As filed with the Securities and Exchange Commission on May 23, 2012
Registration No. 333-______
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Lion Consulting Group Inc.
(Exact name of registrant as specified in its charter)
Delaware 8741 99-0373067
(State or Other Jurisdiction of (Primary Standard Industrial (IRS Employer
Incorporation or Organization) Classification Number) Identification Number)
16192 Coastal Highway
Lewes, Delaware 19958
Tel: (940) 604-6214
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Harvard Business Services, Inc.
16192 Coastal Highway
Lewes, Delaware 19958
Tel: (302) 645-7400
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies of Communications to:
Thomas E. Puzzo
Law Offices of Thomas E. Puzzo, PLLC
4216 NE 70th Street
Seattle, Washington 98115
Fax: (206) 260-0111
Approximate date of proposed sale to the public: As soon as practicable and from
time to time after the effective date of this Registration Statement.
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, please check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
If this Form is a post-effective registration statement 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 registration statement 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 Maximum Proposed Maximum Amount of
Class of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered (1) per Share Price Fee
----------------------------------------------------------------------------------------------------
Common Stock, par value
$0.001 per share 5,000,000 (2) $0.02 (3) $100,000 $11.46
----------------------------------------------------------------------------------------------------
TOTAL 5,000,000 $ -- $100,000 $11.46
====================================================================================================
(1) In the event of a stock split, stock dividend or similar transaction
involving our common stock, the number of shares registered shall
automatically be increased to cover the additional shares of common stock
issuable pursuant to Rule 416 under the Securities Act of 1933, as amended.
(2) Represents the number of shares of common stock currently outstanding to be
sold by the selling stockholders.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) of the Securities Act.
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 SECTION 8(A), MAY
DETERMINE.
================================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE AMENDED. THE
REGISTRANT MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED _________, 2012
PRELIMINARY PROSPECTUS
LION CONSULTING GROUP INC.
5,000,000 SHARES OF COMMON STOCK AT $0.02 PER SHARE
This Prospectus relates to the offer and sale of a maximum of 5,000,000 shares
(the "Maximum Offering") of common stock, $0.001 par value ("Common Shares") by
Lion Consulting Group Inc., a Delaware corporation ("we", "us", "our", "Lion
Consulting", "Company" or similar terms). There is no minimum for this Offering.
The Offering will commence promptly on the date upon which this prospectus is
declared effective by the SEC and will continue for 16 months. We will pay all
expenses incurred in this Offering.
The offering of the 5,000,000 shares is a "best efforts" offering, which means
that our sole director and officer will use his best efforts to sell the common
stock and there is no commitment by any person to purchase any shares. The
shares will be offered at a fixed price of $0.02 per share for the duration of
the offering. There is no minimum number of shares required to be sold to close
the offering. Proceeds from the sale of the shares will be used to fund the
initial stages of our business development. We have not made any arrangements to
place funds received from share subscriptions in an escrow, trust or similar
account. Any funds raised from the offering will be immediately available to us
for our immediate use. 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 the
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, 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.
This is a direct participation Offering since we are offering the stock directly
to the public without the participation of an underwriter. Our sole officer and
director will be solely responsible for selling shares under this Offering and
no commission will be paid on any sales.
Proceeds to Proceeds to Proceeds to Proceeds to
Company Company Company Company
Before Expenses Before Expenses if Before Expenses Before Expenses if
Offering Price if 25% of the 50% of the if 75% of the 100% of the
Per Share Commissions shares are sold shares are sold shares are sold shares are sold
--------- ----------- --------------- --------------- --------------- ---------------
Common Stock $0.02 Not Applicable $25,000 $50,000 $75,000 $100,000
Totals $0.02 Not Applicable $25,000 $50,000 $75,000 $100,000
We are a development stage company and currently have no operations. Any
investment in the shares offered herein involves a high degree of risk. You
should only purchase shares if you can afford a loss of your investment. Our
independent registered public accountant has issued an audit opinion for Lion
Consulting which includes a statement expressing substantial doubt as to our
ability to continue as a going concern. Since there is no minimum amount of
shares that must be sold by us, we may receive no proceeds or very minimal
proceeds from the offering and potential investors may end up holding shares in
a company that (i) has not received enough proceeds from the offering to begin
operations; and (ii) has no market for its shares.
There has been no market for our securities and a public market may never
develop, or, if any market does develop, it may not be sustained. Our common
stock is not traded on any exchange or on the over-the-counter market. After the
effective date of the registration statement relating to this prospectus, we
hope to have a market maker file an application with the Financial Industry
Regulatory Authority ("FINRA") for our common stock to be eligible for trading
on the Over-the-Counter Bulletin Board. We do not yet have a market maker who
has agreed to file such application. There can be no assurance that our common
stock will ever be quoted on a stock exchange or a quotation service or that any
market for our stock will develop.
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this Prospectus. 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 our common shares.
BEFORE INVESTING, YOU SHOULD CAREFULLY READ THIS PROSPECTUS, PARTICULARLY, THE
RISK FACTORS SECTION BEGINNING ON PAGE 5.
NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ("SEC"), NOR ANY
STATE SECURITIES COMMISSION, HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is _________, 2012
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The following table of contents has been designed to help you find information
contained in this prospectus. We encourage you to read the entire prospectus.
TABLE OF CONTENTS
Page
----
Prospectus Summary 4
Risk Factors 5
Risk Factors Relating to Our Business 6
Risk Factors Associated with Our Common Stock 9
Forward-Looking Statements 12
Plan of Distribution 12
Use of Proceeds 13
Determination of Offering Price 14
Dilution 14
Description of Securities 15
Interests of Named Experts and Counsel 18
Description of Business 18
Description of Property 20
Legal Proceedings 21
Market for Common Equity and Related Stockholder Matters 21
Regulation M 23
Where You Can Find More Information 23
Financial Statements 23
Management's Discussion and Analysis of Financial Condition and
Results of Operations 23
Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure 26
Directors, Executive Officers, Promoters and Control Persons 26
Executive Compensation 28
Security Ownership of Certain Beneficial Owners and Management 29
Certain Relationships and Related Transactions 29
Disclosure of Commission Position on Indemnification for Securities
Act Liabilities 30
Index to Financial Statements 31
DEALER PROSPECTUS DELIVERY OBLIGATION
Until ___ ______, 2012 (90 business 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 dealer's obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
3
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND THE FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE
IN THIS PROSPECTUS. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE
INFORMATION DISCUSSED UNDER "RISK FACTORS" AND "USE OF PROCEEDS" SECTIONS,
COMMENCING ON PAGE 4 AND PAGE 13, RESPECTIVELY. AN INVESTMENT IN OUR SECURITIES
PRESENTS SUBSTANTIAL RISKS, AND YOU COULD LOSE ALL OR SUBSTANTIALLY ALL OF YOUR
INVESTMENT.
CORPORATE BACKGROUND AND BUSINESS OVERVIEW
Our Company was incorporated in the State of Delaware on February 6, 2012 to
engage in the development and operation of online business consulting services
for early stage growth companies. Our principal executive offices are located at
16192 Coastal Highway, Lewes, Delaware 19958. Our phone number is (940)
604-6214. We are a development stage company, we only just completed our first
fiscal year end on March 31 and we have no subsidiaries.
We are in the early stages of developing our business, which offers a variety of
services for business owners, depending on their specific business needs. These
services include business and marketing plan preparation, financial search and
procurement, IT consulting services, management development and human resources
advising. We plan to focus on offering our services to start-up businesses,
preferably in the earlier stages of operation. We currently have no revenues,
operating history, and no customers or revenues for our business consulting
services. Our plan of operations over the 12-month period following successful
completion of our offering is to gain support for our concept to then raise
additional financing to commence with our operations. We anticipate that we will
not be able to offer our services for at least 12 to 24 months from the date
hereof, assuming successful completion of this offering and the successful raise
of additional financing of $100,000 for development of our consulting services,
and $100,000 for initial marketing and promotion for commercial launch.
From inception until the date of this filing we have had limited operating
activities, primarily consisting of the incorporation of our company and the
initial equity funding by our officer and director. We received our initial
funding of $25,000 through the sale of common stock to our officer and director,
who purchased 2,500,000 shares at $0.01 per share.
Our financial statements from inception on February 6, 2012 through our first
fiscal period ended March 31, 2012 report no revenues and a net loss of
$(6,951). Our independent auditor has issued an audit opinion for our Company
which includes a statement expressing substantial doubt as to our ability to
continue as a going concern.
The following is a brief summary of this Offering:
The Issuer: Lion Consulting Group Inc.
Securities Being Offered: 5,000,000 shares of common stock
Price Per Share: $0.02
Common stock outstanding
before the offering: 2,500,000 shares of common stock
Common stock outstanding
after the offering
(assuming all shares are sold): 7,500,000 shares of common stock
Duration of the Offering: The offering will conclude upon the earliest of
(i) such time as all of the common stock has
been sold pursuant to the registration
statement or (ii) such time as our officers and
Directors decide to close the offering.
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Net Proceeds: If 10% of the shares are sold - $10,000
If 50% of the shares are sold - $50,000
If 75% of the shares are sold - $75,000
If 100% of the shares are sold - $100,000
Securities Issued and
Outstanding: There are 2,500,000 shares of common stock
issued and outstanding as of the date of this
prospectus, all of which are by Philippe
Wagner, our Present, Secretary, and sole
Director.
Registration Costs: We estimate our total offering registration
costs to be approximately $14,108.46.
Risk Factors: See "Risk Factors" and the other information in
this prospectus for a discussion of the factors
you should consider before deciding to invest
in shares of our common stock.
SUMMARY OF FINANCIAL INFORMATION
The summarized financial data presented below is derived from, and should be
read in conjunction with, our audited financial statements and related notes
from February 6, 2012 (date of inception) to March 31, 2012, included on Page
F-1 in this prospectus.
March 31, 2012 ($)
------------------
Financial Summary
Cash and Deposits 19,936
Total Assets 19,936
Total Liabilities 1,887
Total Stockholder's Equity 18,049
Accumulated From
February 6, 2012
(Inception) to
March 31, 2012 ($)
------------------
Statement of Operations
Total Expenses 6,951
Net Loss for the Period 6,951
Net Loss per Share --
We have just commenced our operations and are currently without revenue. Our
accumulated deficit at March 31, 2012 was $(6,951). We anticipate that we will
continue to incur net losses from our operations for the foreseeable future.
RISK FACTORS
An investment in our securities is considered to be highly speculative due to
various factors, including the nature of our business and the present stage of
our development. An investment in our securities should only be undertaken by
persons who have sufficient financial resources to afford the total loss of
their investment. In addition to the usual risks associated with investment in a
business, you should carefully consider the following known material risk
factors and all other information contained in this Prospectus before deciding
to invest in our Common Shares. If any of the following risks occur, our
business, financial condition and results of operations could be materially and
adversely affected. Additional risks and uncertainties we do not presently know
or that we currently deem immaterial may also impair our business, financial
condition or operating results.
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RISKS RELATING TO OUR BUSINESS
WE HAVE NO OPERATING HISTORY AND HAVE MAINTAINED LOSSES SINCE INCEPTION, WHICH
WE EXPECT TO CONTINUE INTO THE FUTURE.
We were incorporated on February 6, 2012 and have very limited operations. We
have not realized any revenues to date. Our proposed plan to offer business
consulting services is under development, and we are not ready to be offered to
customers. We have no operating history at all upon which an evaluation of our
future success or failure can be made. Our net loss from inception to March 31,
2012 is $(6,951). Based upon our proposed plans, we expect to incur significant
operating losses in future periods. This will happen because there are
substantial costs and expenses associated with the development and marketing of
our proposed services. We may fail to generate revenues in the future. If we
cannot attract a significant number of customers, we will not be able to
generate any significant revenues or income. Failure to generate revenues will
cause us to go out of business because we will not have the money to pay our
ongoing expenses.
