Filed pursuant to Rule 424(b)(3)
Registration No. 333-116890
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COLLEGE OAK INVESTMENTS, INC.
RESALE OF 232,000 SHARES OF COMMON STOCK
The selling stockholders listed on page 21 may offer and sell up to 232,000
shares of our common stock under this prospectus for their own account.
Currently the Company's stock is not traded on any public trading market. Shares
offered by the selling stockholders will be sold at the stated, fixed price of
$.10 per share until the securities are quoted on the OTC Bulletin Board and
thereafter may sell at prevailing market prices or privately negotiated prices.
Shares offered by the selling stockholders may be sold by one or more of the
following methods:
- ordinary brokerage transactions in which a broker solicits purchases;
and
- face to face transactions between the selling stockholders and
purchasers without a broker.
A current prospectus must be in effect at the time of the sale of the
shares of common stock discussed above. We will not receive any proceeds from
the resale of common stock by the selling stockholders. The selling stockholders
will be responsible for any commissions or discounts due to brokers or dealers.
We will pay all of the other offering expenses.
Each selling stockholder or dealer selling the common stock is required to
deliver a current prospectus upon the sale. In addition, for the purposes of the
Securities Act of 1933, selling stockholders may be deemed underwriters.
Therefore, the selling stockholders may be subject to statutory liabilities if
the registration statement, which includes this prospectus, is defective by
virtue of containing a material misstatement or failing to disclose a statement
of material fact. We have not agreed to indemnify any of the selling
stockholders regarding such liability.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY
IF YOU CAN AFFORD A COMPLETE LOSS. WE URGE YOU TO READ THE "RISK FACTORS"
SECTION BEGINNING ON PAGE 6 ALONG WITH THE REST OF THIS PROSPECTUS BEFORE YOU
MAKE YOUR INVESTMENT DECISION.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is November 12, 2004
TABLE OF CONTENTS
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PAGE
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Prospectus Summary 3
Summary Financial Data 5
Risk Factors 6
Use of Proceeds 8
Dividend Policy 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Business 12
Recent Events 16
Management 17
Certain Transactions and Related Transactions 19
Principal Stockholders 19
Description of Capital Stock 20
Shares Available for Future Sale 20
Plan of Distribution and Selling Stockholders 21
Interest of Named Experts and Counsel 23
Disclosure of Commission Position on
Indemnification for Securities Act Liabilities 23
Legal Proceedings 24
Experts 24
Legal Matters 24
Where You Can Find More Information 24
Financial Statements F-1
ABOUT THIS PROSPECTUS
---------------------
You should only rely 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 selling security holders are offering to sell,
and seeking offers to buy, shares of common stock only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common stock.
This summary highlights selected information contained elsewhere in this
prospectus. To understand this offering fully, you should read the entire
prospectus carefully, including the risk factors and financial statements.
All references to "we," "our," or "us," refer to College Oak Investments,
Inc., a Nevada corporation unless specifically stated otherwise.
PROSPECTUS SUMMARY
------------------
The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus. The securities offered
hereby are speculative and involve a high degree of risk. See "Risk Factors."
College Oak Investments, Inc. (the "Company") provides full-service real
estate development consulting, construction management and general contracting
services and support for small to mid-size commercial developers and users of
commercial buildings. These services include the following:
- Site Selection;
- Financial Pro-forma preparation and analysis;
- Return on Investment and Rate of Return Analysis;
- Design Development;
- Construction Management;
- General Contracting;
- Job Supervision;
- Leasing and Property Management; and
- Sale/Leaseback and other Disposition Scenario Analyses.
In addition to the services listed above, we intend to offer for sale newly
issued shares of our Company's Common Stock, specifically for the purpose of
purchasing land for development or income producing commercial real estate after
our registration statement is declared effective.
We have generated net revenues to date from construction management
consulting fees ranging from 3% to 5% of construction related costs. As of July
31, 2004, we had generated approximately $37,901 in such fees, which was offset
by $35,716 from cost of revenues. We do not consider ourselves a "blank check"
company, as defined, and have no intention of seeking a private company with
which to merge in the foreseeable future.
In addition to the services listed above, in the event we raise significant
capital from conventional sources such as our existing investors or commercial
banks, we may purchase raw land for speculative purposes. In a purchase of raw
land in South Texas, it is not unusual to seek out mineral rights, such as oil
and gas, which then can be associated with the purchase of the underlying land.
If we have an opportunity to exploit such mineral rights in a raw land purchase,
we intend to seize that opportunity and find additional partners to perhaps
explore and extract those rights, when it makes sound business sense. Presently
we do not have any such intentions or plans.
3
In addition, our business plan calls for us to enter into joint ventures
such as the Schertz Parkway Joint Venture described further in this prospectus.
To do this, we will seek out owners and/or developers for the construction
and/or ownership of commercial properties and negotiate such arrangements.
As a result of our accumulated deficit, our auditors have expressed
substantial doubt as to whether we will be able to continue as a going concern.
This risk may be exacerbated by the fact that we have only one employee who is
not paid by the Company, our president and sole director, Carey Birmingham. In
addition to being our sole employee, Mr. Birmingham is a majority shareholder
controlling 46% of our common stock.
The Company was incorporated in Nevada on February 3, 2004. Our principal
executive offices are located at 16161 College Oak, Suite 101, San Antonio,
Texas, 78249, our telephone number is (210) 408-6019 Ext. 2, and our fax number
is (210) 408-1856.
4
SUMMARY FINANCIAL DATA
----------------------
You should read the summary financial information presented below for the three
months ending July 31, 2004. We derived the summary financial information from
our unaudited financial statements appearing elsewhere in this prospectus. You
should read this summary financial information in conjunction with our plan of
operation, financial statements and related notes to the financial statements,
each appearing elsewhere in this prospectus.
THE THREE MONTHS ENDING
JULY 31, 2004
DATA:
Revenues $ 37,901
Cost of Revenues $ 35,716
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Gross Profit $ 2,185
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Administrative Expenses $ 1,429
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Net Income (Loss) $ 756
BALANCE SHEET DATA: AS OF JULY 31, 2004
- ------------------------- -------------------------
Cash $8,625
Working Capital Deficit $22,590
Accounts Payable $37,104
Deficit accumulated during development stage ($233,990)
5
RISK FACTORS
------------
This Prospectus contains certain forward-looking statements. Actual results
could differ materially from those projected in the forward-looking statements
as a result of certain of the risk factors set forth below. The shares being
offered hereby involve a high degree of risk. Prospective investors should
consider the following risk factors inherent in and affecting the business of
the Company and an investment in the shares.
WE HAVE FUTURE CAPITAL NEEDS AND WITHOUT ADEQUATE CAPITAL WE MAY GO OUT OF
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BUSINESS
- --------
Our growth and continued operations could be impaired by limitations on our
access to the capital markets. Two of the principals of our Company have
committed up to $50,000 in additional capital to us via non-interest bearing
unsecured lines of credit. However, we can not assure that the capital we have
raised, and the additional capital available to us from our principals, will be
adequate for the long-range growth of our Company. If financing is available, it
may involve issuing securities senior to the shares or equity financings which
are dilutive to holders of the shares. In addition, in the event we do not raise
additional capital from conventional sources, such as our existing investors or
commercial banks, there is every likelihood that our growth will be restricted
and we may need to scale back or curtail implementing our business plan.
Even if we are successful in raising capital, we'll likely need to raise
additional capital to continue and/or expand our operations. If we do not raise
the additional capital, the value of any investment in College Oak Investments,
Inc. may become worthless.
OUR AUDITOR HAS RAISED DOUBT AS TO WHETHER THE COMPANY CAN CONTINUE AS A GOING
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CONCERN
- -------
The Company has generated nominal revenues since inception. Additionally
the Company is run by its sole employee, Carey Birmingham, who is also a
significant shareholder of the Company. These factors among others indicate
that the Company may be unable to continue as a going concern, particularly in
the event that it cannot obtain additional financing and/or attain profitable
operations. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty and
if the company cannot continue as a going concern, your investment in the
Company could become devalued or even worthless.
