAGE. WE COULD BECOME LIABLE FOR
UNINSURED PRODUCT LIABILITY CLAIMS WHICH WOULD ADVERSELY AFFECT OUR ABILITY TO
CONTINUE AS A GOING CONCERN, HOWEVER, WE INTEND TO PROVIDE PRODUCTS LIABILITY
INSURANCE PRIOR TO ANY SALE OF OUR SERVICE OFFERINGS.
The company does not maintain any product liability insurance at this time. Once
the product is released, the Company will evaluate the need for product
liability insurance. If no product liability insurance is obtained, product
claims against the company could have a material affect and potentially cause
the business to fail.
SHOULD OUR SOLE OFFICER AND DIRECTOR LEAVE THE COMPANY, WE MAY BE UNABLE TO
CONTINUE OUR OPERATIONS.
14
Daniel McKelvey, our sole officer and director, has other outside business
activities and is devoting only approximately 20-25 hours per week to our
operations. Our operations may be sporadic and occur at times which are not
convenient to Daniel McKelvey, which may result in periodic interruptions or
suspensions of our business plan. If the demands of the company's business
require the full time of our executive officer, he is prepared to adjust his
timetable in order to devote more time to conducting our business operations.
However, our executive officer may be unable to devote sufficient time to the
management of the company's business, which may result in periodic interruptions
in the implementation of the company's business plans and operations. Such
delays could have a significant negative effect on the success of our business.
The company is entirely dependent on the efforts and abilities of its sole
officer and director. The loss of our sole officer and director could have a
materially adverse effect on the business and its prospects. The company
believes that all commercially reasonable efforts have been made to minimize the
risks associated with the departure from service of our current sole officer and
director. However, replacement personnel may be unavailable to us. Moreover,
even if available, replacement personnel may not enable the company to operate
profitably.
All decisions regarding the management of the company's affairs will be made
exclusively by its sole officer and director. Purchasers of the offered shares
may not participate in the management of the company and, therefore, are
dependent upon the management abilities of the company's sole officer and
director. The only assurance that the shareholders of the company (including
purchasers of the offered shares) have that the company's sole officer and
director will not abuse his discretion in making decisions, with respect to its
affairs and other business decisions, is his fiduciary obligations and business
integrity. Accordingly, no person should purchase offered shares unless that
person is willing to entrust all aspects of management to the company's sole
officer and director, or his successors. Potential purchasers of the offered
shares must carefully evaluate the personal experience and business performance
of the company's management.
The company's management may retain independent contractors to provide services
to the company. Those independent individuals and organizations have no
fiduciary duty to the shareholders of the company and may not perform as
expected. The company does not maintain key person life insurance on its sole
officer and director.
RISKS RELATING TO OUR BUSINESS
IF WE CANNOT EFFECTIVELY PROMOTE OUR PRODUCTS, WE WILL NOT ATTRACT CUSTOMERS.
If we cannot partner with a distribution business partner of financial software
products, we will not have the ability to attract customers. A failure to
achieve partners would have a material and adverse effect on our business,
operating results and financial condition.
IF WE CANNOT ESTABLISH AND MAINTAIN QUALIFICATIONS AS A SUPPLIER TO COMMERCIAL
CUSTOMERS, THE BUSINESS WILL BE ADVERSELY AFFECTED.
15
FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements regarding
management's plans and objectives for future operations, including plans and
objectives relating to our planned entry into our service business. The
forward-looking statements and associated risks set forth in this prospectus
include or relate to, among other things, (a) our projected profitability, (b)
our growth strategies, (c) anticipated trends in our industry, (d) our ability
to obtain and retain sufficient capital for future operations, and (e) our
anticipated needs for working capital. These statements may be found under
"Management's Discussion and Analysis or Plan of Operation" and "Description of
Business," as well as in this prospectus generally. Actual events or results may
differ materially from those discussed in these forward-looking statements as a
result of various factors, including, without limitation, the risks outlined
under "Risk Factors" and matters described in this prospectus generally. In
light of these risks and uncertainties, the forward-looking statements contained
in this prospectus may not in fact occur.
The forward-looking statements herein are based on current expectations that
involve a number of risks and uncertainties. Such forward-looking statements are
based on the assumptions that we will be able to continue our business
strategies on a timely basis, that we will attract customers, that there will be
no materially adverse competitive conditions under which our business operates,
that our sole officer and director will remain employed as such, and that our
forecasts accurately anticipate market demand. The foregoing assumptions are
based on judgments with respect to, among other things, future economic,
competitive and market conditions, and future business decisions, all of which
are difficult or impossible to predict accurately and many of which are beyond
our control. Accordingly, although we believe that the assumptions underlying
the forward-looking statements are reasonable, any such assumption could prove
to be inaccurate and therefore there can be no assurance that the results
contemplated in forward-looking statements will be realized. In addition, as
disclosed elsewhere in this "Risk Factors" section of this prospectus, there are
a number of other risks inherent in our business and operations, which could
cause our operating results to vary markedly and adversely from prior results or
the results contemplated by the forward-looking statements. Increases in the
cost of our services, or in our general or administrative expenses, or the
occurrence of extraordinary events, could cause actual results to vary
materially from the results contemplated by these forward-looking statements.
Management decisions, including budgeting, are subjective in many respects and
subject to periodic revisions in order to reflect actual business conditions and
developments. The impact of such conditions and developments could lead us to
alter our marketing, capital investment or other expenditures and may adversely
affect the results of our operations. In light of the significant uncertainties
inherent in the forward-looking information included in this prospectus, the
inclusion of such information should not be regarded as a representation by us
or any other person that our objectives or plans will be achieved.
USE OF PROCEEDS
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.01. The following table sets forth the uses of proceeds assuming the
sale of 25%, 50%, 75% and 100%, respectively, of the securities offered for sale
by the Company.
16
IF 25% OF IF 50% OF IF 75% OF IF 100% OF
SHARES SOLD SHARES SOLD SHARES SOLD SHARES SOLD
----------- ----------- ----------- -----------
GROSS PROCEEDS FROM
THIS OFFERING $10,000 $20,000 $30,000 $40,000
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.01
The funds raised through this offering will be used to develop and complete the
business and marketing plan.
DETERMINATION OF OFFERING PRICE
As there is no established public market for our shares, the offering price and
other terms and conditions relative to our shares have been arbitrarily
determined by Liquid Financial Engines, Inc. and do not bear any relationship to
assets, earnings, book value, or any other objective criteria of value. In
addition, no investment banker, appraiser, or other independent third party has
been consulted concerning the offering price for the shares or the fairness of
the offering price used for the shares.
The price of the current offering is fixed at $0.01 per share. This price is
significantly greater than the price paid by the company's sole officer and
director for common equity since the company's inception on, 2008. The company's
sole officer and director paid $0.00075 per share, a difference of $0.00925 per
share lower than the share price in this offering.
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing stockholders. The
following tables compare the differences of your investment in our shares with
the investment of our existing stockholders.
COMPANY IF ALL OF THE SHARES ARE SOLD
- -------------------------------------
Price per share ............................................... $ 0.01
Net tangible book value per share before offering ............. $ 0.001
Potential gain to existing shareholders ....................... $ 0
Net tangible book value per share after offering .............. $ 0.0031
Increase to present stockholders in net tangible book value
per share after offering ................................... $ 0.0021
Capital contributions ......................................... $ 9,000
Number of shares outstanding before the offering .............. 12,000,000
Number of shares after offering held by existing stockholders . 12,000,000
Percentage of ownership after offering ........................ 75%
17
PURCHASERS OF SHARES IN THIS OFFERING IF ALL SHARES SOLD
- --------------------------------------------------------
Price per share ............................................... $ 0.01
Dilution per share ............................................ $ 0.0069
Capital contributions ......................................... $ 40,000
Percentage of capital contributions ........................... 82%
Number of shares after offering held by public investors ...... 4,000,000
Percentage of ownership after offering ........................ 25%
THE OFFERING BY THE COMPANY
Liquid Financial Engines, Inc. is registering 4,000,000 shares of its common
stock for offer and sale.
There is currently no active trading market for our common stock, and such a
market may not develop or be sustained. We currently plan to have our common
stock listing on the OTC Bulletin Board, subject to the effectiveness of this
Registration Statement. In addition, a market maker will be required to file a
Form 211 with the National Association of Securities Dealers Inc. before the
market maker will be able to make a market in our shares of common stock. At the
date hereof, we are not aware that any market maker has any such intention.
All of the shares registered herein will become tradable on the effective date
of this registration statement. The company will not offer the shares through a
broker-dealer or anyone affiliated with a broker-dealer.