In particular, additional capital may be required in the event that:
* the actual expenditures required to be made are at or above the higher
range of our estimated expenditures;
* we incur unexpected costs in completing the development of our
services or encounter any unexpected difficulties;
* we incur delays and additional expenses related to the development of
our services or a commercial market for our services;
* we are unable to create a substantial market for our services; or
* we incur any significant unanticipated expenses.
The occurrence of any of the aforementioned events could adversely affect our
ability to meet our business plans and achieve a profitable level of operations.
IF WE ARE UNABLE TO OBTAIN THE NECESSARY FINANCING TO IMPLEMENT OUR BUSINESS
PLAN WE WILL NOT HAVE THE MONEY TO PAY OUR ONGOING EXPENSES AND WE MAY GO OUT OF
BUSINESS.
Because we have not generated any revenue from our business, and we are at least
12 to 24 months (from the date hereof) away from being in a position to generate
revenues, we will need to raise significant, additional funds for the future
development of our business and to respond to unanticipated requirements or
expenses.
Our ability to successfully develop our services and to eventually produce and
use it to generate operating revenues also depends on our ability to obtain the
necessary financing to implement our business plan. Given that we have no
operating history, no revenues and only losses to date, we may not be able to
achieve this goal, and we may go out of business. We may need to issue
additional equity securities in the future to raise the necessary funds. We do
not currently have any arrangements for additional financing and we can provide
no assurance to investors we will be able to find such financing if further
funding is required. Obtaining additional financing would be subject to a number
of factors, including investor acceptance of our planned business consulting
services and our business model. The issuance of additional equity securities by
us would result in a significant dilution in the equity interests of our current
stockholders. Obtaining loans will increase our liabilities and future cash
commitments, and there can be no assurance that we will even have sufficient
funds to repay our future indebtedness or that we will not default on our future
debts if we are able to even obtain loans.
There can be no assurance that capital will continue to be available if
necessary to meet future funding needs or, if the capital is available, that it
will be on terms acceptable to us. If we are unable to obtain financing in the
amounts and on terms deemed acceptable to us, we may be forced to scale back or
cease operations, which might result in the loss of some or all of your
investment in our common stock.
6
IF OUR ESTIMATES RELATED TO EXPENDITURES ARE ERRONEOUS OUR BUSINESS WILL FAIL
AND YOU WILL LOSE YOUR ENTIRE INVESTMENT.
Our success is dependent in part upon the accuracy of our management's estimates
of expenditures, which includes an additional $100,000, which we will need to
raise in addition to this offering, to complete the development and launch our
business consulting services for mass use. If such estimates are erroneous or
inaccurate we may not be able to carry out our business plan, which could, in a
worst-case scenario, result in the failure of our business and you losing your
entire investment.
OUR BUSINESS MODEL MAY NOT BE SUFFICIENT TO ENSURE OUR SUCCESS IN OUR INTENDED
MARKET.
Our survival is currently dependent upon the success of our efforts to gain
market acceptance of our business consulting services that will ultimately
represent a very small segment in our targeted industry when it is completed.
Should our target market not be as responsive to our services as we anticipate,
we may not have in place alternate services or products that we can offer to
ensure our survival.
The markets that we will serve are subject to rapid technological change,
changing customer requirements, frequent new product introductions and evolving
industry standards that may render our proposed business consulting services
obsolete from time-to-time. If we are unable to license leading technologies
useful in our business, enhance our existing services, develop new services and
technology that address the increasingly sophisticated and varied needs of our
prospective customers and respond to technological advances and emerging
industry standards and practices on a cost-effective and timely basis, it could
adversely impact our ability to attract and retain customers. As a result, our
market position could be eroded rapidly by advancements by competitors. It is
not possible to predict presently the life cycle of any of our proposed business
consulting services. Broad acceptance of these proposed services by customers
will be critical to our future success, as will our ability to perform services
on a timely basis that meet changing customer needs and respond to technological
developments and emerging industry standards. We may experience difficulties
that could delay or prevent the successful marketing and delivery of our
proposed business consulting services. We may not be able to successfully
implement new technologies, proprietary technology and transaction-processing
systems to customer requirements or emerging industry standards. Further, new
services offered by others may meet the requirements of the marketplace and
achieve market acceptance.
WE DEPEND TO A SIGNIFICANT EXTENT ON CERTAIN KEY PERSONNEL, THE LOSS OF ANY OF
WHOM MAY MATERIALLY AND ADVERSELY AFFECT OUR COMPANY.
Currently, we have only one employee who is also our sole officer and director.
We depend entirely on Philippe Wagner for all of our operations. The loss of Mr.
Wagner would have a substantial negative effect on our company and may cause our
business to fail. Mr. Wagner has not been compensated for his services since our
incorporation, and it is highly unlikely that he will receive any compensation
unless and until we generate substantial revenues. There is intense competition
for skilled personnel and there can be no assurance that we will be able to
attract and retain qualified personnel on acceptable terms. The loss of Mr.
Wagner's services could prevent us from completing the development of our
offering of business consulting services and garnering revenues. In the event of
the loss of services of such personnel, no assurance can be given that we will
be able to obtain the services of adequate replacement personnel.
We do not have any employment agreements or maintain key person life insurance
policies on our officer and director. We do not anticipate entering into
employment agreements with him or acquiring key man insurance in the foreseeable
future.
WE HAVE LIMITED BUSINESS, SALES AND MARKETING EXPERIENCE IN OUR INDUSTRY.
We have not completed the development of our services and have yet to generate
revenues. While we have plans for marketing and sales, there can be no assurance
that such efforts will be successful. There can be no assurance that our
proposed business consulting services will gain wide acceptance in its target
market or that we will be able to effectively market our services.
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WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AGAINST OUR COMPETITORS.
We expect to face strong competition from well-established companies and small
independent companies like our self that may result in price reductions and
decreased demand for our services. We will be at a competitive disadvantage in
obtaining the facilities, employees, financing and other resources required to
provide the superior, highly customized, state-of-the-art business consulting
services and solutions demanded by customers. Our opportunity to obtain
customers may be limited by our financial resources and other assets. We expect
to be less able than our larger competitors to cope with generally increasing
costs and expenses of doing business. Additionally, it is expected that there
may be significant technological advances in the future and we may not have
adequate creative management and resources to enable us to take advantage of
those advances.
OUR SOLE OFFICER AND DIRECTOR IS ENGAGED IN OTHER ACTIVITIES AND MAY NOT DEVOTE
SUFFICIENT TIME TO OUR AFFAIRS, WHICH MAY AFFECT OUR ABILITY TO CONDUCT
OPERATIONS AND GENERATE REVENUES.
Our officer and director has existing responsibilities and has additional
responsibilities to provide management and services to other entities. We
initially expect Mr. Wagner to spend approximately 20 hours a week on the
business of our company. As a result, demands for the time and attention from
Mr. Wagner from our company and other entities may conflict from time to time.
Because we rely primarily on Mr. Wagner to maintain our business contacts and to
promote our services, his limited devotion of time and attention to our business
may hurt the operation of our business.
OUR INDEPENDENT AUDITORS' REPORT STATES THAT THERE IS A SUBSTANTIAL DOUBT THAT
WE WILL BE ABLE TO CONTINUE AS A GOING CONCERN.
Our independent auditors, Silberstein Ungar PLLC, state in their audit report,
dated May 5, 2012 and included herein, that we are a development stage company,
have no established source of revenue and are dependent on our ability to raise
capital from shareholders or other sources to sustain operations. As a result,
there is a substantial doubt that we will be able to continue as a going
concern.
This qualification clearly highlights that we will, in all likelihood, continue
to incur expenses without significant revenues into the foreseeable future until
our services gains significant popularity. Our only source of funds to date has
been the sale of our common stock from Mr. Wagner. Because we cannot currently
assure anyone that we will be able to generate enough interest in our services,
or that we will be able to generate any significant revenues or income, the
identification of new sources equity financing becomes significantly more
difficult. If we are successful in closing on any new financing, existing
investors will experience substantial dilution. The ability to obtain debt
financing is also severely impacted, and likely not even feasible, given that we
do not have revenues or profits to pay interest or repay principal.
As a result, if we are unable to obtain additional financing at this stage in
our operations, our business will fail and you may lose some or all of your
investment in our common stock.
INVESTORS WILL HAVE LITTLE VOICE REGARDING THE MANAGEMENT OF LION CONSULTING DUE
TO THE LARGE OWNERSHIP POSITION HELD BY OUR EXISTING MANAGEMENT AND THUS IT
WOULD BE DIFFICULT FOR NEW INVESTORS TO MAKE CHANGES IN OUR OPERATIONS OR
MANAGEMENT, AND THEREFORE, SHAREHOLDERS WOULD BE SUBJECT TO DECISIONS MADE BY
MANAGEMENT AND THE MAJORITY SHAREHOLDERS, INCLUDING THE ELECTION OF DIRECTORS.
Mr. Wagner, our sole officer and director, currently owns 100% of Lion
Consulting's common stock. If we are successful in completing the Maximum
Offering he will own 33.3% of the company's issued and outstanding common stock,
and is still in a position to significantly influence control of Lion
Consulting. If we close our Offering with less than the Maximum, his percentage
ownership is even higher. Such control may be risky to the investor because our
company's operations are dependent on a very few people who could lack ability,
or interest in pursuing our operations. In such event, our business may fail and
you may lose your entire investment. Moreover, investors will not be able to
effect a change in the company's board of directors, business or management.
8
WE INTEND TO BECOME SUBJECT TO THE PERIODIC REPORTING REQUIREMENTS OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, WHICH WILL REQUIRE US TO INCUR
AUDIT FEES AND LEGAL FEES IN CONNECTION WITH THE PREPARATION OF SUCH REPORTS.
THESE ADDITIONAL COSTS WILL NEGATIVELY AFFECT OUR ABILITY TO EARN A PROFIT.
Following the effective date of the registration statement in which this
prospectus is included, we will be required to file periodic reports with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934 and the rules and regulations thereunder. In order to comply with such
requirements, our independent registered auditors will have to review our
financial statements on a quarterly basis and audit our financial statements on
an annual basis. Moreover, our legal counsel will have to review and assist in
the preparation of such reports. Although we believe that the $14,500 - 22,000
we have estimated for these costs should be sufficient for the 12 month period
following the completion of our offering, the costs charged by these
professionals for such services may vary significantly . Factors such as the
number and type of transactions that we engage in and the complexity of our
reports cannot accurately be determined at this time and may have a major
negative affect on the cost and amount of time to be spent by our auditors and
attorneys. However, the incurrence of such costs will obviously be an expense to
our operations and thus have a negative effect on our ability to meet our
overhead requirements and earn a profit.
THE LACK OF PUBLIC COMPANY EXPERIENCE OF OUR MANAGEMENT TEAM COULD ADVERSELY
IMPACT OUR ABILITY TO COMPLY WITH THE REPORTING REQUIREMENTS OF U.S. SECURITIES
LAWS.
Mr. Wagner lacks public company experience, which could impair our ability to
comply with legal and regulatory requirements such as those imposed by
Sarbanes-Oxley Act of 2002. He has never been responsible for managing a
publicly traded company. Such responsibilities include complying with federal
securities laws and making required disclosures on a timely basis. Any such
deficiencies, weaknesses or lack of compliance could have a materially adverse
effect on our ability to comply with the reporting requirements of the
Securities Exchange Act of 1934 which is necessary to maintain our public
company status. If we were to fail to fulfill those obligations, our ability to
continue as a U.S. public company would be in jeopardy in which event you could
lose your entire investment in our company.
RISKS ASSOCIATED WITH OUR COMMON STOCK
OUR STOCKHOLDERS MAY NOT BE ABLE TO RESELL THEIR STOCK DUE TO A LACK OF PUBLIC
TRADING MARKET.
