As Filed With the Securities and Exchange Commission on January 6, 2009
Registration No. 333-______
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
UKRAGRO CORPORATION
(Exact name of registrant as specified in its charter))
Nevada 7200 98-0599925
(State or other jurisdiction (Primary Standard Industrial (IRS Employer
of organization) Classification Code) Identification #)
239 B Schorsa Street
Zhitomir, Ukraine, 10008
Tel. 011380506081534
(Address, including zip code, and telephone number,
including area code, of registrants principal executive offices)
Business Filings Incorporated
6100 Neil Road, Suite 500
Reno, Nevada 89511
(608) 827-5300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
with a copy to:
Dean Law Corp.
601 Union Street, Suite 4200
Seattle, Washington 98101
Tel: (206) 274-4598 Fax: (206) 493-2777
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on the Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: [X]
If this Form is filed to register additional common stock for an offering under
Rule 462(b) of 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 under Rule 462(c) of 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 under Rule 462(d) of 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 smaller reporting company)
CALCULATION OF REGISTRATION FEE
================================================================================
Securities to be Amount To Be Offering Price Aggregate Registration
be Registered Registered Per Share Offering Price Fee [1]
- --------------------------------------------------------------------------------
Common Stock: 2,000,000 0.05 $100,000 $3.93
================================================================================
[1] Estimated solely for purposes of calculating the registration fee under
Rule 457.
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
PROSPECTUS
UKRAGRO CORPORATION
SHARES OF COMMON STOCK
500,000 MINIMUM - 2,000,000 MAXIMUM
Before this offering, there has been no public market for our common stock. In
the event that we sell at least the minimum number of shares in this offering,
of which there is no assurance, we intend to have our shares of common stock
quoted on the Over the Counter Bulletin Board operated by the Financial Industry
Regulatory Authority. There is no assurance that our shares will ever be quoted
on the Over the Counter Bulletin Board.
We are offering a minimum of 500,000 up to a maximum of 2,000,000 shares of our
common stock in a direct public offering, without any involvement of
underwriters or broker-dealers. The offering price is $0.05 per share. In the
event that 500,000 shares are not sold within 270 days, all money received by us
will be promptly returned to you without interest or deduction of any kind.
However, future actions by creditors in the subscription period could preclude
or delay us in refunding your money. If at least 500,000 shares are sold within
270 days, all money received will be retained by us and there will be no refund.
Funds will be held in a separate bank account at Wells Fargo Bank, 3101 Woburn
Street, Bellingham, Washington 98226. The bank's telephone number is (360)
738-2331. Sold securities are deemed securities which have been paid for with
collected funds prior to expiration of 270 days. Collected funds are deemed
funds that have been paid by the drawee bank. The foregoing account is not an
escrow, trust or similar account. It is merely a separate account under our
control where we have segregated your funds. As a result, creditors could attach
the funds.
There is no minimum purchase requirement and there are no arrangements to place
the funds in an escrow, trust, or similar account.
Our common stock will be sold on our behalf by Maria Yahodka, our sole officer
and director. Ms. Yahodka will not receive any commissions or proceeds from the
offering for selling shares on our behalf.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" STARTING AT
PAGE 4.
Offering Price Expenses Proceeds to Us
-------------- -------- --------------
Per Share - Minimum $ 0.05 $ 0.020 $ 0.030
Per Share - Maximum $ 0.05 $ 0.005 $ 0.045
Minimum $ 25,000 $10,000 $15,000
Maximum $100,000 $10,000 $90,000
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is _______________________.
TABLE OF CONTENTS
Page No.
--------
Summary of Prospectus 3
Risk Factors 4
Use of Proceeds 7
Determination of Offering Price 8
Dilution of the Price You Pay for Your Shares 8
Plan of Distribution; Terms of the Offering 11
Management's Discussion and Analysis of Financial Condition
and Results of Operations 14
Business 16
Management 18
Executive Compensation 19
Principal Shareholders 20
Description of Securities 21
Certain Transactions 22
Litigation 22
Experts 22
Legal Matters 22
Financial Statements 22
2
SUMMARY OF OUR OFFERING
OUR BUSINESS
We were incorporated on October 23, 2008. We are a development stage company. We
do not have any revenues or operations, and we have minimal assets and have
incurred losses since inception. We intend to open spa centers in Zhitomir and
other cities in Ukraine.
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 and loans from our sole officer and director to fund operations.
Our administrative office is located at 239 B Schorsa Street, Zhitomir, Ukraine
and our telephone number is 011380506081534. Our registered statutory office is
located at 6100 Neil Road, Suite 500, Reno, Nevada 89511. Our fiscal year end is
October 31.
Management or affiliates thereof will not purchase shares in this offering in
order to reach the minimum.
THE OFFERING
Following is a brief summary of this offering:
Securities being offered A minimum of 500,000 shares of common stock and
a maximum of 2,000,000 shares of common stock,
par value $0.00001.
Offering price per share $0.05
Offering period Our shares are being offered for a period not to
exceed 270 days.
Net proceeds to us Approximately $15,000 assuming the minimum
numbers of shares are sold. Approximately
$90,000 assuming the maximum number of shares is
sold.
Use of proceeds We will use the proceeds to pay for offering
expenses, the implementation of our business
plan, and for working capital.
Number of shares outstanding
before the offering 2,000,000
Number of shares outstanding
after the offering if
all of the shares are sold 4,000,000
3
SELECTED FINANCIAL DATA
The following financial information summarizes the more complete historical
financial information at the end of this prospectus.
As of October 31, 2008
----------------------
(audited)
BALANCE SHEET
Total Assets $ 100
Total Liabilities $ 405
Stockholders' Deficit $ (305)
October 23, 2008
(Inception) to
October 31, 2008
----------------
(audited)
INCOME STATEMENT
Revenue $ 0
Total Expenses $ 806
Net Loss $ (806)
RISK FACTORS
PLEASE CONSIDER THE FOLLOWING RISK FACTORS BEFORE DECIDING TO INVEST IN OUR
COMMON STOCK.
RISKS ASSOCIATED WITH UKRAGRO CORPORATION.
BECAUSE OUR AUDITORS HAVE ISSUED A GOING CONCERN OPINION, THERE IS SUBSTANTIAL
UNCERTAINTY THAT WE WILL CONTINUE OPERATIONS IN WHICH CASE YOU COULD LOSE YOUR
INVESTMENT.
Our auditors have issued a going concern opinion. This means that there is
substantial doubt that we can continue as an ongoing business for the next
twelve months. The financial statements do not include any adjustments that
might result from the uncertainty about our ability to continue in business. As
such we may have to cease operations and you could lose your investment.
WE LACK AN OPERATING HISTORY AND HAVE LOSSES THAT WE EXPECT TO CONTINUE INTO THE
FUTURE. THERE IS NO ASSURANCE OUR FUTURE OPERATIONS WILL RESULT IN PROFITABLE
REVENUES. IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE
WILL CEASE OPERATIONS AND YOU WILL LOSE YOUR INVESTMENT.