NOTE: As of the date of this prospectus, our sole officer and director, Daniel
McKelvey, owns 12,000,000 common shares, which are subject to Rule 144
restrictions. There is currently one (1) shareholder of our common stock.
The company is hereby registering 4,000,000 common shares. The price per share
is $0.01 and will remain so unless and until the shares are quoted on the
Over-The-Counter (OTC) Bulletin Board or on an exchange.
In the event the company receives payment for the sale of their shares, Liquid
Financial Engines, Inc. will receive all of the proceeds from such sales. Liquid
Financial Engines, Inc. is bearing all expenses in connection with the
registration of the shares of the company.
PLAN OF DISTRIBUTION
We are offering the shares on a "self-underwritten" basis directly through
Daniel McKelvey our executive officer and director named herein, who will not
receive any commissions or other remuneration of any kind for selling shares in
this offering, except for the reimbursement of actual out-of-pocket expenses
incurred in connection with the sale of the common stock. The offering will
conclude when all 4,000,000 shares of common stock have been sold, or 90 days
after this registration statement becomes effective with the Securities and
Exchange Commission. Liquid Financial Engines, Inc. may at its discretion extend
the offering for an additional 90 days.
This offering is a self-underwritten offering, which means that it does not
involve the participation of an underwriter to market, distribute or sell the
shares offered under this prospectus. We will sell shares on a continuous basis.
We reasonably expect the amount of securities registered pursuant to this
offering to be offered and sold within two years from this initial effective
date of this registration.
18
In connection with his selling efforts in the offering, Daniel McKelvey will not
register as broker-dealer pursuant to Section 15 of the Exchange Act, but rather
will rely upon the "safe harbor" provisions of Rule 3a4-1 under the Exchange
Act. Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer
registration requirements of the Exchange Act for persons associated with an
issuer that participate in an offering of the issuer's securities. Daniel
McKelvey is not subject to any statutory disqualification, as that term is
defined in Section 3(a)(39) of the Exchange Act. Daniel McKelvey will not be
compensated in connection with his participation in the offering by the payment
of commissions or other remuneration based either directly or indirectly on
transactions in our securities. Daniel McKelvey is not and has not been within
the past 12 months, a broker or dealer, and is not within the past 12 months, an
associated person of a broker or dealer. At the end of the offering, Daniel
McKelvey will continue to primarily perform substantial duties for us or on our
behalf otherwise than in connection with transactions in securities. Daniel
McKelvey has not participated in selling an offering of securities for any
issuer more than once every 12 months other than in reliance on Exchange Act
Rule 3a4-1(a)(4)(i) or (iii).
12,000,000 common shares are issued and outstanding as of the date of this
prospectus. The company is registering an additional 4,000,000 shares of its
common stock for possible resale at the price of $0.01 per share. There is no
arrangement to address the possible effect of the offerings on the price of the
stock.
Liquid Financial Engines, Inc. will receive all proceeds from the sale of the
shares by the company. The price per share is $0.01 and will remain so unless
and until the shares are quoted on the Over-The-Counter (OTC) Bulletin Board or
an exchange. However, Liquid Financial Engines, Inc. common stock may never be
quoted on the OTC Bulletin Board or listed on any exchange.
The company's shares may be sold to purchasers from time to time directly by,
and subject to, the discretion of the company. Further, the company will not
offer their shares for sale through underwriters, dealers, or agents or anyone
who may receive compensation in the form of underwriting discounts, concessions
or commissions from the company and/or the purchasers of the shares for whom
they may act as agents. The shares sold by the company may be sold occasionally
in one or more transactions, either at an offering price that is fixed or that
may vary from transaction to transaction depending upon the time of sale, or at
prices otherwise negotiated at the time of sale. Such prices will be determined
by the company or by agreement between the company and any purchasers of our
common stock.
The shares may not be offered or sold in certain jurisdictions unless they are
registered or otherwise comply with the applicable securities laws of such
jurisdictions by exemption, qualification or otherwise. We intend to sell the
shares only in the states in which this offering has been qualified or an
exemption from the registration requirements is available, and purchases of
shares may be made only in those states.
In addition and without limiting the foregoing, the company will be subject to
applicable provisions, rules and regulations under the Exchange Act with regard
to security transactions during the period of time when this Registration
Statement is effective.
Liquid Financial Engines, Inc. will pay all expenses incidental to the
registration of the shares (including registration pursuant to the securities
laws of certain states).
19
LEGAL PROCEEDINGS
We are not a party to any material legal proceedings and to our knowledge; no
such proceedings are threatened or contemplated by any party.
BUSINESS
INTRODUCTION
Liquid Financial Engines, Inc. is a development stage company and was
incorporated in Florida on September 29, 2008, to develop and market financial
software. The rapid growth of the financial services market forces firms to
transform how they interact with their clients and trading partners. Companies
have begun to expand their use of software and Internet technologies to replace
or enhance traditional operations, such as customer relationship management and
investor communication. These competitive pressures drive companies to adopt
business strategies that support dynamic and comprehensive business solutions
within a flexible technical infrastructure. Faced with growing competition,
deregulation, and globalization, firms are increasingly looking to maximize
their client relationships to develop a sustainable competitive advantage.
Investment Relationship Management solutions are critical for investment
managers to streamline daily operations, integrate information flows, and
improve client service, particularly as the investing environment becomes
increasingly complex.
Factors contributing to these changing industry dynamics include:
o Rapid growth of assets under management;
o Increased volume and complexity of information and data flows within
organizations, and between partners and third parties, including
clients, banks, pricing services and other data providers;
o Evolving standards and government regulations, cross-border investing,
extended trading hours.
According to Goldman Sachs, industry analysts such as Dataquest estimate that
total IT spending for the securities industry will grow at a compound annual
growth rate (CAGR) of approximately 16% from 2005-2010, while spending on
external services should grow at a 20% CAGR during the same time period. This
growth is driven by an increase in the number of investment management
professionals, the demand for more sophisticated solutions and analysis, the
increasing complexity of financial instruments, and the desire of investment
managers to reduce costs by automating operations.
We have not generated any revenues to date and our activities have been limited
to developing the Business Plan. We will not have the necessary capital to
develop our Business Plan until we are able to secure financing. There can be no
assurance that such financing will be available on suitable terms. See
"Management's Discussion and Analysis Plan of Operations" and "Liquidity and
Capital Resources."
We have no plans to change our business activities or to combine with another
business and are not aware of any events or circumstances that might cause us to
change our plans. We have no revenues, have achieved losses since inception,
have no operations, have been issued a going concern opinion and rely upon the
sale of our securities to funds operations.
20
The following description of our business is intended to provide an
understanding of our Company and our strategic bearing.
STRATEGY
Liquid Financial Engines, Inc. intends to continue building a world-class
Investment Relationship Management firm by developing enterprise software
solutions to address IRM needs in the capital markets industry. LFE has
developed the following business strategy to address the IRM market opportunity:
o Focus initially on the Alternative Investment Sector to develop a solid
client base and following
o Establish first mover advantage in each market before addressing new
markets
o Leverage success in the Alternative Investment Sector to build
relationships with Center of Influences (for example, prime brokers)
o Focus on organic growth initially while building strategic alliances
with market dominant players (e.g., Advent Software, Sunguard, Goldman
Sachs, CSFB, SEI Investments, and Hemisphere)
o Develop strategic alliances and third party relationships to
significantly increase revenue, while providing quality client service
and support
o Expand product functionality to address future markets
o Become the de facto standard for IRM solutions in the Capital Markets
Industry
LFE is aggressively pursuing its strategy with software, services and Internet
applications in the areas of marketing, selling, and managing client
relationships. In order to effectively execute its rapid growth strategy, LFE is
initially focused on the capital markets in California and New York.
Daniel McKelvey, our CEO, prior to the start up of Liquid Financial Engines,
Inc. has been instrumental in validating the business concept of Liquid
Financial Engines, Inc. He has evaluated numerous direct competitors in the
relevant business spaces, in order to understand how to create competitive
advantages within our marketplace. He brings start-up experience, and extensive
experience with respect to development stage companies.
THE MARKET
The market opportunity for LFE is very large. According to Hedge Fund
Intelligence, currently there are $2.48 trillion dollars globally in hedge
funds. LFE's opportunities are global, span across the investment management
industry, and include both public and private investment managers.
21
LFE estimates their market opportunity based on two assumptions: First, average
management fees are 0.50% (50 basis points), and second, 10% of the management
fees are allocated to communication and distribution of information to investors
and prospects. Both assumptions are conservative. In general, asset management
fees range between 10 basis points for fixed income management to 250 basis
points (plus a performance carry on the profits) for alternative and private
equity products. In addition, typical marketing and communication expenses for
traditional products average 0.25% (25 basis points) of AUM. Mutual funds have
packaged this expense as a "12b-1 fee" and incorporated it into the overall fees
of the fund.