There is presently no public trading market for our common stock, we have not
applied for a trading symbol or quotation, and it is unlikely that an active
public trading market can be established or sustained in the foreseeable future.
We intend to seek out a market maker to apply to have our common stock quoted on
the OTC Bulletin Board upon completion of this Offering. However, there can be
no assurance that Lion Consulting's shares will be quoted on the OTC Bulletin
Board. Until there is an established trading market, holders of our common stock
may find it difficult to sell their stock or to obtain accurate quotations for
the price of the common stock. If a market for our common stock does develop,
our stock price may be volatile.
BROKER-DEALERS MAY BE DISCOURAGED FROM EFFECTING TRANSACTIONS IN OUR SHARES
BECAUSE THEY ARE CONSIDERED PENNY STOCKS AND ARE SUBJECT TO THE PENNY STOCK
RULES.
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934,
as amended, impose sales practice and disclosure requirements on broker-dealers
who make a market in "penny stocks". A penny stock generally includes any
non-Nasdaq equity security that has a market price of less than $5.00 per share.
Our shares currently are not traded on Nasdaq nor on any other exchange nor are
they quoted on the OTC Bulletin Board. Following the date that the registration
statement, in which this prospectus is included, becomes effective we hope to
find a broker-dealer to act as a market maker for our stock and file on our
behalf with FINRA an application on Form 211 for approval for our shares to be
quoted on the OTC Bulletin Board. As of the date of this prospectus, we have not
attempted to find a market maker to file such application for us. If we are
successful in finding such a market maker and successful in applying for
quotation on the OTC Bulletin Board, it is very likely that our stock will be
considered a "penny stock". In that case, purchases and sales of our shares will
be generally facilitated by FINRA broker-dealers who act as market makers for
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our shares. The additional sales practice and disclosure requirements imposed
upon broker-dealers may discourage broker-dealers from effecting transactions in
our shares, which could severely limit the market liquidity of the shares and
impede the sale of our shares in the secondary market.
Under the penny stock regulations, a broker-dealer selling penny stock to anyone
other than an established customer or "accredited investor" (generally, an
individual with net worth in excess of $5,000,000 or an annual income exceeding
$200,000, or $300,000 together with his or her spouse) must make a special
suitability determination for the purchaser and must receive the purchaser's
written consent to the transaction prior to sale, unless the broker-dealer or
the transaction is otherwise exempt.
In addition, the penny stock regulations require the broker-dealer to deliver,
prior to any transaction involving a penny stock, a disclosure schedule prepared
by the Commission relating to the penny stock market, unless the broker-dealer
or the transaction is otherwise exempt. A broker-dealer is also required to
disclose commissions payable to the broker-dealer and the registered
representative and current quotations for the securities. Finally, a
broker-dealer is required to send monthly statements disclosing recent price
information with respect to the penny stock held in a customer's account and
information with respect to the limited market in penny stocks.
INVESTORS THAT NEED TO RELY ON DIVIDEND INCOME OR LIQUIDITY SHOULD NOT PURCHASE
SHARES OF OUR COMMON STOCK.
We have not declared or paid any dividends on our common stock since our
inception, and we do not anticipate paying any such dividends for the
foreseeable future. Investors that need to rely on dividend income should not
invest in our common stock, as any income would only come from any rise in the
market price of our common stock, which is uncertain and unpredictable.
Investors that require liquidity should also not invest in our common stock.
There is no established trading market and should one develop, it will likely be
volatile and subject to minimal trading volumes.
BECAUSE WE CAN ISSUE ADDITIONAL SHARES OF COMMON STOCK, PURCHASERS OF OUR COMMON
STOCK MAY INCUR IMMEDIATE DILUTION AND MAY EXPERIENCE FURTHER DILUTION.
We are authorized to issue up to 100,000,000 shares of common stock. At present,
there are 2,500,000 issued and outstanding common shares, and if we are
successful in completing the Maximum Offering there will be 7,500,000 shares
outstanding. Our Board of Directors has the authority to cause us to issue
additional shares of common stock without consent of any of our stockholders.
Consequently, the stockholders may experience more dilution in their ownership
of our Company in the future, which could have an adverse effect on the trading
market for our common shares.
ALL OF OUR ASSETS AND OUR SOLE OFFICER AND DIRECTOR ARE LOCATED OUTSIDE OF THE
UNITED STATES. THIS MAY CAUSE ANY ATTEMPTS TO ENFORCE LIABILITIES UNDER THE US
SECURITIES AND BANKRUPTCY LAWS TO BE VERY DIFFICULT.
Currently, all of our assets are either located or controlled in Switzerland.
Mr. Wagner also resides in Switzerland. This is likely to remain so for at least
the next 12 months. Therefore, any investor that attempts to enforce against the
company or against Mr. Wagner liabilities that accrue under U.S. securities laws
or bankruptcy laws will face the difficulty of complying with local laws in
these countries, with regards to enforcement of foreign judgments. This could
make it impracticable or uneconomic to enforce such liabilities.
BECAUSE THERE IS NO ESCROW, TRUST OR SIMILAR ACCOUNT, THE OFFERING PROCEEDS
COULD BE SEIZED BY CREDITORS OR BY A TRUSTEE IN BANKRUPTCY, IN WHICH CASE
INVESTORS WOULD LOSE THEIR ENTIRE INVESTMENT.
Any funds that we raise from our offering of 5,000,000 shares of common stock
will be immediately available for our use and will not be returned to investors.
We do not have any arrangements to place the funds received from our offering of
5,000,000 shares of common stock in an escrow, trust or similar 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 the 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 subscription funds. As such, it is
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possible that a creditor could attach your subscription funds 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.
STATE SECURITIES LAWS MAY LIMIT SECONDARY TRADING, WHICH MAY RESTRICT THE STATES
IN WHICH AND CONDITIONS UNDER WHICH YOU CAN SELL THE SHARES OFFERED BY THIS
PROSPECTUS.
Secondary trading in common stock sold in this offering will not be possible in
any state until the common stock is qualified for sale under the applicable
securities laws of the state or there is confirmation that an exemption, such as
listing in certain recognized securities manuals, is available for secondary
trading in the state. If we fail to register or qualify, or to obtain or verify
an exemption for the secondary trading of, the common stock in any particular
state, the common stock could not be offered or sold to, or purchased by, a
resident of that state. In the event that a significant number of states refuse
to permit secondary trading in our common stock, the liquidity for the common
stock could be significantly impacted thus causing you to realize a loss on your
investment.
The Company does not intend to seek registration or qualification of its shares
of common stock the subject of this offering in any State or territory of the
United States. Aside from a "secondary trading" exemption, other exemptions
under state law and the laws of US territories may be available to purchasers of
the shares of common stock sold in this offering.
ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF DELAWARE STATE LAW HINDER A
POTENTIAL TAKEOVER OF OUR COMPANY. We may be subject to Section 203 of the
Delaware General Corporation Law (the "DGCL"), an anti-takeover statute. In
general, Section 203 of the DGCL prohibits a publicly held Delaware corporation
from engaging in a "business combination" with an "interested stockholder" for a
period of three years following the time the person became an interested
stockholder, unless the business combination or the acquisition of shares that
resulted in a stockholder becoming an interested stockholder is approved in a
prescribed manner. Generally, a "business combination" includes a merger, asset
or stock sale, or other transaction resulting in a financial benefit to the
interested stockholder. Generally, an "interested stockholder" is a person who,
together with affiliates and associates, owns (or within three years prior to
the determination of interested stockholder status did own) 15% or more of a
corporation's voting stock. The existence of this provision would be expected to
have an anti-takeover effect with respect to transactions not approved in
advance by our board of directors, including discouraging attempts that might
result in a premium over the market price for the shares of common stock held by
our stockholders.
For purposes of Delaware law, an "interested stockholder" is any person who that
(i) is the owner of 15% or more of the outstanding voting stock of the
corporation, or (ii) is an affiliate or associate of the corporation and was the
owner of 15% or more of the outstanding voting stock of the corporation at any
time within the 3-year period immediately prior to the date on which it is
sought to be determined whether such person is an interested stockholder, and
the affiliates and associates of such person; provided, however, that the term
"interested stockholder" shall not include (x) any person who (A) owned shares
in excess of the 15% limitation set forth herein as of, or acquired such shares
pursuant to a tender offer commenced prior to, December 23, 1987, or pursuant to
an exchange offer announced prior to the aforesaid date and commenced within 90
days thereafter and either (I) continued to own shares in excess of such 15%
limitation or would have but for action by the corporation or (II) is an
affiliate or associate of the corporation and so continued (or so would have
continued but for action by the corporation) to be the owner of 15% or more of
the outstanding voting stock of the corporation at any time within the 3-year
period immediately prior to the date on which it is sought to be determined
whether such a person is an interested stockholder or (B) acquired said shares
from a person described in item (A) of this paragraph by gift, inheritance or in
a transaction in which no consideration was exchanged; or (y) any person whose
ownership of shares in excess of the 15% limitation set forth herein is the
result of action taken solely by the corporation; provided that such person
shall be an interested stockholder if thereafter such person acquires additional
shares of voting stock of the corporation, except as a result of further
corporate action not caused, directly or indirectly, by such person. For the
purpose of determining whether a person is an interested stockholder, the voting
stock of the corporation deemed to be outstanding shall include stock deemed to
be owned by the person through (i) Beneficially owns such stock, directly or
indirectly; or (ii) has (A) the right to acquire such stock (whether such right
is exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise; provided, however,
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that a person shall not be deemed the owner of stock tendered pursuant to a
tender or exchange offer made by such person or any of such person's affiliates
or associates until such tendered stock is accepted for purchase or exchange; or
(B) the right to vote such stock pursuant to any agreement, arrangement or
understanding; provided, however, that a person shall not be deemed the owner of
any stock because of such person's right to vote such stock if the agreement,
arrangement or understanding to vote such stock arises solely from a revocable
proxy or consent given in response to a proxy or consent solicitation made to 10
or more persons; or (iii) Has any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting, or disposing of such stock with any
other person that beneficially owns, or whose affiliates or associates
beneficially own, directly or indirectly, such stock.
The definition of the term "business combination" is sufficiently broad to cover
virtually any kind of transaction that would allow a potential acquiror to use
the corporation's assets to finance the acquisition or otherwise to benefit its
own interests rather than the interests of the corporation and its other
stockholders.
The effect of Delaware's business combination law is to potentially discourage
parties interested in taking control of us from doing so if they cannot obtain
the approval of our board of directors.
FORWARD LOOKING STATEMENTS
This registration statement contains forward-looking statements relating to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may", "should",
"intends", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential", or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors which may cause our or our
industry's actual results, levels of activity or performance to be materially
different from any future results, levels of activity or performance expressed
or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity or performance. You should not place undue reliance on these
statements, which speak only as of the date that they were made. Actual results
are most likely to differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced as
described in the "RISK FACTORS" section and elsewhere in this prospectus.
Factors which may cause the actual results or the actual plan of operations to
vary include, among other things, decisions of the board of directors not to
pursue a specific course of action based on its re-assessment of the facts or
new facts, or changes in general economic conditions and those other factors set
out in this prospectus.
PLAN OF DISTRIBUTION
OUR OFFERING WILL BE SOLD BY OUR SOLE OFFICER AND DIRECTOR
This is a self-underwritten offering, and Mr. Wagner, our sole officer and
director, will sell the shares directly to family, friends, business associates
and acquaintances, with no commission or other remuneration payable to him for
any shares he may sell. There are no plans or arrangements to enter into any
contracts or agreements to sell the shares with a broker or dealer. In offering
the securities on our behalf, they will rely on the safe harbor from broker
dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of
1934.