We were incorporated in October 2008 and we have not started our proposed
business operations or realized any revenues. We have no operating history upon
which an evaluation of our future success or failure can be made. Our net loss
since inception is $806, of which $250 is for office rent, $250 is for
consulting fees, and $306 is for filing fees and general office expenses. Our
ability to achieve and maintain profitability and positive cash flow is
dependent upon:
* completion of this offering
* our ability to attract customers who will buy our services from us
* our ability to generate revenues through the sale of our services
4
Based upon current plans, we expect to incur operating losses in future periods
since 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 you to lose your investment.
IF WE DO NOT ATTRACT CUSTOMERS, WE WILL NOT MAKE A PROFIT WHICH ULTIMATELY WILL
RESULT IN A CESSATION OF OPERATIONS.
We have no customers. We have not identified any customers and we cannot
guarantee we ever will have any customers. Even if we obtain customers, there is
no guarantee that we will generate a profit. If we cannot generate a profit, we
will have to suspend or cease operations.
WE ARE SOLELY DEPENDENT UPON THE FUNDS TO BE RAISED IN THIS OFFERING TO START
OUR BUSINESS, THE PROCEEDS OF WHICH MAY BE INSUFFICIENT TO ACHIEVE REVENUES. IF
WE NEED ADDITIONAL FUNDS AND ARE UNABLE TO RAISE THEM WE WILL HAVE TO TERMINATE
OUR OPERATIONS.
We have not yet started our business. We need the proceeds from this offering to
start our operations. If the minimum of $25,000 is raised, this amount will
enable us, after paying the expenses of this offering, to operate for one year.
If we need additional funds and are unable to raise the money, we will have to
cease operations.
IF WE DO NOT MAKE A PROFIT, WE MAY HAVE TO SUSPEND OR CEASE OPERATIONS.
Since we are small and do not have much capital, we must limit marketing our
services. The sale of services is how we will initially generate revenues.
Because we will be limiting our marketing activities, we may not be able to
attract enough customers to operate profitably. If we cannot operate profitably,
we may have to suspend or cease operations.
BECAUSE OUR SOLE OFFICER AND DIRECTOR WILL ONLY BE DEVOTING LIMITED TIME TO OUR
OPERATIONS, OUR OPERATIONS MAY BE SPORADIC WHICH MAY RESULT IN PERIODIC
INTERRUPTIONS OR SUSPENSIONS OF OPERATIONS. THIS ACTIVITY COULD PREVENT US FROM
ATTRACTING CUSTOMERS AND RESULT IN A LACK OF REVENUES THAT MAY CAUSE US TO
SUSPEND OR CEASE OPERATIONS.
Our sole officer and director, Ms. Yahodka, will only be devoting limited time
to our operations. Ms. Yahodka, our president and sole director will be devoting
approximately 20 hours per week of her time to our operations. Because our sole
officer and director will only be devoting limited time to our operations, our
operations may be sporadic and occur at times which are convenient to her. As a
result, operations may be periodically interrupted or suspended which could
result in a lack of revenues and a possible cessation of operations.
BECAUSE WE HAVE ONLY ONE OFFICER AND DIRECTOR WHO HAS NO FORMAL TRAINING IN
MANAGEMENT, WHO IS RESPONSIBLE FOR OUR MANAGERIAL AND ORGANIZATIONAL STRUCTURE,
IN THE FUTURE, THERE MAY NOT BE EFFECTIVE DISCLOSURE AND ACCOUNTING CONTROLS TO
COMPLY WITH APPLICABLE LAWS AND REGULATIONS WHICH COULD RESULT IN FINES,
PENALTIES AND ASSESSMENTS AGAINST US.
We have only one officer and director. She has no formal training in management;
however, she is responsible for our managerial and organizational structure
which will include preparation of disclosure and accounting controls under the
Sarbanes Oxley Act of 2002. When the disclosure and accounting controls referred
to above are implemented, she will be responsible for the administration of
them. Should she not have sufficient experience, she may be incapable of
creating and implementing the controls which may cause us to be subject to
sanctions and fines by the SEC which ultimately could cause you to lose your
investment. However, because of the small size of our expected operations, we
believe that she will be able to monitor the controls she will have created and
will be accurate in assembling and providing information to investors.
5
BECAUSE OUR SOLE OFFICER AND DIRECTOR DOES NOT HAVE PRIOR EXPERIENCE IN
FINANCIAL ACCOUNTING AND THE PREPARATION OF REPORTS UNDER THE SECURITIES
EXCHANGE ACT OF 1934, WE MAY HAVE TO HIRE INDIVIDUALS WHICH COULD RESULT IN AN
EXPENSE WE ARE UNABLE TO PAY.
Because our sole officer and director does not have prior experience in
financial accounting and the preparation of reports under the Securities Act of
1934, we may have to hire additional experienced personnel to assist us with the
preparation thereof. If we need the additional experienced personnel and we do
not hire them, we could fail in our plan of operations and have to suspend
operations or cease operations entirely and you could lose your investment.
RISKS ASSOCIATED WITH THIS OFFERING:
BECAUSE WE DO NOT HAVE AN ESCROW OR TRUST ACCOUNT FOR YOUR SUBSCRIPTION, IF WE
FILE FOR BANKRUPTCY PROTECTION OR ARE FORCED INTO BANKRUPTCY, OR A CREDITOR
OBTAINS A JUDGMENT AGAINST US AND ATTACHES THE SUBSCRIPTION, YOU WILL LOSE YOUR
INVESTMENT.
Your funds will not be placed in an escrow or trust account. Accordingly, 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 bankruptcy laws. If a creditor sues us and obtains
a judgment against us, the creditor could garnish the bank account and take
possession of the subscriptions. As such, if the minimum conditions of this
offering are not satisfied, it is possible that a creditor could attach your
subscription which could preclude or delay the return of money to you. If that
happens, you will lose your investment and your funds will be used to pay
creditors.
BECAUSE OUR SOLE OFFICER AND DIRECTOR WHO IS ALSO OUR SOLE PROMOTER, WILL OWN
80% OF OUR TOTAL OUTSTANDING COMMON STOCK IF THE MINIMUM AMOUNT OF THE OFFERING
IS SOLD AND 50% OF OUR TOTAL OUTSTANDING COMMON STOCK IF THE MAXIMUM AMOUNT OF
THE OFFERING IS SOLD, SHE WILL RETAIN CONTROL OF US AND WILL BE ABLE TO DECIDE
WHO WILL BE DIRECTORS AND YOU MAY NOT BE ABLE TO ELECT ANY DIRECTORS WHICH COULD
DECREASE THE PRICE AND MARKETABILITY OF OUR SHARES.
Even if we sell all 2,000,000 shares of common stock in this offering, Maria
Yahodka will own 50% of the total outstanding common stock; if the minimum
amount of the offering is sold she will own 80% of the total outstanding common
stock. As a result, after completion of this offering, regardless of the number
of shares we sell, Ms. Yahodka will be able to elect all of our directors and
control our operations, which could decrease the price and marketability of our
shares.
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 stock exchange or electronic trading system,
to resell your shares. If you want to resell your shares, you will have to
locate a buyer and negotiate your own sale.