LFE's primary market is Alternative Investments, which includes hedge funds,
fund of funds, and private equity funds. According to Merrill Lynch, Alternative
Investments have over $1.1 Trillion in AUM globally, one third of which is from
hedge funds and the remaining two-thirds from private equity. 86% of the assets
are in North America. Considering the average hedge fund management and
performance fees noted above, the opportunity for LFE with hedge funds in the US
alone exceeds $1 Billion. In addition, assets have poured into hedge funds at a
growth rate of over 13% per year during the last five years. The success of the
six thousand hedge funds in existence, particularly during turbulent market
times like 2003-2008, has accelerated asset growth. On the private equity side,
the amount of funds have increased 21% each year with the committed assets
growing over 35% during the same timeframe.
Similar to the mutual fund industry in the late 1980's, alternative investments
have begun to balloon and show no signs of slowing. According to Merrill Lynch
and Cap Gemini Ernst & Young, the alternative market is expected to grow at
25-35% over the next ten years (see Wealth Report 2006). The alternative market
is exploding so rapidly that firms managing public mutual funds are beginning to
roll out alternative investment products to answer client demand and retain
portfolio management talent. LFE will capitalize on this trend.
While some firms may claim to have competencies in some aspects of client
interaction, very few companies can offer a viable solution addressing the
sophisticated and institutional investor. Numerous companies have emerged to
focus on the creative Web-design aspect. However, they are quickly realizing
that in order to compete they must also offer a more technologically oriented
desktop solution that integrates the Web with existing investor reporting, fund
analytics/reporting, corporate branding, marketing campaigns, and prospect
tracking strategies. Many solution providers do not have the ability to deliver
the strategic, creative and technical skills required to meet clients' demands.
LFE believes that it is uniquely poised to capitalize on these compelling market
dynamics as a result of the breadth of LFE's product suites and service
offerings.
Liquid Financial Engines, Inc.' FundSprint product suite will be designed for
hedge fund and fund of funds managers. However, primary market opportunities
also include venture capital/private equity, prime brokers, fund administrators
and other service providers. Additional markets include mutual funds, family
offices, pension plans, insurance administrators, endowments, foundations,
registered investment advisors, and financial consultants/planners. All are
natural candidates for using LFE's suite of products and services, however the
primary markets are most attractive due to their growth characteristics.
22
PRIMARY MARKETS:
HEDGE FUNDS
Hedge funds are private investment funds, typically limited partnerships, the
clients of which are high net-worth individuals or entities that the SEC deems
as "accredited investors." Usually, hedge funds are small shops of 3-50
employees managing assets from $5 million to over $5 billion. In general, hedge
fund managers are skilled at generating returns on a portfolio, however they are
not as strong running an operational business. Plus, with the influx of
sophisticated investor assets into alternative strategies, the demand for timely
communications, accurate information, and efficient, secure electronic
distribution systems increases. LFE's industry specific knowledge of SEC and
NASD compliance regulations, AIMR performance calculation standards, and
familiarity with hedge fund clientele, competitively positions LFE to capitalize
on the market opportunity.
FUND OF FUNDS
Fund of funds combines various funds into a single fund and are quickly becoming
mainstream in the industry. These investment vehicles provide a diversified
portfolio of constituent funds that seek to deliver more consistent returns than
stock portfolios, mutual funds, unit trusts or individual hedge funds. Fund of
funds are the preferred investment of choice for many pension funds, endowments,
insurance companies, private banks and high-net-worth families and individuals
because they provide access to a broad range of investment styles, strategies
and hedge fund managers for one easy-to-administer investment. Effective
diversification is the key objective with fund of funds.
VENTURE CAPITAL/PRIVATE EQUITY FIRMS
Liquid Financial Engines, Inc. products intend to fill a major void in the
Venture Capital/Private Equity space by providing not only efficient private
deal tracking and reporting tools, but also industry specific client service and
communication systems. LFE intends to operate in this space and will identify
strategic partners to assist in the expansion of products and services.
Currently, LFE plans to develop Private Equity as a module in the FundSprint
suite of products.
PRIME BROKERS
Prime brokers include companies like Morgan Stanley, Goldman Sachs, Credit
Suisse, Bear Stearns, etc., which provide the Alternative Investment Market with
support to run their businesses. Specific support services include trading desk,
hardware, market data and software solutions. LFE will enter into the equation
by providing prime brokers with an alternative set of solutions to distinguish
themselves from their competition.
FUND ADMINISTRATORS
Similar to prime brokers, on and offshore fund administrators provide support
services to the Alternative Investment Market. These services include fund
marketing, administration, compliance oversight, reporting and distribution.
Again, with LFE's suite of products and services, LFE will be able to provide
fund administrators internal efficiencies and a unique way to differentiate
themselves in the marketplace by incorporating the FundSprint products into
their offerings.
23
OTHER MARKETS:
FAMILY OFFICES
The preservation of the estate and the protection of heirs against economic
misfortune are the primary reasons why wealthy individuals/families form
investment offices to manage money. According to the Family Office Exchange, a
family office industry trade group, there are approximately 3,000 professional
money management family offices in the US, up 100% from ten years ago. In
addition, there are an estimated 10,500 plus households in the US that each have
a net worth of $50 million. A typical family office farms out management of
funds and dedicates a substantial amount of time to the asset allocation
decision. Liquid Financial Engines, Inc.' products will provide these
organizations much needed back office automation to manage much of their data
needs.
PENSION FUNDS, INSURANCE COMPANIES, ENDOWMENTS, FOUNDATIONS
Various investment managers provide portfolio management services to 401K,
pension and other retirement plans, insurance companies, foundations and
endowments. Such companies can be large, with assets under management well into
the billions of dollars, however, they maintain a different profile from the
Alternative Investment Market by placing greater importance on reporting and
compliance.
REGISTERED INVESTMENT ADVISORS
Registered Investment Advisors (RIAs) are independent money managers that
provide portfolio management services to individual investors, retirement plans,
corporations, foundations and endowments. The RIA market, much like the hedge
fund industry, is eager to embrace recent innovations in technology that fit
with their model of providing clients with meaningful communication about their
services.
FINANCIAL CONSULTANTS/PLANNERS
Financial planning is the process of establishing financial goals and creating a
strategy to achieve them. As a lifetime process, financial plans must be
monitored and reviewed periodically so that necessary adjustments can be made to
ensure that strategies continue to meet individual needs. The financial planning
industry is still largely unregulated, however. Financial planners can be found
of every degree of competence and integrity.
MANAGEMENT
We intend to employ and use consultants to build the corporate infrastructure in
FINANCE, ACCOUNTING, MARKETING, SALES, SOFTWARE, PURCHASING and other
administrative functions.
SALES AND MARKETING
DIRECT SALES
Liquid Financial Engines, Inc. will utilize a consultative approach to selling
by focusing on developing the client's understanding and recognition of the
value of LFE's services, and LFE's ability to deliver that value. LFE's will
have a direct sales force that will be dedicated to marketing and selling
services to clients seeking Investor Relationship Management solutions. LFE
expects to rapidly grow the sales force in both California and New York. The
24
sales team will identify prospects, develop opportunities, close sales, and
manage client relationships. LFE intends to market solutions to hedge funds,
fund of funds and family offices, specifically with funds with exceeding $250
million under management.
INDIRECT SALES / PARTNERSHIPS
Liquid Financial Engines, Inc. will develop partnership relationships
specifically with market leaders in the industry in order to expand the
distribution channel for its products and services. LFE's will hire business
development professionals to identify structure and drive VAR, OEM, and reseller
programs with each strategic partner.
COMPETITION
With potentially numerous competitors in Investment Relationship Management, it
is imperative that Liquid Financial Engines, Inc. develops a unique strategy and
branding play. As a result, LFE intends to create significant competitive
advantages, and assembled a seasoned and highly motivated management team with
the requisite skill sets to capitalize on the substantial market opportunity.
The IRM space is comprised of various types of services and providers
principally within the following types of software and services firms:
Customer Relationship Management Software Firms: Provide basic customer
relationship management software to all vertical (manufacturing, telecom, retail
etc) markets. Cross-industry software providers that focus on the financial
services market typically exclude the Alternative Investments Market.
Financial Services: Pure financial services firms that supply back-office
support as a part of their products and services.
Web Development Firms: "Pure play" firms that provide website services.