Our sole officer and director will not register as a broker-dealer pursuant to
Section 15 of the Securities Exchange Act of 1934, in reliance upon Rule 3a4-1,
which sets forth those conditions, as noted herein, 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:
1. Our sole officer and director is not subject to a statutory disqualification,
as that term is defined in Section 3(a)(39) of the Act, at the time of his
participation; and,
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2. Our sole officer and director will not be compensated in connection with his
participation by the payment of commissions or other remuneration based either
directly or indirectly on transactions in securities; and
3. Our sole officer and director is not, nor will he be at the time of their
participation in the offering, an associated person of a broker-dealer; and
4. Our sole officer and director meets the conditions of paragraph (a)(4)(ii) of
Rule 3a4-1 of the Exchange Act, in that he (A) primarily perform, or intend
primarily to perform at the end of the offering, substantial duties for or on
behalf of our company, other than in connection with transactions in securities;
and (B) is not a broker or dealer, or been an associated person of a broker or
dealer, within the preceding twelve months; and (C) has not participated in
selling and offering securities for any Issuer more than once every twelve
months other than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
Our sole officer, director, control person and affiliate does not intend to
purchase any shares in this offering.
TERMS OF THE OFFERING
We are offering a total of 5,000,000 shares of our common stock in a
self-underwritten public offering, with no minimum purchase requirement. We do
not have an arrangement to place the proceeds from this offering in an escrow,
trust, or similar account. Any funds raised from the offering will be
immediately available to us for our immediate use. 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 the 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, 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.
The shares will be sold at the fixed price of $0.02 per share until the
completion of this offering. There is no minimum amount of subscription required
per investor, and subscriptions, once received, are irrevocable. This offering
will commence on the date of this prospectus and continue for a period of 16
months (the "Expiration Date"). At the discretion of our board of directors, we
may discontinue the Offering before expiration of the 16-month period.
PROCEDURES AND REQUIREMENTS FOR SUBSCRIPTION
If you decide to subscribe for any shares in this offering, you will be required
to execute a Subscription Agreement and tender it, together with a check, bank
draft, wire or cashier's check payable to the company. Subscriptions, once
received by the company, are irrevocable. All checks for subscriptions should be
made payable to Lion Consulting Group Inc.
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 $0.02. 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.
If 25% of If 50% of If 75% of If 100% of
Shares Shares Shares Shares
Sold Sold Sold Sold
-------- -------- -------- --------
GROSS PROCEEDS FROM THIS OFFERING (1) $ 25,000 $ 50,000 $ 75,000 $100,000
======== ======== ======== ========
Product Development $ 1,000 $ 2,000 $ 3,000 $ 4,000
Web/graphic design $ 1,500 $ 5,000 $ 7,500 $ 10,000
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Marketing/Advertising $ 0 $ 5,000 $ 7,500 $ 10,000
Equipment/servers $ 2,000 $ 4,000 $ 6,000 $ 8,000
VoIP connectivity fees $ 500 $ 1,000 $ 1,500 $ 2,000
Marketing and Collateral $ 500 $ 1,000 $ 1,500 $ 2,000
Advertising $ 0 $ 6,000 $ 13,000 $ 14,500
Webhosting $ 500 $ 1,000 $ 1,500 $ 2,000
Offices Expenses $ 0 $ 2,000 $ 3,000 $ 4,000
Office Equipment $ 0 $ 4,000 $ 6,000 $ 8,000
Legal, Accounting and Audit $ 14,500 $ 14,500 $ 22,000 $ 22,000
Filing Fees $ 3,000 $ 3,000 $ 3,000 $ 5,000
Transfer Agent $ 1,500 $ 1,500 $ 1,500 $ 1,500
Miscellaneous/contingency $ 0 $ 0 $ 500 $ 7,000
TOTALS $ 25,000 $ 50,000 $ 75,000 $100,000
----------
(1) Expenditures for the 12 months following the completion of this Offering.
The expenditures are categorized by significant area of activity.
The above figures represent only estimated costs.
We will establish a separate bank account and all proceeds will be deposited
into that account. If necessary, Philippe Wagner, our sole officer and director,
has verbally agreed to loan the company funds to complete the registration
process but we will require full funding to implement our complete business
plan.
Please see a detailed description of the use of proceeds in the "Plan of
Operation" section of this Prospectus.
DETERMINATION OF OFFERING PRICE
The offering price of the shares has been determined arbitrarily by us. The
price does not bear any relationship to our assets, book value, earnings, or
other established criteria for valuing a privately held company. In determining
the number of shares to be offered and the offering price, we took into
consideration our cash on hand and the amount of money we would need to
implement our business plan. Accordingly, the offering price should not be
considered an indication of the actual value of the securities.
DILUTION
The price of the current offering is fixed at $0.02 per share. T his price is
twice the price paid by the Company's sole officers and directors for common
equity since the Company's inception on February 6, 2012. On February 23, 2012,
we offered and sold to Philippe Wagner, our President, Secretary and sole
Director, a total of 2,500,000 shares of common stock for a purchase price of
$0.01 per share, for aggregate proceeds of $2,500.
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.
EXISTING STOCKHOLDERS IF ALL OF THE SHARES ARE SOLD
Price per share $ 0.02
Net tangible book value per share before offering $ 0.007
Potential gain to existing shareholders $ 100,000
Net tangible book value per share after offering $ 0.015
Increase to present stockholders in net tangible book value
per share after offering $ 0.008
Capital contributions $ 25,000
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Number of shares outstanding before the offering 2,500,000
Number of shares after offering held by existing stockholders 2,500,000
Percentage of ownership after offering 33.3%
PURCHASERS OF SHARES IN THIS OFFERING IF 100% OF SHARES SOLD
Price per share $ 0.02
Dilution per share $ 0.005
Capital contributions $ 100,000
Percentage of capital contributions 80.0%
Number of shares after offering held by public investors 5,000,000
Percentage of ownership after offering 66.67%
PURCHASERS OF SHARES IN THIS OFFERING IF 75% OF SHARES SOLD
Price per share $ 0.02
Dilution per share $ 0.006
Capital contributions $ 75,000
Percentage of capital contributions 75.0%
Number of shares after offering held by public investors 3,750,000
Percentage of ownership after offering 60.0%
PURCHASERS OF SHARES IN THIS OFFERING IF 50% OF SHARES SOLD
Price per share $ 0.02
Dilution per share $ 0.007
Capital contributions $ 50,000
Percentage of capital contributions 66.6%
Number of shares after offering held by public investors 2,500,000
Percentage of ownership after offering 50.0%
PURCHASERS OF SHARES IN THIS OFFERING IF 25% OF SHARES SOLD
Price per share $ 0.02
Dilution per share $ 0.009
Capital contributions $ 25,000
Percentage of capital contributions 50.0%
Number of shares after offering held by public investors 1,250,000
Percentage of ownership after offering 33.3%
DESCRIPTION OF SECURITIES
COMMON STOCK
Pursuant to the our Certificate of Incorporation, as amended and restated and
filed with the Secretary of State of the State of Delaware on February 6, 2012,
as amended on April 20, 2012, our authorized capital stock consists of
100,000,000 shares of common stock, par value $0.001 per share, of which
2,500,000 shares are issued and outstanding as of the date of this prospectus.
Each share of common stock entitles the holder to one (1) vote on each matter
submitted to a vote of our shareholders, including the election of Directors.
There is no cumulative voting. Subject to preferences that may be applicable to
any outstanding preferred stock, our Shareholders are entitled to receive
ratably such dividends, if any, as may be declared from time to time by the
Board of Directors. Shareholders have no preemptive, conversion or other
subscription rights. There are no redemption or sinking fund provisions related
to the common stock. In the event of liquidation, dissolution or winding up of
the Company, our shareholders are entitled to share ratably in all assets
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remaining after payment of liabilities, subject to prior distribution rights of
preferred stock, if any, then outstanding.
PREFERRED STOCK
We do not have any shares of preferred stock authorized for issuance
DELAWARE ANTI-TAKEOVER LAWS
The Delaware Business Corporation Law contains a provision governing
"Acquisition of Controlling Interest." This law provides generally that any
person or entity that acquires 20% or more of the outstanding voting shares of a
publicly-held Delaware corporation in the secondary public or private market may
be denied voting rights with respect to the acquired shares, unless a majority
of the disinterested stockholders of the corporation elects to restore such
voting rights in whole or in part. The control share acquisition act provides
that a person or entity acquires "control shares" whenever it acquires shares
that, but for the operation of the control share acquisition act, would bring
its voting power within any of the following three ranges: (1) 20 to 33 1/3%,
(2) 33 1/3 to 50%, or (3) more than 50%. A "control share acquisition" is
generally defined as the direct or indirect acquisition of either ownership or
voting power associated with issued and outstanding control shares. The
stockholders or board of directors of a corporation may elect to exempt the
stock of the corporation from the provisions of the control share acquisition
act through adoption of a provision to that effect in the Certificate of
Incorporation or Bylaws of the corporation. Our Certificate of Incorporation and
Bylaws do not exempt our common stock from the control share acquisition act.
The control share acquisition act is applicable only to shares of "Issuing
Corporations" as defined by the act. An Issuing Corporation is a Delaware
corporation, which; (1) has 200 or more stockholders, with at least 100 of such
stockholders being both stockholders of record and residents of Delaware; and
(2) does business in Delaware directly or through an affiliated corporation.
At this time, we do not have 100 stockholders of record resident of Delaware.
Therefore, the provisions of the control share acquisition act do not apply to
acquisitions of our shares and will not until such time as these requirements
have been met. At such time as they may apply to us, the provisions of the
control share acquisition act may discourage companies or persons interested in
acquiring a significant interest in or control of the Company, regardless of
whether such acquisition may be in the interest of our stockholders.
The Delaware "Combination with Interested Stockholders Statute" may also have an
effect of delaying or making it more difficult to effect a change in control of
the Company. This statute prevents an "interested stockholder" and a resident
domestic Delaware corporation from entering into a "combination," unless certain
conditions are met. The statute defines "combination" to include any merger or
consolidation with an "interested stockholder," or any sale, lease, exchange,
mortgage, pledge, transfer or other disposition, in one transaction or a series
of transactions with an "interested stockholder" having; (1) an aggregate market
value equal to 5 percent or more of the aggregate market value of the assets of
the corporation; (2) an aggregate market value equal to 5 percent or more of the
aggregate market value of all outstanding shares of the corporation; or (3)
representing 10 percent or more of the earning power or net income of the
corporation. An "interested stockholder" means the beneficial owner of 10
percent or more of the voting shares of a resident domestic corporation, or an
affiliate or associate thereof. A corporation affected by the statute may not
engage in a "combination" within three years after the interested stockholder
acquires its shares unless the combination or purchase is approved by the board
of directors before the interested stockholder acquired such shares. If approval
is not obtained, then after the expiration of the three-year period, the
business combination may be consummated with the approval of the board of
directors or a majority of the voting power held by disinterested stockholders,
or if the consideration to be paid by the interested stockholder is at least
equal to the highest of: (1) the highest price per share paid by the interested
stockholder within the three years immediately preceding the date of the
announcement of the combination or in the transaction in which he became an
interested stockholder, whichever is higher; (2) the market value per common
share on the date of announcement of the combination or the date the interested
stockholder acquired the shares, whichever is higher; or (3) if higher for the
holders of preferred stock, the highest liquidation value of the preferred
stock. The effect of Delaware's business combination law is to potentially
discourage parties interested in taking control of us from doing so if it cannot
obtain the approval of our board of directors.
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OPTIONS
We have no options to purchase shares of our common stock or any other of our
securities outstanding as of the date of this prospectus.
WARRANTS
We have no warrants to purchase shares of our common stock or any other of our
securities outstanding as of the date of this Prospectus.
REGISTRATION RIGHTS AGREEMENTS
We have not entered into any registration rights agreements.
TRANSFER AGENT AND REGISTRAR
We have not retained a transfer agent to serve as transfer agent for shares of
our common stock. Until we engage such a transfer agent, we will be responsible
for all record-keeping and administrative functions in connection with the
shares of our common stock.
INDEMNIFICATION AND LIMITED LIABILITY PROVISIONS
We have authority under the General Corporation Law of the State of Delaware to
indemnify our directors and officers to the extent provided in that statute. Our
Certificate of Incorporation and our Bylaws require the company to indemnify
each of our directors and officers against liabilities imposed upon them
(including reasonable amounts paid in settlement) and expenses incurred by them
in connection with any claim made against them or any action, suit or proceeding
to which they may be a party by reason of their being or having been a director
or officer of the company. We intend to enter into indemnification agreements
with each of our officers and directors containing provisions that may require
us, among other things, to indemnify our officers and directors against certain
liabilities that may arise by reason of their status or service as officers or
directors (other than liabilities arising from willful misconduct of a culpable
nature) and to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified. Management believes that
such indemnification provisions and agreements are necessary to attract and
retain qualified persons as directors and executive officers.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions or otherwise, we have been advised that in
the opinion or the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
DIVIDENDS
As of the date hereof, the Company has not declared or paid any cash dividends
to stockholders. The declaration or payment of any future cash dividend will be
at the discretion of the Board of Directors and will depend upon the earnings,
if any, capital requirements and financial position of the Company, general
economic conditions, and other pertinent factors. It is the present intention of
the Company not to declare or pay any cash dividends in the foreseeable future,
but rather to reinvest earnings, if any, in the Company's business operations.
17
INTERESTS OF NAMED EXPERTS AND COUNSEL
We have not hired or retained any experts or counsel on a contingent basis, who
would receive a direct or indirect interest in the Company, or who is, or was, a
promoter, underwriter, voting trustee, director, officer or employee of the
Company.
Our financial statements for the period from inception to the year ended March
31, 2012, included in this prospectus, have been audited by Silberstein Ungar,
PLLC. We include the financial statements in reliance on their reports, given
upon their authority as experts in accounting and auditing.
The Law Offices of Thomas E. Puzzo, PLLC, has acted as special counsel to Lion
Consulting in connection with the registration and proposed sale of the
5,000,000 shares of common stock at $0.02 per share.
DESCRIPTION OF BUSINESS
GENERAL
We were incorporated on February 6, 2012 in the State of Delaware. We have never
declared bankruptcy, have never been in receivership, and have never been
involved in any legal action or proceedings. Since incorporation, we have not
made any significant purchase or sale of assets. We are not a blank check
registrant as that term is defined in Rule 419(a)(2) of Regulation C of the
Securities Act of 1933, since we have a specific business plan or purpose. We
have not had preliminary contact or discussions with, nor do we have any present
plans, proposals, arrangements or understandings with any representatives of the
owners of any business or company regarding the possibility of an acquisition or
merger.
From inception until the date of this filing we have had limited operating
activities, primarily consisting of the incorporation of our company and the
initial equity funding by our sole officer and director. We received our initial
funding of $25,000 through the sale of common stock to our sole officer and
director, who purchased 2,500,000 shares at $0.01 per share.
Our financial statements from inception on February 6, 2012 through our first
fiscal period ended March 31, 2012 report no revenues and a net loss of
$(6,951). Our independent auditor has issued an audit opinion for our Company
which includes a statement expressing substantial doubt as to our ability to
continue as a going concern.
PRINCIPAL SERVICES
We are in the early stages of developing our business, which offers a variety of
services for business owners, depending on their specific business needs. These
services include business and marketing plan preparation, financial search and
procurement, IT consulting services, management development and human resources
advising. We plan to focus on offering our services to start-up businesses,
preferably in the earlier stages of operation. We currently have no revenues,
operating history, and no customers or revenues for our business consulting
services. Our plan of operations over the 12 month period following successful
completion of our offering is to gain support for our concept to then raise
additional financing to commence with our operations. We anticipate that we will
not be able to offer our services for at least 12 to 24 months from the date
hereof, assuming successful completion of this offering and the successful raise
of additional financing of $100,000 for development of our consulting services,
and $100,000 for initial marketing and promotion for commercial launch.
To date, we have only completed a business plan along the logo for our brand. We
do not currently have a website, though we plan to develop one that is
functional and will ultimately serve as the primary method to promote our
company, our current and planned services, and gain feedback on our commercial
services offerings.
During the next 12 months, we plan to:
18
* Find investors to be fully financed;
* Set up office infrastructure; and
* Set up website and create marketing material, forms, corporate
stationary and business cards
Within the first 12 months, we intend to:
* Be fully operational;
* Expand network of specialized consultants;
* Evaluate countries and cities for additional branches of operation;
and
* Evaluate financing options to fund expansion.
THE MARKET
We consider our proposed business to be part of the overall business consulting
services industry. We will focus on rendering our services to start-up
businesses, preferably in the earlier stages of operation.
Small and mid-sized businesses make up a sizable majority of U.S. and
international markets. We prefer to establish a relationship with a younger
operation and continue to nurture that relationship for the long term.
START-UPS: Start-up companies often are in need of expert advice and planning in
initiating a successful start-up. It is believed that a majority of start-ups
actually seek out consulting assistance. Those that do typically are searching
for a comprehensive area of services.
1-3 YEAR OLD COMPANIES: Young companies, between 1 and 3 years old are less
likely to be searching for expert business consulting services. Typically, they
have already secured financing and have developed a satisfactory level of
security. However, these businesses are still in the beginnings of their overall
cycle and in most cases need the broad expertise of a team of expert
consultants.
3 + YEAR-OLD COMPANIES: Established companies make up the final segment, and is
significantly smaller than the start-up segment. The established company segment
typically has a need for a less comprehensive range of services. These entities
are in need of specialized services, e.g., operational planning or human
resources, restructuring or listing on an exchange.
TARGET MARKET SEGMENT STRATEGY: Start-up companies are the target market of this
firm. We intends to stay on the pulse of new business activity within the local
area. Additionally, business contacts, referrals from among the group, and
Internet marketing efforts will be made in pursuit of new clients.
MARKET NEEDS: Start-up company owners often lack the broad range of knowledge
and expertise required to launch a new business. There is a serious need in the
marketplace, and certainly a significant demand for, these types of start-up
consulting services.
SERVICE BUSINESS ANALYSIS: The business consulting industry is very fragmented.
Several large multi-national companies dominate the industry while many smaller
(and often more specialized) firms occupy their market niches. Major management
consulting companies, such as McKinsey, Bain, and Boston Consulting Group, have
established their dominant position by providing services to the leading
companies in various industries. Consulting practices of the major accounting
firms (a.k.a. the Big Five) have established worldwide presence and sell their
packaged services to companies of different sizes and industries. At the same
time, numerous firms and individual business consultants prosper in the market
niches that bigger players consider unprofitable to enter.
COMPETITION AND COMPETITIVE STRATEGY
When our business is operational, we will be competing in the business
consultancy industry. Our competitors will vary in size and cost structure from
very small companies with limited resources to very large, diversified
19
corporations with greater financial and marketing resources than ours. We are
considered the smallest as we do not currently have consulting business services
yet available for sale or use. We will be competing with well funded start-ups,
regional and specialty consulting firms, as well as the consulting groups of
international accounting firms. In its management and IT consulting services, we
will compete with information system vendors such as HBO & Company, Inc.,
Integrated Systems Solution Corporation, Electronic Data Systems Corporation,
Perot Systems Corporation, SAIC, CAP Gemini America, Inc., and Computer Sciences
Corporation. In e-commerce-related services, we will compete with the
traditional competitors, as well as newer, Internet product and service
companies such as Razorfish, Scient, TriZetto and Viant.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
We plan on selling our services directly to end use consumers over the Internet.
Our intended offering is also priced for mass market play and revenue
generation. Therefore, we do not anticipate dependence on one or a few major
customers.
PATENT, TRADEMARK, LICENSE & FRANCHISE RESTRICTIONS AND CONTRACTUAL OBLIGATIONS
& CONCESSIONS
We currently do not own any intellectual property have not obtained any
copyrights, patents or trademarks in respect of any intellectual property.
Interactive entertainment software is susceptible to piracy and unauthorized
copying. Our primary protection against unauthorized use, duplication and
distribution of our services is copyright and trademark protection of our
business consulting services and any related elements and enforcement to protect
these interests. We do not anticipate filing any copyright or trademark
applications related to any assets over the next 12 months.
We have not entered into any franchise agreements or other contracts that have
given, or could give rise to obligations or concessions.
RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS
We have no research or development activities costs.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
In addition to being our sole officer and director, Mr. Wagner is currently our
only employee. He is currently planning to devote 20 hours per week to company
matters. Subsequent to successful completion of this Offering, he is planning to
devote as much time as the board of directors determines is necessary to manage
the affairs of the company. There is no formal employment agreement between the
Company and Mr. Wagner. We do not anticipate hiring any additional employees for
the next 12 months.
DESCRIPTION OF PROPERTY
We do not currently own any real property. Our corporate offices are located at
the same office as our registered agent, at 16192 Coastal Highway, Lewes,
Delaware 19958. This location will serve as our primary executive offices for
the foreseeable future. Mr. Wagner currently performs his duties from a home
office, as space for which he does not charge us. Management believes the
current premises arrangements are sufficient for its needs for at least the next
12 months.
We currently have no investment policies as they pertain to real estate, real
estate interests or real estate mortgages.
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LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings and we are not aware of
any pending or potential legal actions.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
We plan to contact a market maker immediately following the completion of the
offering and apply to have the shares quoted on the OTC Electronic Bulletin
Board ("OTCBB"). The OTCBB is a regulated quotation service that displays
real-time quotes, last sale prices and volume information in over-the-counter
securities. The OTCBB is not an issuer listing service, market or exchange.
Although the OTCBB does not have any listing requirements to be eligible for
quotation on the OTCBB, issuers must remain current in their filings with the
SEC. Market makers are not permitted to begin quotation of a security of an
issuer that does not meet this requirement. Securities already quoted on the
OTCBB that become delinquent in their required filings will be removed following
a 30 or 60 day grace period if they do not make their required filing during
that time. We cannot guarantee that our application will be accepted or approved
and our stock listed and quoted for sale. As of the date of this filing, there
have been no discussions or understandings between Lion Consulting with any
market maker regarding participation in a future trading market for our
securities.
As of the date of this filing, there is no public market for our securities.
There has been no public trading of our securities, and, therefore, no high and
low bid pricing. As of the date of this prospectus, we have one shareholder of
record.
RULE 144 SHARES
As of the date of this prospectus, our sole officer and director beneficially
owns all of the 2,300,000 issued and outstanding shares of common stock. These
shares are currently restricted from trading under Rule 144. They will only be
available for resale, within the limitations of Rule 144, to the public if:
* We are no longer a shell company as defined under section 12b-2 of the
Exchange Act. A "shell company" is defined as a company with no or
nominal operations, and with no or nominal assets or assets consisting
solely of cash and cash equivalents;
* We have filed all Exchange Act reports required for at least 12
consecutive months; and
* If applicable, at least one year has elapsed from the time that we
file current Form 10-type of information on Form 8-K or other report
changing our status from a shell company to an entity that is not a
shell company.
At present, we are considered to be a shell company under the Regulations. If we
subsequently meet these requirements, our officer and director would be entitled
to sell within any three month period a number of shares that does not exceed
the greater of: 1% of the number of shares of our common stock then outstanding,
or the average weekly trading volume of Lion Consulting common stock during the
four calendar weeks, preceding the filing of a notice on Form 144 with respect
to the sale for sales exceeding 5,000 shares or an aggregate sale price in
excess of $50,000. If fewer shares at lesser value are sold, no Form 144 is
required.
DIVIDENDS
As of the filing of this prospectus, we have not paid any dividends to our
shareholders. There are no restrictions which would limit our ability to pay
dividends on common equity or that are likely to do so in the future. The
Delaware General Corporation Law, however, do prohibit us from declaring
dividends where, after giving effect to the distribution of the dividend, Lion
Consulting would not be able to pay its debts as they become due in the usual
course of business, or its total assets would be less than the sum of the total
liabilities plus the amount that would be needed to satisfy the rights of
shareholders who have preferential rights superior to those receiving the
distribution.
21
STOCK OPTIONS AND WARRANTS
We have are no outstanding stock options or warrants
PENNY STOCK RULES
The Securities and Exchange Commission has also 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 Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
A purchaser is purchasing penny stock which limits the ability to sell the
stock. The shares offered by this prospectus constitute penny stock under the
Securities and Exchange Act. The shares will remain penny stocks for the
foreseeable future. The classification of penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his/her investment. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, to deliver a standardized risk
disclosure document, 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 of such duties or other requirements of the
Securities Act of 1934, as amended;
* contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" price for the penny stock 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 Securities and Exchange
Commission shall require by rule or regulation;
The broker-dealer also must provide the following to the customer, prior to
effecting any transaction in a penny stock:
* the 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 stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
their securities.
22
REGULATION M
Our sole officer and director, who will offer and sell the shares, is aware that
he is required to comply with the provisions of Regulation M, promulgated under
the Securities Exchange Act of 1934, as amended. With certain exceptions,
Regulation M precludes officers and directors, sales agents, any broker-dealer
or other person who participates 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.
WHERE YOU CAN FIND MORE INFORMATION
We have not registered our common shares pursuant to Section 12 of the Act,
which means we are considered a "voluntary filer" under SEC regulations. We are,
therefore, not currently obligated to file any periodic reports under the
Exchange Act, to follow the SEC's proxy rules or to distribute an annual report
to our securities holders. However, we intend to file annual, quarterly and
special reports, and other information with the SEC, even though we are not
required to do so. You may read or obtain a copy of the registration statement
to be filed or any other information 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 regarding the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. Our SEC filings are also available to the public from the
SEC web site at www.sec.gov, which contains all of our reports, and other
information we file electronically with the SEC.
FINANCIAL STATEMENTS
The financial statements and related notes of Lion Consulting for our first
fiscal year ended March 31, 2012 included in this prospectus have been audited
by Silberstein Ungar, PLLC, and have been so included in reliance upon the
opinion of such accountants given upon their authority as an expert in auditing
and accounting.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIMITED OPERATING HISTORY AND NEED FOR ADDITIONAL CAPITAL
Our Company was incorporated in the State of Delaware on February 6, 2012 to
engage in the development of online business consulting services for social
networking websites. We are a development stage company with very limited
financial backing and assets. We are only in the early stages of developing our
first business consulting services. We currently have no revenues or operating
history, and no users for our business consulting services. We anticipate that
we will not have a commercial services for at least 12-24 months from the date
hereof, which is dependent on completion of a financing (in addition to this
offering) of $100,000 to complete development and then commercially launch our
business consulting services. From inception until the date of this filing we
have had limited operating activities, primarily consisting of the incorporation
of our company and the initial equity funding by our sole officer and director.
We received our initial funding of $25,000 through the sale of common stock to
our sole officer and director, who purchased 2,500,000 shares at $0.01 per
share.
We currently have no employees. During the first stages of our company's growth,
our officer and director will provide his time free of charge to execute our
business plan at no charge. Since we intend to operate with very limited
administrative support, the officer and director will continue to be responsible
for administering the company for at least the first year of operations.
Management has no intention at this time to hire additional employees during the
first year of operations. Due to limited financial resources, he is planning to
dedicate between 20 hours per week, to ensure all operations are executed.
We cannot guarantee we will be successful in our business operations. Our
business is subject to all of the risks inherent in the establishment of a new
business enterprise and we are at least 24 months away from generating any
revenue. We believe that the funds from this offering will allow us to operate
for one year, only if we are successful in raising the Maximum Offering.
23
12-MONTH PLAN OF OPERATION
Our plan of operations over the 12 month period following successful completion
of our offering is to gain support for our concept and then raise sufficient
suitable additional financing to business consulting services plan. In order to
achieve our plan, we have established the following goals for this initial 12
month period:
* Find investors to be fully financed ($600,000 to hire 6 consultants);
* Set up office infrastructure;
* Begin marketing and advertising our business;
* Set up website and create marketing material, forms, corporate
stationary and business cards;
* Be fully operational;
* Expand network of specialized consultants;
* Evaluate countries/cities for additional branches; and
* Evaluate financing options to fund expansion.
Our long term business objectives are to:
* Complete our business consulting services, achieve ongoing
profitability and create value for our stockholders and our
subscribers;
* Become a well-recognized brand & entertaining business consulting
services destination for businesses; and
* Develop a leadership role over time in business consulting services.
Our ability to achieve our business objectives and goals is entirely dependent
upon the amount of shares sold in this Offering.
We currently do not have any arrangements regarding this Offering or following
this Offering for further financing and we may not be able to obtain financing
when required. Our future is dependent upon our ability to obtain further
financing, the successful development of our planned business consulting
services, a successful marketing and promotion program, and achieving a
profitable level of operations. The issuance of additional equity securities by
us could result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments. There are
no assurances that we will be able to obtain further funds required for our
continued operations. Even if additional financing is available, it may not be
available on terms we find favorable. At this time, there are no anticipated
sources of additional funds in place. Failure to secure the needed additional
financing will have an adverse effect on our ability to remain in business.
If we are successful in selling all 5,000,000 common shares under this Offering,
the net proceeds will be used for the development of our office infrastructure
and general working capital, during the twelve months following the successful
completion of this Offering. In all instances, after the effectiveness of the
registration statement of which this prospectus is a part, we will require some
amount of working capital to maintain our basic operations and comply with our
public reporting obligations. In addition to changing our allocation of cash
because of the amount of proceeds received, we may change the use of proceeds
because of changes in our business plan. Investors should understand that we
have wide discretion over the use of proceeds.
PROPOSED ACTIVITIES
EXPENDITURES
The following chart provides an overview of our budgeted expenditures for the 12
months following the completion of this Offering. The expenditures are
categorized by significant area of activity.
24
If 25% of If 50% of If 75% of If 100% of
Shares Shares Shares Shares
Sold Sold Sold Sold
-------- -------- -------- --------
GROSS PROCEEDS FROM THIS OFFERING (1) $ 25,000 $ 50,000 $ 75,000 $100,000
======== ======== ======== ========
Product Development $ 1,000 $ 2,000 $ 3,000 $ 4,000
Web/graphic design $ 1,500 $ 5,000 $ 7,500 $ 10,000
Marketing/Advertising $ 0 $ 5,000 $ 7,500 $ 10,000
Equipment/servers $ 2,000 $ 4,000 $ 6,000 $ 8,000
VoIP connectivity fees $ 500 $ 1,000 $ 1,500 $ 2,000
Marketing and Collateral $ 500 $ 1,000 $ 1,500 $ 2,000
Advertising $ 0 $ 6,000 $ 13,000 $ 14,500
Webhosting $ 500 $ 1,000 $ 1,500 $ 2,000
Offices Expenses $ 0 $ 2,000 $ 3,000 $ 4,000
Office Equipment $ 0 $ 4,000 $ 6,000 $ 8,000
Legal, Accounting and Audit $ 14,500 $ 14,500 $ 22,000 $ 22,000
Filing Fees $ 3,000 $ 3,000 $ 3,000 $ 5,000
Transfer Agent $ 1,500 $ 1,500 $ 1,500 $ 1,500
Miscellaneous/contingency $ 0 $ 0 $ 500 $ 7,000
TOTALS $ 25,000 $ 50,000 $ 75,000 $100,000
----------
(1) Expenditures for the 12 months following the completion of this Offering.
The expenditures are categorized by significant area of activity.
GOING CONCERN
Our auditor has issued a going concern opinion. This means that 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 revenues and no revenues are anticipated within
the next 12 months. There is no assurance we will ever reach that point.
RESULTS OF OPERATIONS
From the inception of our company on February 6, 2012 to March 31, 2012, our
operating activities were limited to the incorporation of our company and the
initial equity funding by our officer and director. For our first fiscal year
ended March 31, 2012 we incurred a loss of $6,951. We believe we will continue
to incur losses into the foreseeable future as we develop our business.
PURCHASE OR SALE OF EQUIPMENT
We have not purchased or sold any plants or significant equipment, and have no
plans to do so over the next 12 months.
REVENUES
We did not generate any revenues from February 6, 2012 (inception) to March 31,
2012. We will not be in a position to generate revenues for at least 12-24
months. Future revenue generation is dependent on the successful development and
launch of our business consulting services.
LIQUIDITY AND CAPITAL RESOURCES
Our cash balance at March 31, 2012 was $19,936 and our current liabilities,
consisting of accruedexpenses of $500 and a loan payable to related party of
$500, totaled $1,887. Our working capital balance was therefore $18,049.
Historically, we have financed our cash flow and operations solely from the sale
of $25,000 of common stock to our sole officer and director. Of the $25,000 we
raised, $5,500 was used for professional fees, $945 was used to pay
incorporation costs, $463 on general and administrative expenses and $43 on
advertising fees. As of the date hereof, our cash and working capital balance is
now $19,936.
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We believe our current cash and working capital balance is only sufficient to
cover our expenses for the next 9-12 months. If we cannot raise any additional
financing prior to the expiration of this timeframe, we will be forced to cease
operations and our business will fail.
Even under a limited operations scenario to maintain our corporate existence, we
believe we will require a minimum of $14,500 in additional cash over the next 12
months to pay for the remainder of our total offering costs, and to maintain our
regulatory reporting and filings. Other than our planned offering, we currently
have no arrangement in place to cover this shortfall.
In order to achieve our stated business plan goals, we require the funding from
this offering. We are a development stage company and have generated no revenue
to date. We cannot guarantee that we will be able to sell all the shares
required. If we are successful, any money raised will be applied to the items
set forth in the Use of Proceeds section of this prospectus.
Even if we are successful in raising all of the funding under this offering, we
will still not be in a position to generate revenues or become profitable. We
still must raise significant additional funding to continue with our business.
The offering is only sufficient to enable us to develop our business concept to
the point to raise these additional funds. We currently estimate that we will
require a minimum of 24-30 months from the date hereof and $650-730,000 to
complete the development of our business consulting services plan and promote it
commercially.
These funds will have to be raised through equity financing, debt financing, or
other sources, which may result in the dilution in the equity ownership of our
shares. We will also need more funds if the costs of the development of our
concept and actual business consulting services are greater than we have
budgeted. We will also require additional financing to sustain our business
operations if we are ultimately not successful in earning revenues. We currently
do not have any arrangements regarding this Offering or following this Offering
for further financing and we may not be able to obtain financing when required.
Obtaining commercial loans, assuming those loans would be available, will
increase our liabilities and future cash commitments.
There are no assurances that we will be able to obtain further funds required
for our continued operations. Even if additional financing is available, it may
not be available on terms we find favorable. At this time, there are no
anticipated sources of additional funds in place. Failure to secure the needed
additional financing will have an adverse effect on our ability to remain in
business.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
We do not expect the adoption of recently issued accounting pronouncements to
have a significant impact on our results of operations, financial position or
cash flow.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
CHANGES IN DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES
There have been no changes in and/or disagreements with Silberstein Ungar, PLLC
on accounting and financial disclosure matters.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
All directors of our company hold office until the next annual meeting of the
stockholders or until their successors have been elected and qualified. The
officers of our company are appointed by our board of directors and hold office
26
until their death, resignation or removal from office. Our directors and
executive officers, their ages, positions held, and duration as such, are as
follows:
Name (1) Age Positions and Offices
-------- --- ---------------------
Philippe Wagner 40 President and Director
----------
(1) Unless otherwise noted, the address of each person or entity listed is c/o
Lion Consulting Group Inc., 16192 Coastal Highway, Lewes, Delaware 19958.
BUSINESS EXPERIENCE
The following is a brief account of the education and business experience of
each director and executive officer during at least the past five years,
indicating each person's business experience, principal occupation during the
period, and the name and principal business of the organization by which he was
employed.
MR. PHILIPPE WAGNER, PRESIDENT, SECRETARY AND MEMBER OF THE BOARD OF DIRECTORS
Mr. Wagner has served as our President, Secretary and as our sole Director,
since February 6, 2012. From 2006 to 2011, Mr. Wagner was Managing Partner at
Aeon Group, in Zurich, Switzerland, where he was responsible for consulting,
corporate structuring, project management and providing financial advisory
services to both private and public companies. Mr. Wagner attended the
University of St. Gallen, located in Switzerland, from 1991 to 1993, and the
GSBA School of Business Administration, also located in Switzerland, from 1996
to 1998, where he earned a BBA (Bachelor of Business Administration). Mr.
Wagner's entrepreneurial desire and background advising businesses led to our
conclusion that Mr. Wagner should be serving as a member of our Board of
Directors in light of our business and structure.
Mr. Wagner currently devotes approximately 20 hours a week of his time to our
company, and is planning to devote 40 hours per week if necessary during the
next 12 months of operation.
Mr. Wagner is not an officer or director of any reporting company that files
annual, quarterly, or periodic reports with the United States Securities and
Exchange Commission.
COMMITTEES OF THE BOARD
We do not have an audit or compensation committee at this time.
FAMILY RELATIONSHIPS
None.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
No director, person nominated to become a director, executive officer, promoter
or control person of our company has, during the last ten years: (i) been
convicted in or is currently subject to a pending a criminal proceeding
(excluding traffic violations and other minor offenses); (ii) been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to any federal or state securities or banking or commodities
laws including, without limitation, in any way limiting involvement in any
business activity, or finding any violation with respect to such law, nor (iii)
any bankruptcy petition been filed by or against the business of which such
person was an executive officer or a general partner, whether at the time of the
bankruptcy or for the two years prior thereto.
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CONFLICTS OF INTEREST
Our sole officer or director is not subject to a conflict of interest.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
We have not implemented a formal policy or procedure by which our stockholders
can communicate directly with our Board of Directors. Nevertheless, every effort
will be made to ensure that the views of stockholders are heard by the Board of
Directors, and that appropriate responses are provided to stockholders in a
timely manner. During the upcoming year, our Board will continue to monitor
whether it would be appropriate to adopt such a process.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to compensation paid by
us to our sole officer from our date of incorporation on February 6, 2012 to
March 31, 2012, our first completed fiscal year end.
SUMMARY COMPENSATION TABLE
Name and Non-Equity Nonqualified
Principal Stock Option Incentive Plan Deferred All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Compensation($) Compensation($) Total($)
-------- ---- --------- -------- --------- --------- --------------- --------------- --------------- --------
Philippe 2012 0 0 0 0 0 0 0 0
Wagner (1)
----------
(1) President, Secretary and Director since February 6, 2012.
None of our directors have received monetary compensation since our inception to
the date of this prospectus. We currently do not pay any compensation to our
director serving on our board of directors.
STOCK OPTION GRANTS
We have not granted any stock options to our executive officer since our
inception. Upon the further development of our business, we will likely grant
options to directors and officers consistent with industry standards for
development stage companies.
EMPLOYMENT AGREEMENTS
The Company is not a party to any employment agreement and has no compensation
agreement with its sole officer and director, Philippe Wagner.
DIRECTOR COMPENSATION
The following table sets forth director compensation for the period from
inception to March 31, 2012:
DIRECTOR COMPENSATION TABLE
Fees Nonqualified
Earned Non-Equity Deferred
Paid in Stock Option Incentive Plan Compensation All Other
Name Cash($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Total($)
---- ------- --------- --------- --------------- ----------- --------------- --------
Philippe 0 0 0 0 0 0 0
Wagner (1)
----------
(1) President, Secretary and Director since February 6, 2012.
28
OPTION/SAR GRANTS
There are no stock option, retirement, pension, or profit sharing plans for the
benefit of our sole officer and director.
LONG-TERM INCENTIVE PLAN AWARDS
We do not have any long-term incentive plans.
DIRECTORS COMPENSATION
We have no formal plan for compensating our director for his services in his
capacity as director. Our director is entitled to reimbursement for reasonable
travel and other out-of-pocket expenses incurred in connection with attendance
at meetings of our board of directors. The board of directors may award special
remuneration to any director undertaking any special services on behalf of Lion
Consulting other than services ordinarily required of a director. Since
inception to the date hereof, no director received and/or accrued any
compensation for his services as a director, including committee participation
and/or special assignments.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists, as of the date of this prospectus, the number of
shares of common stock of our Company that are beneficially owned by (i) each
person or entity known to our Company to be the beneficial owner of more than 5%
of the outstanding common stock; (ii) each officer and director of our Company;
and (iii) all officers and directors as a group. Information relating to
beneficial ownership of common stock by our principal stockholders and
management is based upon information furnished by each person using "beneficial
ownership" concepts under the rules of the Securities and Exchange Commission.
Under these rules, a person is deemed to be a beneficial owner of a security if
that person has or shares voting power, which includes the power to vote or
direct the voting of the security, or investment power, which includes the power
to vote or direct the voting of the security. The person is also deemed to be a
beneficial owner of any security of which that person has a right to acquire
beneficial ownership within 60 days. Under the Securities and Exchange
Commission rules, more than one person may be deemed to be a beneficial owner of
the same securities, and a person may be deemed to be a beneficial owner of
securities as to which he or she may not have any pecuniary beneficial interest.
Except as noted below, each person has sole voting and investment power.
The percentages below are calculated based on 2,500,000 shares of our common
stock issued and outstanding as of the date of this prospectus. We do not have
any outstanding warrants, options or other securities exercisable for or
convertible into shares of our common stock.
Name and Address of Number of Shares Percent of
Title of Class Beneficial Owner(1) Owned Beneficially Class Owned
-------------- ---------------- ------------------ -----------
Common Stock: Philippe Wagner 2,500,000 100.0%
All executive officers
and directors as a group 2,500,000 100.0%
----------
(1) Unless otherwise noted, the address of each person or entity listed is c/o
Lion Consulting Group Inc., 16192 Coastal Highway, Lewes, Delaware 19958.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Wagner will not be paid for any underwriting services that they perform on
our behalf with respect to this offering. He will not receive any interest on
any funds that he may advance to us for expenses incurred prior to the offering
being closed. Any funds that he may loan to our company will be repaid from the
proceeds of the offering.
29
On February 23, 2012, Mr. Wagner purchased 2,500,000 shares of our common stock
for $0.01 per share. All of these shares are restricted securities, and are held
by the sole officer and director of our Company. (See "Principal Stockholders".)
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions described above, or otherwise, we have been advised that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than our payment of expenses
incurred or paid by our director, officer or controlling person 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 it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
We have been advised that in the opinion of the SEC indemnification for
liabilities arising under the Securities Act is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities is asserted by one of
our directors, officers, or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our legal counsel
the matter has been settled by controlling precedent, submit the question of
whether such indemnification is against public policy to a court of appropriate
jurisdiction. We will then be governed by the court's decision.
30
INDEX TO FINANCIAL STATEMENTS
LION CONSULTING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
Report of Independent Registered Public Accounting Firm F-1
Balance Sheet as of March 31, 2012 F-2
Statement of Operations for the period from
February 6, 2012 (date of inception) to March 31, 2012 F-3
Statement of Stockholder's Equity as of March 31, 2012 F-4
Statement of Cash Flows for the period from
February 6, 2012 (date of inception) to March 31, 2012 F-5
Notes to the Financial Statements F-6
31
Silberstein Ungar, PLLC CPAs and Business Advisors
--------------------------------------------------------------------------------
Phone (248) 203-0080
Fax (248) 281-0940
30600 Telegraph Road, Suite 2175
Bingham Farms, MI 48025-4586
www.sucpas.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Lion Consulting Group, Inc.
Lewes, Delaware
We have audited the accompanying balance sheet of Lion Consulting Group, Inc.
(the "Company") as of March 31, 2012, and the related statements of operations,
stockholder's equity, and cash flows for the period from February 6, 2012 (Date
of Inception) through March 31, 2012. 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 audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lion Consulting Group, Inc. as
of March 31, 2012 and the results of its operations and its cash flows for the
period from February 6, 2012 (Date of Inception) through March 31, 2012 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 7 to the
financial statements, the Company has limited working capital, has not yet
received revenue from sales of products or services, and has incurred losses
from operations. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans with regard to these
matters are described in Note 7. The accompanying financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Silberstein Ungar, PLLC
------------------------------------
Bingham Farms, Michigan
May 5, 2012
F-1
LION CONSULTING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF MARCH 31, 2012
2012
--------
ASSETS
Current assets
Cash and cash equivalents $ 19,936
--------
Total Assets $ 19,936
========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Current liabilities
Accrued expenses $ 500
Loan payable - related party 1,387
--------
Total Liabilities 1,887
--------
Stockholder's Equity
Common stock, par value $.001, 100,000,000 shares authorized,
2,500,000 shares issued and outstanding 2,500
Additional paid in capital 22,500
Deficit accumulated during the development stage (6,951)
--------
Total Stockholder's Equity 18,049
--------
Total Liabilities and Stockholder's Equity $ 19,936
========
The accompanying notes are an integral part of these financial statements.
F-2
LION CONSULTING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM FEBRUARY 6, 2012 (INCEPTION) TO MARCH 31, 2012
Period from
February 6, 2012
(Inception) to
March 31,
2012
----------
REVENUES $ 0
----------
OPERATING EXPENSES
Professional fees 5,500
Advertising fees 43
Business licenses and fees 945
General and administrative expenses 463
----------
TOTAL OPERATING EXPENSES 6,951
----------
LOSS FROM OPERATIONS (6,951)
PROVISION FOR INCOME TAXES --
----------
NET LOSS $ (6,951)
==========
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00)
==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
BASIC AND DILUTED 1,712,963
==========
The accompanying notes are an integral part of these financial statements.
F-3
LION CONSULTING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDER'S EQUITY
AS OF MARCH 31, 2012
Deficit
Accumulated
Common Stock Additional During the Total
-------------------- Paid in Development Stockholder's
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
Inception, February 6, 2012 0 $ 0 $ 0 $ 0 $ 0
Common stock issued to founder
for cash 2,500,000 2,500 22,500 -- 25,000
Net loss for the period ended
March 31, 2012 -- -- -- (6,951) (6,951)
--------- ------- -------- -------- --------
Balance, March 31, 2012 2,500,000 $ 2,500 $ 22,500 $ (6,951) $ 18,049
========= ======= ======== ======== ========
The accompanying notes are an integral part of these financial statements.
F-4
LION CONSULTING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM FEBRUARY 6, 2012 (INCEPTION) TO MARCH 31, 2012
Period from
February 6, 2012
(Inception) to
March 31,
2012
--------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (6,951)
Adjustments to reconcile net loss to net cash
used in operating activities:
Increase in accrued expenses 500
--------
Net Cash Used in Operating Activities (6,451)
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock to founder for cash 25,000
Proceeds from related party loan 1,387
--------
Net Cash Provided by Financing Activities 26,387
--------
NET INCREASE IN CASH 19,936
CASH, BEGINNING OF PERIOD 0
--------
CASH, END OF PERIOD $ 19,936
========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 0
========
Income taxes paid $ 0
========
The accompanying notes are an integral part of these financial statements.
F-5
LION CONSULTING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2012
NOTE 1 - NATURE OF OPERATIONS
Lion Consulting Group, Inc. ("the "Company") was formed on February 6, 2012 in
the State of Delaware. The Company will engage primarily in serving the
comprehensive needs of businesses in the full range of the business cycle
through providing professional consulting services. The Company initially
intends to focus on providing services to start-up businesses in order to
establish a relationship with younger operations and continue to nurture those
relationships over the long term. Currently the Company is engaged in raising
capital and entering into relationships in furtherance of its planned
activities.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DEVELOPMENT STAGE COMPANY
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles related to development-stage companies.
A development stage company is one in which planned principal operations have
not commenced or if its operations have commenced, and there has been no
significant revenues there from.
ACCOUNTING BASIS
The Company uses the accrual basis of accounting and accounting principles
generally accepted in the United States of America ("GAAP" accounting). The
Company has adopted a March 31 fiscal year end.
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash equivalents,
accrued expenses, and a loan payable to a related party. The carrying amounts of
these financial instruments approximate fair value due either to length of
maturity or interest rates that approximate prevailing rates unless otherwise
disclosed in these financial statements.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents.
CONCENTRATIONS OF CREDIT RISK
The Company maintains its cash in bank deposit accounts, the balances of which
at times may exceed federally insured limits. The Company continually monitors
its banking relationships and consequently has not experienced any losses in
such accounts. The Company believes it is not exposed to any significant credit
risk on cash and cash equivalents.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles of the United States 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 year.
Management bases its estimates on historical experience and on other assumptions
considered to be reasonable under the circumstances. However, actual results may
differ from the estimates.
F-6
LION CONSULTING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2012
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION
The Company has yet to realize significant revenues from operations and is still
in the development stage. The Company recognizes revenues when delivery of goods
or completion of services has occurred provided there is persuasive evidence of
an agreement, acceptance has been approved by its customers, the fee is fixed or
determinable based on the completion of stated terms and conditions, and
collection of any related receivable is collection is reasonably assured.
INCOME TAXES
Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized. It is the
Company's policy to classify interest and penalties on income taxes as interest
expense or penalties expense. As of March 31, 2012, there have been no interest
or penalties incurred on income taxes.
BASIC INCOME (LOSS) PER SHARE
Basic income (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company's net income 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 for any potentially dilutive debt or equity. There are no such
common stock equivalents outstanding as of March 31, 2012.
DIVIDENDS
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.
STOCK-BASED COMPENSATION
The Company accounts for employee stock-based compensation in accordance with
the guidance of FASB ASC Topic 718, COMPENSATION - STOCK COMPENSATION which
requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the financial statements based on their fair
values. The fair value of the equity instrument is charged directly to
compensation expense and credited to additional paid-in capital over the period
during which services are rendered. There has been no stock-based compensation
issued to employees.
The Company follows ASC Topic 505-50, formerly EITF 96-18, "ACCOUNTING FOR
EQUITY INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN
CONJUNCTION WITH SELLING GOODS AND SERVICES," for stock options and warrants
issued to consultants and other non-employees. In accordance with ASC Topic
505-50, these stock options and warrants issued as compensation for services
provided to the Company are accounted for based upon the fair value of the
services provided or the estimated fair market value of the option or warrant,
whichever can be more clearly determined. There has been no stock-based
compensation issued to non-employees.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flow.
F-7
LION CONSULTING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2012
NOTE 3 - RELATED PARTY TRANSACTIONS
A related party loaned funds to the Company to pay certain expenses. The loan is
unsecured, non-interest bearing, and has no specific terms of repayment. As of
March 31, 2012 the balance of this loan is $1,387.
NOTE 4 - CAPITAL STOCK
The Company was incorporated on February 6, 2012 in Delaware with authorized
capital of 2,000,000 shares of $0.001 par value common stock. In April, 2012 the
Company amended its Certificate of Incorporation to authorize 100,000,000 shares
of $0.001 par value common stock.
On February 23, 2012, the Company issued 2,500,000 shares of common stock to the
founder for cash proceeds of $25,000.
NOTE 5 - INCOME TAXES
For the period ended March 31, 2012, the Company has incurred a net loss and,
therefore, has no tax liability. The net deferred tax asset generated by the
loss carry-forward has been fully reserved. The cumulative net operating loss
carry-forward is approximately $6,951 at March 31, 2012, and will expire
beginning in the year 2032.
The provision for Federal income tax consists of the following for the period
ended March 31, 2012:
2012
--------
Federal income tax attributable to:
Current Operations $ 2,363
Less: valuation allowance (2,363)
--------
Net provision for Federal income taxes $ 0
========
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows at March 31, 2012:
2012
--------
Deferred tax asset attributable to:
Net operating loss carryover $ 2,363
Valuation allowance (2,363)
--------
Net deferred tax asset $ 0
========
Due to the change in ownership provisions of the Tax Reform Act of 1986, the net
operating loss carry forwards for Federal income tax reporting purposes are
subject to annual limitations.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or personal property. An officer
has provided office services without charge. There is no obligation for the
officer to continue this arrangement. Such costs are immaterial to the financial
statements and accordingly are not reflected herein. The officers and directors
are involved in other business activities and most likely will become involved
in other business activities in the future.
F-8
LION CONSULTING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2012
NOTE 7 - LIQUIDITY AND GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate continuation of the
Company as a going concern. However, the Company had no revenues as of March 31,
2012. The Company currently has limited working capital, and has not completed
its efforts to establish a stabilized source of revenues sufficient to cover
operating costs over an extended period of time.
Management anticipates that the Company will be dependent, for the near future,
on additional investment capital to fund operating expenses The Company intends
to position itself so that it may be able to raise additional funds through the
capital markets. In light of management's efforts, there are no assurances that
the Company will be successful in this or any of its endeavors or become
financially viable and continue as a going concern.
NOTE 8 - SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations
subsequent to March 31, 2012 to the date these financial statements were issued,
and has determined that it does not have any material subsequent events to
disclose in these financial statements.
F-9
[OUTSIDE BACK COVER PAGE]
PROSPECTUS
LION CONSULTING GROUP INC.
5,000,000 SHARES OF
COMMON STOCK
We have not authorized any dealer, salesperson or other person to give you
written information other than this prospectus or to make representations as to
matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or a
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor any
sales made hereunder after the date of this prospectus shall create an
implication that the information contained herein nor the affairs of the Issuer
have not changed since the date hereof.
Until ___________, 2012 (90 days after the date of this prospectus), all dealers
that effect transactions in these shares of common stock may be required to
deliver a prospectus. This is in addition to the dealer's obligation to deliver
a prospectus when acting as an underwriter and with respect to their unsold
allotments or subscriptions.
THE DATE OF THIS PROSPECTUS IS ____________, 2012
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses in connection with the
issuance and distribution of the securities being registered hereby. All such
expenses will be borne by the Company; none shall be borne by any selling
stockholders.
Amount
Item (US$)
---- ----------
SEC Registration Fee $ 11.46
Legal fees and expenses 10,000.00
Accounting fees and expenses 3,500.00
Printing and marketing costs 500.00
Miscellaneous 97.00
----------
TOTAL $14,108.46
==========
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant has authority under General Corporation Law of the State of
Delaware to indemnify its directors and officers to the extent provided in such
statute. The Registrant's Certificate of Incorporation provide that the
Registrant shall indemnify each of its executive officers and directors against
liabilities imposed upon them (including reasonable amounts paid in settlement)
and expenses incurred by them in connection with any claim made against them or
any action, suit or proceeding to which they may be a party by reason of their
being or having been a director or officer of the Registrant.
The provisions of the General Corporation Law of the State of Delaware that
authorize indemnification do not eliminate the duty of care of a director, and
in appropriate circumstances equitable remedies such as injunctive or other
forms of nonmonetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for (a)
violations of the criminal law, unless the director had reasonable cause to
believe his conduct was lawful or had no reasonable cause to believe his conduct
was unlawful; (b) deriving an improper personal benefit from a transaction; (c)
voting for or assenting to an unlawful distribution; and (d) willful misconduct
or a conscious disregard for the best interests of the Registrant in a
proceeding by or in the right of the Registrant to procure a judgment in its
favor or in a proceeding by or in the right of a shareholder. The statute does
not affect a director's responsibilities under any other law, such as the
federal securities laws or state or federal environmental laws.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "1933 Act") may be permitted to directors, officers or
controlling persons of Registrant, pursuant to the foregoing provisions or
otherwise, Registrant has been advised that, in the opinion of the Securities
and Exchange Commission (the "Commission"), such indemnification is against
public policy as expressed in the 1933 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 Registrant in the successful defense of any
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, 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 1933 Act
and will be governed by the final adjudication of such issue.
RECENT SALES OF UNREGISTERED SECURITIES
We have sold securities within the past three years without registering the
securities under the Securities Act of 1933 on one occasion.
II-1
On February 23, 2012 Mr. Philippe Wagner, our sole officer and Director,
purchased 2,500,000 shares of our common stock for $0.01 per share or an
aggregate of $25,000. No underwriters were used, and no commissions or other
remuneration was paid except to Lion Consulting. The securities were sold in an
offshore transaction in reliance on Rule 903 of Regulation S of the Securities
Act of 1933. Mr. Wagner is not a U.S. person as that term is defined in
Regulation S. No directed selling efforts were made in the United States by Lion
Consulting, any distributor, any of their respective affiliates or any person
acting on behalf of any of the foregoing. We are subject to Category 3 of Rule
903 of Regulation S and accordingly we implemented the offering restrictions
required by Category 3 of Rule 903 of Regulation S by including a legend on all
offering materials and documents which stated that the shares have not been
registered under the Securities Act of 1933 and may not be offered or sold in
the United States or to US persons unless the shares are registered under the
Securities Act of 1933, or an exemption from the registration requirements of
the Securities Act of 1933 is available. The offering materials and documents
also contained a statement that hedging transactions involving the shares may
not be conducted unless in compliance with the Securities Act of 1933. The
shares continue to be subject to Rule 144 of the Securities Act of 1933.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following exhibits are filed as part of this registration statement:
Exhibit Description
------- -----------
3.1.1 Certificate of Incorporation
3.1.2 Certificate of Amendment
3.2 Bylaws
5.1 Opinion of Law Offices of Thomas E. Puzzo, PLLC, regarding the
legality of the securities being registered
23.1 Consent of Law Offices of Thomas E. Puzzo, PLLC (included in
Exhibit 5.1)
23.2 Consent of Silberstein Ungar PLLC
UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales of securities are
being made, a post-effective amendment to this registration statement to:
(i) 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) (Sec.230.424(b) of this
chapter) if, in the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement.
(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.
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(4) That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:
(i) If the registrant is subject to Rule 430C, each prospectus filed pursuant to
Rule 424(b) as part of a registration statement relating to an offering, other
than registration statements relying on Rule 430B or other than prospectuses
filed in reliance on Rule 430A, shall be deemed to be part of and included in
the registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as to 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.
(5) 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 (ss.230.424
of this chapter);
(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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Zurich, Switzerland on May
23, 2012.
LION CONSULTING GROUP INC.
(Registrant)
By: /s/ Philippe Wagner
----------------------------------------------
Name: Philippe Wagner
Title: President
(Principal Executive Officer and Principal
Financial and Accounting Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Philippe Wagner, as his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this Registration
Statement on Form S-1 of Lion Consulting Group Inc., and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, grant unto said attorney-in-fact and agent,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the foregoing, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitutes, may
lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
Signature Title Date
--------- ----- ----
/s/ Philippe Wagner
----------------------------- President, Secretary and Director May 23, 2012
Philippe Wagner
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EXHIBIT INDEX
Exhibit Description
------- -----------
3.1.1 Certificate of Incorporation
3.1.2 Certificate of Amendment
3.2 Bylaws
5.1 Opinion of Law Offices of Thomas E. Puzzo, PLLC, regarding the
legality of the securities being registered
23.1 Consent of Law Offices of Thomas E. Puzzo, PLLC (included in
Exhibit 5.1)
23.2 Consent of Silberstein Ungar PLLC