BECAUSE THE SEC IMPOSES ADDITIONAL SALES PRACTICE REQUIREMENTS ON BROKERS WHO
DEAL IN OUR SHARES THAT ARE PENNY STOCKS, SOME BROKERS MAY BE UNWILLING TO TRADE
THEM. THIS MEANS THAT YOU MAY HAVE DIFFICULTY RESELLING YOUR SHARES AND THIS MAY
CAUSE THE PRICE OF OUR SHARES TO DECLINE.
Our shares would be classified as penny stocks and are covered by Section 15(g)
of the Securities Exchange Act of 1934 and the rules promulgated thereunder
which impose additional sales practice requirements on brokers/dealers who sell
our securities in this offering or in the aftermarket. For sales of our
securities, the broker/dealer must make a special suitability determination and
receive from you a written agreement prior to making a sale for you. Because of
the imposition of the foregoing additional sales practices, it is possible that
6
brokers will not want to make a market in our shares. This could prevent you
from reselling your shares and may cause the price of our shares to decline.
FINRA SALES PRACTICE REQUIREMENTS MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND
SELL OUR STOCK.
The FINRA has adopted rules that require that in recommending an investment to a
customer, a broker-dealer must have reasonable grounds for believing that the
investment is suitable for that customer. Prior to recommending speculative low
priced securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may have the effect of reducing the level
of trading activity and liquidity of our common stock. Further, many brokers
charge higher transactional fees for penny stock transactions. As a result,
fewer broker-dealers may be willing to make a market in our common stock, which
may limit your ability to buy and sell our stock and
USE OF PROCEEDS
Our offering is being made in a direct public offering, without any involvement
of underwriters or broker-dealers, 500,000 common shares minimum, 2,000,000
common shares maximum basis. The table below sets forth the use of proceeds if
500,000 or 2,000,000 common shares of the offering are sold.
500,000 200,000
------- -------
Gross proceeds $ 25,000 $100,000
Offering expenses $ 10,000 $ 10,000
Net proceeds $ 15,000 $ 90,000
The net proceeds will be used as follows:
Website development $ 1,200 $ 2,400
Repayment of loan $ 405 $ 405
Marketing and advertising $ 1,395 $ 4,000
Establishing spa center $ 1,000 $ 15,000
Equipment $ 5,000 $ 50,000
Hiring one additional employee $ 0 $ 8,000
Audit, accounting and filing fees $ 6,000 $ 6,000
Other expenses $ 0 $ 4,195
TOTAL $ 15,000 $ 90,000
Total offering expenses of $10,000 to be paid from the proceeds of the offering
are for legal fees and auditing fees related to this offering. No other expenses
of the offering will be paid from the proceeds.
After the completion of this offering, we intend to initiate the development of
our website "WWW.UKRAGROSPA.COM." WE intend to hire an outside web designer to
assist us in designing and building our website. Also in the first year
following our offering, we plan to open a spa in the city of Zhitomir, Ukraine.
7
We will repay $405 that was advanced to us by our president, Maria Yahodka.
Marketing and advertising will be focused on promoting our spa services,
advertising it in local newspapers, magazines, city billboards, etc.
The cost of establishing a spa is estimated to be $15,000.
We estimate that equipment will cost approximately $50,000.
We intend to hire one additional employee to handle administrative duties,
provided we raise the maximum amount of the offering.
We estimate our auditing and accounting fees to be $6,000 during the next twelve
months. We have allocated up to $4,195 for additional unforeseen expenses which
may arise as a result of initiating our operations.
The proceeds from the offering will allow us to operate for twelve months,
whether the minimum or maximum amount is raised. Maria Yahodka our sole officer
and director has determined that the funds will last twelve months, including
filing reports with the Securities and Exchange Commission as well as the
business activities contemplated by our business plan.
DETERMINATION OF OFFERING PRICE
The price of the shares we are offering was arbitrarily determined in order for
us to raise a minimum of $25,000 and a maximum of $100,000 in this offering. The
offering price bears no relationship to our assets, earnings, book value or
other criteria of value. Among the factors we considered were:
* our lack of operating history;
* the proceeds to be raised by the offering;
* the amount of capital to be contributed by purchasers in this offering
in proportion to the amount of stock to be retained by our existing
stockholder; and,
* our relative cash requirements.
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 our shares being
offered. Dilution of the value of our shares you purchase is also a result of
the lower book value of our shares held by our existing stockholders.
As of October 31, 2008, the net tangible book value of our shares of common
stock was a deficit of ($806) or approximately ($0.00) per share based upon
2,000,000 shares outstanding.
IF 100% OF THE SHARES ARE SOLD:
Upon completion of this offering, in the event all of our shares are sold, the
net tangible book value of the 4,000,000 shares to be outstanding will be
$89,194 or approximately $0.022 per share. The net tangible book value of our
shares held by our existing stockholder will be increased by $0.022 per share
8
without any additional investment on their part. You will incur an immediate
dilution from $0.05 per share to $0.022 per share
After completion of this offering, if 2,000,000 shares are sold, you will own
50% of the total number of outstanding shares for which you will have made a
cash investment of $100,000, or $0.05 per share. Our existing stockholders will
own 50% of the total number of outstanding shares for which they have made cash
contributions totaling $20.00 or approximately $0.00001 per share.
IF 62.5% OF THE SHARES ARE SOLD:
Upon completion of this offering, in the event 62.5% of the shares are sold, the
net tangible book value of the 3,250,000 shares then outstanding will be
$51,694, or approximately $0.016 per share. The net tangible book value of our
shares held by our existing stockholders will be increased by $0.016 per share
without any additional investment on their part. You will incur an immediate
dilution from $0.05 per share to $0.016 per share.
After completion of this offering, if 1,250,000 shares are sold, you will own
approximately 38% of the total number of outstanding shares for which you will
have made a cash investment of $62,500, or $0.05 per share. Our existing
stockholders will own approximately 62% of the total number of outstanding
shares for which they have made cash contributions totaling $20.00 or
approximately $0.00001 per share.
IF THE MINIMUM NUMBER OF SHARES IS SOLD:
Upon completion of this offering, in the event 25% or the minimum amount of
shares are sold, the net tangible book value of the 2,500,000 shares to be
outstanding will be $14,194 or approximately $0.006 per share. The net tangible
book value of the shares held by our existing stockholders will be increased by
$0.006 per share without any additional investment on their part. You will incur
an immediate dilution from $0.05 per share to $0.006 per share.
After completion of this offering, if 500,000 shares are sold, you will own 20%
of the total number of outstanding shares for which you will have made a cash
investment of $25,000, or $0.05 per share. Our existing stockholders will own
80% of the total number of outstanding shares for which they have made cash
contributions totaling $20.00 or approximately $0.00001 per share.
The following table compares the differences of your investment in our shares
with the investment of our existing stockholders.