Liquid Financial Engines, Inc. Competitive Advantages
With projects ranging in value from $10,000 to $20 million, determining how to
address and penetrate the market becomes a question of size--size of project,
size of budget, and size of software provider. LFE believes there is significant
advantage in targeting the emerging and middle market--projects from $150,000 to
$3 million--where competition is limited. The following table illustrates how
LFE is positioned in the competitive landscape.
LIQUID FINANCIAL
LARGE FIRMS SMALL FIRMS ENGINES, INC.
----------- ----------- -------------
TARGET PROJECT SIZE $1 million $10,000 to $150,000 to
& up $150,000 $3 million
MANAGEMENT Professional Technical Professional
PROJECT MANAGEMENT Disciplined Inconsistent Disciplined
SERVICE OFFERING Broad IT/End-to Limited End-to-End Solutions,
-End Solutions Solutions and Web enabled
RESPONSIVE No Yes Yes
FLEXIBLE No Yes Yes
SCALABLE Yes No Yes
25
Liquid Financial Engines, Inc.'s IRM solutions will represent a new class of
product offerings available to the investment management industry. Firms
operating in the CRM, financial software or web development space are perceived
as competition. In reality, a variety of these firms have the potential to be
alliance partners versus competitors. In addition, the complexities of the
Alternative Investment Market require a comprehensive set of both industry and
technical skills, which limits the potential for existing companies to become
competition for LFE.
STAFFING
As of October 31, 2008, Liquid Financial Engines, Inc. has no permanent staff
other than its sole officer and director, Daniel McKelvey, who is the President
and Chairman of the company. Daniel McKelvey has the flexibility to work on
Liquid Financial Engines, Inc. up to 20 to 25 hours per week. He is prepared to
devote more time to our operations as may be required. He is not being paid at
present.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, Liquid Financial Engines, Inc. has no employees other than its
current sole officer and director, Daniel McKelvey, who has not been
compensated. There are no employment agreements in existence. The company
presently does not have any pension, health, annuity, insurance, stock options,
profit sharing, or similar benefit plans; however, the company may adopt plans
in the future. There are presently no personal benefits available to the
company's director.
During the initial implementation of our development strategy, the company
intends to hire independent consultants, contractors, and fee-for-service
laboratories, to develop, prototype, various components of sensor platforms.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This section of the prospectus includes a number of forward-looking statements
that reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
"believe", "expect", "estimate", "anticipate", "intend", "project" and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements, which apply only
as of the date of this prospectus. These forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to differ
materially from historical results or our predictions.
WE ARE A DEVELOPMENT STAGE COMPANY ORGANIZED TO DEVELOP AND MARKET FINANCIAL
SOFTWARE.
We have not yet generated or realized any revenues from business operations. Our
auditors have issued a going concerned opinion. This means there is substantial
doubt that we can continue as an on-going business for the next twelve (12)
months unless we obtain additional capital to pay our bills. This is because we
have not generated any revenues and no revenues are anticipated until we begin
marketing our service to customers. Accordingly, we must raise cash from sources
other than revenues generated from the proceeds of loans we undertake.
From inception to October 31, 2008, the company's business operations have
primarily been focused on developing our business plan and market research.
26
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
THERE IS NO HISTORICAL FINANCIAL INFORMATION ABOUT US UPON WHICH TO BASE AN
EVALUATION OF OUR PERFORMANCE. LIQUID FINANCIAL ENGINES, INC. WAS INCORPORATED
IN THE STATE OF FLORIDA ON SEPTEMBER 29, 2008; WE ARE A DEVELOPMENT STAGE
COMPANY ATTEMPTING TO ENTER INTO THE FINANCIAL SOFTWARE MARKET. OUR INTENDED
PRIMARY MARKETING BUSINESS APPROACH WILL BE TO PARTNER WITH ESTABLISHED
FINANCIAL INSTITUTIONS TO MARKET AND SUPPORT THE PRODUCT OFFERING. WE HAVE NOT
GENERATED ANY REVENUES FROM OUR OPERATIONS. WE CANNOT GUARANTEE WE WILL BE
SUCCESSFUL IN OUR BUSINESS OPERATIONS. OUR BUSINESS IS SUBJECT TO RISKS INHERENT
IN THE ESTABLISHMENT OF A NEW BUSINESS ENTERPRISE, INCLUDING THE FINANCIAL RISKS
ASSOCIATED WITH THE LIMITED CAPITAL RESOURCES CURRENTLY AVAILABLE TO US FOR THE
IMPLEMENTATION OF OUR BUSINESS STRATEGIES(SEE "RISK FACTORS"). TO BECOME
PROFITABLE AND COMPETITIVE, WE MUST DEVELOP THE BUSINESS AND MARKETING PLAN,
EXECUTE THE PLAN AND ESTABLISH SALES AND CO-DEVELOPMENT RELATIONSHIPS WITH
CUSTOMERS AND PARTNERS.
Our sole officer and director undertakes to provide us with initial operating
and loan capital to sustain our business plan over the next twelve (12) month
period partially through this offering and will seek alternative financing
through means such as borrowings from institutions or private individuals.
PLAN OF OPERATION
Over the 12 month period starting upon the effective date of this registration
statement, the company must raise capital in order to complete the Business and
Marketing Plan and to commence the execution.
Since inception, to October 31, 2008, Liquid Financial Engines, Inc. has spent a
total of $ 12.00 on start-up costs. The company has not generated any revenue
from business operations. All proceeds currently held by the company are the
result of the sale of common stock to its officers.
The company incurred expenditures of $ 0.00 for accounting services, the
preparation of audited financial statements and legal services. The company also
had expenditures of $ 0.00 for general administrative costs.
Since inception, the majority of the company's time has been spent refining its
business plan and conducting industry research, and preparing for a primary
financial offering.
LIQUIDITY AND CAPITAL RESOURCES
As of the date of this registration statement, we have yet to generate any
revenues from our business operations. For the period ended October 31, 2008,
Liquid Financial Engines, Inc. issued 12,000,000 shares of common stock to our
sole officer and director for cash proceeds of $9,000 at $0.00075 per share.
As we anticipate needing a minimum of $125,000 in order to execute our business
plan in a meaningful way over the next year, the available cash is not
sufficient to allow us to commence full execution of our business plan. Our
business expansion will require significant capital resources that may be funded
through the issuance of common stock or of notes payable or other debt
arrangements that may affect our debt structure. Despite our current financial
status we believe that we may be able to issue notes payable or debt instruments
in order to start executing our Business and Marketing Plan. We anticipate that
receipt of such financing may require granting a security interest in the
service offering, but are willing to grant such interest to secure the necessary
funding.
27
Through October 31, 2008, we have spent a total of $12.00 in general operating
expenses. We raised the cash amounts used in these activities from our officer.
To date, we have managed to keep our monthly cash flow requirement low for two
reasons. First, our sole officer has agreed not to draw a salary until a minimum
of $250,000 in funding is obtained or until we have achieved $500,000 in gross
revenues. Second, we have been able to keep our operating expenses to a minimum
by operating in space owned by our sole officer and are only paying the direct
expenses associated with our business operations.
Given our low monthly cash flow requirement and the agreement of our officer,
management believes that, even though our auditors have expressed substantial
doubt about our ability to continue as a going concern, and assuming that we do
not commence our anticipated operations it has sufficient financial resources to
meet its obligations for at least the next twelve months.
In the early stages of our company, we will need cash for completing the
business and marketing plan. We anticipate that during the first year, in order
to execute our business plan to any meaningful degree, we would need to spend a
minimum of $125,000 on such endeavors. If we are unable to raise the funds
partially through this offering we will seek alternative financing through means
such as borrowings from institutions or private individuals. There can be no
assurance that we will be able to keep costs from being more than these
estimated amounts or that we will be able to raise such funds. Even if we sell
all shares offered through this registration statement, we expect that we will
seek additional financing in the future. However, we may not be able to obtain
additional capital or generate sufficient revenues to fund our operations. If we
are unsuccessful at raising sufficient funds, for whatever reason, to fund our
operations, we may be forced to seek a buyer for our business or another entity
with which we could create a joint venture. If all of these alternatives fail,
we expect that we will be required to seek protection from creditors under
applicable bankruptcy laws.
Our independent auditor has expressed substantial doubt about our ability to
continue as a going concern and believes that our ability is dependent on our
ability to implement our business plan, raise capital and generate revenues. See
Note 6 of our financial statements.
MANAGEMENT
OFFICERS AND DIRECTORS
Our sole officer and director will serve until his successor is elected and
qualified. Our officers are elected by the board of directors to a term of one
(1) year and serve until their successor is duly elected and qualified, or until
they are removed from office. The board of directors has no nominating, auditing
or compensation committees.