WE HAVE A LIMITED OPERATING HISTORY AND BECAUSE OF THIS IT MAY BECOME DIFFICULT
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TO EVALUATE OUR CHANCE FOR SUCCESS
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We were formed as a Nevada corporation in February 2004. Aside from
organizational costs incurred, we haven't incurred significant expenses to date
but do have a limited operating history which includes construction management
and consulting agreements that have generated a small amount of fees. As such,
it may be difficult to evaluate our business prospects. We are a development
stage company new to our business, which means we need to arrange new
agreements, raise needed capital, and pay expenses and general administrative
fees. Although we have an experienced president and significant talents in our
consultants, we are a new company and, as such, run a real risk of not being
able compete because of our relatively short existence. New companies in the
competitive environment of construction, real estate and consulting often do not
survive without a history of projects and contacts. Without our efforts to
market our business, we may be forced to close and go out of business. Under
such a circumstance, the value of any investment in College Oak Investments,
Inc. may become worthless.
WE DEPEND ON CAREY BIRMINGHAM, OUR SOLE DIRECTOR AND OFFICER, AND IF WE LOSE
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HIM, WE WILL FACE SIGNIFICANT HURDLES TO CONTINUING OPERATION
- -------------------------------------------------------------
Our performance is substantially dependent on the performance of Carey
Birmingham, our sole officer and director. The loss of the services of Carey
Birmingham will have a material adverse effect on our business, results of
operations and financial condition. In addition, the absence of Mr. Birmingham
will force us to seek a replacement who may have less experience or who may not
understand our business as well, or we may not be able to find a suitable
replacement. Without the expertise of Mr. Birmingham, or an immediate and
qualified successor, we may be forced to curtail operations or close the
business entirely, making the value of any investment in College Oak
Investments, Inc. worthless. In addition, we relay on Mr. Birmingham's
discretion in the direction of our business and the agreements he enters into.
6
THE TWO FOUNDERS OF OUR COMPANY POSSESS SIGNIFICANT CONTROL OVER THE COMPANY'S
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OPERATIONS, AND BECAUSE OF THIS THEY MAY CHOOSE A PLAN OF ACTION WHICH WILL
- ---------------------------------------------------------------------------
DEVALUE THE COMPANY'S OUTSTANDING SECURITIES
- --------------------------------------------
Our executive officer and director, along with our co-founder David Loev,
control 89% of our outstanding Common Stock. Accordingly, our executive officer
and co-founder possess significant influence over the Company on matters
submitted to the stockholders for approval. These matters include the election
of directors, mergers, consolidations, the sale of all or substantially all of
our assets, and also the power to prevent or cause a change in control. This
amount of control by our founders gives them virtually limitless ability to
determine the future of our Company, and as such, they may unilaterally elect to
close the business, change the business plan or make any number of other major
business decisions without the approval of shareholders. This control may
eventually make the value of any investment in College Oak Investments, Inc.
worthless.
NO MARKET CURRENTLY EXISTS FOR OUR COMMON STOCK
- -----------------------------------------------
We currently lack a market for the Company's Common Stock. Because of this,
it is hard to determine exactly how much our securities are worth. This makes an
investment in our Company very speculative. As a result of the lack of market,
it is hard to judge how much our securities are worth. Because of the illiquid
nature of our shares, any investment in the Company may become worthless. In
addition, even if a market does develop for our shares it is likely that it will
be illiquid and sporadic.
WE HAVE NOT AND DO NOT ANTICIPATE PAYING ANY CASH DIVIDENDS ON OUR COMMON STOCK,
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BECAUSE OF THIS OUR SECURITIES COULD FACE DEVALUATION IN THE MARKET
- -------------------------------------------------------------------
We have paid no cash dividends on our Common Stock to date and it is not
anticipated that any cash dividends will be paid to holders of our Common Stock
in the foreseeable future. While our dividend policy will be based on the
operating results and capital needs of the business, it is anticipated that any
earnings will be retained to finance our future expansion. As an investor, you
should take note of the fact that a lack of a dividend can further affect the
market value of our stock, and could significantly affect the value of any
investment in our Company.
OUR COMPANY HAS INDEMNIFIED ITS SOLE OFFICER AND DIRECTOR SO IT WILL BE
- ------------------------------------------------------------------------
DIFFICULT TO SEEK DAMAGES FROM HIM IN A LAWSUIT
- -----------------------------------------------
Our Bylaws provide that the officers and directors will only be liable to
the Company for acts or omissions that constitute actual fraud, gross negligence
or willful and wanton misconduct. Thus, we may be prevented from recovering
damages for certain alleged errors or omissions by the officers and directors
for liabilities incurred in connection with their good faith acts for the
Company. Such an indemnification payment might deplete our assets. Stockholders
who have questions respecting the fiduciary obligations of our officers and
directors should consult with independent legal counsel. It is the position of
the Securities and Exchange Commission that exculpation from and indemnification
for liabilities arising under the 1933 Act and the rules and regulations
thereunder is against public policy and therefore unenforceable. See
"Management".
You should carefully consider the above risk factors and warnings before
making an investment decision. The risks described above are not the only ones
facing us. Additional risks that we do not yet know of or that we currently
think are not material may also have an adverse effect on our business
operations. If any of those risks or any of the risks described above actually
occur, our business could be adversely affected. In that case, the price of our
common stock could decline, and you could lose all or part of your investment.
You should also refer to the other information set forth or incorporated by
reference in this prospectus.
7
FORWARD-LOOKING STATEMENTS
--------------------------
This Prospectus includes forward-looking statements within the meaning of
Section 27A of the Securities Act, and Section 21E of the Securities Exchange
Act. We have based these forward-looking statements on our current expectations
and projections about future events. These forward-looking statements are
subject to known and unknown risks, uncertainties and assumptions about us that
may affect our actual results, levels of activity, performance, or achievements
expressed or implied by such forward-looking statements. These factors are
discussed in the "Risk Factors" section beginning on page 6 of this Prospectus.
In some cases you can identify forward-looking statements by terminology such as
"may", "should", "could", "would", "expect", "plan", "anticipate", "believe",
"estimate", "continue", or the negative of such terms or other similar
expressions. All forward-looking statements attributable to us, or persons
acting on our behalf, are expressly qualified in their entirety by the
cautionary statements included in this Prospectus. We undertake no obligation
to publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this
Prospectus might not occur. The safe harbor contained in the present Securities
Litigation Reform Act does not apply to initial public offerings.
USE OF PROCEEDS
---------------
We will not receive any proceeds from the resale of common stock.
DIVIDEND POLICY
---------------
We have not in the past paid any dividends on our equity securities and
anticipate that we will retain any future earnings for use in the expansion and
operation of our business. We do not anticipate paying any cash dividends in the
foreseeable future. Any determination to pay dividends will depend upon our
financial condition, results of operations and capital requirements.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
The following discussion should be read in conjunction with our financial
statements.
GENERAL
College Oak Investments, Inc. is a development stage company with a limited
operating history. Our fiscal year ends April 30.
Since inception, we have utilized funds obtained primarily through the
private placement sale of stock to 39 investors, raising $8,400 since March
2004, and net consulting fees of approximately $2,185 to develop our business
Nevertheless, we have recorded minimal revenues and have incurred net losses
from operations totaling approximately ($233,990) from inception through July
31,2004.
Our current cash forecast indicates that there will be negative cash flows
from operations through the fiscal year ending April 30, 2005. On July 15,
2004, two of our founders, David Loev and Carey G. Birmingham committed to
provide us with additional capital in the form of non-interest bearing,
unsecured lines of credit totaling $50,000. This commitment is pursuant to
written agreements between our company and the founders dated September 15,
2004. While these lines of credit will help our current cash position, we will
need to seek additional financing in the short term to continue with our
business plan and marketing needs. Additionally, we will need to seek out
conventional long term financing for particular projects as needed in the form
of mortgages or bank lines of credit. However, even with the capital available
to us currently and which we hope to obtain through mortgages and lines of
credit, we can provide no assurance that we will be successful in implementing
our business plan or that revenues from our services or investments will be
sufficient to fund our working capital and marketing expenditure requirements in
the foreseeable future. Failure to obtain sufficient funding may adversely
impact our financial position.
8
The following discussion should be read in conjunction with our financial
statements.
We are a development stage company with a limited operating history. We
were incorporated in February 2004, but have conducted limited business
operations as we have had limited cash and assets. Since inception, we have
marketed our services in a limited fashion as cash flow has allowed, relying on
the efforts of our president and consultants to act on pending bids and/or
opportunities as they arise. In the future, as revenues provide, we will place
our company on broad bid lists, seek out potential real estate owners requiring
our specific expertise, and attend various local and regional social functions
to spread awareness of our services. Traditionally, the services that we provide
are sought out on a "word-of-mouth" basis and by networking within the industry.
Other methods, such as advertising and public relations, are less often utilized
for small companies such as ours, but will be implemented as our growth allows.
As of July 31, 2004, we had generated gross profits from consulting fees of
approximately $2,185 from two clients. Nevertheless, there exists limited
historic operations with respect to our operations. The financial information
contained in this prospectus is for the unaudited period from February 3, 2004
(inception) through July 31, 2004.
Currently, the majority of our losses have resulted from non-cash
expenditures in the form of stock for services. We have no plans to pay any
salaries or overhead costs in the foreseeable future. As a result, we believe
that cash flows from fees, along with our available lines of credit, will be
sufficient to pay the costs of this offering and the small amount of operating
expenses we require for the next six months. We have begun to generate revenues
from operations, but there is no assurance as to how long these revenues will be
sufficient to cover cash requirements. As a result, we will likely rely on the
lines of credit available from our founders to supplement our operations.
9
ESTIMATED
CASH DATE OR NUMBER OF MONTHS
REQUIRED AFTER RECEIPT OF PROCEEDS
METHOD OF FOR SUCH WHEN EVENT SHOULD BE
EVENT ACHIEVEMENT EVENT ACCOMPLISHED
Fund operations and Operations are currently being $0 Currently underway. We are generating
generate revenue funded by existing gross revenues now. First revenues were
revenues and working capital generated in May 2004.
Expand services to new Currently underway $2,500 Ongoing process which has already
customers and seek out commenced with the purchase by the
development projects. Company of 3.0% of Schertz Parkway
Ventures, LLC. Future J/V projects will
include ownership and construction
management fees on a project by project
basis.
Seek to establish Source businesses in related $2,500 The ability to complete strategic
strategic alliances that fields. alliances cannot be definitively timed
will maximize our and will depend on opportunities which
value. these individuals will continue to
explore.
Seek liquidity and Become listed on the over- $3,000 Six months to one year initially and then
growth in the market the-counter bulletin board and a continuing effort thereafter.
place. continue marketing efforts.
Plan of Operations
- ------------------
Management anticipates a need for approximately $50,000 to meet our needs
for working capital, capital expenditures and business development for the next
twelve months. To date, we have been utilizing our resources in an effort to
become a publicly traded entity. As of July 31, 2004, we had received net
revenues from consulting fees of approximately $2,185 from two clients in San
Antonio, Texas. Due to the nature of our business providing consulting services,
our net revenue from consulting fees can be expected to be minimal for the
foreseeable future, in the range of 3-5% of construction cost. We anticipate
increasing our revenues by purchasing equity interests in development joint
ventures, such as the Schertz Parkway venture described in Recent Events Section
herein.
We have raised approximately $8,400 from 39 investors.
To fund operations and purchase equity interests in properties and
development joint ventures, we will rely on the commitment of our two
principals, Mr. David Loev and Mr. Carey Birmingham to provide us with working
capital in the form of open lines of credit totaling $50,000, or $25,000 from
each principal. These commitments were made in the form of written lines of
credit to our Company dated September 15, 2004, are non-secured and non-interest
bearing. As of the date of this filing, we have not drawn upon these lines of
credit.
Even though the Company can draw on these lines of credit from our two
principals and the fact that we are receiving revenues from our current
projects, we believe we will need to seek out additional funding within the next
six months to expand our services to new customers and seek out development
projects.
10
Product Research and Development
- --------------------------------
There is no planned product research and development in the foreseeable
future.
Planned purchase of plant and/or equipment
- ------------------------------------------
There is no planned purchase of plant or equipment in the next 12 months,
but it can be anticipated that, by the nature of our business, we may need to
acquire various pieces of construction equipment or tools in the future.
Planned significant changes in number of employees
- --------------------------------------------------
We are not planning any significant changes in the number of employees of
our Company in the near future. We believe that because of the nature of our
business, the Company can be effectively managed by our current president, Mr.
Birmingham, combined with the efforts of our consultants. Mr. Birmingham plans
on concentrating his full time and effort on the company and leveraging his time
with the effective use of consultants listed in this prospectus and
subcontractors in the trade which will be billed to specific projects.
RESULTS OF OPERATIONS
During the period from February 3, 2004 through July 31, 2004, we relied on
revenues generated from two projects, Schertz Parkway Ventures ("SPV") and
QuadK, to support our operations. While these projects have offered our company
net fees, the QuadK project will be completed by year end 2004, meaning no
additional fees will be obtained from the QuadK project past that point.
If the joint venture, SPV, does not secure the financing for development of
the Schertz Parkway project, and our company does not secure additional projects
over the next several months, there is a material risk that we will need to
curtail or possibly cease operations on a temporary or permanent basis. This
project in Schertz is critical to our short term and long term success as a
company. If it is successful, it will provide us with significant liquidity and
assets, by way of fees generated for our company and the increased value of our
ownership interest in the joint venture. We anticipate that the first phase of
the project will have a construction cost of approximately $1.6 million,
generating net fees for our company of approximately $48,000 over the next 8-10
months. Net fees do not include our normal operating expenses associated with
the project, which will be reimbursed. Furthermore, as the entire project
progresses, we estimate the entire construction cost will exceed $9 million,
with estimated net fees in excess of $270,000.
These two projects generated 100% of our revenues, consisting of $37,901
during the three month period ending July 31, 2004.
SPV, on the other hand should begin construction during the first quarter
of 2005. In addition, we will be generating net fees from SPV in the interim
for preliminary engineering, architecture and site preparation.
Despite the anticipated revenues from SPV, it is critical that we continue
to generate revenues through additional construction management and contracting
projects, as well as through direct ownership of income producing real estate.
Without new projects generating additional revenues, or new financing, we may
run out of cash resources and be unable to continue with our business plan.
For the three months ending July 31, 2004
For the three month period ending July 31, 2004, the company had revenues
of $37,901, which were offset by $35,716 due to cost of revenue associated with
subcontractor fees and expenses associated with the QUADK contract, leaving a
gross profit of $2,185.
The expenses associated with the QuadK project consist solely of
subcontracting expenses paid to Sage Development and Construction. Our contract
with QuadK calls for us to receive a fee of approximately 5% of the construction
cost. For the three month period ending July 31, 2004, general and
administrative expenses consisted of cash items of $629.
11
Net income totaled $1,556 for the three months ending July 31, 2004.
For the period from February 2, 2004 (Inception) through April 30, 2004.
We had no revenues for the period from February 3, 2004 through April 30,
2004.
General and administrative expenses consisted of cash items of $32,545,
which were for start up expenses, including accrued legal fees of $30,000 In
addition, we incurred non-cash expenses of $203,000 which consisted of stock
issued for services consisting of: sourcing new clients; providing construction
expertise; real estate finance; leasing; market knowledge and property
management expertise; and legal services.
Net loss totaled ($235,545) for the period from February 3, 2004 through
April 30, 2004.
Liquidity And Capital Resources.
- --------------------------------
OVERVIEW
--------
Our cash position was $8,625 as of July 31, 2004. We also had additional
assets of $5,889, which consisted of $5,493 of Accounts Receivable and $396 of
Investment in the Schertz Parkway Joint Venture.
Accounts payable as of July 31, 2004, was $37,104.
Working capital on July 31, 2004, was negative $22,590.
For the period from February 3, 2004 to July 31,2004, cash flows from
operating activities were positive $621. Consisting primarily of $203,000 of
adjustments to reconcile net loss, due to stock issued for services. Net cash
flows from investing activities were negative $396 for the period from February
3, 2004 to July 31, 2004. For the same period the net cash flows from financing
activities of the Company was $8,400.
We have a written commitment from two of our founders to provide us with
financing via lines of credit totaling $50,000 in the future. Despite this
assurance, however, if we are unable to raise additional capital from
conventional sources, including lines of credit and additional sales of
additional stock in the future, we may be forced to curtail or cease our
operations. Even if we are able to continue our operations, the failure to
obtain financing could have a substantial adverse effect on our business and
financial results.
In the future, we may be required to seek additional capital by selling
debt or equity securities, curtailing operations, selling assets, or otherwise
be required to bring cash flows in balance when it approaches a condition of
cash insufficiency. The sale of additional equity securities, if accomplished,
may result in dilution to our shareholders. We cannot assure you, however, that
financing will be available in amounts or on terms acceptable to us, or at all.
BUSINESS
--------
OUR BUSINESS DEVELOPMENT
- ------------------------
College Oak Investments, Inc. was formed in February 2004, as a new
corporation with no predecessor corporation. Although our Company has only been
in existence for a few months, our president has over 25 years of experience in
the commercial construction and real estate business.
12
Neither we, nor our president, have been in bankruptcy, receivership or any
similar proceeding, and we have not had any material reclassification, merger,
consolidation or purchase or sale of a significant amount of assets.
Our Business
- ------------
College Oak Investments offers full-service development consulting,
construction management and general contracting services and support for small
to mid-size commercial developers and users of commercial buildings and various
types of raw land for speculation and development. These services include the
following:
- Site Selection;
- Financial Pro-forma preparation and analysis;
- Return on Investment and Rate of Return Analysis;
- Design Development;
- Construction Management;
- General Contracting;
- Job Supervision;
- Leasing and Property Management;
- Sale/Leaseback and other Disposition Scenario Analyses; and
- Sale Negotiation and Brokerage.
- Raw Land, including oil and gas properties, for acquisition, sale and/or
development.
As a service business, we do not have a need for any distribution.
In addition to the services listed above, we intend to raise additional
capital through the sale of our Company's Common Stock after our registration
statement is declared effective, specifically for the purpose of purchasing land
for development or income producing commercial real estate.
Our initial concentration will be in the San Antonio and South Texas
markets where we will offer our services to developers or land owners.
Insodoing, we will encounter a number of other larger and more established
consulting companies and general contractors. We will capitalize on our
consultants' contacts in area businesses, as well as the extensive experience in
finance, construction, real estate and general contracting which is inherent in
our team. This, we expect, along with our competitive fee structure, will set us
aside from much of the competition. In addition, as a result of our real estate
expertise in addition to the relationship with various consultants, we will be
available to take a reduced fee in exchange for an ownership position in
particular projects, similar to what we have negotiated with Schertz Parkway
Ventures. We may also choose to sell stock in the future, which we hope will
generate enough cash to allow us to form joint ventures with existing land
owners or purchase land outright for development.
The nature of our current contracts and agreements call for us to receive a
fee for services ranging from 3% to 5% of construction or subcontracting costs.
As such, we act as a consultant to the developer or owner of a particular
project.
As a result of our initial contracts, we plan on realizing revenues from
project consulting in amounts ranging from 3% to 5% of construction costs, plus
any out of pocket expenses. We believe we will be able to limit initial overhead
and non-project related operating expenses, which should help us to maximize our
potential revenues.
On August 1, 2004, we entered into a joint venture with a property owner in
Schertz, Texas, for the development of approximately 7.6 acres of raw land for
professional office, retail and mini-storage. In addition to a 3.06% equity
interest in the project, we have received and will continue to receive a 3% fee
for providing consulting services to the joint venture.
13
The structure of the Schertz Parkway venture will be the model for future
projects with owners/developers for the construction and/or ownership of
commercial properties. As such, we hope to structure similar ventures where we
provide consulting services for a percentage fee of the total development cost.
We have no unannounced new product or service.
As a general rule, we will rely on a variety of sub-contractors and their
suppliers for completion of our business, and there is no shortage of such
sub-contractors in our market. We do not see any need to depend on any single
sub-contractor or supplier, and, indeed, welcome a wide range of such services
to provide a competitive pricing strategy for our clients and partners.
Generally speaking, we will not need to rely on outside consultants for any
particular projects. In the event we utilize outside consultants for acquiring
new contracts, similar to the services we sought from David Mooney and Jay
Alkire, we anticipate paying for such services in stock, thereby retaining our
cash flow for future growth.
We do not depend on any or a small number of customers, but instead we hope
to have several projects going on at one time.
We have no trademarks, licenses franchises, concessions, royalty agreements
or labor contracts which have not been disclosed in this prospectus.
As a general rule, all governmental approvals for our services are required
to be obtained by, and maintained by, our clients and partners. As such, we have
no pending or unapproved governmental services.
There are no governmental regulations which directly affect our business.
We can, for a fee, consult with the client's engineers in seeking governmental
approvals for environmental or other governmental regulations. Again, as a
general rule, these are the responsibility of the owner/client.
We have not spent any funds on research and development since our
inception, nor do we plan on spending any funds in the near future.
MARKET NEED
- ------------
We believe that numerous small and mid-size commercial developers have need
from time to time for financial analyses consulting as well as site selection
and analysis and construction assistance, whether construction management or
general contracting. In addition, numerous individuals and companies of all
sizes often have requirements when considering development and construction of
home offices, build-to suit projects or commercial facilities which may combine
income from rental as well as home office use for the developer/owner. Based on
the extensive experience of its executive, Mr. Birmingham, and its consultants,
Mr. Alkire and Mr. Yount, and their knowledge of contacts and the market, the
Company believes it can offer an immediate presence to San Antonio-based
companies who seek such development consulting and/or construction consulting
services.
The Company's principal business activity consists of providing a full
range of real estate development and construction services to individuals or
companies seeking to develop or build small (3,000 square foot) to mid-size
(25,000-35,000 square foot) commercial buildings. This entire process begins
with site selection for a client and continues through actual construction,
lease-up and management of the facility. While the initial emphasis of the
Company is to seek out small and mid-size users, we do not limit ourselves to
this niche. As opportunities develop, we will seek out larger projects and
joint ventures as time and business progress.
Construction consulting is a highly competitive business in which companies
of all sizes strive to attract new clients or additional assignments from
existing clients. Competition for new business is difficult as large
construction management companies and general contractors have tremendous
resources, both monetary and with personnel, to attract new clients. We believe
that our general pricing of cost of construction plus a fee ranging from .5% to
10% will be very competitive and it expects to offer excellent service.
14
The majority of the agreements between us and our clients will be
terminable by either us or the client upon mutually agreed notice, as is the
custom in the industry. We are currently being engaged on a project by project
basis and accept engagements generally on a cost of construction plus a flat fee
of from .5% to 10% or on an hourly basis or flat fee arrangement. We also
participate in equity ownership positions in development projects for cash
and/or reduction of cash fees. We may engage consultants as independent
contractors to assist it on various projects on an as needed basis.
As is generally the case in the construction industry, our business is
expected to be seasonal and will fluctuate with the general economy and real
estate markets. The diverse aspect of our business plan can be expected to
ameliorate these fluctuations to a degree.
COMPETITION
- -----------
There is significant competition to our core business from not only
existing construction management consultants but also general contractors and
owner/developers themselves. As we are currently positioned, we have little
competitive edge over other, larger and more established construction management
companies and general contractors. These other, larger companies have
significantly larger sources of revenue with which to market their services and
therefore compete for areas of our core business. However, many of these larger
companies do not provide the real estate financial expertise, negotiating
expertise and management expertise of various disparate functions (i.e. banking,
general real state knowledge, architecture and construction) that we provide via
our president and consultants. We believe that our core team provides a depth of
knowledge that allows us to compete in the market. In addition, such competition
is commonplace in the business and we believe our expertise, pricing policy and
availability of knowledge and ownership ability will distinguish us from the
competition.
Furthermore, we intend to concentrate on smaller projects in terms of
square footage, where we believe we will have an advantage. We believe that
there is a demand in the market for smaller projects which have not been
adequately serviced by our larger competitors.
DEPENDENCE ON MAJOR CUSTOMERS
- -----------------------------
At this time, we have two customers and do not expect to be dependent on
any single customer for our success. Indeed, the nature of our business, and our
fee structure, demand that we seek either: 1) more consulting customers, or 2)
more ownership transactions to offset future expenses associated with our
growth.
The advantages to consulting customers are that the fees that are generated
are entirely net of all expenses associated with a project. For example, when we
charge a 3% fee for consulting services, this fee does not include all of the
costs associated with the project, such as travel, phone expenses, etc.
Ownership transactions, as exemplified by the Schertz Parkway Ventures deal
described in this prospectus, offer us opportunities for current cash fees via a
construction management contract, as well as participation in future sales
and/or rental revenues if the project succeeds.
PATENTS AND TRADEMARKS
- ----------------------
We do not have any patents or trademarks and do not see the need for any in
the near future.
15
LICENSE AND GOVERNMENT APPROVAL
- -------------------------------
As a consultant, we are not required to have licenses nor do we require
governmental approval for our services. When we begin to provide general
contracting services as envisioned in our business plan, we will be required to
obtain licenses from the state in which we conduct business. The fees and
process for obtaining such a license are simple and inexpensive, ranging from
approximately $100 per year in Texas to $500.00 in other states.
RESEARCH AND DEVELOPMENT
- ------------------------
The nature of our business does not require any research and development.
NUMBER OF EMPLOYEES
- -------------------
Currently, we have one, unpaid employee, our president, Carey G.
Birmingham. At the present time, based on the agreements we have in place, we do
not foresee the need for additional employees in the next 12 months.
RECENT EVENTS
-------------
QUADK BUILDING
--------------
On June 9, 2004, we entered into a General Contracting and Construction
Management Contract with QuadK, LLC, a Texas Limited Liability Company for the
construction of a new 3,600 square foot office building in San Antonio, Texas.
The Contract includes a fee for our services of approximately 5% of the
construction cost, or approximately $12,400. We have subcontracted with Sage
Development and Construction to complete this project. Jay Alkire is the
president of Sage Development & Construction and a shareholder and consultant to
our company.
The Contract with QuadK is a Standard Form American Institute of Architects
(AIA) contract ("Contract"), which is widely recognized as the industry standard
in defining the relationships and terms involved in design and construction
projects. The Contract provides for us to seek out and engage subcontractors for
the construction of a 3,600 square foot office building. As the primary
contractor, relying on subcontractors such as Sage Development, it is our
responsibility to make periodic cash draws from the owner, in this case QuadK,
and process and pay invoices to our subcontractors.
SCHERTZ PARKWAY VENTURES, LLC
- -----------------------------
On August 1, 2004, we entered into a joint venture agreement and along with
other investors (several of whom are also investors in our company), formed
Schertz Parkway Ventures, LLC. On that date, we agreed to purchase a 3.0%
ownership interest in the company for an initial investment of $396.00. Schertz
Parkway Ventures, LLC ("SPV"), in turn, has the right to own approximately 7.6
acres of commercial land in Schertz, Texas, a city of 30,000 located 8 miles
northeast of San Antonio, Texas on Interstate IH-35. The property consists of
raw land, zoned commercial and preliminary design studies anticipate
approximately 37,000 square feet of professional office space, 15,000 square
feet of retail space and 60,000 square feet of mini-storage space.
It is the intention of the joint venture to develop, sell or otherwise
improve the 7.6 acres in Schertz by December 31, 2005. In the event that the
joint venture does not make a substantial effort in that regard by December 31,
2005, the owner of the land has the right to terminate the joint venture and the
land will revert to its current owner without the need for payment of any
consideration. In such an event, our company's investment will effectively
equate to nothing.
As part owner of the project in Schertz, we are entitled to receive our pro
rata share from a sale of all or part of the land which generates sale proceeds
of over $3.50 per square foot, for the life of the joint venture. In the event a
building or other improvement to the property is completed and rented or sold,
we will be entitled to receive our pro rata portion of cash flows from rental or
the sale.
16
During August 2004, SPV obtained a $25,000 line of credit from a local,
commercial bank for, among other things, the purposes of paying development
costs of the project, including construction management fees to our company. The
president of our Company, along with another investor in SPV, guaranteed the
line of credit for SPV. No member of SPV, including our Company, is obligated to
guarantee any obligations of SPV, and College Oak Investments, Inc. has not
guaranteed any debts to date on behalf of SPV.
In addition to our ownership in the joint venture, we are entitled to
receive a 3% fee for construction management consulting. When a contractor
provides service to the joint venture, College Oak Investments reviews the
invoice and checks to ensure the work has been adequately performed. We then
bill the joint venture for the amount of the contract plus a 3% fee.
In the event the project continues past the design development stage, and
the members elect to begin construction, we will enter into a construction
management contract which will include a 3% fee, based on construction costs,
for services. As of July 31, 2004, we had billed SPV $375 for various
development related services.
JANET T. BIRMINGHAM INTER VIVOS TRUST
-------------------------------------
On August 15, 2004, we accepted the management and oversight of the
renovation of a 500 square foot condominium in South Norwalk, Connecticut, owned
by the Janet Birmingham Inter Vivos Trust. Janet Birmingham is the mother of our
President. The verbal contract called for us to oversee the renovation of the
condominium for a fee of 5% of the cost of construction. The renovation of this
project was competed on October 15, 2004, for a total cost of $7,913.00, and
generated $395.00 in fees to our company. Our consultant, David Mooney aided us
in the completion of the project for no cost to our company beyond the shares of
stock he has already received.
MANAGEMENT
----------
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth our director and officer and his age and
position:
NAME AGE POSITION
- ---- --- --------
Carey G. Birmingham 48 President and Chief Executive
Officer
Carey Birmingham has served as our President and Director since inception in
January 2004. As President and Director for College Oak Investments, Inc., Mr.
Birmingham is responsible for our long-term strategic planning and all
day-to-day administrative activities, including marketing, finance, profit and
loss responsibility, building strategic alliances and developing sales. In
addition, Mr. Birmingham brings his extensive 20-year experience in all aspects
of commercial real estate in assisting clients and negotiating contracts. From
September 1999 through September 2003, Mr. Birmingham served as President,
Executive Vice President and Director of International Test Systems, Inc., which
filed a registration statement in an effort to become publicly traded, but never
obtained a stock symbol. ITS is a manufacturer of automated test equipment for
electronic printed circuit boards. As an officer of ITS, Mr. Birmingham worked
full time in selling the company's products and attempting to grow the company.
Mr. Birmingham resigned as a Director of ITS in September 2003 and resigned as
Executive Vice President in March 2004.
In August 2003, ITS sold 92% of its stock to a US subsidiary of an offshore
(Greek) company in a private transaction. Prior to ITS's sale of 92% of its
stock to the Greek Company, Mr. Birmingham controlled 522,500 shares of ITS, or
approximately 21.7% of the then outstanding shares. Immediately after the sale
of stock, Mr. Birmingham resigned as a Director and was retained as the
Executive Vice President of ITS. At the time of the acquisition by the Greek
Company, BFP Texas was issued an additional 100,000 shares of ITS in
consideration for conversion of debt in the amount of approximately $15,000. Mr.
Birmingham controls BFP Texas, Ltd,. As a result of his founding ITS, the
issuance of the additional 100,000 share to BFP, and the subsequent stock
purchase by the subsidiary of the Greek Company, Mr. Birmingham retained
personal and beneficial ownership of 622,500 shares of ITS, or approximately
2.8% of the outstanding shares of ITS after the Greek Company acquired 92% of
ITS. ITS's new management did not compete a planned initial public offering of
the company's stock, and Mr. Birmingham resigned as Executive Vice President of
the company in March 2004 and formed College Oak Investments, Inc. devoting all
of his efforts to the Company.
17
During the past 20 years, in addition to his work in venture capital and
individual investments, Mr. Birmingham has served in various capacities. From
March 1982 through April 1984, Mr. Birmingham served as Asset Manager and Sr.
Asset Manager of commercial real estate for New York Life Insurance. Mr.
Birmingham served as a Vice President of Commercial Real Estate for Unicorp
American Corporation and Executive Vice President for Unicorp Property
Management, a company subsidiary, from May 1984 through November 1989. Mr.
Birmingham served as a Portfolio Director, Commercial Real Estate, for United
Services Automobile Association (USAA) from 1990 through part of 1992. In
addition, Mr. Birmingham served as a real estate consultant for Fidelity Mutual
Life Insurance and Mutual Benefit Life from 1992 through 1994. Mr. Birmingham
has been responsible for the asset and real property management of real estate
portfolios valued in excess of $250 Million at New York Life, $300-$400 Million
at Unicorp American, $200-$300 Million at USAA and approximately $300 -$400
million at Fidelity and Mutual Benefit Life. During his tenure with these
companies, Mr. Birmingham generated gross sales proceeds of over $700 million
from the sale of real estate properties. Mr. Birmingham received a BA degree
from New York University in 1980.
In 2001, Mr. Birmingham formed or assisted in the formation of two Rule 419
companies, also known as blank check companies. The companies were formed for
the purpose of raising funds in the public market and filed registration
statements and amendments the same year. However, neither company progressed
past there respective first amendments, and Mr. Birmingham abandoned his efforts
in this regard in December 2001 and undertakes to withdraw such registration
statements. Other that his limited experience with the two companies, Mr.
Birmingham has had no further experience in so-called blank check, or Rule 419
companies.
Our company is in no way similar to the 419 companies Mr. Birmingham
formed. Such companies never sought money from investors, had no revenue, no
clear business plan, no assets, no agreements with customers and were formed for
the purposes of merging with existing businesses. Our Company has revenues,
agreements with customers, assets, including an ownership interest in Schertz
Parkway Ventures, and has been conducting business for several months.
Furthermore, we have raised $8,400 from 39 investors since March 2004.
EXECUTIVE COMPENSATION
----------------------
Mr. Birmingham has not received a salary. It is anticipated that he will
not receive a salary until the Company obtains a minimum of $250,000 in
revenues.
LIMITATION OF DIRECTORS' LIABILITY
Our Articles of Incorporation eliminate, to the fullest extent permitted by
the Nevada General Corporation Law, the personal liability of our directors for
monetary damages for breaches of fiduciary duty by such directors. However, our
Articles of Incorporation do not provide for the elimination of or any
limitation on the personal liability of a director for (i) acts or omissions
which involve intentional misconduct, fraud or a knowing violation of the law,
or (ii) unlawful corporate distributions. This provision of the Articles of
Incorporation will limit the remedies available to the stockholder who is
dissatisfied with a decision of the board of directors protected by this
provision; such stockholder's only remedy may be to bring a suit to prevent the
action of the board. This remedy may not be effective in many situations,
because stockholders are often unaware of a transaction or an event prior to
board action in respect of such transaction or event. In these cases, our
stockholders could be injured by a board's decision and have no effective
remedy.
18
CERTAIN TRANSACTIONSAND RELATED TRANSACTIONS
--------------------------------------------
In January 2004, we issued an aggregate of 2,030,000 shares of common stock
to certain founders for nominal consideration in connection with our formation.
In January 2004, we issued 880,000 shares of common stock to Carey G.
Birmingham in consideration for management services rendered.
In January 2004, we issued 1,000,000 shares of common stock to David Loev
in consideration for legal services rendered. In January 2004, the Company
committed to pay Mr. Loev an additional $30,000.00 for legal fees associated
with this Registration Statement. As of this date, there is no written agreement
with Mr. Loev regarding this fee.
In January 2004, we issued 50,000 shares of common stock to David W. Mooney
in consideration for consulting services, which include sourcing new clients and
providing architectural review for proposed projects, as needed.
In January 2004, we issued 50,000 shares of common stock to Jay Alkire in
consideration for consulting services, which include sourcing new clients and
providing valuable construction expertise, as well as trade and subcontractor
contacts, on a project by project basis, as needed.
In January 2004, we issued 50,000 shares of common stock to H. Alex Yount
in consideration for consulting services, including real estate finance,
leasing, market knowledge and property management expertise on a project by
project basis, as needed.
In July 2004, Messrs. Birmingham and Loev agreed to provide the Company
with lines of credit in the amount of $25,000 each, or $50,000 total. The lines
of credit are unsecured, have a one year maturity and are payable in full,
without interest, at any time during the term of the notes. However, any unpaid
principal which remains outstanding under the lines of credit after September
15, 2005, shall bear interest at ten percent per year. As of the date of this
filing, no funds have been drawn by the Company.
In August 2004, BFP Texas, Ltd. purchased a 13% interest in Schertz Parkway
Ventures, LLC. BFP Texas, Ltd. is a shareholder of our company. Carey
Birmingham, our president, is a General Partner in BFP Texas, Ltd.
We are currently sharing office space leased by BFP Texas, Ltd., one of our
shareholders, rent free on a month-to-month basis. The lease by BFP Texas, Ltd.
expires on December 31, 2004, and after that time, we plan on using space in Mr.
Birmingham's home, also on a rent free, month-to-month basis, until such time as
we require and can afford new office space.
PRINCIPAL STOCKHOLDERS
----------------------
The table below sets forth, as of November 12, 2004, the beneficial
ownership of common stock of our directors, officers, and holders of five
percent or more of our common stock, and the officers and directors as a group.
19
NAME AND ADDRESS NUMBER OF SHARES OF
OF BENEFICIAL OWNERS COMMON STOCK
BENEFICIALLYOWNED(1) PERCENTAGE OF OWNERSHIP
- -------------------- -------------------- -----------------------
Carey G. Birmingham(2) 882,000 41.7%
16161 College Oak, S. 101
San Antonio, TX 78249
David M. Loev 1,000,000 47.66%
2777 Allen Parkway
Suite 1000
Houston, TX 77019
All officers and directors
as a group (1) person 882,000 41.7%
<FN>
(1) The listed beneficial owners have no right to acquire any shares of the
Company through outstanding warrants, options, or any other type of
conversion privilege within sixty days from the date of this filing.
(2) Includes 2,000 shares held of record by BFP Texas, Ltd., a Texas
Limited Partnership, of which Mr. Birmingham owns, via a trust, 5.26% and
is co trustee of the General Partner, the Janet Birmingham Inter Vivos
Trust.
DESCRIPTION OF CAPITAL STOCK
----------------------------
COMMON STOCK
We are authorized to issue up to 140,000,000 shares of common stock. As of
November 12, 2004 there were 2,114,000 shares of common stock issued and
outstanding,
The holders of shares of common stock are entitled to one vote per share on
each matter submitted to a vote of stockholders. In the event of liquidation,
holders of common stock are entitled to share ratably in the distribution of
assets remaining after payment of liabilities, if any. Holders of common stock
have no cumulative voting rights, and, accordingly, the holders of a majority of
the outstanding shares have the ability to elect all of the directors. Holders
of common stock have no preemptive or other rights to subscribe for shares.
Holders of common stock are entitled to such dividends as may be declared by the
board of directors out of funds legally available therefor. The outstanding
common stock is validly issued, fully paid and non-assessable.
PREFERRED STOCK
We are authorized to issue of up to 10,000,000 shares of preferred stock.
We have no present plans for the issuance of such preferred stock. The issuance
of such preferred stock could adversely affect the rights of the holders of
common stock and, therefore, reduce the value of the common stock. In addition,
the issuance of preferred stock, while providing desirable flexibility in
connection with possible acquisitions, financings, and other corporate purposes,
could have the effect of making it more difficult or discouraging a third party
from acquiring a controlling interest in us. In many cases, shareholders receive
a premium for their shares in a change of control, and these provisions will
make it somewhat less likely that a change in control will occur or that
shareholders will receive a premium for their shares if a change of control does
occur.
SHARES AVAILABLE FOR FUTURE SALE
--------------------------------
Upon the date of this prospectus, there are 2,114,000 shares of common
stock issued and outstanding. Upon the effectiveness of this registration
statement, the 232,000 shares of common stock to be resold pursuant to this
Prospectus will be eligible for immediate resale in the public market if and
when any market for the common stock develops.
20
The remaining 1,882,000 shares of common stock outstanding will be subject
to the resale provisions of Rule 144. Sales of shares of common stock in the
public markets may have an adverse effect on prevailing market prices for the
common stock.
Rule 144 governs resale of "restricted securities" for the account of any
person (other than an issuer), and restricted and unrestricted securities for
the account of an "affiliate" of the issuer. Restricted securities generally
include any securities acquired directly or indirectly from an issuer or its
affiliates which were not issued or sold in connection with a public offering
registered under the Securities Act. An affiliate of the issuer is any person
who directly or indirectly controls, is controlled by, or is under common
control with, the issuer. Affiliates of the company may include its directors,
executive officers, and persons directly or indirectly owning 10% or more of the
outstanding common stock. Under Rule 144, unregistered resales of restricted
common stock cannot be made until it has been held for one year from the later
of its acquisition from the company or an affiliate of the company. Thereafter,
shares of common stock may be resold without registration subject to Rule 144's
volume limitation, aggregation, broker transaction, notice filing requirements,
and requirements concerning publicly available information about the company
("Applicable Requirements"). Resales by the company's affiliates of restricted
and unrestricted common stock are subject to the Applicable Requirements. The
volume limitations provide that a person (or persons who must aggregate their
sales) cannot, within any three-month period, sell more than the greater of one
percent of the then outstanding shares, or the average weekly reported trading
volume during the four calendar weeks preceding each such sale. A non-affiliate
may resell restricted common stock which has been held for two years free of the
Applicable Requirements.
PLAN OF DISTRIBUTION AND SELLING STOCKHOLDERS
---------------------------------------------
This Prospectus relates to the resale of 232,000 shares of common stock by
the selling stockholders. The table below sets forth information with respect to
the resale of shares of common stock by the selling stockholders. We will not
receive any proceeds from the resale of common stock by the selling stockholders
for shares currently outstanding. The selling shareholders will sell their
common shares at the price of $.10 per share until our shares are quoted on the
OTC Bulletin Board and thereafter, shares will be sold at the prevailing market
prices or at privately negotiated prices.
SHARES AMOUNT OFFERED
BENEFICIALLY (ASSUMING ALL SHARES BENEFICIALLY
OWNED BEFORE SHARES IMMEDIATELY OWNED AFTER
STOCKHOLDER NAME CONSIDERATION RESALE SOLD) RESALE
- ---------------- ------------- ----------------- ------------------ -------------------
Brenda Yount Cash 2,000 2,000 -
Ray Barger Cash 2,000 2,000 -
Lisa Stewart Cash 2,000 2,000 -
Jay Alkire Services 50,000 50,000 -
Alex Yount Services 50,000 50,000 -
David Mooney Cash 2,000 2,000 -
David Mooney Services 50,000 50,000 -
Nina Mooney Cash 2,000 2,000 -
Janet T. Birmingham Cash 2,000 2,000 -
Stephen Birmingham Cash 2,000 2,000 -
Brad Smith Cash 2,000 2,000 -
Harriet Birmingham Cash 2,000 2,000 -
Mark Birmingham Cash 2,000 2,000 -
Stephen Kramer Cash 2,000 2,000 -
Trae O.High Cash 2,000 2,000 -
Dr. Ed Lahniers Cash 2,000 2,000 -
Jennie Loev Cash 2,000 2,000 -
Rafi Sonsino Cash 2,000 2,000 -
Kevin McAdams Cash 2,000 2,000 -
Gwen Carden Cash 2,000 2,000 -
Robert McMahon Cash 2,000 2,000 -
Christopher Crumpler Cash 2,000 2,000 -
Christopher Matthews Cash 2,000 2,000 -
Dr. Harold Yount Cash 2,000 2,000 -
Rita Stewart Cash 2,000 2,000 -
Hans Hodell Cash 2,000 2,000 -
Kwajo M. Sarfoh Cash 2,000 2,000 -
Ali Ahmed, PC (Corp.) Cash 2,000 2,000 -
Jacob Cohen Cash 2,000 2,000 -
Steven Weiss Cash 2,000 2,000 -
Tony Meade Cash 2,000 2,000 -
Chris Ullman Cash 2,000 2,000 -
Robert Moore Cash 2,000 2,000 -
Charlie Butler Cash 2,000 2,000 -
Roberto Berrios Cash 2,000 2,000 -
Geraldine Smith Cash 6,000 6,000 -
Gregorio Inestroza Cash 4,000 4,000 -
Eric Hymowitz Cash 2,000 2,000 -
Brian Harris Cash 2,000 2,000 -
Breitman Family Trust Cash 2,000 2,000 -
Dan Gostylo Cash 2,000 2,000 -
TOTAL 232,000 232,000 -
21
RESALE OF COMMON STOCK BY SELLING STOCKHOLDERS
SHARES CURRENTLY OUTSTANDING
None of the selling shareholders are broker-dealers or affiliates of
broker-dealers.
The 232,000 shares offered by the selling stockholders may be sold by one
or more of the following methods, without limitation:
- ordinary brokerage transactions and transactions in which the broker
solicits purchases; and
- face-to-face transactions between sellers and purchasers without a
broker-dealer. In effecting sales, brokers or dealers engaged by the
selling stockholders may arrange for other brokers or dealers to
participate.
Such brokers or dealers may receive commissions or discounts from the
selling stockholders in amounts to be negotiated. Each broker-dealer who is
involved in the offering must seek and obtain clearance of the underwriting
compensation and arrangements from the NASD Corporate Finance Department. Such
brokers and dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act, in connection
with such sales. The selling stockholder or dealer effecting a transaction in
the registered securities, whether or not participating in a distribution, is
required to deliver a prospectus. As a result of such shares being registered
under the Securities Act, holders who subsequently resell such shares to the
public may be deemed to be underwriters with respect to such shares of common
stock for purposes of the Securities Act with the result that they may be
subject to certain statutory liabilities if the registration statement to which
this prospectus relates is defective by virtue of containing a material
misstatement or omitting to disclose a statement of material fact. We have not
agreed to indemnify any of the selling stockholders regarding such liability.
22
Before our Common Stock is listed on the OTC Bulletin Board, selling
security holders will sell their common shares at the price of $.10 per share
until our shares are quoted on the OTC Bulletin Board, and thereafter, shares
will be sold at the prevailing market prices or at privately negotiated prices.
Once our Common Stock is listed on the OTC Bulletin Board, it will be subject to
the requirements of Rule 15(g)9, promulgated under the Securities Exchange Act
as long as the price of our Common Stock is below $5.00 per share. Under such
rule, broker-dealers who recommend low-priced securities to persons other than
established customers and accredited investors must satisfy special sales
practice requirements, including a requirement that they make an individualized
written suitability determination for the purchaser and receive the purchaser's
consent prior to the transaction. The Securities Enforcement Remedies and Penny
Stock Reform Act of 1990 also requires additional disclosure in connection with
any trades involving a stock defined as a penny stock. Generally, the Commission
defines a penny stock as any equity security not traded on an exchange or quoted
on NASDAQ that has a market price of less than $5.00 per share. The required
penny stock disclosures include the delivery, prior to any transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
with it.
Relationships of Selling Shareholders
- Brenda Yount is the wife of H. Alex Yount, a shareholder and
consultant to our company.
- Jay Alkire is a consultant to our company and president of Sage
Development and Construction, the primary subcontractor on one of our
projects, the QuadK Building in San Antonio, TX.
- Alex Yount is a consultant to our company.
- David Mooney is a consultant to our company.
- Nina Mooney is the wife of David Mooney
- Janet Birmingham is the mother of the President of our company, Carey
G. Birmingham
- Stephen Birmingham is the father of the President of our company,
Carey G. Birmingham
- Harriet Birmingham is the sister of the President of our company,
Carey G. Birmingham
- Mark Birmingham is the brother of the President of our company, Carey
G. Birmingham
- Stephen J. Kramer is the owner of QuadK and the client for one of our
projects.
- Jennie Loev is the sister of David Loev, our corporate counsel and
founder.
- Dr. Harold Yount is the father of Alex Yount, a consultant to our
company.
INTEREST OF NAMED EXPERTS AND COUNSEL
-------------------------------------
David M. Loev, Attorney at Law, owns 1,000,000 shares of our Common Stock.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
--------------------------------------------------------
SECURITIES ACT LIABILITIES
--------------------------
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer has 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.
23
In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer 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 Securities Act and will be governed by
the final adjudication of such issue.
LEGAL PROCEEDINGS
-----------------
None
EXPERTS
-------
The financial statements of College Oak Investments, Inc., appearing in
this SB-2 Registration Statement have been audited by Malone & Bailey, PLLC,
independent auditors, as set forth in their report thereon appearing elsewhere
herein and are included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
LEGAL MATTERS
-------------
Certain legal matters with respect to the issuance of shares of common
stock offered hereby will be passed upon by David M. Loev, Attorney at Law,
Houston, Texas.
WHERE YOU CAN FIND MORE INFORMATION
-----------------------------------
This Prospectus does not contain all of the information with respect to the
various agreements and other documents referred to herein. The delivery of this
Prospectus at any time does not imply that the information contained herein is
correct as of any time subsequent to the date hereof. For further information
with respect to the Company and the shares, any prospective purchaser should
contact Carey G. Birmingham at 210-408-6019, Ext. 2.
Our fiscal year ends on April 30. We intend to furnish our shareholders
annual reports containing audited financial statements and other appropriate
reports. In addition, we intend to become a reporting company and file annual,
quarterly and current reports, proxy statements, or other information with the
SEC. You may read and copy any reports, statements, or other information we file
at the SEC's public reference room at 450 Fifth Street, N.W., Washington D.C.
20549. You can request copies of these documents, upon payment of a duplicating
fee by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. Our SEC filings are
also available to the public on the SEC's Internet site at http\\www.sec.gov.
24
COLLEGE OAK INVESTMENTS, INC.
(A Development Stage Company)
BALANCE SHEET
July 31, 2004
(Unaudited)
ASSETS
Cash $ 8,625
Accounts receivable 5,493
Investment in joint venture 396
--------
Total current assets $ 14,514
========
LIABILITIES & STOCKHOLDERS' DEFICIT
Accounts Payable $ 37,104
-----------
Commitments
STOCKHOLDERS' DEFICIT
Preferred stock, $.001 par, 10,000,000 shares
authorized, none issued and outstanding -
Common stock, $.001 par, 140,000,000 shares
authorized, 2,122,000 shares issued
and outstanding 2,122
Additional paid in capital 210,078
Deficit accumulated during the development stage (234,790)
-----------
TOTAL STOCKHOLDERS' DEFICIT (22,590)
-----------
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $14,514
===========
F-1
COLLEGE OAK INVESTMENTS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Three Months Ending July 31, 2004, and Period from
February 3, 2004 (Inception)
Through July 31, 2004
(Unaudited)
Three
Months Inception
--------- ---------
Revenues
General contracting $ 37,374 $ 37,374
Management fees 527 527
--------- ---------
Total revenues 37,901 37,901
Cost of revenues 35,716 35,716
--------- ---------
Gross profit 2,185 2,185
Administrative expenses
- cash 1,429 33,975
- non-cash - 203,000
--------- ---------
Net income (loss) $ 756 $(234,790)
========= =========
Basic and diluted net
income per common share $ 0.00
Weighted average common
shares outstanding 2,117,143
F-2
COLLEGE OAK INVESTMENTS
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Three Months Ended July 31, 2004 and Period from
February 3, 2004 (Inception)
Through July 31, 2004
(Unaudited)
Three
Months Inception
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ 756 $ (234,790)
Adjustments to reconcile net loss
to cash used in operating activities:
Stock issued for services - 203,000
Changes in:
Accounts receivable (5,493) (5,493)
Accounts payable 6,349 37,104
--------- ----------
NET CASH USED IN OPERATING ACTIVITIES 1,612 (179)
--------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase in joint venture (396) (396)
--------- ----------
NET CASHED USED IN INVESTING ACTIVITIES (396) (396)
--------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of stock 2,600 9,200
--------- ----------
NET CHANGE IN CASH 3,816 8,625
Cash balance, beginning 4,809 -
--------- ----------
Cash balance, ending $ 8,625 $ 8,625
========= =========
F-3
COLLEGE OAK INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of College Oak
Investments, Inc. ("College Oak"), have been prepared in accordance with
accounting principles generally accepted in the United States of America and the
rules of the Securities and Exchange Commission ("SEC"), and should be read in
conjunction with the audited financial statements and notes thereto contained in
College Oak's latest annual report filed with the SEC on Form SB-2. In the
opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and the
results of operations for the interim periods presented have been reflected
herein. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year. Notes to the
financial statements which would substantially duplicate the disclosure
contained in the audited financial statements for fiscal year 2004, as reported
in the SB-2, have been omitted.
F-4
Financial Statements
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
College Oak Investments, Inc.
(A Development Stage Company)
San Antonio, Texas
We have audited the accompanying balance sheet of College Oak Investments, Inc.,
as of April 30, 2004 and the related statements of expenses, stockholders
deficit, and cash flows for the period from February 3, 2004 (Inception) through
April 30, 2004. These financial statements are the responsibility of College
Oak Investments, Inc. 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. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
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 College Oak Investments, Inc.,
as of April 30, 2004, and the results of its operations and its cash flows for
the periods described in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that College
Oak will continue as a going concern. As discussed in Note 2 to the financial
statements, College Oak has minimal operations and has a net capital deficiency,
which raises substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters also are described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
MALONE & BAILEY, PLLC
www.malone-bailey.com
Houston, Texas
May 27, 2004
F-5
COLLEGE OAK INVESTMENTS, INC.
(A Development Stage Company)
BALANCE SHEET
April 30, 2004
ASSETS
Cash $4,809
========
LIABILITIES
Accounts Payable $30,754
----------
Commitments
STOCKHOLDERS' DEFICIT
Preferred stock, $.001 par, 10,000,000 shares
Authorized, none issued and outstanding -
Common stock, $.001 par, 140,000,000 shares
authorized, 2,096,000 shares issued
and outstanding 2,096
Additional paid in capital 207,504
Deficit accumulated during the development stage (235,545)
----------
TOTAL STOCKHOLDERS' DEFICIT ( 25,945)
----------
TOTAL LIABILITIES & STOCKHOLDERS'
DEFICIT $ 4,809
==========
See accompanying summary of accounting policies and notes to financial
statements.
F-6
COLLEGE OAK INVESTMENTS, INC.
(A Development Stage Company)
STATEMENT OF EXPENSES
Period from February 3, 2004 (Inception)
Through April 30, 2004
Administrative expenses
- - cash
- accrued legal expense $ 30,000
- other 2,545
- - non-cash financial and consulting expense 203,000
---------
Net loss $ (235,545)
=========
Basic and diluted net loss per common share $ (0.11)
Weighted average common shares outstanding 2,049,149
F-7
COLLEGE OAK INVESTMENTS, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
Period from February 3, 2004 (Inception)
Through April 30, 2004
Deficit
Accumulated
Additional During
Common Stock Paid in Development
Shares $ Capital Stage Totals
------------- -------- ---------- ----------------- --------------
Shares issued
- -for services at
$.10 per share 2,030,000 $2,030 $200,970 $ - $203,000
- -for cash at $.10
per share 66,000 66 6,534 - 6,600
Net loss - - - (235,545) (235,545)
------------- -------- ---------- ----------------- --------------
Balances,
April 30, 2004 2,096,000 $2,096 $207,504 $ (235,545) $(25,945)
============= ======== ========== ================= ==============
See accompanying summary of accounting policies and notes to financial
statements.
F-8
COLLEGE OAK INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business. College Oak Investments, Inc. ("COI") was incorporated
in Nevada on February 3, 2004. COI is engaged in general contracting,
construction management, and real estate development.
COI's fiscal year end is April 30th.
Cash and Cash Equivalents. For purposes of the statement of cash flows, COI
considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.
Use of Estimates. In preparing financial statements, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities in the balance sheet and revenue and expenses in the statement of
expenses. Actual results could differ from those estimates.
Revenue Recognition. COI recognizes revenue when persuasive evidence of an
arrangement exists, services have been rendered, the sales price is fixed or
determinable, and collectibility is reasonably assured. There were no revenues
through April 30, 2004.
Income taxes. COI recognizes deferred tax assets and liabilities based on
differences between the financial reporting and tax bases of assets and
liabilities using the enacted tax rates and laws that are expected to be in
effect when the differences are expected to be recovered. COI provides a
valuation allowance for deferred tax assets for which it does not consider
realization of such assets to be more likely than not.
Basic and diluted net loss per share calculations are presented in
accordance with Financial Accounting Standards Statement 128, and are calculated
on the basis of the weighted average number of common shares outstanding during
the year. They include the dilutive effect of common stock equivalents in years
with net income. Basic and diluted loss per share is the same due to the absence
of common stock equivalents.
Recently issued accounting pronouncements. COI does not expect the adoption
of recently issued accounting pronouncements to have a significant impact on
COI's results of operations, financial position or cash flow.
NOTE 2 - GOING CONCERN
As shown in the accompanying financial statements, COI has minimal
operations and has a working capital deficit of $25,945 as of April 30, 2004.
These conditions create an uncertainty as to COI's ability to continue as a
going concern. Management is trying to raise additional capital through sales of
its common stock as well as seeking financing from third parties. The financial
statements do not include any adjustments that might be necessary if COI is
unable to continue as a going concern.
NOTE 3 - COMMON STOCK
In February 2004, COI issued 2,030,000 shares of common stock for services
valued at $.10 per share, or $203,000. COI sold 2,000 shares of common to an
individual for $.10 per share, or $200.
In March 2004, COI sold 32,000 shares of common stock to individuals at
$.10 per share for $3,200.
In April 2004, COI sold 32,000 shares of common stock to individuals at
$.10 per share for $3,200.
NOTE 4 - INCOME TAXES
Deferred tax assets $ 5,000
Less: valuation allowance (5,000)
----------
Net deferred taxes $ 0
==========
COI has a net operating loss of approximately $32,000 as of April 30, 2004
which can be carried forward 20 years.
NOTE 5 - COMMITMENTS
COI has no lease expense as of April 30, 2004. COI is using office space
provided by a related party on a rent-free, month to month basis.
NOTE 6 - SUBSEQUENT EVENTS
In May 2004, COI sold 16,000 shares of common stock to individuals at $.10
per share for $1,600.
F-9