EXISTING STOCKHOLDERS IF ALL OF THE SHARES ARE SOLD:
Price per share $ 0.00001
Net tangible book value per share before offering $ (0.00)
Potential gain to existing shareholders $ 90,000
Net tangible book value per share after offering $ 0.022
Increase to present stockholders in net tangible book value
per share after offering $ 0.022
Capital contributions $ 20
Number of shares outstanding before the offering 2,000,000
Number of shares after offering assuming the sale of the maximum
number of shares 4,000,000
Percentage of ownership after offering 50%
9
PURCHASERS OF SHARES IN THIS OFFERING IF ALL SHARES SOLD
Price per share $ 0.05
Dilution per share $ 0.028
Capital contributions $ 100,000
Number of shares after offering held by public investors 2,000,000
Percentage of capital contributions by existing shareholders 0.02%
Percentage of capital contributions by new investors 99.98%
Percentage of ownership after offering 50%
PURCHASERS OF SHARES IN THIS OFFERING IF 62.5% OF SHARES SOLD
Price per share $ 0.05
Dilution per share $ 0.034
Capital contributions $ 62,500
Number of shares after offering held by public investors 1,250,000
Percentage of capital contributions by existing shareholders 0.032%
Percentage of capital contributions by new investors 99.968%
Percentage of ownership after offering 38%
PURCHASERS OF SHARES IN THIS OFFERING IF 25% OF SHARES SOLD
Price per share $ 0.05
Dilution per share $ 0.044
Capital contributions $ 25,000
Percentage of capital contributions by existing shareholders 0.08%
Percentage of capital contributions by new investors 99.92%
Number of shares after offering held by public investors 500,000
Percentage of ownership after offering 20%
10
PLAN OF DISTRIBUTION; TERMS OF THE OFFERING
We are offering up to 2,000,000 shares of common stock on a self-underwritten
basis, 500,000 shares minimum, 2,000,000 shares maximum. The offering price is
$0.05 per share. Funds from this offering will be placed in a separate bank
account at Wells Fargo Bank, 3101 Woburn street, Bellingham, WA 98226. The
bank's telephone number is (360) 738-2331. The funds will be maintained in a
separate bank until we receive a minimum of $25,000 at which time we will remove
those funds and use the same as set forth in the Use of Proceeds section of this
Prospectus. This account is not an escrow, trust or similar account. Your
subscription will only be deposited in a separate bank account under our name.
As a result, if we are sued for any reason and a judgment is rendered against
us, your subscription could be seized in a garnishment proceeding and you could
lose your investment, even if we fail to raise the minimum amount in this
offering. As a result, there is no assurance that your funds will be returned to
you if the minimum offering is not reached. Any funds received by us thereafter
will immediately used by us. If we do not receive the minimum amount of $25,000
within 270 days of the effective date of our registration statement, all funds
will be promptly returned to you without a deduction of any kind. During the 270
day period, no funds will be returned to you. You will only receive a refund of
your subscription if we do not raise a minimum of $25,000 within the 270 day
period referred to above. There are no finders involved in our distribution.
Officers, directors, affiliates or anyone involved in marketing our shares will
not be allowed to purchase shares in the offering. You will not have the right
to withdraw your funds during the offering. You will only have the right to have
your funds returned if we do not raise the minimum amount of the offering or if
there is a material change in the terms of the offering. The following are
material changes that would entitle you to a refund of your money:
* an extension of the offering period beyond 270 days;
* a change in the offering price;
* a change in the minimum sales requirement;
* a change to allow sales to affiliates in order to meet the minimum
sales requirement; or
* a change in the amount of proceeds necessary to release the funds held
in the separate bank account.
If any of the above material changes occur, a new offering may be made by means
of a post-effective amendment.
We will sell the shares in this offering through Ms. Yahodka, our sole officer
and director. She will receive no commission from the sale of any shares. She
will not register as a broker-dealer under section 15 of the Securities Exchange
Act of 1934 in reliance upon Rule 3a4-1. Rule 3a4-1 sets forth those conditions
under which a person associated with an issuer may participate in the offering
of the issuer's securities and not be deemed to be a broker/dealer. The
conditions are that:
1. The person is not statutorily disqualified, as that term is defined in
Section 3(a)(39) of the Act, at the time of her participation; and,
2. The person is not compensated in connection with her participation by
the payment of commissions or other remuneration based either directly
or indirectly on transactions in securities;
3. The person is not at the time of their participation, an associated
person of a broker/dealer; and,
11
4. The person meets the conditions of Paragraph (a)(4)(ii) of Rule 3a4-1
of the Exchange Act, in that she (A) primarily performs, or is
intended primarily to perform at the end of the offering, substantial
duties for or on behalf of the Issuer otherwise than in connection
with transactions in securities; and (B) is not a broker or dealer, or
an associated person of a broker or dealer, within the preceding
twelve months; and (C) does not participate in selling and offering of
securities for any Issuer more than once every twelve months other
than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
Ms. Yahodka is not statutorily disqualified, is not being compensated, and is
not associated with a broker/dealer. She is and will continue to be our sole
officer and director at the end of the offering and has not been during the last
twelve months and is currently not a broker/dealer or associated with a
broker/dealer. She will not participate in selling and offering securities for
any issuer more than once every twelve months.
Only after our registration statement is declared effective by the SEC, do we
intend to advertise, through tombstones, and hold investment meetings in various
states where the offering will be registered. We will not utilize the Internet
to advertise our offering. Ms. Yahodka will also distribute the prospectus to
potential investors at meetings, to business associates and to her friends and
relatives who are interested in a possible investment in the offering. No shares
purchased in this offering will be subject to any kind of lock-up agreement.
Management and affiliates thereof will not purchase shares in this offering to
reach the minimum. We intend to sell our shares outside of the United States.
SECTION 15(g) OF THE EXCHANGE ACT - PENNY STOCK RULES
The SEC has adopted rules that regulate broker-dealer practices in connection
with transactions in penny stocks. Penny stocks are generally equity securities
with a price of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on the OTC Bulletin Board system,
provided that current price and volume information with respect to transactions
in such securities is provided by the exchange or system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the SEC, which:
* contains a description of the nature and level of risk in the market
for penny stocks in both public offerings and secondary trading;
* contains a description of the broker's or dealer's duties to the
customer and of the rights and remedies available to the customer with
respect to a violation to such duties or other requirements;
* contains a brief, clear, narrative description of a dealer market,
including "BID" and "ASK" prices for penny stocks and the significance
of the spread between the bid and ask price;
* contains a toll-free telephone number for inquiries on disciplinary
actions;
* defines significant terms in the disclosure document or in the conduct
of trading penny stocks; and
* contains such other information and is in such form (including
language, type, size, and format) as the SEC shall require by rule or
regulation.
12
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, the customer:
* with bid and offer quotations for the penny stock;
* the compensation of the broker-dealer and its salesperson in the
transaction;
* the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
* monthly account statements showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our securities because it will be subject
to these penny stock rules. Therefore, security holders may have difficulty
selling those securities.
REGULATION M
Our sole officer and director, who will sell the shares, is aware that she is
required to comply with the provisions of Regulation M, promulgated under the
Securities and Exchange Act of 1934, as amended. With certain exceptions,
Regulation M precludes officers and/or directors, sales agents, any
broker-dealers or other person who participate in the distribution of shares in
this offering from bidding for or purchasing, or attempting to induce any person
to bid for or purchase any security which is the subject of the distribution
until the entire distribution is complete.