The name, address, age and position of our president, secretary/treasurer, and
director and vice president is set forth below:
Name and Address Age Position(s)
- ---------------- --- ---------------------
Daniel McKelvey 42 President, Secretary/Treasurer, Principal
Executive Officer Principal Financial Officer,
and sole member of the Board of Directors
The person named above has held his offices/positions since the inception of our
company and is expected to hold his offices/positions until the next annual
meeting of our stockholders.
28
COMMITTEES OF THE BOARD OF DIRECTORS
Our Board of Directors has not established any committees, including an Audit
Committee, a Compensation Committee, a Nominating Committee or any committee
performing a similar function. The functions of those committees are being
undertaken by the entire board as a whole. Because we do not have any
independent directors, our Board of Directors believes that the establishment of
committees of the Board would not provide any benefits to our company and could
be considered more form than substance.
We do not have a policy regarding the consideration of any director candidates
which may be recommended by our stockholders, including the minimum
qualifications for director candidates, nor has our Board of Directors
established a process for identifying and evaluating director nominees. We have
not adopted a policy regarding the handling of any potential recommendation of
director candidates by our stockholders, including the procedures to be
followed. Our Board has not considered or adopted any of these policies as we
have never received a recommendation from any stockholder for any candidate to
serve on our Board of Directors. Given our relative size and lack of directors
and officers insurance coverage, we do not anticipate that any of our
stockholders will make such a recommendation in the near future. While there
have been no nominations of additional directors proposed, in the event such a
proposal is made, all members of our Board will participate in the consideration
of director nominees. Our director is not an "audit committee financial expert"
within the meaning of Item 401(e) of Regulation S-B. In general, an "audit
committee financial expert" is an individual member of the audit committee or
Board of Directors who:
o understands generally accepted accounting principles and financial
statements,
o is able to assess the general application of such principles in
connection with accounting for estimates, accruals and reserves,
o has experience preparing, auditing, analyzing or evaluating financial
statements comparable to the breadth and complexity to our financial
statements,
o understands internal controls over financial reporting, and
o understands audit committee functions.
Our Board of Directors is comprised of an individual who was integral to our
formation and who is involved in our day to day operations. While we would
prefer our director be an audit committee financial expert, the individual who
has been key to our development has professional background in finance or
accounting. As with most small, early stage companies, until such time as our
company further develops its business, achieves a stronger revenue base and has
sufficient working capital to purchase directors and officers insurance, we do
not have any immediate prospects to attract independent directors. When we are
able to expand our Board of Directors to include one or more independent
directors, we intend to establish an Audit Committee of our Board of Directors.
It is our intention that one or more of these independent directors will also
qualify as an audit committee financial expert. Our securities are not quoted on
an exchange that has requirements that a majority of our Board members be
independent and we are not currently otherwise subject to any law, rule or
29
regulation requiring that all or any portion of our Board of Directors include
"independent" directors, nor are we required to establish or maintain an Audit
Committee or other committee of our Board of Directors.
WE DO NOT HAVE ANY INDEPENDENT DIRECTORS AND WE HAVE NOT VOLUNTARILY IMPLEMENTED
VARIOUS CORPORATE GOVERNANCE MEASURES, IN THE ABSENCE OF WHICH, STOCKHOLDERS MAY
HAVE MORE LIMITED PROTECTIONS AGAINST INTERESTED DIRECTOR TRANSACTIONS,
CONFLICTS OF INTEREST AND SIMILAR MATTERS.
Recent Federal legislation, including the Sarbanes-Oxley Act of 2002, has
resulted in the adoption of various corporate governance measures designed to
promote the integrity of the corporate management and the securities markets.
Some of these measures have been adopted in response to legal requirements.
Others have been adopted by companies in response to the requirements of
national securities exchanges, such as the NYSE or The NASDAQ Stock Market, on
which their securities are listed. Among the corporate governance measures that
are required under the rules of national securities exchanges are those that
address board of directors' independence, audit committee oversight, and the
adoption of a code of ethics. Our Board of Directors is comprised of one
individual who is also our executive officer. Our executive officer makes
decisions on all significant corporate matters such as the approval of terms of
the compensation of our executive officer and the oversight of the accounting
functions.
Although we have adopted a Code of Ethics and Business Conduct we have not yet
adopted any of these other corporate governance measures and, since our
securities are not yet listed on a national securities exchange, we are not
required to do so. We have not adopted corporate governance measures such as an
audit or other independent committees of our board of directors as we presently
do not have any independent directors. If we expand our board membership in
future periods to include additional independent directors, we may seek to
establish an audit and other committees of our board of directors. It is
possible that if our Board of Directors included independent directors and if we
were to adopt some or all of these corporate governance measures, stockholders
would benefit from somewhat greater assurances that internal corporate decisions
were being made by disinterested directors and that policies had been
implemented to define responsible conduct. For example, in the absence of audit,
nominating and compensation committees comprised of at least a majority of
independent directors, decisions concerning matters such as compensation
packages to our senior officers and recommendations for director nominees may be
made by a majority of directors who have an interest in the outcome of the
matters being decided. Prospective investors should bear in mind our current
lack of corporate governance measures in formulating their investment decisions.
CODE OF BUSINESS CONDUCT AND ETHICS
In November 2008 we adopted a Code of Ethics and Business Conduct which is
applicable to our future employees and which also includes a Code of Ethics for
our CEO and principal financial officers and persons performing similar
functions. A code of ethics is a written standard designed to deter wrongdoing
and to promote
o honest and ethical conduct,
o full, fair, accurate, timely and understandable disclosure in
regulatory filings and public statements,
o compliance with applicable laws, rules and regulations,
30
o the prompt reporting violation of the code, and
o accountability for adherence to the code.
A copy of our Code of Business Conduct and Ethics has been filed with the
Securities and Exchange Commission as an exhibit to our S-1/A filing. Any person
desiring a copy of the Code of Business Conduct and Ethics, can obtain one by
going to Edgar and looking at the attachments to our S-1/A.
BACKGROUND OF OFFICERS AND DIRECTORS
Daniel McKelvey, PRESIDENT, CEO, DIRECTOR, SECRETARY/TREASURER
RESUME
Daniel McKelvey has been involved in capital markets and finance for 20 years.
Mr. McKelvey is the Senior Managing Director and co-founder of Forte Capital
Partners, LLC. He serves as a general partner of three partnership funds
organized to provide developmental and expansion capital for rapidly growing
software, Internet, networking, and broadband communication businesses. Mr.
McKelvey has also been an active entrepreneur, co-founding Forte Capital LLC, a
New York based public money management firm with over $500 million in assets
under management.
Mr. McKelvey served 8 years as a professional in Capital Markets for Accenture
(formally Andersen Consulting) in New York and San Francisco. Mr. McKelvey has
extensive expertise in enterprise software development, networking, and
financial equity trading systems.
Mr. McKelvey holds a B.S. in mathematics and computer science from the
University of New Hampshire.
CONFLICTS OF INTEREST
At the present time, we do not foresee a direct conflict of interest with our
sole officer and director. The only conflict that we foresee is Daniel
McKelvey's devotion of time to projects that do not involve us. In the event
that Daniel McKelvey ceases devoting time to our operations, he has agreed to
resign as an officer and director.
EXECUTIVE COMPENSATION
Daniel McKelvey will not be taking any compensation until the Company has raised
$250,000 in working capital or has sales in excess of $500,000.
SUMMARY OF COMPENSATION
We did not pay any salaries in 2008. We do not anticipate beginning to pay
salaries until we have adequate funds to do so. There are no stock option plans,
retirement, pension, or profit sharing plans for the benefit of our officers and
director other than as described herein.
REMUNERATION OF DIRECTORS AND OFFICERS
The following table sets forth the remuneration of our sole director and officer
for the period from inception through, 2008.
31
CAPACITIES IN WHICH AGGREGATE
NAME OF INDIVIDUAL REMUNERATION WAS RECEIVED REMUNERATION
- ------------------ ------------------------- ------------
Daniel McKelvey Sole Executive Officer and Director $0
We have no employment agreements with our sole Executive Officer and Director.
We will not pay compensation to Directors for attendance at meetings. We will
reimburse the Directors for reasonable expenses incurred during the course of
their performance.
DIRECTOR COMPENSATION
Mr. Daniel McKelvey a member of our Board of Directors is also our executive
officer. We do not pay fees to directors for attendance at meetings of the Board
of Directors or of committees; however, we may adopt a policy of making such
payments in the future. We will reimburse out-of-pocket expenses incurred by
directors in attending board and committee meetings.
LONG-TERM INCENTIVE PLAN AWARDS
We do not have any long-term incentive plans that provide compensation intended
to serve as incentive for performance.
EMPLOYMENT AGREEMENTS
At this time, Liquid Financial Engines, Inc. has not entered into any employment
agreements with our sole officer and director. If there is sufficient cash flow
available from our future operations, the company may in the future enter into
employment agreements with our sole officer and director, or future key staff
members.
INDEMNIFICATION
Under our Articles of Incorporation and Bylaws of the corporation, we may
indemnify an officer or director who is made a party to any proceeding,
including a lawsuit, because of his position, if he acted in good faith and in a
manner he reasonably believed to be in our best interest. We may advance
expenses incurred in defending a proceeding. To the extent that the officer or
director is successful on the merits in a proceeding as to which he is to be
indemnified, we must indemnify him against all expenses incurred, including
attorney's fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the proceeding, and
if the officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by the laws of
the State of Florida
Regarding indemnification for liabilities arising under the Securities Act of
1933, which may be permitted to directors or officers under Florida law, we are
informed that, in the opinion of the Securities and Exchange Commission,
indemnification is against public policy, as expressed in the Act and is,
therefore, unenforceable.
32
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this prospectus, the total
number of shares owned beneficially by our sole officer and director, and key
employees, individually and as a group, and the present owners of 5% or more of
our total outstanding shares. The table also reflects what his ownership will be
assuming completion of the sale of all shares in this offering. The stockholder
listed below has direct ownership of his shares and possesses sole voting and
dispositive power with respect to the shares.
Number Percentage
of Shares of ownership
after offering after offering
assuming all assuming all
Name and address Number of Shares of the shares of the shares
Beneficial Ownership (1) Before Offering are sold are sold
- ------------------------ ---------------- -------------- --------------
Daniel McKelvey 12,000,000 12,000,000 75%
All Officers and 12,000,000 12,000,000 75%
Directors as a Group
(1 person)
_________
(1) The person named above may be deemed to be a "parent" and "promoter" of our
company, within the meaning of such terms under the Securities Act of 1933, as
amended, by virtue of his direct and indirect stock holdings. Daniel McKelvey is
the only "promoter" of our company.
For the period ended October 31, 2008, a total of 12,000,000 shares of common
stock were issued to our sole officer and director, all of which are restricted
securities, as defined in Rule 144 of the Rules and Regulations of the SEC
promulgated under the Securities Act. Under Rule 144, the shares can be publicly
sold, subject to volume restrictions and restrictions on the manner of sale,
commencing one year after their acquisition. Under Rule 144, a shareholder can
sell up to 1% of total outstanding shares every three months in brokers'
transactions. Shares purchased in this offering, which will be immediately
resalable, and sales of all of our other shares after applicable restrictions
expire, could have a depressive effect on the market price, if any, of our
common stock and the shares we are offering.
Our sole officer and director will continue to own the majority of our common
stock after the offering, regardless of the number of shares sold. Since he will
continue control our company after the offering, investors in this offering will
be unable to change the course of our operations. Thus, the shares we are
offering lack the value normally attributable to voting rights. This could
result in a reduction in value of the shares you own because of their
ineffective voting power. None of our common stock is subject to outstanding
options, warrants, or securities convertible into common stock.
The company is hereby registering 4,000,000 of its common shares, in addition to
the 12,000,000 shares currently issued and outstanding. The price per share is
$0.01 and will remain so until the offering is completed.
33
The 12,000,000 shares currently issued and outstanding were acquired by our sole
officer and director for the period ended, 2008. We issued a total of 12,000,000
common shares for consideration of $9,000, which was accounted for as a purchase
of common stock.
In the event the company receives payment for the sale of their shares, Liquid
Financial Engines, Inc. will receive all of the proceeds from such sales. Liquid
Financial Engines, Inc. is bearing all expenses in connection with the
registration of the shares of the company.
DESCRIPTION OF SECURITIES
COMMON STOCK
The authorized common stock is two hundred and fifty million (250,000,000)
shares with a par value of $.0001 for an aggregate par value of twenty five
thousand dollars ($25,000).
* have equal ratable rights to dividends from funds legally available if and
when declared by our Board of Directors;
* are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution or winding
up of our affairs;
* do not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights;
* and are entitled to one non-cumulative vote per share on all matters on
which stockholders may vote.
We refer you to the Bylaws of our Articles of Incorporation and the applicable
statutes of the State of Florida for a more complete description of the rights
and liabilities of holders of our securities.
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting
for the election of directors, can elect all of the directors to be elected, if
they so choose, and, in that event, the holders of the remaining shares will not
be able to elect any of our directors. After this offering is completed, present
stockholders will own approximately 60% of our outstanding shares.
CASH DIVIDENDS
As of the date of this prospectus, we have not declared or paid any cash
dividends to stockholders. The declaration of any future cash dividend will be
at the discretion of our Board of Directors and will depend upon our earnings,
if any, our capital requirements and financial position, our general economic
conditions, and other pertinent conditions. It is our present intention not to
pay any cash dividends in the foreseeable future, but rather to reinvest
earnings, if any, in our business operations.
34
REPORTING
After we complete this offering, we will not be required to furnish you with an
annual report. Further, we will not voluntarily send you an annual report. We
will be required to file reports with the SEC under section 15(d) of the
Securities Act. The reports will be filed electronically. The reports we will be
required to file are Forms 10-K, 10-Q, and 8-K. You may read copies of any
materials we file with the SEC at the SEC's Public Reference Room at 100 F
Street, N.E., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC also maintains an Internet site that will contain copies of the reports we
file electronically. The address for the Internet site is www.sec.gov.
STOCK TRANSFER AGENT
We have not engaged the services of a transfer agent at this time. However,
within the next twelve months we anticipate doing so. Until such a time a
transfer agent is retained, Liquid Financial Engines, Inc. will act as its own
transfer agent.
STOCK OPTION PLAN
The Board of Directors of Liquid Financial Engines, Inc. has not adopted a stock
option plan ("Stock Option Plan"). The company has no plans to adopt a stock
option plan but may choose to do so in the future. If such a plan is adopted,
this plan may be administered by the board or a committee appointed by the board
(the "Committee"). The committee would have the power to modify, extend or renew
outstanding options and to authorize the grant of new options in substitution
therefore, provided that any such action may not, without the written consent of
the optionee, impair any rights under any option previously granted. Liquid
Financial Engines, Inc. may develop an incentive based stock option plan for its
officers and directors and may reserve up to 10% of its outstanding shares of
common stock for that purpose.
LITIGATION
We are not a party to any pending litigation and none is contemplated or
threatened.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be passed upon
for us by Schneider Weinberger & Beilly LLP.
EXPERTS
Our financial statements have been audited for the period ending, 2008 by Moore
and Associates, as set forth in their report included in this prospectus. Their
report is given upon their authority as experts in accounting and auditing.
35
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Audited, 2008
Auditors' Report .......................................................... F-2
Balance Sheet ............................................................. F-3
Statement of Operations ................................................... F-4
Statement of Stockholders' Equity (Deficit) ............................... F-5
Statement of Cash Flows ................................................... F-6
Notes to the Financial Statements ......................................... F-7
F-1
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
------------------------
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Board of Directors
Liquid Financial Engines, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Liquid Financial Engines, Inc.
(A Development Stage Company) as of October 31, 2008, and the related statements
of operations, stockholders' equity and cash flows from inception on September
29, 2008 through October 31, 2008. 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 conduct 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.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Liquid Financial Engines, Inc.
(A Development Stage Company) as of October 31, 2008, and the related statements
of operations, stockholders' equity and cash flows from inception on September
29, 2008 through October 31, 2008, in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company has an accumulated deficit of $12, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 6. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Moore & Associates, Chartered
Moore & Associates, Chartered
Las Vegas, Nevada
December 8, 2008
6490 West Desert Inn Rd, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501
------------------------------------------------------------------------------
F-2
Liquid Financial Engines, Inc
(A Development Stage Company)
Balance Sheet
ASSETS
------
As of
October 31,
2008
-----------
CURRENT ASSETS
Cash and cash equivalents ...................................... $ 8,988
----------
Total current assets ........................................ 8,988
----------
----------
TOTAL ASSETS ...................................................... $ 8,988
==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
-------------------------------------------------
CURRENT LIABILITIES
Accounts Payable and Accrued Liabilities ....................... -
Total liabilities ........................................... -
STOCKHOLDERS' EQUITY (DEFICIENCY)
Capital Stock (Note 3)
Authorized:
250,000,000 common shares, $0.0001 par value
Issued and outstanding shares:
12,000,000 ............................................... $ 1,200
Additional paid-in capital .................................. 7,800
Deficit accumulated during the development stage ............ (12)
----------
Total Stockholders' Equity (Deficiency) ........................ 8,988
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........................ $ 8,988
==========
The accompanying notes are an integral part of these financial statements.