OFFERING PERIOD AND EXPIRATION DATE
This offering will start on the date that this registration statement is
declared effective by the SEC and continue for a period of 270 days, or sooner
if the offering is completed or otherwise terminated by us.
We will not accept any money until this registration statement is declared
effective by the SEC.
PROCEDURES FOR SUBSCRIBING
We will not accept any money until this registration statement is declared
effective by the SEC. Once the registration statement is declared effective by
the SEC, if you decide to subscribe for any shares in this offering, you must:
1. Execute and deliver a subscription agreement, a copy of which is
included with the prospectus; and
2. Deliver a check, wire transfer, bank draft or money order to us for
acceptance or rejection.
All checks for subscriptions must be made payable to "UKRAGRO CORPORATION".
13
RIGHT TO REJECT SUBSCRIPTIONS
We have the right to accept or reject subscriptions in whole or in part, for any
reason or for no reason. All monies from rejected subscriptions will be returned
immediately by us to the subscriber, without interest or deductions.
Subscriptions for securities will be accepted or rejected within 48 hours after
we receive them.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
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 corporation and have not started operations and have
not yet generated or realized any revenues.
Our auditors have issued a going concern opinion. This means that our auditors
believe there is substantial doubt that we can continue as an on-going business
for the next twelve 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 complete the development of our website and begin
implementing and marketing our spa services to our target markets. We believe
the technical aspects of our website will be sufficiently developed to use for
our operations within 90 days from the completion of our offering. Accordingly,
we must raise cash from sources other than operations. Our only other source for
cash at this time is investments by others in our company. We must raise cash to
implement our project and begin our operations. Whether we raise the minimum or
maximum amount of money in this offering, it will last twelve months. The
difference between the minimum and maximum amount relates to the website
development; marketing and advertising; equipment and furniture; and hiring one
employee. In each case, if we raise the maximum amount, we will devote more
funds to the same in order to enhance the quality of the website and promote our
business plan to potential customers. We will not begin operations until we
raise money from this offering.
We have only one officer and director. She is responsible for our managerial and
organizational structure which will include preparation of disclosure and
accounting controls under the Sarbanes Oxley Act of 2002. When theses controls
are implemented, she will be responsible for the administration of the controls.
Should she not have sufficient experience, she may be incapable of creating and
implementing the controls which may cause us to be subject to sanctions and
fines by the SEC which ultimately could cause you to lose your investment.
PLAN OF OPERATION
Assuming we raise the minimum amount in this offering, we believe we can satisfy
our cash requirements during the next 12 months. We will not be conducting any
product research or development. We do not expect to purchase any significant
equipment. Further we do not expect significant changes in the number of
employees.
14
Upon completion of our public offering, our goal is to commence our operations.
We intend to accomplish the foregoing through the following milestones:
1. Complete our public offering. We believe that we will raise sufficient
capital to begin our operations, and we believe that this could take
up to 270 days from the date the Securities and Exchange Commission
declares our offering effective. We will not begin operations until we
have closed this offering. We intend to concentrate all of our efforts
on raising as much capital as we can during this period.
2. After completion of the offering, we will immediately begin to develop
our website. We believe that our website can be fully operational
within 90 days and that it will cost between $1,200 and $2,400 to
build our website.
3. After our website is established, we intend to begin to market our
business to potential customers or investors through our website and
by personal contacts through Ms. Yahodka, our president.
Within 120 days after we complete our public offering, we should be in the
position to begin to establish our spa center. We will attempt to build this
center on a cost-sharing basis with potential vendors in Zhitomir, Ukraine.
If we cannot generate sufficient revenues to continue operations, we will
suspend or cease operations. If we cease operations, we do not know what we will
do and we do not have any plans to do anything else.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an
evaluation of our performance. We are in development stage operations and have
not yet generated any revenues. 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 limited capital resources
and possible cost overruns.
In addition to this offering, we are seeking equity financing in order to obtain
the capital required to implement our business plan.
We have no assurance that future financing will be available to us on acceptable
terms. If financing is not available to us on satisfactory terms, we may be
unable to continue, develop or expand our operations. Equity financing could
result in additional dilution to our existing shareholders.
RESULTS OF OPERATIONS
FROM INCEPTION ON OCTOBER 23, 2008 TO OCTOBER 31, 2008
During this period we incorporated the company, hired an attorney, and hired an
auditor for the preparation of this registration statement. We also prepared an
internal business plan. Our loss since inception is $806 of which $250 is for
rent, $250 is for consulting services, and $306 is for filing fees and general
office expenses. We have not yet started our proposed business operations and
will not do so until we have completed this offering. We expect to begin
operations within 120 days after we complete this offering.
15
Since inception, we have issued 2,000,000 founder's shares of common stock to
our sole officer and director.
LIQUIDITY AND CAPITAL RESOURCES
To meet our need for cash we are attempting to raise money from this offering.
We believe that we will be able to raise enough money through this offering to
begin operations but we cannot guarantee that once we begin operations we will
stay in business after operations have commenced. If we are unable to
successfully attract customers to utilize our spa services, we may use up the
proceeds from this offering and will need to find alternative sources, like a
second public offering, a private placement of securities, or loans from our
officers or others in order for us to continue our operations. At present, we
have not made any arrangements to raise additional capital, other than through
this offering.
Our sole officer and director is willing to loan us money for our operations
until this offering has been completed or until the offering period has expired.
If we need additional capital and cannot raise it we will either have to suspend
operations until we do raise the capital or cease operations entirely. If we
raise the minimum amount of money from this offering, it will last one year.
Other than as described in this paragraph, we have no other financing plans.
As of the date of this prospectus, we have yet to generate any revenues from our
business operations.
We issued 2,000,000 shares of common stock pursuant to an exemption from
registration contained in Section 4(2) of the Securities Act of 1933. This was
accounted for as a sale of common stock.
As of October 31, 2008, our total assets were $100 and our total liabilities
were $405. We also had cash of $100.
BUSINESS
GENERAL
We were incorporated in the State of Nevada on October 23, 2008. We have not
started operations. We intend to start a spa center in the city of Zhitomir,
Ukraine.
We have not yet generated any revenues and the only operation we have engaged in
is the development of a business plan. Our business office is located at 239 B
Schorsa Street, Zhitomir, Ukraine. Our telephone number is 011380506081534. This
is the office of our President, Maria Yahodka. We have paid rent of $250 to Ms.
Yahodka.
We have no plans to change our planned business activities or to combine with
another business, and we are not aware of any events or circumstances that might
cause these plans to change. We have not yet begun operations and will not begin
operations until we have completed this offering. Our plan of operation is
forward looking and there is no assurance that we will ever begin operations.
We have not conducted any market research into the likelihood of success of our
operations or the acceptance of our products or advisory services by the public.
16
OUR STRATEGY
We intend to establish spa centers in urban areas. Our approach is to provide
our clients with the most up-to-date skin care treatments and massage services.
Currently, we do not yet have any customers or any contracts for our services.
We also have not yet commenced any operations.
TARGET MARKET
We intend to target the city of Zhitomir, Ukraine. In our first year of
operation, we plan to open one location. Customers will pay for our services
with cash or credit cards and will be able to book appointments by person, by
phone, over the internet or via mobile phone text messages.
REGULATORY REQUIREMENTS
We are not required to obtain any special licenses, nor meet any special
regulatory requirements before establishing our business, other than a simple
business license. If new government regulations, laws, or licensing requirements
are passed that would restrict or eliminate delivery of any of our intended
services, then our business may suffer. For example, if we were required to
obtain a government issued license for the purpose of providing spa services,
then we may not be able to qualify for such a license. If such a licensing
requirement existed, and we were not able to qualify, then our business would
suffer. Presently, to the best of our knowledge, no such regulations, laws, or
licensing requirements exist or are likely to be implemented in the near future
that would reasonably be expected to have a material impact on or sales,
revenues, or income from our business operations.
MARKETING
Initially, our services will be promoted by Ms. Yahodka. She will discuss our
services with her friends and business associates. We also anticipate utilizing
other marketing avenues in our attempt to make our services known to the general
public and attract potential customers. These marketing activities will be
designed to inform potential customers about the benefits of using our services
and may include the following: development and distribution of marketing
literature; direct mail and email advertising; and, promotion of our web site.
REVENUE
We intend to generate revenues by charging a fee for our spa services.
Our spa center will require the purchase of equipment and the location setup.
Therefore, we will require substantial start-up capital in order to begin
operations.
Maria Yahodka, our president, will be devoting approximately 20 hours a week of
her time to our operations. Once we begin operations, and are able to attract
more and more clients to use our services, Ms. Yahodka has agreed to commit more
time as required. Because Ms. Yahodka will only be devoting limited time to our
operations, our operations may be sporadic and occur at times which are
convenient to Ms. Yahodka. As a result, operations may be periodically
interrupted or suspended which could result in a lack of revenues and a
cessation of operations.
EMPLOYEES; IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES
We are a development stage company and currently have no employees, other than
our sole officer and director. We intend to hire additional employees when they
are needed.
17
OFFICES
Our offices are currently located at 239 B Schorsa Street, Zhitomir, Ukraine.
Our telephone number is 011380506081534. We pay $250 rent. Upon the completion
of our offering, we intend to establish our spa center elsewhere. As of the date
of this prospectus, we have not sought or selected a new location.
MANAGEMENT
OFFICERS AND DIRECTORS
Our sole director will serve until her successor is elected and qualified. Our
sole officer is elected by the board of directors for a term of one year and
serves until her successor is duly elected and qualified, or until she is
removed from office. Our board of directors has no nominating, auditing or
compensation committees.
The name, address, age and position of our sole officer and director is set
forth below:
Name and Address Age Positions
- ---------------- --- ---------
Maria Yahodka 79 President, Chief Executive Officer, Secretary/
239 B Schorsa Street, Treasurer, Chief Financial Officer, and the
Zhitomir, Ukraine sole member of the Board of Directors
10008
The person named above has held her offices/positions since the inception of our
company and is expected to hold her offices/positions until the next annual
meeting of our stockholders.
BACKGROUND OF OUR SOLE OFFICER AND DIRECTOR
MARIA YAHODKA - PRESIDENT, CHIEF EXECUTIVE OFFICER, SECRETARY, TREASURER, CHIEF
FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER AND OUR SOLE DIRECTOR.
Since October 23, 2008, Ms. Yahodka has been our President, Chief Executive
Officer, Secretary, Treasurer, Chief Financial Officer, Principal Accounting
Officer and sole member of our Board of Directors. Ms. Yahodka has received
formal training in massage therapy in Ukraine. Following the successful
completion of her massage therapy program in 1997, Ms. Yahodka has owned and
operated a private massage clinic. Ms. Yagodka devotes approximately 20 hours
per week to our operations. and will devote additional time as required. Ms.
Yagodka is not an officer or director of any other reporting company.
AUDIT COMMITTEE FINANCIAL EXPERT
The functions of the Audit Committee are currently carried out by our Board of
Directors. Our Board of Directors has determined that we do not have an audit
committee financial expert on our Board of Directors carrying out the duties of
the Audit Committee. The Board of Directors has determined that the cost of
hiring a financial expert to act as a director us and to be a member of the
Audit Committee or otherwise perform Audit Committee functions outweighs the
benefits of having a financial expert on the Audit Committee.
18
CONFLICTS OF INTEREST
Ms. Yahodka devotes approximately 20 hours per week to our Company. The only
conflict that exists is Ms. Yahodka's devotion of time to other projects. We
have no provisions for handling conflicts of interest should they arise in the
future; however, Ms. Yahodka has agreed not to engage in any business activity
which conflicts with our activities.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by us from inception on
October 23, 2008, through October 31, 2008, for our sole officer and director.
This information includes the dollar value of base salaries, bonus awards and
number of stock options granted, and certain other compensation, if any.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
-------------------------- -------------------------------------------
Awards Payouts
------ -------
Securities
Names Other Under Restricted Other
Executive Annual Options/ Shares or Annual
Officer and Compen- SARs Restricted LTIP Compen-
Principal Year Salary Bonus sation Granted Share/Units Payouts sation
Position (US$) (US$) (US$) (#) (US$) (US$) (US$)
--------- ---- ------ ----- ------ ------- ----------- ------- ------
Maria Yahodka 2008 0 0 0 0 0 0 0
President,
Secretary/Treasurer,
Director
We do not have any employment agreements with any of our officers. We do not
contemplate entering into any employment agreements until such time as we begin
to attain profitable operations.
The compensation discussed herein addresses all compensation awarded to, earned
by, or paid to our named executive officer.
There are no other stock option plans, retirement, pension, or profit sharing
plans for the benefit of our sole officer and director other than as described
herein.
LONG-TERM INCENTIVE PLAN AWARDS
We do not have any long-term incentive plans that provide compensation intended
to serve as incentive for performance.
COMPENSATION OF DIRECTORS
Our sole director does not receive any compensation for serving as a member of
the board of directors.
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 her position, if she acted in good faith and in
19
a manner she 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 she is to be
indemnified, we must indemnify her 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 Nevada.
Regarding indemnification for liabilities arising under the Securities Act of
1933, which may be permitted to directors or officers under Nevada 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.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this prospectus, the total
number of shares owned beneficially by our directors, officers 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 their ownership assuming
the sale of all of the shares in this offering. The stockholders listed below
have direct ownership of their shares and possesses sole voting and dispositive
power with respect to the shares.
Percentage of
Number of Percentage of Number of Shares Ownership After
Shares Ownership After Offering the Offering
Name and Address Before the Before the Assuming all of the Assuming all of the
Beneficial Owner [1] Offering Offering Shares are Sold Shares are Sold
- -------------------- -------- -------- --------------- ---------------
Maria Yahodka 2,000,000 100.00% 4,000,000 50%
239 B Schorsa Street
Zhitomir, Ukraine
10008
- ----------
[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 her direct stock holdings. Ms. Yahodka is the only
"promoter" of our company.
FUTURE SALES BY EXISTING STOCKHOLDERS
A total of 2,000,000 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
General Rules and Regulations promulgated under the Securities Act of 1933.
Under Rule 144, since Ms. Yahodka is an affiliate as defined in that rule, the
shares can be publicly sold, subject to volume restrictions and restrictions on
the manner of sale, commencing one year after their acquisition.
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.
There is no public trading market for our common stock. There are no outstanding
options or warrants to purchase, or securities convertible into, our common
stock. There is one holder of record for our common stock. The record holder is
our sole officer and director and she owns 2,000,000 restricted shares of our
common stock.
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DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized capital stock consists of 75,000,000 shares of common stock, par
value $0.00001 per share. The holders of our common stock:
* 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.
All shares of common stock now outstanding are fully paid and non-assessable and
all shares of common stock that are the subject of this offering, when issued,
will be fully paid for and non-assessable. We refer you to our Articles of
Incorporation, Bylaws and the applicable statutes of the State of Nevada 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,
assuming the sale of all of our shares of common stock, present stockholders
will own approximately 50% of our outstanding shares.
CASH DIVIDENDS
As of the date of this prospectus, we have not 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 and our general economic
condition. It is our intention not to pay any cash dividends in the foreseeable
future, but rather to reinvest earnings, if any, in our business operations.
PREFERRED STOCK
We do not have a class of preferred stock.
ANTI-TAKEOVER PROVISIONS
There are no Nevada anti-takeover provisions that may have the affect of
delaying or preventing a change in control.
21
REPORTS
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 and 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., Room 1580, 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 selected a stock transfer agent yet.
CERTAIN TRANSACTIONS
In October 2008, we issued a total of 2,000,000 shares of restricted common
stock to Maria Yahodka, our sole officer and director. These shares represent
100% of our issued and outstanding shares. This represents the complete interest
of our sole current shareholder prior to any future issuance of stock under this
registration statement.
Further, Ms. Yahodka has advanced funds to us for our legal, audit, filing fees,
general office administration and cash needs. As of October 31, 2008, Ms.
Yahodka has advanced us $405 for our benefit. Ms. Yahodka will be repaid from
the proceeds of this offering. There is no due date for the repayment of the
funds advanced by Ms. Yahodka. The obligation to Ms. Yahodka does not bear
interest. There is no written agreement evidencing the advancement of funds by
Ms. Yahodka or the repayment of the funds to Ms. Yahodka. The entire transaction
was oral.
LITIGATION
We are not a party to any pending litigation and none is contemplated or
threatened.
EXPERTS
Our financial statements for the period from inception to October 31, 2008,
included in this prospectus have been audited by M&K CPAS, PLLC, 13831 Northwest
Freeway, Suite 300 Houston, TX 77040, telephone 832-242-9950 as set forth in
their report included in this prospectus. Their report is given upon their
authority as experts in accounting and auditing.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for us by of
the law firm Dean Law Corp.
FINANCIAL STATEMENTS
Our fiscal year end is October 31. We will provide audited financial statements
to our stockholders on an annual basis; the statements will be prepared by M&K
CPAS, PLLC 13831 Northwest Freeway, Suite 300 Houston, TX 77040; telephone:
832-242-9950:
22
FINANCIAL STATEMENTS
Ukragro Corporation
(A Development Stage Corporation)
October 31, 2008
Index
-----
Report of Independent Registered Public Accounting Firm .................. F-1
Balance Sheet as of October 31, 2008 ..................................... F-2
Statement of Operations for the Period From October 23, 2008
(Inception) Through October 31, 2008 ..................................... F-3
Statement of Cash Flows for the Period From October 23, 2008
(Inception) Through October 31, 2008 ..................................... F-4
Statement of Changes in Stockholders' Deficit for the Period From
October 23, 2008 (Inception) Through October 31, 2008 .................... F-5
Notes to the Financial Statements ........................................ F-6
23
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS
Ukragro Corporation
We have audited the accompanying balance sheet of Ukragro Corporation (a
development stage company) as of October 31, 2008 and the related statements of
operations, changes in stockholders' deficit, and cash flows for the period from
October 23, 2008 (inception) through October 31, 2008. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ukragro Corporation as of
October 31, 2008, and the results of its operations, changes in stockholders'
deficit and cash flows for the period from October 23, 2008 (inception) 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 2 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency, which raises substantial doubt about its
ability to continue as a going concern. Management's plans regarding those
matters also are described in Note 2. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/ M&K CPAS, PLLC
- -------------------------------
Houston, Texas
www.mkacpas.com
December 18, 2008
F-1
Ukragro Corporation
(A Development Stage Company)
Balance Sheet
As of October 31, 2008
ASSETS
Current Assets
Cash $ 100
-------
Total Assets $ 100
=======
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Loan to related party $ 405
-------
Stockholders' Deficit
Common Stock (2,000,000 shares issued and outstanding
at par value 0.00001) 20
Additional paid-in capital 481
Deficit accumulated during the development stage (806)
-------
Total Stockholders' Deficit (305)
-------
Total Liabilities and Stockholders' Deficit $ 100
=======
See the accompanying summary of accounting policies and
notes to the financial statements
F-2
Ukragro Corporation
(A Development Stage Company)
Statement of Operations
For the Period from October 23, 2008 (inception) through October 31, 2008
Operating Expenses
Consulting services $ 250
General and administrative 30
Rent 250
Legal and accounting 275
Interest Expense 1
-----------
Total Expenses 806
-----------
Net Loss $ (806)
===========
Net Loss Per Common Share - Basic and Diluted $ (0.00)
===========
Weighted Average Number of Common Shares Outstanding 2,000,000
===========
See the accompanying summary of accounting policies and
notes to the financial statements
F-3
Ukragro Corporation
(A Development Stage Company)
Statements of Cash Flows
For the period from October 23, 2008 (inception) through October 31, 2008
Operating Activities
Net loss $ (806)
Adjustments to reconcile net loss to cash
used in operating activities:
Contributed rent and consulting services 500
Imputed interest on due to directors 1
-------
Net Cash Used in Operating Activities (305)
-------
Financing Activities
Proceeds from loans - related party 405
-------
Net Cash Provided by Financing Activities 405
-------
Increase (Decrease) in Cash 100
Cash - Beginning of Period --
-------
Cash - End of Period $ 100
=======
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Interest $ --
Income taxes $ --
See the accompanying summary of accounting policies and
notes to the financial statements
F-4
Ukragro Corporation
(A Development Stage Company)
Statement of Changes in Stockholders' Deficit
For the period from October 23, 2008 (inception) through October 31, 2008
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Issuance of founders shares 2,000,000 $ 20 $ (20) $ -- $ --
Contributed rent and consulting
services -- -- 500 -- 500
Imputed Interest 1 -- 1
Net loss -- -- -- (806) (806)
--------- ----- ------ ------ ------
Balances at October 31, 2008 2,000,000 $ 20 $ 481 $ (806) $ (305)
========= ===== ====== ====== ======
See the accompanying summary of accounting policies and
notes to the financial statements
F-5
Ukragro Corporation
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
UkrAgro Corporation (the "Company") was incorporated on October 23, 2008, under
the laws of the State of Nevada, as a development stage company. The Company
intends to commence operations in the agricultural industry.
BASIS OF PRESENATATION
The Company follows accounting principles generally accepted in the United
States of America. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the periods presented have been
reflected herein.
REVENUE RECOGNITION
Revenue is recognized when it is realized or realizable and earned. The Company
considers revenue realized or realizable and earned when persuasive evidence of
an arrangement exists, services have been provided, and collectability is
reasonably assured. Revenue that is billed in advance such as recurring weekly
or monthly services are initially deferred and recognized as revenue over the
period the services are provided.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents. As of October 31, 2008, there were no cash equivalents.
DEVELOPMENT STAGE COMPANY
The Company complies with Statement of Financial Accounting Standard ("SFAS")
No. 7 and the Securities and Exchange Commission Exchange Act 7 for its
characterization of the Company as development stage.
IMPAIRMENT OF LONG LIVED ASSETS
Long-lived assets are reviewed for impairment in accordance with SFAS No. 144,
"Accounting for the Impairment or Disposal of Long- lived Assets". Under SFAS
No. 144, long-lived assets are tested for recoverability whenever events or
changes in circumstances indicate that their carrying amounts may not be
recoverable. An impairment charge is recognized or the amount, if any, which the
carrying value of the asset exceeds the fair value.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial instruments, including cash, receivables, accounts payable, and notes
payable are carried at amounts which reasonably approximate their fair value due
to the short-term nature of these amounts or due to variable rates of interest
which are consistent with market rates. No adjustments have been made in the
current period.
INCOME TAXES
The Company accounts for income taxes under the Financial Accounting Standards
Board of Financial Accounting Standard No. 109, "Accounting for Income Taxes"
("Statement 109"). Under Statement 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax basis. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment
date. There was no current or deferred income tax expense or benefits for the
periods ending October 31, 2008.
F-6
BASIC AND DILUTED NET LOSS PER COMMON SHARE
Basic and diluted net loss per share calculations are calculated on the basis of
the weighted average number of common shares outstanding during the year. The
per share amounts include the dilutive effect of common stock equivalents in
years with net income. Basic and diluted loss per share is the same due to the
anti dilutive nature of potential common stock equivalents.
STOCK BASED COMPENSATION
The Company accounts for stock-based employee compensation arrangements using
the fair value method in accordance with the provisions of Statement of
Financial Accounting Standards No.123(R) or SFAS No. 123(R), Share-Based
Payments, and Staff Accounting Bulletin No. 107, or SAB 107, Share-Based
Payments. The company accounts for the stock options issued to non-employees in
accordance with the provisions of Statement of Financial Accounting Standards
No. 123, or SFAS No. 123, Accounting for Stock-Based Compensation, and Emerging
Issues Task Force No. 96-18, Accounting for Equity Instruments with Variable
Terms That Are Issued for Consideration other Than Employee Services under FASB
Statement No. 123.
The Company did not grant any stock options or warrants during the period ended
October 31, 2008.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on its results of operations,
financial position or cash flow.
NOTE 2 - GOING CONCERN
These financial statements have been prepared on a going concern basis, which
implies Ukragro Corporation will continue to meet its obligations and continue
its operations for the next fiscal year. Realization value may be substantially
different from carrying values as shown and these financial statements do not
include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should
Ukragro Corporation be unable to continue as a going concern. As at October 31,
2008, Ukragro Corporation has a working capital deficiency, has not generated
revenues and has accumulated losses of $ 806 since inception. The continuation
of Ukragro Corporation as a going concern is dependent upon the continued
financial support from its shareholders, the ability of Ukragro Corporation to
obtain necessary equity financing to continue operations, and the attainment of
profitable operations. These factors raise substantial doubt regarding the
Ukragro Corporation' ability to continue as a going concern.
NOTE 3 - RELATED PARTY TRANSACTIONS
A director loaned $405 to the Company during the period ended October 31, 2008,
which is unsecured, non interest bearing, with no specific terms of repayment.
Imputed interest in the amount of $1 is included as a contribution to additional
paid in capital.
During the period ended October 31, 2008 the Company recognized a total of $250
for donated services and $250 for consulting services provided by the President
and Director of the Company.
NOTE 4 - COMMON STOCK
As of October 31, 2008 the Ukragro Corporation has issued 2,000,000 common
shares as founder's shares.
NOTE 5 - INCOME TAXES
The Company has tax losses which may be applied against future taxable income.
The potential tax benefits arising from these loss carryforwards expire
beginning in 2028 and are offset by a valuation allowance due to the uncertainty
of profitable operations in the future. The net operating loss carryforward was
$806 at October 31, 2008. The significant components of the deferred tax asset
as of October 31, 2008 are as follows:
Net operating loss carryforwards $ 282
Valuation allowance (282)
-------
Net deferred tax asset $ --
=======
F-7
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering all of which are to be paid by the
registrant are as follows:
SEC Registration Fee $ 100
Printing Expenses 100
Accounting Fees and Expenses 4,500
Legal Fees and Expenses 3,000
Blue Sky Fees/Expenses 500
Transfer Agent Fees 1,800
-------
TOTAL $10,000
=======
RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the registrant has sold the following securities
which were not registered under the Securities Act of 1933, as amended.
Name and Address Date Shares Consideration
- ---------------- ---- ------ -------------
Maria Yahodka October 31, 2008 2,000,000 $20
239 B Schorsa Street
Zhitomir , Ukraine
10008
We issued the foregoing restricted shares of common stock to Ms. Yahodka
pursuant to Regulation S of the Securities Act of 1933. The sale of our shares
to Ms. Yahodka took place outside the United States of America and Ms. Yahodka
is non-US persons as defined in Regulation S. Further, no commissions were paid
to anyone in connection with the sale of our shares and general solicitation was
not made to anyone.
EXHIBITS.
The following Exhibits are filed as part of this Registration Statement:
Exhibit No. Document Description
----------- --------------------
3.1 Articles of Incorporation.
3.2 Bylaws.
4.1 Specimen Stock Certificate.
5.1 Opinion of Dean Law Corp. regarding the legality of the
securities being registered.
23.1 Consent of M&K CPAS, PLLC
99.1 Subscription Agreement.
II-1
UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) Intentionally omitted.
(5) That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:
(i) Intentionally omitted.
(ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant
to Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
II-2
statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
(6) That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of
any of the following communications, the undersigned registrant will be a seller
to the purchaser and will be considered to offer or sell such securities to such
purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424.
(ii) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
B. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
SIGNATURES
In accordance with the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and authorized this Prospectus on Form S-1
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Zhitomir, Ukraine, on the 6th day of January, 2009.
UKRAGRO CORPORATION
BY: /s/ Maria Yahodka
--------------------------------------------------------
Maria Yahodka, President, Chief Executive Officer,
Treasurer, Chief Financial Officer, Principal Accounting
Officer and sole member of the Board of Directors.
II-4