F-3
Liquid Financial Engines, Inc.
(A Development Stage Company)
Statement of Operations
For the Period
from Inception
September 29,
2008 to
October 31,
2008
--------------
REVENUES .................................................... $ 0
-------------
EXPENSES
General & Administrative ................................. $ 12
-------------
Loss Before Income Taxes .................................... $ 12
-------------
Provision for Income Taxes .................................. 0
-------------
Net Loss .................................................... $ 12
=============
PER SHARE DATA:
Basic and diluted loss per common share .................. $ 0
=============
Weighted Average Common shares outstanding ............... 12,000,000
=============
The accompanying notes are an integral part of these financial statements.
F-4
Liquid Financial Engines, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficiency)
Deficit
Accumulated
Common Stock Additional During the
----------------------- Paid-in Development
Shares Amount Capital Stage Total
---------- ---------- ---------- ---------- ----------
Inception - September 29, 2008 ... - $ - $ - $ - $ -
Common shares issued to Founder
for cash at $0.0075 per share
(par value $0.0001) on 9/29/08 12,000,000 1,200 7,800 - 9,000
Loss for the period from
inception on September 29, 2008
to October 31, 2008 ........... - - - (12) (12)
---------- ---------- ---------- ---------- ----------
Balance - October 31, 2008 ....... 12,000,000 1,200 7,800 (12) 8,988
========== ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
F-5
Liquid Financial Engines, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Period
from Inception
September 29,
2008 to
31-Oct
2008
--------------
OPERATING ACTIVITIES
Loss for the period ........................................ $ 12
Changes in Operating Assets and Liabilities:
(Increase) decrease in prepaid expenses ................. -
Increase (decrease) in accounts payable ................. -
Increase (decrease) in accrued liabilities .............. -
Increase in short-term note payable (leasehold) ......... -
----------
Net cash used in operating activities ...................... 12
----------
INVESTING ACTIVITIES
----------
Net cash used in operating activities ...................... -
----------
FINANCING ACTIVITIES
Common stock issued for cash ............................... 9,000
----------
Net cash provided by financing activities .................. 9,000
----------
INCREASE IN CASH AND CASH EQUIVALENTS ......................... 9,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD .............. 0
----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .................... $ 8,988
==========
Supplemental Cash Flow Disclosures:
Cash paid for:
Interest expense ........................................ $ -
==========
Income taxes ............................................ $ -
==========
The accompanying notes are an integral part of these financial statements.
F-6
LIQUID FINANCIAL ENGINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(OCTOBER 31, 2008)
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
Liquid Financial Engines, Inc. ("Liquid Financial Engines, Inc." or "LFE") is a
development stage company, incorporated in the State of Florida on, 09/29/2008,
to develop and market financial software systems for banks, brokerage firms,
pension funds, family offices, and hedge funds
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Accounting Basis
- ----------------
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
Cash and Cash Equivalents
- -------------------------
For the purpose of the financial statements cash equivalents include all highly
liquid investments with maturity of three months or less.
Earnings (Loss) per Share
- -------------------------
The basic earnings (loss) per share are calculated by dividing the Company's net
income available to common shareholders by the weighted average number of common
shares outstanding during the year. The diluted earnings (loss) per share are
calculated by dividing the Company's net income (loss) available to common
shareholders by the diluted weighted average number of shares outstanding during
the year. The diluted weighted average number of shares outstanding is the basic
weighted number of shares adjusted as of the first of the year for any
potentially dilutive debt or equity. There are no diluted shares outstanding.
Dividends
- ---------
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
Income Taxes
- ------------
The Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes". SFAS No. 109 requires the use
of an asset and liability approach in accounting for income taxes.
F-7
LIQUID FINANCIAL ENGINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(OCTOBER 31, 2008)
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. No
provision for income taxes is included in the statement due to its immaterial
amount, net of the allowance account, based on the likelihood of the Company to
utilize the loss carry-forward
Advertising
- -----------
The Company expenses advertising as incurred. The advertising since inception
has been $0.0
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Revenue and Cost Recognition
- ----------------------------
The Company has no current source of revenue; therefore the Company has not yet
adopted any policy regarding the recognition of revenue or cost.
Property
- --------
The company does not own any real estate or other properties. The company's
office is located 250 Montgomery Street, Suite 1200, San Francisco, CA 94104 and
our telephone number is 415.296.8510. The business office is located at the home
of Daniel McKelvey, the CEO of the company at no charge to the company.
NOTE 3. INCOME TAXES:
The Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect currently.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Details for
the last three years follow:
F-8
LIQUID FINANCIAL ENGINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(OCTOBER 31, 2008)
Year Ended October 31 2008
- --------------------- ----
Deferred Tax Asset
Valuation Allowance
Current Taxes Payable .................... 0.00
---------
Income Tax Expense ....................... $ 0.00
=========
The Company has filed no income tax returns since inception.
NOTE 4. STOCKHOLDERS' EQUITY
Common Stock
- ------------
On September 29, 2008, the Company issued 12,000,000 of its $0.00075 par value
common stock for $9,000 cash to the founders of the Company.
There are 250,000,000 Common Shares at $0.0001 par value Authorized with
12,000,000 Issued and Outstanding as of October 31, 2008.
NOTE 5. RELATED PARTY TRANSACTIONS
The officer and director of the Company is involved in other business activities
and may, in the future, become involved in other business opportunities that
become available. He may face a conflict in selecting between the Company and
other business interests. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 6. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. For the period September 29, 2008
(date of inception) through October 31, 2008 the Company has had a net loss of
$12. As of October 31, 2008, the Company has not emerged from the development
stage. In view of these matters, recoverability of any asset amounts shown in
the accompanying financial statements is dependent upon the Company's ability to
begin operations and to achieve a level of profitability. Since inception, the
Company has financed its activities principally from the sale of equity
securities. The Company intends on financing its future development activities
and its working capital needs largely from loans and the sale of public equity
securities with some additional funding from other traditional financing
sources, including term notes, until such time that funds provided by operations
are sufficient to fund working capital requirements.
F-9
LIQUID FINANCIAL ENGINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(OCTOBER 31, 2008)
NOTE 7. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below is a listing of the most recent accounting standards and their effect on
the Company.
In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities, ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether
instruments granted in share-based payment transactions are participating
securities prior to vesting, and therefore need to be included in the
computation of earnings per share under the two-class method as described in
FASB Statement of Financial Accounting Standards No. 128, "Earnings per Share."
FSP EITF 03-6-1 is effective for financial statements issued for fiscal years
beginning on or after December 15, 2008 and earlier adoption is prohibited. We
are not required to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF
03-6-1 would have material effect on our consolidated financial position and
results of operations if adopted.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No.
163, "Accounting for Financial Guarantee Insurance Contracts-and interpretation
of FASB Statement No. 60". SFAS No. 163 clarifies how Statement 60 applies to
financial guarantee insurance contracts, including the recognition and
measurement of premium revenue and claims liabilities. This statement also
requires expanded disclosures about financial guarantee insurance contracts.
SFAS No. 163 is effective for fiscal years beginning on or after December 15,
2008, and interim periods within those years. SFAS No. 163 has no effect on the
Company's financial position, statements of operations, or cash flows at this
time.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No.
162, "The Hierarchy of Generally Accepted Accounting Principles". SFAS No. 162
sets forth the level of authority to a given accounting pronouncement or
document by category. Where there might be conflicting guidance between two
categories, the more authoritative category will prevail. SFAS No. 162 will
become effective 60 days after the SEC approves the PCAOB's amendments to AU
Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on
the Company's financial position, statements of operations, or cash flows at
this time.
In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS
No. 161, Disclosures about Derivative Instruments and Hedging Activities--an
amendment of FASB Statement No. 133. This standard requires companies to provide
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. The Company has not yet
adopted the provisions of SFAS No. 161, but does not expect it to have a
material impact on its consolidated financial position, results of operations or
cash flows.
F-10
LIQUID FINANCIAL ENGINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(OCTOBER 31, 2008)
In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110
regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB
107), in developing an estimate of expected term of "plain vanilla" share
options in accordance with SFAS No. 123 (R), Share-Based Payment. In particular,
the staff indicated in SAB 107 that it will accept a company's election to use
the simplified method, regardless of whether the company has sufficient
information to make more refined estimates of expected term. At the time SAB 107
was issued, the staff believed that more detailed external information about
employee exercise behavior (e.g., employee exercise patterns by industry and/or
other categories of companies) would, over time, become readily available to
companies. Therefore, the staff stated in SAB 107 that it would not expect a
company to use the simplified method for share option grants after December 31,
2007. The staff understands that such detailed information about employee
exercise behavior may not be widely available by December 31, 2007. Accordingly,
the staff will continue to accept, under certain circumstances, the use of the
simplified method beyond December 31, 2007. The Company currently uses the
simplified method for "plain vanilla" share options and warrants, and will
assess the impact of SAB 110 for fiscal year 2009. It is not believed that this
will have an impact on the Company's consolidated financial position, results of
operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements--an amendment of ARB No. 51. This statement
amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this statement was issued,
limited guidance existed for reporting noncontrolling interests. As a result,
considerable diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as liabilities or
in the mezzanine section between liabilities and equity. This statement improves
comparability by eliminating that diversity. This statement is effective for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2008 (that is, January 1, 2009, for entities with calendar
year-ends). Earlier adoption is prohibited. The effective date of this statement
is the same as that of the related Statement 141 (revised 2007). The Company
will adopt this Statement beginning March 1, 2009. It is not believed that this
will have an impact on the Company's consolidated financial position, results of
operations or cash flows.
In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations'. This Statement replaces FASB Statement No. 141, Business
Combinations, but retains the fundamental requirements in Statement 141. This
Statement establishes principles and requirements for how the acquirer: (a)
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree; (b) recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and (c) determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. 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. An entity may not apply it before that date. The
effective date of this statement is the same as that of the related FASB
Statement No. 160, Noncontrolling Interests in Consolidated Financial
Statements. The Company will adopt this statement beginning March 1, 2009. It is
not believed that this will have an impact on the Company's consolidated
financial position, results of operations or cash flows.
F-11
LIQUID FINANCIAL ENGINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(OCTOBER 31, 2008)
In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for
Financial Assets and Liabilities--Including an Amendment of FASB Statement No.
115. This standard permits an entity to choose to measure many financial
instruments and certain other items at fair value. This option is available to
all entities. Most of the provisions in FAS 159 are elective; however, an
amendment to FAS 115 Accounting for Certain Investments in Debt and Equity
Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not report
net income. SFAS No. 159 is effective as of the beginning of an entity's first
fiscal year that begins after November 15, 2007. Early adoption is permitted as
of the beginning of the previous fiscal year provided that the entity makes that
choice in the first 120 days of that fiscal year and also elects to apply the
provisions of SFAS No. 157 Fair Value Measurements. The Company will adopt SFAS
No. 159 beginning March 1, 2008 and is currently evaluating the potential impact
the adoption of this pronouncement will have on its consolidated financial
statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements This
statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles (GAAP), and expands disclosures
about fair value measurements. This statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this statement does not require any
new fair value measurements. However, for some entities, the application of this
statement will change current practice. This statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. Earlier application is
encouraged, provided that the reporting entity has not yet issued financial
statements for that fiscal year, including financial statements for an interim
period within that fiscal year. The Company will adopt this statement March 1,
2008, and it is not believed that this will have an impact on the Company's
consolidated financial position, results of operations or cash flows.
NOTE 8. CONCENTRATIONS OF RISKS
Cash Balances
- -------------
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). This government corporation insured balances up to
$100,000 through October 13, 2008. As of October 14, 2008 all non-interest
bearing transaction deposit accounts at an FDIC-insured institution, including
all personal and business checking deposit accounts that do not earn interest,
are fully insured for the entire amount in the deposit account. This unlimited
insurance coverage is temporary and will remain in effect for participating
institutions until December 31, 2009.
All other deposit accounts at FDIC-insured institutions are insured up to at
least $250,000 per depositor until December 31, 2009. On January 1, 2010, FDIC
deposit insurance for all deposit accounts, except for certain retirement
accounts, will return to at least $100,000 per depositor. Insurance coverage for
certain retirement accounts, which include all IRA deposit accounts, will remain
at $250,000 per depositor.
F-12
PART II. INFORMATION NOT REQUIRED IN THE PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The registrant will pay for all expenses incurred by this offering. Whether or
not all of the offered shares are sold, these expenses are estimated as follows:
SEC Filing Fee and
Printing ............ $ 1,000 *
Transfer Agent ......... 0
-------
TOTAL ............. $ 1,000
-------
* estimate
RECENT SALES OF UNREGISTERED SECURITIES
(a) Prior sales of common shares
Liquid Financial Engines, Inc. is authorized to issue up to 250,000,000 shares
of common stock with a par value of $0.0001. For the period ended, 2008, we had
issued 12,000,000 common shares to our sole officer and director for a total
consideration of $9,000.00.
Liquid Financial Engines, Inc. is not listed for trading on any securities
exchange in the United States, and there has been no active market in the United
States or elsewhere for the common shares.
During the past year, Liquid Financial Engines, Inc. has sold the following
securities which were not registered under the Securities Act of 1933, as
amended:
For the period ended October 31, 2008, Liquid Financial Engines, Inc. issued
12,000,000 shares of common stock to the sole officer and director for cash
proceeds of $9,000 at 0.00075 per share.
EXHIBITS
The following exhibits are filed as part of this registration statement,
pursuant to Item 601 of Regulation K. All exhibits have been previously filed
unless otherwise noted.
EXHIBIT NO. DOCUMENT DESCRIPTION
- ----------- --------------------
3.1 Articles of Incorporation of Liquid Financial Engines, Inc.*
3.2 Bylaws of Liquid Financial Engines, Inc.*
4.1 Specimen Stock Certificate of Liquid Financial Engines, Inc.*
5.1 Opinion of Counsel (to be supplied by amendment).
23.1 Consent of Accountants.**
23.2 Consent of Counsel (to be supplied by amendment).
99.1 Subscription Agreement of Liquid Financial Engines, Inc.*
_________________
* Previously filed
** Filed herewith
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(B) DESCRIPTION OF EXHIBITS
EXHIBIT 3.1
Articles of Incorporation of Liquid Financial Engines, Inc. dated September 29,
2008 and approved September 29, 2008.
EXHIBIT 3.2
Bylaws of Liquid Financial Engines, Inc., approved and adopted on September 29,
2008.
EXHIBIT 4.1
Specimen Stock Certificate of Liquid Financial Engines, Inc.
EXHIBIT 5.1
Opinion of Counsel (to be supplied by amendment).
EXHIBIT 23.1
Consent of Accountants, regarding the use in this Registration Statement of
their auditors' report on the financial statements of Liquid Financial Engines,
Inc. for the period ending October 31, 2008.
EXHIBIT 23.2
Consent of Counsel (to be supplied by amendment).
EXHIBIT 99.1
Subscription Agreement of Liquid Financial Engines, Inc.
UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy and as expressed in the Act and
is, therefore, unenforceable.
The Company hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
i. Include any prospectus required by Section 10(a)(3) of the
Securities Act;
ii. Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement.
iii. Include any additional or changed material information on the
plan of distribution.
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(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(4) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company under Rule 424(b)(1) or (4) or 497(h) under the
Securities Act as part of this registration statement as of the time the
Commission declared it effective.
(5) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.
(6) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to our directors, officers and
controlling persons pursuant to the foregoing provisions, or otherwise, we have
been advised by the Securities and Exchange Commission that such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by us of expenses incurred or paid by one of our directors,
officers or controlling persons in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
us is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on this Form S-1. Furthermore, the registrant has
authorized this registration statement and has duly caused this Form S-1
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in San Francisco, California, on this day of January 12, 2009.
Liquid Financial Engines, Inc.
/s/ Daniel McKelvey
---------------
Daniel McKelvey
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer
Know all men by these present, that each person whose signature appears below
constitutes and appoints Daniel McKelvey, as agent, with full power of
substitution, for his and in his name, place and stead, in any and all
capacities, to sign any and all amendments, including post-effective amendments,
to this registration statement, and to file the same, therewith, with the
Securities and Exchange Commission, and to make any and all state securities law
filings, granting unto said attorney-in-fact and agent, full power and authority
to do and perform each and every act and thing requisite or necessary to be done
in about the premises, as fully to all intents and purposes as he might or could
do in person, hereby ratifying the confirming all that said attorney-in-fact and
agent, or any substitute or substitutes, may lawfully do or cause to be done by
virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this
Form S-1 registration statement has been signed by the following persons in the
capacities and on the dates indicated:
/s/ Daniel McKelvey January 12, 2009
---------------
Daniel McKelvey
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer