U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
KOHLER CAPITAL III, CORPORATION
(Name of Small Business Issuer in its charter)
Florida 54-2048542
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
2208 Pershing Avenue
Sheboygan, Wisconsin 53083
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (920)-207-7772
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Not Applicable Not Applicable
Securities to be registered under Section 12(g) of the Act:
Common Stock
(Title of class)
Smaller reporting company
FORWARD LOOKING STATEMENTS
THIS FORM 10-12G AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME BY
KOHLER CAPITAL III, CORPORATION (HEREINAFTER REFERRED TO AS "KOHLER" AND/OR
"COMPANY") OR ITS REPRESENTATIVES CONTAIN STATEMENTS WHICH MAY CONSTITUTE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANINGOF THE SECURITIES ACT OF 1933
AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED BY THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. FIFTEEN U.S.C.A. SECTIONS 77Z-2 AND
78U-5 (SUPP. 1996). THOSESTATEMENTS INCLUDE STATEMENTS REGARDING THE INTENT,
BELIEF OR CURRENT EXPECTATIONS OF KOHLER AND MEMBERS OF ITS MANAGEMENT TEAM AS
WELL AS THE ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE BASED. PROSPECTIVE
INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARENOT
GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS ANDUNCERTAINTIES, AND THAT
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD-
LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT THAT COULD
CAUSE ACTUAL RESULTSTO DIFFER MATERIALLY FROM THOSE IN FORWARD-LOOKING
STATEMENTS ARE SET FORTH IN THE SAFE HARBOR COMPLIANCE STATEMENT FOR FORWARD-
LOOKING STATEMENTS INCLUDED AS EXHIBIT 99.1 TO THIS FORM 10-12G, AND ARE
HEREBY INCORPORATED HEREIN BY REFERENCE. THE COMPANY UNDERTAKES NO OBLIGATION
TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED ASSUMPTIONS,
THE OCCURRENCE OF UNANTICIPATED EVENTS OR CHANGES TO FUTURE OPERATING RESULTS
OVER TIME.
ITEM 1 DESCRIPTION OF BUSINESS
The Company is what is classified as a "blank-check" company, sometimes
referred to as a "shell" company. It is a legally formed entity that is
designed to facilitate transactions with and for other corporations that
have ongoing operations, but may not have, in the past, structured their
corporate formation to facilitate the eventual trading of their stock. As
a "blank-check" corporation, the Company may present an advantageous
merger candidate, as it has already established an identity with the S.E.C.
in the form of a reporting history.
Blank check companies may offer alternative routes to "go public" for
smaller cap companies than a more costly initial public offering (IPO).
Companies that can afford an IPO may well find that route to be more
advantageous, as it is a process that can raise a large amount of
capital in a relatively short amount of time. Also, the forms necessary
for a company to trade publicly upon merging with a shell may present
a more onerous filing burden than the Form 1 filed preceding an IPO.
Certain disadvantages are inherent in becoming a public company, and
these should be carefully considered by any business considering a
possible business combination with the Company. Immediately upon
consummation of a merger with the Company, the surviving entity would
be subject to all of the reporting requirements of the '33 and '34
Acts. Additionally, management would assume certain fiduciary duties
with respect to shareholders and the public, including, but not limited
to; the timely disclosure of all material information regarding the
company that might bear upon the consideration of the Company's stock
as a suitable investment; the duties of care and loyalty in the
conductingof the Company's business; and the duty not to misappropriate
corporateopportunites.
Prior to entering into a business combination, the company will fulfill
the reporting requirements of the 1934 Act through the services of
its President and General Counsel. Gerard Werner is currently
President and Director of the Company, and, at present, is the sole
Officer and Director. The Company has selected June 30 as its fiscal
year end.
History and Operations
The Company was incorporated under the laws of the State of
Florida on May 7, 2001, and is in the early developmental and
promotional stages. To date the Company's only activities have been
organizational ones, directed at developing its business plan and
raising its initial capital. The Company has not commenced any
commercial operations. The Company has no full-time employees and
owns no real estate.
Regulation of "Blank Check" Companies
The proposed business activities described herein classify the
Companyas a "blank check" or "shell company" whose sole purpose at this
time is to locate and consummate a merger or acquisition with a private
entity. Many states have enacted statutes, rules and regulations limiting
the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not believe it will undertake any efforts to
cause a market to develop in the Company's securities until such time as the
Company has successfully implemented its business plan described herein.
However, if the Company intends to facilitate the eventual creation of a
public trading market in its outstanding securities, it must consider that
the Company's securities, when available for trading, will be subject to a
Securities and Exchange Commission rule that imposes special sales practice
requirements upon broker-dealers who sell such securities to persons other
than established customers or accredited investors. For purposes of the
rule, the phrase "accredited investors" means, in general terms,
institutions with assets in excess of $5,000,000, or individuals having
a net worth in excess of $1,000,000 or having an annual income that
exceeds $200,000 (or that, when combined with a spouse's income,
exceeds $300,000). For transactions covered by the rule, the broker-
dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior
to the sale. Consequently, the rule may affect the ability of broker-
dealers to sell the Company's securities and also may affect the ability
of purchasers in this offering to sell their securities in any market that
might develop therefore.
In addition, the Securities and Exchange Commission has
adopted a number of rules to regulate "penny stocks." Such rules
include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and
15g-7 under the Securities Exchange Act of 1934, as amended.
Because the securities of the Company may constitute "penny stocks"
within the meaning of the rules, the rules would apply to the
Company and to its securities. The rules may further affect the ability
of owners of Shares to sell the securities of the Company in any
market that might develop for them.
Regulation of "blank check" companies by the State of Florida
mirrors, to a large extent, the regulation thereof by the S.E.C.
The State of Florida has adopted legislation based upon Section
21E of The Private Securities Litigation Reform Act of 1995. The Act
provides a safe harbor for issuers regarding certain forward-looking
statements, but specifially excludes from the safe harbor issuers
making statements in connection with an offering of securities of a
blank check company. Florida has also adopted an amended Rule 504,
made effective August 13, 1992 as part of the Commission's Small Business
Intiatives. The amended Rule 504 exempts from registration certain
offerings up to $1,000,000. Notably, "blank check" or "development
stage" companies are excluded by this exemption also.
Shareholders should be aware that, according to Securities and
Exchange Commission Release No. 34-29093, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse.
Such patterns include (i) control of the market for the security by one
or a few broker-dealers that are often related to the promoter or issuer;
(ii) manipulation of prices through prearranged matching of purchases
and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and
undisclosed bid-ask differentials and markups by selling broker-
dealers; and (v) the wholesale dumping of the same securities by
promoters and broker-dealers after prices have been manipulated to a
desired level, along with the resulting inevitable collapse of those
prices and with consequent investor losses. The Company's
management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to
be in a position to dictate the behavior of the market or of broker-
dealers who participate in the market, management will strive within
the confines of practical limitations to prevent the described patterns
from being established with respect to the Company's securities.
As part of its business plan, this Company is filing this
registration statement on Form 10-SB on a voluntary basis in order to
become a "public" company by virtue of being subject to the reporting
requirements of the Securities Exchange Act of 1934.
Search for Business Opportunity
The Company's business plan is to seek, investigate, and, if
warranted, acquire one or more properties or businesses, and to pursue
other related activities intended to enhance shareholder value. The
acquisition of a business opportunity may be made by purchase,
merger, exchange of stock, or otherwise, and may encompass assets
or a business entity, such as a corporation, joint venture, or
partnership. The Company has very limited capital, and it is unlikely
that the Company will be able to take advantage of more than one
such business opportunity. The Company intends to seek
opportunities demonstrating the potential of long-term growth as
opposed to short-term earnings.
At the present time the Company has not identified any business
opportunity that it plans to pursue, nor has the Company reached
any agreement or definitive understanding with any person concerning
an acquisition. The Company's officer and director has previously
been involved in transactions involving a merger between an
established company and a shell entity, and has a number of contacts
within the field of corporate finance. As a result, he has had
preliminary contacts with representatives of numerous companies
concerning the general possibility of a merger or acquisition by a
shell company. However, none of these preliminary contacts or
discussions involved the possibility of a merger or acquisition
transaction with the Company.
It is anticipated that the Company's officer and director may
contact broker-dealers and other persons with whom he is acquainted
who are involved in corporate finance matters to advise them of the
Company's existence and to determine if any companies or businesses
they represent have an interest in considering a merger or acquisition
with the Company. No assurance can be given that the Company will
be successful in finding or acquiring a desirable business opportunity,
given the limited funds that are expected to be available for
acquisitions, or that any acquisition that occurs will be on terms that
are favorable to the Company or its stockholders.
The Company's search will be directed toward small and
medium-sized enterprises which have a desire to become public
corporations and which are able to satisfy, or anticipate in the
reasonably near future being able to satisfy, the minimum asset
requirements in order to qualify shares for trading on NASDAQ or on
a stock exchange (See "Investigation and Selection of Business
Opportunities"). The Company anticipates that the business
opportunities presented to it will (i) be recently organized with no
operating history, or a history of losses attributable to
under-capitalization or other factors; (ii) be experiencing financial or
operating difficulties; (iii) be in need of funds to develop a new
product or service or to expand into a new market; (iv) be relying
upon an untested product or marketing concept; or (v) have a
combination of the characteristics mentioned in (i) through (iv). The
Company intends to concentrate its acquisition efforts on properties or
businesses that it believes to be undervalued. Given the above factors,
investors should expect that any acquisition candidate may have a
history of losses or low profitability.
The Company does not propose to restrict its search for investment
opportunities to any particular geographical area or industry,
and may, therefore, engage in essentially any business, to the extent
of its limited resources. This includes industries such as service,
finance, natural resources, manufacturing, high technology, product
development, medical, communications and others. The Company's
discretion in the selection of business opportunities is unrestricted,
subject to the availability of such opportunities, economic conditions,
and other factors.
Potential Consequences of Business Combination
As a consequence of this registration of its securities, any
entity which has an interest in being acquired by, or merging into the
Company, is expected to be an entity that desires to become a public
company and establish a public trading market for its securities. In
connection with such a merger or acquisition, it is highly likely that
an amount of stock constituting control of the Company would be
issued by the Company or purchased from the current principal
shareholders of the Company by the acquiring entity or its affiliates.
If stock is purchased from the current shareholders, the transaction is
very likely to result in substantial gains to them relative to their
purchase price for such stock.
In the Company's judgment, none of its officers and directors
would thereby become an "underwriter" within the meaning of the
Section 2(11) of the Securities Act of 1933, as amended. The sale
of a controlling interest by certain principal shareholders of the
Company could occur at a time when the other shareholders of the
Company remain subject to restrictions on the transfer of their shares.
Depending upon the nature of the transaction, the current
officer and director of the Company may resign his management
positions with the Company in connection with the Company's
acquisition of a business opportunity. See "Form of Acquisition,"
below, and "Risk Factors - The Company - Lack of Continuity in
Management." In the event of such a resignation, the Company's
current management would not have any control over the conduct of
the Company's business following the Company's combination with
a business opportunity.
It is anticipated that business opportunities will come to the
Company's attention from various sources, including its officer and
director, its other stockholders, professional advisors such as attorneys
and accountants, securities broker-dealers, venture capitalists, members
of the financial community, and others who may present unsolicited
proposals. The Company has no plans, understandings, agreements,
or commitments with any individual for such person to act as a finder
of opportunities for the Company.
The Company does not foresee that it would enter into a
merger or acquisition transaction with any business with which its
officer or director is currently affiliated. Should the Company
determine in the future, contrary to the foregoing expectations, that a
transaction with an affiliate would be in the best interests of the
Company and its stockholders, the Company is in general permitted
by Florida law to enter into such a transaction if:
1. The material facts as to the relationship or interest of the
affiliate and as to the contract or transaction are disclosed or
are known to the Board of Directors, and the Board in good
faith authorizes the contract or transaction by the affirmative
vote of a majority of the disinterested directors, even though
the disinterested directors constitute less than a quorum; or
2. The material facts as to the relationship or interest of the
affiliate and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith
by vote of the stockholders; or
3. The contract or transaction is fair as to the Company as of the
time it is authorized, approved or ratified, by the Board of
Directors or the stockholders.
Investigation and Selection of Business Opportunities
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality
of the other company's management and personnel, the anticipated
acceptability of new products or marketing concepts, the merit of
technological changes, the perceived benefit the company will derive
from becoming a publicly held entity, and numerous other factors
which are difficult, if not impossible, to analyze through the
application of any objective criteria. In many instances, it is antici-
pated that the historical operations of a specific business opportunity
may not necessarily be indicative of the potential for the future
because of the possible need to shift marketing approaches
substantially, expand significantly, change product emphasis, change
or substantially augment management, or make other changes. The
Company will be dependent upon the owners of a business opportunity
to identify any such problems which may exist and to implement, or
be primarily responsible for the implementation of, required changes.
Because the Company may participate in a business opportunity
with a newly organized firm or with a firm which is entering a new phase
of growth, it should be emphasized that the Company will incur further
risks, because management in many instances will not have
proved its abilities or effectiveness, the eventual market for such
company's products or services will likely not be established, and such
company may not be profitable when acquired.
It is anticipated that the Company will not be able to diversify,
but will essentially be limited to one such venture because of the
Company's limited financing. This lack of diversification will not
permit the Company to offset potential losses from one business
opportunity against profits from another, and should be considered an
adverse factor affecting any decision to purchase the Company's
securities.
It is emphasized that management of the Company may effect
transactions having a potentially adverse impact upon the Company's
shareholders pursuant to the authority and discretion of the Company's
management to complete acquisitions without submitting any proposal
to the stockholders for their consideration. Holders of the Company's
securities should not anticipate that the Company necessarily will
furnish such holders, prior to any merger or acquisition, with financial
statements, or any other documentation, concerning a target company
or its business. In some instances, however, the proposed participation
in a business opportunity may be submitted to the stockholders for
their consideration, either voluntarily by such directors to seek the
stockholders' advice and consent or because state law so requires.
The analysis of business opportunities will be undertaken by or under
the supervision of the Company's President, who is not a professional
business analyst. See "Management." Since Company management has
no current plans to use any outside consultants or advisors to assist in the
investigation and selection of business opportunities, no policies have
been adopted regarding use of such consultants or advisors, the criteria
to be used in selecting such consultants or advisors, the services to be
provided, the term of service, or regarding the total amount of fees
that may be paid.
The Company anticipates that it will consider, among other things,
the following factors:
1. Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
2. The Company's perception of how any particular business
opportunity will be received by the investment community and
by the Company's stockholders;
3. Whether, following the business combination, the financial
condition of the business opportunity would be, or would have
a significant prospect in the foreseeable future of becoming
sufficient to enable the securities of the Company to qualify
for listing on an exchange or on a national automated
securities quotation system, such as NASDAQ, so as to permit
the trading of such securities to be exempt from the
requirements of Rule 15c2-6 recently adopted by the Securities
and Exchange Commission. See "Risk Factors - The
Company - Regulation of Penny Stocks."
4. Capital requirements and anticipated availability of required
funds, to be provided by the Company or from operations,
through the sale of additional securities, through joint ventures
or similar arrangements, or from other sources;
5. The extent to which the business opportunity can be advanced;
6. Competitive position as compared to other companies of
similar size and experience within the industry segment as
well as within the industry as a whole;
7. Strength and diversity of existing management, or management
prospects that are scheduled for recruitment;
8. The cost of participation by the Company as compared to the
perceived tangible and intangible values and potential; and
9. The accessibility of required management expertise, personnel,
raw materials, services, professional assistance, and other
required items.
In regard to the possibility that the shares of the Company
would qualify for listing on NASDAQ, the current standards include
the requirements that the issuer of the securities that are sought to be
listed have total assets of at least $4,000,000 and total capital and
surplus of at least $2,000,000, and proposals have recently been made
to increase these qualifying amounts. Many, and perhaps most, of the
business opportunities that might be potential candidates for a
combination with the Company would not satisfy the NASDAQ listing
criteria.
No one of the factors described above will be controlling in
the selection of a business opportunity, and management will attempt
to analyze all factors appropriate to each opportunity and make a
determination based upon reasonable investigative measures and
available data. Potentially available business opportunities may occur
in many different industries and at various stages of development, all
of which will make the task of comparative investigation and analysis
of such business opportunities extremely difficult and complex.
Potential investors must recognize that, because of the Company's
limited capital available for investigation and management's limited
experience in business analysis, the Company may not discover or
adequately evaluate adverse facts about the opportunity to be acquired.
The Company is unable to predict when it may participate in
a business opportunity. It expects, however, that the analysis of
specific proposals and the selection of a business opportunity may take
several months or more.
Prior to making a decision to participate in a business
opportunity, the Company will generally request that it be provided
with written materials regarding the business opportunity containing
such items as a description of products, services and company history;
management resumes; financial information; available projections, with
related assumptions upon which they are based; an explanation of
proprietary products and services; evidence of existing patents,
trademarks, or services marks, or rights thereto; present and proposed
forms of compensation to management; a description of transactions
between such company and its affiliates during relevant periods; a
description of present and required facilities; an analysis of risks and
competitive conditions; a financial plan of operation and estimated
capital requirements; audited financial statements, or if they are not
available, unaudited financial statements, together with reasonable
assurances that audited financial statements would be able to be
produced within a reasonable period of time not to exceed 60 days
following completion of a merger transaction; and other information
deemed relevant.
As part of the Company's investigation, the Company's
executive officer and director may meet personally with management
and key personnel, may visit and inspect material facilities, obtain
independent analysis or verification of certain information provided,
check references of management and key personnel, and take other
reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise. There will
be no loan agreements or understandings between the Company
and third parties, nor does the Company intend to raise any additional
operating capital by implementing private placements of restricted stock
and/or public offerings of its common stock.
It is possible that the range of business opportunities that
might be available for consideration by the Company could be limited
by the impact of Securities and Exchange Commission regulations
regarding purchase and sale of "penny stocks." The regulations would
affect, and possibly impair, any market that might develop in the
Company's securities until such time as they qualify for listing on
NASDAQ or on another exchange which would make them exempt
from applicability of the "penny stock" regulations. See "Risk Factors
- - - - - Regulation of Penny Stocks."
Company management believes that various types of potential
merger or acquisition candidates might find a business combination
with the Company to be attractive. These include acquisition
candidates desiring to create a public market for their shares in order
to enhance liquidity for current shareholders, acquisition candidates
which have long-term plans for raising capital through the public sale
of securities and believe that the possible prior existence of a public
market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of
development of a public market for their securities will be of
assistance in that process. Acquisition candidates which have a need
for an immediate cash infusion are not likely to find a potential
business combination with the Company to be an attractive alternative.
Form of Acquisition
It is impossible to predict the manner in which the Company
may participate in a business opportunity. Specific business
opportunities will be reviewed as well as the respective needs and
desires of the Company and the promoters of the opportunity and,
upon the basis of that review and the relative negotiating strength
of the Company and such promoters, the legal structure or method
deemed by management to be suitable will be selected. Such structure
may include, but is not limited to leases, purchase and sale
agreements, licenses, joint ventures and other contractual arrangements.
The Company may act directly or indirectly through an interest in a
partnership, corporation or other form of organization. Implementing
such structure may require the merger, consolidation or reorganization
of the Company with other corporations or forms of business
organization, and although it is likely, there is no assurance that the
Company would be the surviving entity. In addition, the present
management and stockholders of the Company most likely will not
have control of a majority of the voting shares of the Company
following a reorganization transaction. As part of such a transaction,
the Company's existing directors may resign and new directors may
be appointed without any vote by stockholders.
Depending on the nature of the business combination entered
into, it is possible that management will receive favorable terms
of exchange with the target company that will not be available to
other shareholders.
Management may actively negotiate or otherwise consent to the
purchase of any portion of their common shares as a condition to or
in connection with a proposed merger or acquisition transaction.
It is emphasized that management of the Company may effect
transactions having a potentially adverse impact upon the Company's
shareholders pursuant to the authority and discretion of the Company's
management to complete acquisitions without submitting any proposal
to the stockholders for their consideration. Holders of the Company's
securities should not anticipate that the Company necessarily will
furnish such holders, prior to any merger or acquisition, with financial
statements, or any other documentation, concerning a target company
or its business. In some instances, however, the proposed participation
in a business opportunity may be submitted to the stockholders for
their consideration, either voluntarily by such directors to seek the
stockholders' advice and consent or because state law so requires.
Existing shareholders of the company may suffer significant
dilution to their ownership percentage of the company, insofar as
the business combination entered into may involve the issuance of
a large number of authorized but unissued shares to the target
company. Also, depending on the nature of the business combination,
existing shareholders may incur taxable capital gains as a result
thereof.
It is likely that the Company will acquire its participation in
a business opportunity through the issuance of Common Stock or
other securities of the Company. Although the terms of any such
transaction cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or not an acquisition
is a so-called "tax free" reorganization under the Internal Revenue
Code of 1986, depends upon the issuance to the stockholders of the
acquired company of a controlling interest (i.e. 80% or more) of the
common stock of the combined entities immediately following the
reorganization. If a transaction were structured to take advantage of
these provisions rather than other "tax free" provisions provided under
the Internal Revenue Code, the Company's current stockholders would
retain in the aggregate 20% or less of the total issued and outstanding
shares. This could result in substantial additional dilution in the
equity of those who were stockholders of the Company prior to such
reorganization. Any such issuance of additional shares might also be
done simultaneously with a sale or transfer of shares representing a
controlling interest in the Company by the current officer, director
and principal shareholders. (See "Description of Business - General").
It is anticipated that any new securities issued in any
reorganization would be issued in reliance upon exemptions, if any are
available, from registration under applicable federal and state securities
laws. In some circumstances, however, as a negotiated element of the
transaction, the Company may agree to register such securities either
at the time the transaction is consummated, or under certain conditions
or at specified times thereafter. The issuance of substantial additional
securities and their potential sale into any trading market that might
develop in the Company's securities may have a depressive effect
upon such market.
Operating within the parameters of Rule 145 of the Securities Act
of 1933 (the "Act"), the Company may attempt to rely on any of the
following exemptions from registration under the Act:
1. Section 4(2) of the Act;
2. Section 4(6) of the Act;
3. Section 3(a)1/ Rule 147 of the Act;
4. Section 3(a)(10) of the Act;
5. Rule 504, Regulation D of the Act;
6. Rule 505, Regulation D of the Act; and
7. Rule 506, Regulation D of the Act.
The Company will participate in a business opportunity only
after the negotiation and execution of a written agreement. Although
the terms of such agreement cannot be predicted, generally such an
agreement would require specific representations and warranties by all
of the parties thereto, specify certain events of default, detail the terms
of closing and the conditions which must be satisfied by each of the
parties thereto prior to such closing, outline the manner of bearing
costs if the transaction is not closed, set forth remedies upon default,
and include miscellaneous other terms
As a general matter, the Company anticipates that it, and/or its
officer and principal shareholders will enter into a letter of intent
with the management, principals or owners of a prospective business
opportunity prior to signing a binding agreement. Such a letter of
intent will set forth the terms of the proposed acquisition but will not
bind any of the parties to consummate the transaction. Execution of
a letter of intent will by no means indicate that consummation of an
acquisition is probable. Neither the Company nor any of the other
parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the ac-
quisition as described in the preceding paragraph is executed. Even
after a definitive agreement is executed, it is possible that the
acquisition would not be consummated should any party elect to
exercise any right provided in the agreement to terminate it on
specified grounds.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for
accountants, attorneys and others. If a decision is made not to
participate in a specific business opportunity, the costs theretofore
incurred in the related investigation would not be recoverable.
Moreover, because many providers of goods and services require
compensation at the time or soon after the goods and services are
provided, the inability of the Company to pay until an indeterminate
future time may make it impossible to procure goods and services.
Investment Company Act and Other Regulation
The Company may participate in a business opportunity by
purchasing, trading or selling the securities of such business. The
Company does not, however, intend to engage primarily in such
activities. Specifically, the Company intends to conduct its activities
so as to avoid being classified as an "investment company" under the
Investment Company Act of 1940 (the "Investment Act"), and
therefore to avoid application of the costly and restrictive registration
and other provisions of the Investment Act, and the regulations
promulgated thereunder.
Section 3(a) of the Investment Act contains the definition of
an "investment company," and it excludes any entity that does not
engage primarily in the business of investing, reinvesting or trading in
securities, or that does not engage in the business of investing,
owning, holding or trading "investment securities" (defined as "all
securities other than government securities or securities of
majority-owned subsidiaries") the value of which exceeds 40% of the
value of its total assets (excluding government securities, cash or cash
items). The Company intends to implement its business plan in a
manner which will result in the availability of this exception from the
definition of "investment company." Consequently, the Company's
participation in a business or opportunity through the purchase and
sale of investment securities will be limited.
The Company's plan of business may involve changes in its
capital structure, management, control and business, especially if it
consummates a reorganization as discussed above. Each of these areas
is regulated by the Investment Act, in order to protect purchasers of
investment company securities. Since the Company will not register
as an investment company, stockholders will not be afforded these
protections.
The SEC, in a letter to the NASD has taken the position that in
some instances "both before and after the business combination or
transactions with an operating entity or other person, the promoters or
affiliates of blank check companies, as well as their transferees are
'underwriters' of the securities issued". If that determination were
made with regards to the Company and its shareholders, Rule 144
transactions might be precluded.
Any securities which the Company might acquire in exchange
for its Common Stock will be "restricted securities" within the
meaning of the Securities Act of 1933, as amended (the "Act"). If the
Company elects to resell such securities, such sale cannot proceed
unless a registration statement has been declared effective by the
Securities and Exchange Commission or an exemption from
registration is available. Section 4(1) of the Act, which exempts sales
of securities not involving a distribution, would in all likelihood be
available to permit a private sale. Although the plan of operation does
not contemplate resale of securities acquired, if such a sale were to be
necessary, the Company would be required to comply with the
provisions of the Act to effect such resale.
An acquisition made by the Company may be in an industry
which is regulated or licensed by federal, state or local authorities.
Compliance with such regulations can be expected to be a
time-consuming and expensive process.
Competition
The Company expects to encounter substantial competition in
its efforts to locate attractive opportunities, primarily from business
development companies, venture capital partnerships and corporations,
venture capital affiliates of large industrial and financial companies,
small investment companies, and wealthy individuals. Many of these
entities will have significantly greater experience, resources and
managerial capabilities than the Company and will therefore be in a
better position than the Company to obtain access to attractive
business opportunities. The Company also will experience competition
from other public "blind pool" companies, many of which may have
more funds available than does the Company.
Administrative Offices
The Company currently maintains a mailing address at 2208 Pershing
Avenue, Sheboygan, Wisconsin 53083, which is the office address of its
legal counsel. The Company's telephone number is (920)-207-7772. Other
than this mailing address, the Company does not currently maintain any
other office facilities, and does not anticipate the need for
maintaining office facilities at any time in the foreseeable future.
The Company pays no rent or other fees for the use of this mailing
address.
Employees
The Company is a development stage company and currently has no
employees. Management of the Company expects to use consultants,
attorneys and accountants as necessary, and does not anticipate a need
to engage any full-time employees so long as it isseeking and evaluating
business opportunities. The need for employees and their availability will
be addressed in connection with thedecision whether or not to acquire or
participate in specific business opportunities. Although there is no current
plan with respect to its benefit of, the Company's officer prior to, or in
conjunction with, the completion of a business acquisition. The Company's
officer has accepted common stock for services rendered for consulting,
organizing the corporation, seeking merger candidates and evaluating these
candidates. See "Executive Compensation" and under "Certain Relationships
and Related Transactions."
ITEM 1A. RISK FACTORS
1. The majority control by the Company's Principal Shareholders, Officers
and Directors may negatively impact the operation of the Company.
The Company's principal shareholders, officers and directors will beneficially
own ninety-three percent (93%) of the Company's Common Stock. As a
result, such persons will have the ability to control the Company and direct
its affairs and business. Such concentration of ownership may also have the
effect of delaying, deferring or preventing change in control of the Company.
See "Principal Stockholders."
2. Conflicts of interest between the Company and its officer and director
may impede the operational ability of the Company.
Certain conflicts of interest exist between the Company and its officer and
director. He has other business interests to which he devotes his
attention, and he may be expected to continue to do so although management
time should be devoted to the business of the Company. As a result, conflicts
of interest may arise that can be resolved only through his exercise of such
judgment as is consistent with his fiduciary duties to the Company. See
"Management," and "Conflicts of Interest."
The Company's President and all current shareholders own all of the issued
and outstanding stock of one (1) additional corporation (Kohler
Capital IV) which is a shell company formed May 7, 2001.
(See "Item 5. Directors, Executive Officers, Promoters, and Control Persons-
- --Other Blind Pool Activities.") Thus, the Company may be in competition with
Kohler Capital IV in seeking merger candidates.
The Company's Director may also elect, in the future, to form one or more
additional public shell companies with a business plan similar or identical to
that of the Company. Any such additional shell companies would also be in
direct competition with the Company for available business opportunities.
(See Item 5 - "Directors, Executive Officers, Promoters and Control Persons-
Conflicts of Interest.")
It is anticipated that Company's President may actively negotiate or
otherwise consent to the purchase of a portion of his common stock as a
condition to, or in connection with, a proposed merger or acquisition
transaction. In this process, the Company's President may consider his own
personal pecuniary benefit rather than the best interests of other Company
shareholders, and the other Company shareholders are not expected to be
afforded the opportunity to approve or consent to any particular stock
buy-out transaction. See "Conflicts of Interest."
3. The possible need for additional financing may impair the Company's
ability to locate the best available business opportunity.
The Company has very limited funds, and such funds may not be adequate to take
advantage of any available business opportunities. Even if the Company's funds
prove to be sufficient to acquire an interest in, or complete a transaction
with, a business opportunity, the Company may not have enough capital to exploit
the opportunity. The ultimate success of the Company may depend upon its
ability to raise additional capital. The Company has not investigated the
availability, source, or terms that might govern the acquisition of additional
capital and will not do so until it determines a need for additional financing.
If additional capital is needed, there is no assurance that funds will be
available from any source or, if available, that they can be obtained on terms
acceptable to the Company. If not available, the Company's operations will be
limited to those that can be financed with its modest capital.
4. The regulation of Penny Stocks may negatively impact the potential
trading market for the Company's securities. The Company's securities, when
available for trading, will be subject to a Securities and Exchange
Commission rule that imposes special sales practice requirements upon
broker-dealers who sell such securities to persons other than established
customers or accredited investors. For purposes of the rule, the phrase
"accredited investors" means, in general terms, institutions with assets in
excess of $5,000,000, or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or that, when combined with
a spouse's income, exceeds $300,000). For transactions covered by the rule,
the broker-dealer must make a special suitability determination for the
purchaser and receive the purchaser's written agreement to the transaction
prior to the sale. Consequently, the rule may affect the ability of broker-
dealers to sell the Company's securities and also may affect the ability of
purchasers in this offering to sell their securities in any market that might
develop therefor.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1,
15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and 15g-7 under the Securities Exchange Act
of 1934, as amended. Because the securities of the Company may constitute
"penny stocks" within the meaning of the rules, the rules would apply to the
Company and to its securities. The rules may further affect the ability of
owners of Shares to sell the securities of the Company in any market that
might develop for them.
Shareholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse.
Such patterns include (i) control of the market for the security by one or a
few broker-dealers that are often related to the promoter or issuer; (ii)
manipulation of prices through prearranged matching of purchases and sales and
false and misleading press releases; (iii) "boiler room" practices involving
high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (iv) excessive and undisclosed bid-ask differentials and
markups by selling broker-dealers; and (v) the wholesale dumping of the same
securities by promoters and broker-dealers after prices have been manipulated
to a desired level, along with the resulting inevitable collapse of those
prices and with consequent investor losses.
5. The Company's limited operating history may severely impact its
ability to operate and locate the best available business opportunity.
The Company was formed in May of 2001 for the purpose of registering its
common stock under the 1934 Act and acquiring a business opportunity. The
Company has no operating history, revenues from operations, or assets other
than cash from private sales of stock. The Company faces all of the risks of
a new business and the special risks inherent in the investigation, acquisition,
or involvement in a new business opportunity. The Company must be regarded as
a new or "start-up" venture with all of the unforeseen costs, expenses,
problems, and difficulties to which such ventures are subject.
6. There can be no assurance of the Company's potential success or
profitability.
There is no assurance that the Company will acquire a favorable business
opportunity. Even if the Company should become involved in a business
opportunity, there is no assurance that it will generate revenues or profits,
or that the market price of the Company's Common Stock will be increased
thereby.
7. Reporting Requirements May Delay Or Preclude Acquisition.
Section 13 of the Securities Exchange Act of 1934 (the "Exchange Act"),
requires companies subject thereto to provide certain information about
significant acquisitions, including certified financial statements for the
company acquired, covering one or two years, depending on the relative size of
the acquisition. The time and additional costs that may be incurred by some
target entities to prepare such statements may significantly delay or
essentially preclude consummation of an otherwise desirable acquisition by the
Company. Acquisition prospects that do not have or are unable to obtain the
required audited statements may not be appropriate for acquisition so long as
the reporting requirements of the 1934 Act are applicable.
8. The Company lacks market research and marketing organization.
The Company has neither conducted, nor have others made available to it,
results of market research indicating that market demand exists for the
transactions contemplated by the Company. Moreover, the Company does not
have, and does not plan to establish, a marketing organization. Even in the
event demand is identified for a merger or acquisition contemplated by the
Company, there is no assurance the Company will be successful in completing
any such business combination.
9. The Company's potential business opportunity -
Has not been identified and will be highly risky
The Company has not identified and has no commitments to enter into or acquire
a specific business opportunity and therefore can disclose the risks and
hazards of a business or opportunity that it may enter into in only a general
manner, and cannot disclose the risks and hazards of any specific business or
opportunity that it may enter into. An investor can expect a potential
business opportunity to be quite risky. The Company's acquisition of or
participation in a business opportunity will likely be highly illiquid and
could result in a total loss to the Company and its stockholders if the business
or opportunity proves to be unsuccessful. See Item 1 "Description of
Business."
10. The type of business acquired may be unprofitable or present other
negative factors.
The type of business to be acquired may be one that desires to avoid effecting
its own public offering and the accompanying expense, delays, uncertainties,
and federal and state requirements which purport to protect investors. Because
of the Company's limited capital, it is more likely than
not that any acquisition by the Company will involve other parties whose
primary interest is the acquisition of control of a publicly traded company.
Moreover, any business opportunity acquired may be currently unprofitable or
present other negative factors.
11. The Company may not be able to conduct an exhaustive investigation
and analysis of potential business opportunities.
The Company's limited funds and the lack of full-time management will likely
make it impracticable to conduct a complete and exhaustive investigation and
analysis of a business opportunity before the Company commits its capital or
other resources thereto. Management decisions, therefore, will likely be made
without detailed feasibility studies, independent analysis, market surveys and
the like which, if the Company had more funds available to it, would be
desirable. The Company will be particularly dependent in making decisions
upon information provided by the promoter, owner, sponsor, or others associated
with the business opportunity seeking the Company's participation.
A significant portion of the Company's available funds may be expended for
investigative expenses and other expenses related to preliminary aspects of
completing an acquisition transaction, whether or not any business opportunity
investigated is eventually acquired.
12. The Company may lack diversification.
Because of the limited financial resources that the Company has, it is
unlikely that the Company will be able to diversify its acquisitions or
operations. The Company's probable inability to diversify its activities into
more than one area will subject the Company to economic fluctuations within a
particular business or industry and therefore increase the risks associated
with the Company's operations.
13. The Company may have to rely upon unaudited financial statements of
a potential business opportunity.
The Company generally will require audited financial statements from companies
that it proposes to acquire. No assurance can be given, however, that audited
financials will be available to the Company. In cases where audited financials
are unavailable, the Company will have to rely upon unaudited information
received from target companies' management that has not been audited by outside
auditors. The lack of the type of independent verification which audited
financial statements would provide, increases the risk that the Company, in
evaluating an acquisition with such a target company, will not have the benefit
of full and accurate information about the financial condition and operating
history of the target company. This risk increases the prospect that the
acquisition of such a company might prove to be an unfavorable one for the
Company or the holders of the Company's securities.
Moreover, the Company will be subject to the reporting provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and thus
will be required to furnish certain information about significant acquisitions,
including audited financial statements for any business that it acquires.
Consequently, acquisition prospects that do not have, or are unable to provide
reasonable assurances that they will be able to obtain, the required audited
statements would not be considered by the Company to be appropriate for
acquisition so long as the reporting requirements of the Exchange Act are
applicable. Should the Company, during the time it remain
subject to the reporting provisions of the Exchange Act, complete an acquisition
of an entity for which audited financial statements prove to be unobtainable,
the Company would be exposed to enforcement actions by the Securities and
Exchange Commission (the "Commission") and to corresponding administrative
sanctions, including permanent injunctions against the Company and its
management. The legal and other costs of defending a Commission enforcement
action are likely to have material, adverse consequences for the Company and
its business. The imposition of administrative sanctions would subject the
Company to further adverse consequences.
In addition, the lack of audited financial statements would prevent the
securities of the Company from becoming eligible for listing on NASDAQ, the
automated quotation system sponsored by the National Association of Securities
Dealers, Inc., or on any existing stock exchange. Moreover, the lack of such
financial statements is likely to discourage broker-dealers from becoming or
continuing to serve as market makers in the securities of the Company. Without
audited financial statements, the Company would almost certainly be unable to
offer securities under a registration statement pursuant to the Securities Act
of 1933, and the ability of the Company to raise capital would be significantly
limited until such financial statements were to become available.
14. Government, State or Local regulations may limit the Company's
business opportunities.
An acquisition made by the Company may be of a business that is subject to
regulation or licensing by federal, state, or local authorities. Compliance
with such regulations and licensing can be expected to be a time-consuming,
expensive process and may limit other investment opportunities of the
Company.
15. There will be a limited participation by Management in the daily
operations of the Company.
The Company currently has one individual who is serving as its sole
officer and director. The Company will be heavily dependent upon his
skills, talents, and abilities to implement its business plan, and may, from
time to time, find that the inability of the officer and director to devote
his full time attention to the business of the Company results in a delay in
progress toward implementing its business plan. Furthermore, since only one
individual is serving as the officer and director of the Company, it will
be entirely dependent upon his experience in seeking, investigating, and
acquiring a business and in making decisions regarding the Company's operations.
See "Management." Because investors will not be able to evaluate the merits of
possible business acquisitions by the Company, they should critically assess
the information concerning the Company's officer and director.
16. There is a lack of continuity in the Management of the Company.
The Company does not have an employment agreement with its officer and
director, and as a result, there is no assurance that he will continue to
manage the Company in the future. In connection with acquisition of a
business opportunity, it is likely the current officer and director of the
Company may resign. A decision to resign will be based upon the identity of
the business opportunity and the nature of the transaction, and is likely to
occur without the vote or consent of the stockholders of the Company.
17. The Company's required indemnification of its Officers and Directors
may negatively impact its operation.
The Company's Articles of Incorporation provide for the indemnification of its
directors, officers, employees, and agents, under certain circumstances,
against attorney's fees and other expenses incurred by them in any litigation
to which they become a party arising from their association with or activities
on behalf of the Company. The Company will also bear the expenses of such
litigation for any of its directors, officers, employees, or agents, upon such
person's promise to repay the Company therefor if it is ultimately determined
that any such person shall not have been entitled to indemnification. This
indemnification policy could result in substantial expenditures by the Company
which it will be unable to recoup.
18. The Company's Directors have potentially limited liability.
The Company's Articles of Incorporation exclude personal liability of its
directors to the Company and its stockholders for monetary damages for breach
of fiduciary duty except in certain specified circumstances. Accordingly, the
Company will have a much more limited right of action against its directors
than otherwise would be the case. This provision does not affect the
liability of any director under federal or applicable state securities laws.
19. The Company may have to depend upon Outside Advisors.
To supplement the business experience of its officer and director, the
Company may be required to employ accountants, technical experts, appraisers,
attorneys, or other consultants or advisors. The selection of any such
advisors will be made by the Company's President without any input from
stockholders. Furthermore, it is anticipated that such persons may be engaged
on an "as needed" basis without a continuing fiduciary or other obligation to
the Company.
20. The Company may engage in a highly risky leveraged transaction.
There is a possibility that any acquisition of a business opportunity by the
Company may be leveraged, i.e., the Company may finance the acquisition of the
business opportunity by borrowing against the assets of the business opportunity
to be acquired, or against the projected future revenues or profits of the
business opportunity. This could increase the Company's exposure to larger
losses. A business opportunity acquired through a leveraged transaction is
profitable only if it generates enough revenues to cover the related debt and
expenses. Failure to make payments on the debt incurred to purchase the
business opportunity could result in the loss of a portion or all of the assets
acquired. There is no assurance that any business opportunity acquired through
a leveraged transaction will generate sufficient revenues to cover the related
debt and expenses.
21. Significant competition may impair the Company's ability to locate
the best available business opportunity.
The search for potentially profitable business opportunities is intensely
competitive. The Company expects to be at a disadvantage when competing with
many firms that have substantially greater financial and management resources
and capabilities than the Company. These competitive conditions will exist in
any industry in which the Company may become interested.
22. There are no foreseeable dividends for the Company's shareholders.
The Company has not paid dividends on its Common Stock and does not anticipate
paying such dividends in the foreseeable future.
23. The Company's present Management and Stockholders may lose control.
The Company may consider an acquisition in which the Company would issue as
consideration for the business opportunity to be acquired an amount of the
Company's authorized but unissued Common Stock that would, upon issuance,
represent the great majority of the voting power and equity of the Company.
The result of such an acquisition would be that the acquired company's
stockholders and management would control the Company, and the Company's
management could be replaced by persons unknown at this time. Such a merger
would result in a greatly reduced percentage of ownership of the Company by
its current shareholders. In addition, the Company's President could sell
his control block of stock at a premium price to the acquired company's
stockholders.
24. There is no public trading market for the Company's common stock.
There is no public market for the Company's common stock, and no assurance can
be given that a market will develop or that a shareholder ever will be able to
liquidate his investment without considerable delay, if at all. If a market
should develop, the price may be highly volatile. Factors such as those
discussed in this "Risk Factors" section may have a significant impact upon
the market price of the securities offered hereby. Owing to the low price of
the securities, many brokerage firms may not be willing to effect transactions
in the securities. Even if a purchaser finds a broker willing to effect a
transaction in these securities, the combination of brokerage commissions,
state transfer taxes, if any, and any other selling costs may exceed the
selling price. Further, many lending institutions will not permit the use of
such securities as collateral for any loans.
25. Affiliates and their successors/assigns may have exposure and risk
if re-selling securities pursuant to Rule 144.
All of the outstanding shares of Common Stock held by present stockholders are
"restricted securities" within the meaning of Rule 144 under the Securities
Act of 1933, as amended.
As restricted shares, these shares may be resold only pursuant to an effective
registration statement or under the requirements of Rule 144 or other
applicable exemptions from registration under the Act and as required under
applicable state securities laws. Rule 144 provides in essence that a person
who has held restricted securities for a prescribed period may, under certain
conditions, sell every three months, in brokerage transactions, a number of
shares that does not exceed the greater of 1.0% of a company's outstanding
common stock or the average weekly trading volume during the four calendar
weeks prior to the sale. As a result of revisions to Rule 144 which became
effective on or about April 29, 1997, there will be no limit on the amount of
restricted securities that may be sold by a nonaffiliate after the restricted
securities have been held by the owner for a period of two years. A sale
under Rule 144 or under any other exemption from the Act, if available, or
pursuant to subsequent registrations of shares of Common Stock of present
stockholders, may have a depressive effect upon the price of the Common Stock
in any market that may develop.
Of the total 2,000,000 shares of common stock held by present stockholders of
the Company, 2,000,000 shares were issued pursuant to Rule 701, and may become
available for re-sale under Rule 144 at some time after the filing of an
effective registration statement by the Company. However,
recent correspondence directed from the Commission to the NASD suggests that
Rule 144 sales by affiliates or their successors/assigns will generally not
be afforded an opportunity to rely on Rule 144 for "safe harbor" re-selling
under such rule and will most likely only be able to transfer such securities
pursuant to an effective registration statement filed under the Securities
Act of 1933 (the "Act"). Specifically, the S.E.C., in a January 21, 2000,
letter to Mr. Ken Worm of the NASD, has expressed the view that promoters
and affiliates of blank-check companies are "underwriters", within the
meaning of the '33 Act. Accordingly, securities acquired by non-affiliates
from the promoters or affiliates of the Company could not be resold prior to
registration under the Act.
26. Blue Sky considerations may negatively impact the Company's ability
to sell or transfer its securities or to establish secondary trading
markets.
Because the securities registered hereunder have not been registered for
resale under the blue sky laws of any state, the holders of such shares and
persons who desire to purchase them in any trading market that might develop
in the future, should be aware that there may be significant state blue-sky law
restrictions upon the ability of investors to sell the securities and of
purchasers to purchase the securities. Some jurisdictions may not
under any circumstances allow the trading or resale of blind-pool or "blank-
check" securities. Accordingly, investors should consider the secondary market
for the Company's securities to be a limited one.
27. Existing shareholders are likely to experience significant dilution of
their ownership percentage, in any business combination in which the
Company may enter into.
Insofar as a business combination involving the Company will likely entail
the issuance of authorized, but currently unissued, shares of the Company's
common stock, existing shareholders may find their equity position
significantly diluted. Any business combination involving the Company is
likely to include the issuance of additional shares of the Company's common
stock to the shareholders of the target company, in exchange for an equity
position in the surviving entity for existing shareholders of the Company.
The equity percentage held by shareholders in the surviving entity will
likely be considerably lower than that held in the Company presently.
28. Any business combination entered into by the Company could result in a
taxable gain to current shareholders of the Company's stock.
A business combination entered into by the Company could likely result in
a taxable event to existing shareholders of the Company's common stock.
In the event that current shareholders of the Company's common stock
receive consideration for their shares above the value of their original
investment, in a business combinaiton entered into by the Company, they
will incur a taxable gain.
29. Certain adverse effects on the Company could result from a determination
by the S.E.C. that the Company is subject to the regulatory provisions
of the Investment Company Act of 1940.
A determination by the S.E.C. that the Compnay is an "investment company",
could impose especially onerous reporting and other requirements upon the
Company's management, which could seriously impede the Company's ability
to enter into a business combination with another company, given the
relatively limited resources of the Company at the present time. It should
be noted that management strongly believes that the Company does not qualify
as an "investment company", as that term is defined in the 1940 Act.
The Investment Company Act also places certain restrictions on our ability
to take certain actions. We may not alter or change our corporate objectives,
strategies or policies such that we cease to be a "blank check" company.
We would also be prohibited by the Investment Company Act from knowingly
participating in a joint transaction, including a co-investment with an
affiliated person, including any of our directors, or any entity managed or
advised by any of them.
The following table documents the current involvement of Gerard Werner
with each shell company (please see Item 2 below for elaboration):
KOHLER CAPITAL
GLOBAL GREEN
HOLDINGS, LIMITED KC III, Inc. KC IV, Inc.
Gerard Werner's President President President
Titles Director Director Director
Gerard Werner's 97.71% 20.00% 20.00%
Equity percentage
Filing Type 10-12G 10-12G undetermined
Percentage time minimal minimal minimal
Devoted to the
Company
The Company's President may form Janka Capital I, Inc., which is a shell
company with the same capital structure and business plan as Kohler
Capital IV, and the Company. He may also elect, in the future,
to form one or more additional public shell companies with a business plan
similar or identical to that of the Company. Any such additional shell
companies would also be in direct competition with the Company for
available business opportunities. (See Item 5 - "Directors, Executive
Officers, Promoters and Control Persons - Conflicts of Interest.")
The Company's President was previously a Director and Vice-President of Oak
Brook Capital I, II, III, and IV, as well as North Shore Capital III and IV,
and Kohler Capital I and II, blank-check companies with similar capital
structures as the Company. As of this date, he has resigned his positions
as an officer and director with Oak Brook Capital I, II, III, and IV, North
Shore Capital III and IV, and Kohler Capital I and II, Corporation, each
having consummated a business combination with an operating entity. Mr.
Werner retained between 1.5% and 2.0% equity in the surviving companies, which
are now known as AEI Environmental, America's Power Partners, PVAXX
Corporation, Vertical Jet, Inc., Gridline Communications, Expleo
Solutions, Inc., and All-American Care Centers, Inc., respectively.
Shareholders have certain rights with regards to the Company's management,
in the event of breaches of certain obligations including loyalty and
the misappropriation of a corporate opportunity. Shareholders may
seek remedies under several provisions of the 1933 and 1934 acts.
Sections 11 and 12 of the '33 Act help safeguard investors against
materially false statements in Registration Statements (section 11);
and against materially false statements in prospectuses and other
communications (section 12). Remedies available under these sections
include the reimbursement to the investor, by the company, of the
consideration paid for the security minus any gain received thereupon.
Investors are also protected by section 10(b) of the '34 Act, which
proscribes manipulative or deceptive practices in connection with the
purchase or sale of a security; and by section 14(e) of the '34 Act,
which proscribes material misstatements in connection with proxies. As
many states, including Florida, have securities laws modeled after
the '33 and '34 Acts, remedies may be available under state law as well.
In any case, lawsuits under section 11 of the '33 Act may be brought "at
law or in equity, in any court of competent jurisdiction".
It is anticipated that the Company's President may actively negotiate or
otherwise consent to the purchase of a portion of his common stock as a
condition to, or in connection with, a proposed merger or acquisition
transaction. In this process, the Company's President and may consider
his own personal pecuniary benefit rather than the best interests of other
Company shareholders, and the other Company shareholders are not expected to
be afforded the opportunity to approve or consent to any particular stock
buy-out transaction.
..
.
ITEM 2. FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS.
General
The Registrant intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues, in exchange for its
securities. The Registrant has no particular acquisitions in mind and has not
entered into any negotiations regarding such an acquisition. None of the
Company's officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any other
company regarding the possibility of an acquisition or merger between the
Company and such other company as of the date of this registration statement.
While the Company will attempt to obtain audited financial statements of
a target entity, there is no assurance that such audited financial statements
will be available. The Board of Directors does intend to obtain certain
assurances of value of the target entity's assets prior to consummating such a
transaction, with further assurances that an audited statement would be
provided within seventy-five days after closing of such a transaction.
Closing documents relative thereto will include representations that the value
of the assets conveyed to or otherwise so transferred will not materially
differ from the representations included in such closing documents.
The Company is filing this registration statement on a voluntary basis
because the primary attraction of the Registrant as a merger partner or
acquisition vehicle will be its status as an SEC reporting company. Any
business combination or transaction will likely result in a significant
issuance of shares and substantial dilution to present stockholders of the
Registrant.
The Company has, and will continue to have, little capital with which to
provide the owners of business opportunities with any significant cash or
other assets. However, management believes the Company will be able to offer
owners of acquisition candidates the opportunity to acquire a controlling
ownership interest in a publicly registered company without incurring the cost
and time required to conduct an initial public offering. The owners of the
business opportunities will, however, incur significant legal and accounting
costs in connection with the acquisition of a business opportunity, including
the costs of preparing Form 8-K's, 10-K's or 10-KSB's, agreements and related
reports and documents. The Securities Exchange Act of 1934 (the "34 Act"),
specifically requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited financial
statements to be included within the numerous filings relevant to complying
with the 34 Act. Nevertheless, the officer and director of the Company has
not conducted market research and is not aware of statistical data which
would support the perceived benefits of a merger or acquisition transaction
for the owners of a business opportunity.
As stated hereinabove, the Company will not acquire or merge with any
entity which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction. The
Company is subject to all of the reporting requirements included in the 34
Act. Included in these requirements is the affirmative duty of the Company to
file independent audited financial statements as part of its Form 8-K to be
filed with the Securities and Exchange Commission upon consummation of a
merger or acquisition, as well as the Company's audited financial statements
included in its annual report on Form 10-K (or 10-KSB, as applicable). If
such audited financial statements are not available at closing, or within time
parameters necessary to insure the Company's compliance with the requirements
of the 34 Act, or if the audited financial statements provided do not conform
to the representations made by the candidate to be acquired in the closing
documents, the closing documents may provide that the proposed transaction
will be voidable, at the discretion of the present management of the Company.
The Company's officer and shareholders have verbally agreed that they
will advance to the Company certain additional funds which the Company needs
for operating capital and for costs in connection with searching for or
completing an acquisition or merger. These will primarily consist of
services rendered by the Company's president, specifically S.E.C. compliance
and the due diligence required as a condition precedent to any business
combination. These persons have also agreed that such advances will be made
interest free without expectation of repayment unless the owners of the
business which the Company acquires or merges with agree to repay all or a
portion of such advances. Such repayment will in no way be a condition to
the selection of a target company. The Company will not borrow any funds
from anyone other than its current shareholders for the purpose of repaying
advances made by the shareholders, and the Company will not borrow any funds
to make any payments to the Company's promoters, management or their
affiliates or associates.
Liquidity and Capital Resources
The Company remains in the development stage and, since
inception, has experienced no significant change in liquidity or capital
resources or stockholder's equity. The Company's balance sheet as of
June 30, 2010, reflects a current asset value of $0, and a
total asset value of $0.
The Company will carry out its plan of business as discussed
above. The Company cannot predict to what extent its liquidity and
capital resources will be diminished prior to the consummation of a
business combination or whether its capital will be further depleted by
the operating losses (if any) of the business entity which the Company
may eventually acquire.
Results of Operations
During the period from May 7, 2001 (inception) through
June 30, 2010, the Company has engaged in no significant
operations other than organizational activities, acquisition of capital
and preparation for registration of its securities under the Securities
Exchange Act of 1934, as amended. No revenues were received by
the Company during this period.
For the current fiscal year, the Company anticipates incurring
a loss as a result of organizational expenses, expenses associated with
registration under the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition candidates. The
Company anticipates that until a business combination is completed
with an acquisition candidate, it will not generate revenues other than
interest income, and may continue to operate at a loss after completing
a business combination, depending upon the performance of the
acquired business.
Basis of Reporting
The Company's financial statements are presented on a going concern basis,
which contemplates the realization of assets and satisfaction of liabilities
in the normal course of business.
The Company has experienced a loss from operations as a result of its
investment necessary to achieve its operating plan, which is long-range
in nature. The Company incurred net losses from inception to June 30, 2010,
aggregating $11,250, has no revenue generating operations and is in the
development stage.
The Company's ability to continue as a going concern is contingent upon its
ability to secure additional financing, increase ownership equity and develop
profitable operations. In addition, the Company's ability to continue as a
going concern must be considered in light of the problems, expenses and
complications frequently encountered by entrance into established markets
and the competitive environment in which the Company operates.
The Company is pursuing financing for its operations and seeking additional
private investments. In addition, the Company is seeking to find a merger
candidate. Failure to secure such financing or to raise additional equity
capital or to locate a merger candidate may result in the Company having to
discontinue its operations.
The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets
or the amounts and classification of liabilities that may result from the
possible inability of the Company to continue as a going concern.
Need for Additional Financing
The Company believes that its existing capital will be
sufficient to meet the Company's cash needs, including the costs of
compliance with the continuing reporting requirements of the
Securities Exchange Act of 1934, as amended, for a period of
approximately one year. Accordingly, in the event the Company is
able to complete a business combination during this period, it
anticipates that its existing capital will be sufficient to allow it to
accomplish the goal of completing a business combination. There is
no assurance, however, that the available funds will ultimately prove
to be adequate to allow it to complete a business combination, and
once a business combination is completed, the Company's needs for
additional financing are likely to increase substantially.
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109") issued by the Financial Accounting Standards Board ("FASB"), under which
deferred tax assets and liabilities are provided on differences between the
carrying amounts for financial reporting and the tax basis of assets and
liabilities for income tax purposes using the enacted tax rates.
Under SFAS 109, deferred tax assets may be recognized for temporary
differences that will result in deductible amounts in future periods. A
valuation allowance is recognized, if on the weight of available evidence, it
is more likely than not that some portion or all of the deferred tax asset
will not be realized.
NEW ACCOUNTING PRONOUNCEMENTS
Accounting Standards Codification
In June 2009, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 168, The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles (the Codification).
This standard replaces SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles, and establishes only two levels of U.S. generally
accepted accounting principles (GAAP), authoritative and nonauthoritative.
The FASB ASC has become the source of authoritative, nongovernmental GAAP,
except for rules and interpretive releases of the SEC, which are sources of
authoritative GAAP for SEC registrants. All other nongrandfathered, non-SEC
accounting literature not included in the Codification will become
nonauthoritative. This standard is effective for financial statements for
interim or annual reporting periods ending after September 15, 2009. The
adoption of the Codification changed the Company's references to GAAP
accounting standards but did not impact the Company's results of operations,
financial position or liquidity.
Participating Securities Granted in Share-Based Transactions
Effective January 1, 2009, the Company adopted a new accounting standard
included in ASC 260, Earnings Per Share (formerly FASB Staff Position (FSP)
Emerging Issues Task Force (EITF) 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities).
The new guidance clarifies that non-vested share-based payment awards that
entitle their holders to receive nonforfeitable dividends or dividend
equivalents before vesting should be considered participating securities and
included in basic earnings per share. The Company's adoption of the new
accounting standard did not have a material effect on previously issued or
current earnings per share.
Business Combinations and Noncontrolling Interests
Effective January 1, 2009, the Company adopted a new accounting standard
included in ASC 805, Business Combinations (formerly SFAS No. 141(R),
Business Combinations). The new standard applies to all transactions or
other events in which an entity obtains control of one or more businesses.
Additionally, the new standard requires the acquiring entity in a business
combination to recognize all (and only) the assets acquired and liabilities
assumed in the transaction; establishes the acquisition-date fair value as the
measurement date for all assets acquired and liabilities assumed; and requires
the acquirer to disclose additional information needed to evaluate and
understand the nature and financial effect of the business combination. The
Company's adoption of the new accounting standard did not have a material
effect on the Company's consolidated financial statements.
Fair Value Measurement and Disclosure
Effective January 1, 2009, the Company adopted a new accounting standard
included in ASC 820, Fair Value Measurements and Disclosures (ASC 820)
(formerly FASB FSP No 157-2, Effective Date of FASB Statement No. 157), which
delayed the effective date for disclosing all non-financial assets and non-
financial liabilities, except for items that are recognized or disclosed at
fair value on a recurring basis (at least annually). This standard did not
have a material impact on the Company's consolidated financial statements. In
April 2009, the FASB issued new guidance for determining when a transaction
is not orderly and for estimating fair value when there has been a significant
decrease in the volume and level of activity for an asset or liability. The
new guidance, which is now part of ASC 820 (formerly FSP 157-4, Determining
Fair Value When the Volume and Level of Activity for the Asset or Liability
Have Significantly Decreased and Identifying Transactions That Are Not
Orderly), requires disclosure of the inputs and valuation techniques used, as
well as any changes in valuation techniques and inputs used during the period,
to measure fair value in interim and annual periods. In addition, the
presentation of the fair value hierarchy is required to be presented by major
security type as described in ASC 320, Investments - Debt and Equity
Securities. The provisions of the new standard were effective for interim
periods ending after June 15, 2009. The adoption of the new standard on
April 1, 2009 did not have a material on the Company's consolidated financial
statements.
In April 2009, the Company adopted a new accounting standard included in
ASC 820, (formerly FSP 107-1 and Accounting Principles Board (APB) 28-1,
Interim Disclosures about Fair Value of Financial Instruments). The new
standard requires disclosures of the fair value of financial instruments
for interim reporting periods of publicly traded companies in addition to
the annual disclosure required at year-end. The provisions of the new standard
were effective for the interim periods ending after June 15, 2009. The
Company's adoption of this new accounting standard did not have a material
effect on the Company's consolidated financial statements.
In August 2009, the FASB issued new guidance relating to the accounting for the
fair value measurement of liabilities. The new guidance, which is now part of
ASC 820, provides clarification that in certain circumstances in which a quoted
price in an active market for the identical liability is not available, a
company is required to measure fair value using one or more of the following
valuation techniques: the quoted price of the identical liability when traded
as an asset, the quoted prices for similar liabilities or similar liabilities
when traded as assets, or another valuation technique that is consistent with
the principles of fair value measurements. The new guidance clarifies that a
company is not required to include an adjustment for restrictions that prevent
the transfer of the liability and if an adjustment is applied to the quoted
price used in a valuation technique, the result is a Level 2 or 3 fair value
measurement. The new guidance is effective for interim and annual periods
beginning after August 27, 2009. The Company's adoption of the new guidance
did not have a material effect on the Company's consolidated financial
statements Derivative Instruments and Hedging Activities Effective January 1,
2009, the Company adopted a new accounting standard included in ASC 815,
Derivatives and Hedging (SFAS No. 161, Disclosures about Derivative Instruments
and Hedging Activities, an amendment of SFAS No.133). The new accounting
standard requires enhanced disclosures about an entity's derivative and hedging
activities and is effective for fiscal years and interim periods beginning
after November 15, 2008. Since the new accounting standard only required
additional disclosure, the adoption did not impact the Company's consolidated
financial statements.
Other-Than-Temporary Impairments
In April 2009, the FASB issued new guidance for the accounting for other-than-
temporary impairments. Under the new guidance, which is part of ASC 320,
Investments Debt and Equity Securities (formerly FSP 115-2 and 124-2,
Recognition and Presentation of Other-Than-Temporary Impairments), and other-
than-temporary impairment is recognized when an entity has the intent to sell
a debt security or when it is more likely than not that an entity will be
required to sell the debt security before its anticipated recovery in value.
The new guidance does not amend existing recognition and measurement guidance
related to other-than-temporary impairments of equity securities and is
effective for interim and annual reporting periods ending after June 15, 2009.
The Company's adoption of the new guidance did not have a material effect on
the Company's consolidated financial statements.
Subsequent Events
In May 2009, the FASB issued new guidance for subsequent events. The new
guidance, which is part of ASC 855, Subsequent Events (formerly SFAS
No. 165, Subsequent Events) is intended to establish general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued.
Specifically, this guidance sets forth the period after the balance sheet date
during which management of a reporting entity should evaluate events or
transactions that may occur for potential recognition or disclosure in the
financial statements, the circumstances under which an entity should recognize
events or transactions occurring after the balance sheet date in its financial
statements, and the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date. The new guidance is
effective for fiscal years and interim periods ended after June 15, 2009 and
will be applied prospectively. The Company's adoption of the new guidance did
not have a material effect on the Company's consolidated financial statements.
Accounting for the Transfers of Financial Assets
In June 2009, the FASB issued new guidance relating to the accounting for
transfers of financial assets. The new guidance, which was issued as SFAS
No. 166, Accounting for Transfers of Financial Assets, an amendment to
SFAS No. 140, was adopted into Codification in December 2009 through the
issuance of Accounting Standards Updated (ASU) 2009-16. The new standard
eliminates the concept of a qualifying special-purpose entity, changes the
requirements for derecognizing financial assets, and requires additional
disclosures in order to enhance information reported to users of financial
statements by providing greater transparency about transfers of financial
assets, including securitization transactions, and an entity's continuing
involvement in and exposure to the risks related to transferred financial
assets. The new guidance is effective for fiscal years beginning after
November 15, 2009. The Company will adopt the new guidance in 2010 and is
evaluating the impact it will have to the Company's consolidated
financial statements.
Accounting for Variable Interest Entities
In June 2009, the FASB issued revised guidance on the accounting for variable
interest entities. The revised guidance, which was issued as SFAS No. 167,
Amending FASB Interpretation No. 46(R), was adopted into Codification in
December 2009 through the issuance of ASU 2009-17. The revised guidance amends
FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, in
determining whether an enterprise has a controlling financial interest in a
variable interest entity. This determination identifies the primary beneficiary
of a variable interest entity as the enterprise that has both the power to
direct the activities of a variable interest entity that most significantly
impacts the entity's economic performance, and the obligation to absorb losses
or the right to receive benefits of the entity that could potentially be
significant to the variable interest entity. The revised guidance requires
ongoing reassessments of whether an enterprise is the primary beneficiary and
eliminates the quantitative approach previously required for determining the
primary beneficiary. The Company does not expect that the provisions of the new
guidance will have a material effect on its consolidated financial statements.
Revenue Recognition
In October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable Revenue
Arrangements. The new standard changes the requirements for establishing
separate units of accounting in a multiple element arrangement and requires
the allocation of arrangement consideration to each deliverable based on the
relative selling price. The selling price for each deliverable is based on
vendor-specific objective evidence (VSOE) if available, third-party evidence
if VSOE is not available, or estimated selling price if neither VSOE or
third-party evidence is available. ASU 2009-13 is effective for revenue
arrangements entered into in fiscal years beginning on or after June 15, 2010.
The Company does not expect that the provisions of the new guidance will have
a material effect on its consolidated financial statements.
Fair Value Measurements
In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and
Disclosures (ASC Topic 820) Improving Disclosures About Fair Value
Measurements. The ASU requires new disclosures about transfers into and out
of Levels 1 and 2 and separate disclosures about purchases, sales, issuances,
and settlements relating to Level 3 measurements. It also clarifies existing
fair value disclosures about the level of disaggregation and about inputs and
valuation techniques used to measure fair value. The new disclosures and
clarifications of existing disclosures are effective for the Company's third
quarter of fiscal year 2010, except for the disclosures about purchases, sales,
issuances, and settlements relating to Level 3 measurements, which are
effective for the Company's first quarter of fiscal year 2012. Other than
requiring additional disclosures, the adoption of this new guidance did not
and will not have a material impact on the Company's consolidated financial
statements.
Federal Income Tax Aspects of Investment in the Company
The discussion contained herein has been prepared by the
Company and is based on existing law as contained in the Code,
amended United States Treasury Regulations ("Treasury
Regulations"), administrative rulings and court decisions as of the
date of this Registration Statement. No assurance can be given
that future legislative enactments, administrative rulings or court
decisions will not modify the legal basis for statements contained
in this discussion. Any such development may be applied
retroactively to transactions completed prior to the date thereof,
and could contain provisions having an adverse affect upon the
Company and the holders of the Common Stock. In addition, several
of the issues dealt with in this summary are the subject of
proposed and temporary Treasury Regulations. No assurance can be
given that these regulations will be finally adopted in their
present form.
Basis in Common Stock
The tax basis that a Shareholder will have in his Common Stock
will equal his cost in acquiring his Common Stock. If a
Shareholder acquires Common Stock at different times or at
different prices, he must maintain records of those transactions so
that he can accurately report gain or loss realized upon
disposition of the Common Stock.
Dividends on Common Stock
Distributions made by the Company with respect to the Common
Stock will be characterized as dividends that are taxable as
ordinary income to the extent of the Company's current or
accumulated earnings and profits ("earnings and profits"), if any,
as determined for U.S. federal income tax purposes. To the extent
that a distribution on the Common Stock exceeds the holder's
allocable share of the Company's earnings and profits, such
distribution will be treated first as a return of capital that will
reduce the holder's adjusted tax basis in such Common Stock, and
then as taxable gain to the extent the distribution exceeds the
holder's adjusted tax basis in such Common Stock. The gain will
generally be taxed as a long-term capital gain if the holder's
holding period for the Common Stock is more than one year.
The availability of earnings and profits in future years will
depend on future profits and losses which cannot be accurately
predicted. Thus, there can be no assurance that all or any portion
of a distribution on the Common Stock will be characterized as a
dividend for general income tax purposes. Corporate shareholders
will not be entitled to claim the dividends received deduction with
respect to distributions that do not qualify as dividends. See the
discussion regarding the dividends received deduction below.
Redemption of Common Stock
The Company does not have the right to redeem any Common
Stock. However, any redemption of Common Stock, with the consent
of the holder, will be a taxable event to the redeemed holder.
The Company does not believe that the Common Stock will be
treated as debt for federal income tax purposes. However, in the
event that the Common Stock is treated as debt for federal tax
purposes, a holder generally will recognize gain or loss upon the
redemption of the Common Stock measured by the difference between
the amount of cash or the fair market value of property received
and the holder's tax basis in the redeemed Common Stock. To the
extent the cash or property received are attributable to accrued
interest, the holder may recognize ordinary income rather than
capital gain. Characterization of the Common Stock as debt would
also cause a variety of other tax implications, some of which may
be detrimental to either the holders, the Company, or both
(including, for example, original issue discount treatment to the
Investors). Potential Investors should consult their tax advisors
as to the various ramifications of debt characterization for
federal income tax purposes.
Other Disposition of the Common Stock
Upon the sale or exchange of shares of Common Stock, to or
with a person other than the Company, a holder will recognize
capital gain or loss equal to the difference between the amount
realized on such sale or exchange and the holder's adjusted basis
in such stock. Any capital gain or loss recognized will generally
be treated as a long-term capital gain or loss if the holder held
such stock for more than one year. For this purpose, the period
for which the Common Stock was held would be included in the
holding period of the Common Stock received upon a conversion.
State, Local and Foreign Taxes
In addition to the federal income tax consequences described
above, prospective investors should consider potential state, local
and foreign tax consequences of an investment in the Common Stock.
ITEM 3. PROPERTIES
The Company does not currently maintain an office or any
other facilities. It does currently maintain a mailing address at
2208 Pershing Avenue, Sheboygan, Wisconsin 53083, which is
the mailing address of its legal counsel. The Company pays no
rent for the use of this mailing address. The Company does not
believe that it will need to maintain an office at any time in the
foreseeable future in order to carry out its plan of operations
described herein. The Company's telephone number is (920)-207-7772.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth as of June 30, 2010, information with
respect to the beneficial ownership of the Company's outstanding Common Stock
by (i) each director and executive officer of the Company, (ii) all directors
and executive officers of the Company as a group, and (iii) each shareholder
who was known by the Company to be the beneficial owner of more than 5% of
the Company's outstanding Common Stock. Except as otherwise indicated,
the persons or entities listed below have sole voting and investment power
with respect to all shares of Common Stock beneficially owned by them.
Name and Address Number of Percent of
Shares Owned Class Owned
Beneficially
Gerard Werner, Esq.(1) 400,000 20.00%
2208 Pershing Avenue
Sheboygan, WI 53083
All directors and executive
officers as a group (1 person) 400,000 20.00%
(1) The person listed is the sole officer and director of the Company.
Management has no plans to issue any additional securities to management,
promoters or their affiliates or associates and will do so only if such
issuance is in the best interests of shareholders of the Company and
complies with all applicable federal and state securities rules and
regulations.
Although the Company has a very large amount of authorized but unissued
common and preferred stock that may be issued without further shareholder
approval or notice, it is the intention of the Company to avoid inhibiting
certain transactions with prospective acquisition or merger candidates,
based upon the perception by such candidate that they may be engaged
in a rapidly expanding industry (i.e. Internet) and cannot afford to proxy
shareholders each time their management needs to authorize additional
shares.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers currently serving the
Company are as follows:
Name Age Positions Held and Tenure
Gerard Werner 38 President and Director since
June 15, 2003
The director named above will serve until the first annual
meeting of the Company's stockholders. Thereafter, directors will be
elected for one-year terms at the annual stockholders' meeting.
Officers will hold their positions at the pleasure of the board of
directors, absent any employment agreement, of which none currently
exists or is contemplated. There is no arrangement or understanding
between the sole director and officer of the Company and any other
person pursuant to which any director or officer was or is to be
selected as a director or officer.
The sole director and officer of the Company will devote his
time to the Company's affairs on an "as needed" basis. As a result,
the actual amount of time which he will devote to the Company's
affairs is unknown and is likely to vary substantially from month to
month.
Biographical Information
Gerard Werner
Mr. Werner is a member of the District of Columbia Bar Association
and worked on Antitrust cases for Compliance, Inc., responding to
document requests from the U.S. Department of Justice from January
through March of 1999.
Mr. Werner served as Vice-President and Director of Oak Brook
Capital I, II, III, and IV, respectively, prior to those companies
entering into business combinations with other entities. Mr. Werner
has also served as President and Director of North Shore Capital I, II,
III and IV, and Kohler Capital I, Corporation. The Oak Brook Capital
companies were formed in May of 1998, and the North Shore Capital
companies were formed in February of 1999.
Mr. Werner was admitted into the D.C. Court of Appeals Bar
Association in January, 1999. He served as Case Design Manager for The
Equitable, April 1998- Sep. 1998, during which time he was also a
registered representative, having passed the series 6 and series 63, as
well as Virginia's Life and Health Insurance licensing exams.
Mr. Werner graduated from the Georgetown University Law School
in 1997 where he served as a staff member of the American Criminal
Law Review Volume 33, and as Articles and Notes Editor Volume 34.
He is a contributing author of Volume 33-3, Eleventh Survey of White
Collar Crime- "Tax Evasion".
Mr. Werner graduated in 1994 from Georgetown University with a
double major in philosophy and government. He served as an intern
in United States Representative Thomas Petri's office on three separate
occasions: 1992, 1994 and 1995.
Indemnification of Officers and Directors
As permitted by Florida law, the Company's Articles of In-
corporation provide that the Company will indemnify its directors and
officers against expenses and liabilities they incur to defend, settle, or
satisfy any civil or criminal action brought against them on account
of their being or having been Company directors or officers unless, in
any such action, they are adjudged to have acted with gross negligence
or willful misconduct. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in that Act and is, therefore, unenforceable.
Exclusion of Liability
Pursuant to the Florida Business Corporation Act, the
Company's Articles of Incorporation exclude personal liability for its
directors for monetary damages based upon any violation of their
fiduciary duties as directors, except as to liability for any breach of the
duty of loyalty, acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, acts in violation
of Section 7-106-401 of the Florida Business Corporation Act, or
any transaction from which a director receives an improper personal
benefit. This exclusion of liability does not limit any right which a
director may have to be indemnified and does not affect any director's
liability under federal or applicable state securities laws.
Other Public Shell Activities
The Company's President has also formed two other shell companies,
Kohler Capital IV Corporation, and Global Green Holdings, Limited.
Kohler Capital IV was formed May 7, 2001. There is not
currently a market for resale of the outstanding shares of Kohler
Capital IV. Global Green Holdings, Limited, was formed July 23, 2009.
ThereIs not currently a market for resale of the outstanding shares of
Global Green Holdings.
Conflicts of Interest
The sole officer and director of the Company will devote only
a small portion of his time to the affairs of the Company, estimated
to be no more than approximately 20 hours per month. There will be
occasions when the time requirements of the Company's business
conflict with the demands of his other business and investment
activities. Such conflicts may require that the Company attempt to
employ additional personnel. There is no assurance that the services
of such persons will be available or that they can be obtained upon
terms favorable to the Company.
The Company's sole officer and director will promote all three (3)
"blank check" entities noted above.
The Company's President was previously President and Director of
Kohler Capital I and II, which were renamed Expleo Solutions, Inc.,
and All-American Care Centers, Inc, in reorganizations in August of 2006,
and October of 2007, detailed in Form 8K filings by Expleo Solutions,
Inc., and All-American Care Centers, Inc.
The Company's President was previously a Director and Vice-President
of Oak Brook Capital I, II, III, and IV, and North Shore Capital I, III,
and IV, blank-check companies with similar capital structures as the
Company. As of this date, he has resigned his positions as an officer and
director with all four Oak Brook Capital companies, and with North Shore
Capital I, III and IV, each having consummated a business combination with
an operating entity. Mr. Werner retained equity in the surviving companies,
which are now known as AEI Environmental, America's Power Partners,
Alpha Fibre Ltd, PVAXX corporation, Vertical Jet, Inc., and Gridline, Inc.,
respectively.
There is no procedure in place which would allow Mr. Werner to resolve
potential conflicts in an arms-length fashion. Accordingly, he will be
required to use his discretion to resolve them in a manner which he
considersappropriate.
The Company's sole officer and director may actively
negotiate or otherwise consent to the purchase of a portion of his
common stock as a condition to, or in connection with, a proposed
merger or acquisition transaction. It is anticipated that a substantial
premium over the initial cost of such shares may be paid by the
purchaser in conjunction with any sale of shares by the Company's
officer and director which is made as a condition to, or in connection
with, a proposed merger or acquisition transaction. The fact that a
substantial premium may be paid to the Company's sole officer and
director to acquire his shares creates a potential conflict of interest for
him in satisfying his fiduciary duties to the Company and its other
shareholders. Even though such a sale could result in a substantial
profit to him, he would be legally required to make the decision based
upon the best interests of the Company and the Company's other
shareholders, rather than his own personal pecuniary benefit.
ITEM 6. EXECUTIVE COMPENSATION
At the time of his appointment to the Company's board, its Director,
Gerard Werner received 400,000 shares of Common Stock valued at $0.001
per share in consideration for pre-incorporation services rendered to the
Company related to investigating and developing the Company's proposed
business plan and capital structure, and completion of the incorporation
and organization of the Company. In previous "blank-check" corporate
transactions, Mr. Werner received shares of the Oak Brook Capital
corporations for pre-incorporation services, but received no other legal
or consulting fees from these companies. No officer or director has
received any other remuneration. Although there is no current plan in
existence, it is possible that the Company will adopt a plan to pay or
accrue compensation to its sole officers and directors for services
related to seeking business opportunities and completing
a merger or acquisition transaction. See "Certain Relationships and
Related Transactions." The Company has no stock option, retirement,
pension, or profit-sharing programs for the benefit of directors,
officers or other employees, but the Board of Directors may
recommend adoption of one or more such programs in the future.
It is possible that, after the Company successfully consummates a merger
or acquisition with an unaffiliated entity, that entity may desire to employ
or retain one or more members of the Company's management for the purposes of
providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy
whereby the offer of any post-transaction remuneration to members of
management will not be a consideration in the Company's decision to undertake
any proposed transaction. Each member of management has agreed to disclose to
the Company's Board of Directors any discussions concerning possible
compensation to be paid to them by any entity which proposes to undertake a
transaction with the Company and further, to abstain from voting on such
transaction. Therefore, as a practical matter, if each member of the
Company's Board of Directors is offered compensation in any form from any
prospective merger or acquisition candidate, the proposed transaction will not
be approved by the Company's Board of Directors as a result of the inability
of the Board to affirmatively approve such a transaction.
No member of management of the Company will receive any finders fee, either
directly or indirectly, as a result of their respective efforts to implement
the Company's business plan outlined herein. Also, there are no plans,
proposals, arrangements or understandings with respect to the sale or issuance
of additional securities by the Company prior to the location of an
acquisition or merger candidate. Please also see Item I, Description of
Business-General for information regarding the seeking out and selection of
a target company, addressing matters such as the manner of solicitation of
potential investors, the approximate number of persons who will be contacted
or solicited, their relationships to the Company's management, etc.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE
There is no public market for KOHLER Common Stock. The
KOHLER Common Stock may be traded in the over-the-counter market
in the near future, however, there can be no assurance as to the price
at which trading in KOHLER Common Stock will occur.
With respect to financial and other information relating to
KOHLER, Gerard Werner, Esq., whose mailing address is 2208 Pershing Avenue,
Sheboygan, Wisconsin, 53083, will file annual and periodic reports with the
Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934. Copies of such reports may be inspected by anyone without charge
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W.,Room 1024, Washington D.C. 20549, and copies may be obtained
from the Commission at prescribed rates. Any such requests should be
directed to the President of KOHLER, address 2208 Pershing Avenue,
Sheboygan, Wisconsin 53083.
Prior to the date of this Registration Statement, the Company
issued to its officer and director a total of 400,000 shares of Common
Stock for a total services valued at $400. Certificates evidencing the
Common Stock issued by the Company to this person have all been
stamped with a restrictive legend, and are subject to stop transfer orders
by the Company. For additional information concerning restrictions
that are imposed upon the securities held by current stockholders,
and the responsibilities of such stockholders to comply with federal
securities laws in the disposition of such Common Stock, see "Risk
Factors -Rule 144 Sales."
No officer, director, promoter, or affiliate of the Company has or
proposes to have any direct or indirect material interest in any asset
proposed to be acquired by the Company through security holdings,
contracts, options, or otherwise.
Although there is no current plan in existence, it is possible
that the Company will adopt a plan to pay or accrue compensation to
its sole officers and directors for services related to seeking business
opportunities and completing a merger or acquisition transaction.
The Company maintains a mailing address at the office of its
legal counsel, but otherwise does not maintain an office. As a result,
it pays no rent and incurs no expenses for maintenance of an office
and does not anticipate paying rent or incurring office expenses in the
future.
Although management has no current plans to cause the
Company to do so, it is possible that the Company may enter into an
agreement with an acquisition candidate requiring the sale of all or a
portion of the Common Stock held by the Company's current
stockholders to the acquisition candidate or principals thereof, or to
other individuals or business entities, or requiring some other form of
payment to the Company's current stockholders, or requiring the
future employment of specified officers and payment of salaries to
them. It is more likely than not that any sale of securities by the
Company's current stockholders to an acquisition candidate would be
at a price substantially higher than that originally paid by such
stockholders. Any payment to current stockholders in the context of
an acquisition involving the Company would be determined entirely
by the largely unforeseeable terms of a future agreement with an
unidentified business entity.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings,
and no such proceedings are known to be contemplated.
No director, officer or affiliate of the Company, and no owner
of record or beneficial owner of more than 5.0% of the securities of
the Company, or any associate of any such director, officer or security
holder is a party adverse to the Company or has a material interest
adverse to the Company in reference to pending litigation.
ITEM 9. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER SHAREHOLDER MATTERS
No public trading market exists for the Company's securities
and all of its outstanding securities are restricted securities as defined
in Rule 144. There were 20 (twenty) holders of record of the Company's
common stock on June 30, 2010. No dividends have been paid to date and
the Company's Board of Directors does not anticipate paying dividends in
the foreseeable future.
The Company does not plan to take affirmative steps to request or
encourage any broker-dealer to act as a market maker for the Company's
securities. There are to date no understandings, agreements or discussions
in place with any such broker-dealer. Although management has set forth
disclosure throughout this registration statement indicating it would consider
the public "trading" of its securities if such activity was in the best
interests of its shareholders, it presently has no plans to do so.
(a) MARKET PRICE. The Registrant's Common Stock is not quoted at the
present time.
Effective August 11, 1993, the Securities and Exchange Commission adopted
Rule 15g-9, which established the definition of a "penny stock," for purposes
relevant to the Company, as any equity security that has a market price of
less than $5.00 per share or with an exercise price of less than $5.00 per
share, subject to certain exceptions. For any transaction involving a penny
stock, unless exempt, the rules require: (i) that a broker or dealer approve
a person's account for transactions in penny stocks; and (ii) the broker or
dealer receive from the investor a written agreement to the transaction,
setting forth the identity and quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a reasonable
determination that the transactions in penny stocks are suitable for that
person and that person has sufficient knowledge and experience in financial
matters to be capable of evaluating the risks of transactions in penny
stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating to the penny
stock market, which, in highlight form, (i) sets forth the basis on which the
broker or dealer made the suitability determination; and (ii) that the broker
or dealer received a signed, written agreement from the investor prior to the
transaction. Disclosure also has to be made about the risks of investing in
penny stocks in both public offerings and in secondary trading, and about
commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities and the rights and
remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on
the limited market in penny stocks.
The National Association of Securities Dealers, Inc. (the "NASD"), which
administers NASDAQ, has recently made changes in the criteria for initial
listing on the NASDAQ Small Cap market and for continued listing. For initial
listing, a company must have net tangible assets of $4 million, market
capitalization of $50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years. For initial
listing, the common stock must also have a minimum bid price of $4 per share,
at least three market makers in its stock, and at least 300 round lot share-
holders. In order to continue to be included on NASDAQ, a company must maintain
$2,000,000 in net tangible assets and a $1,000,000 market value of its
publicly-traded securities. In addition, continued inclusion requires two
market-makers and a minimum bid price of $1.00 per share, as well as 300
round lot holders of the company's securities.
The NASD requirements for small-cap listings are more stringent than
those for the OTC BB (Over the counter Bulletin Board) listings. Listing
as an OTC BB stock requires the filing of a Form 211 by a brokerage firm.
Stocks traded OTC BB are required to have audited financial statements.
On October 7, 1998, the National Association of Securities Dealers,
Inc. ("NASD"), through its wholly-owned subsidiary, the Nasdaq Stock
Market, Inc. ("Nasdaq") submitted to the Securities and Exchange
Commission ("SEC" or "Commission"), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 ("Exchange Act" or "Act") \1\ and Rule
19b-4 thereunder,\2\ proposed amendments to NASD Rules 6530 and 6540 to
limit quotations on the OTC Bulletin Board- ("OTCBB") to the securities
of issuers that are current in their reports filed with the SEC or other
regulatory authority, and to prohibit a member from quoting a security
on the OTCBB unless the issuer has made current filings, respectively.
- - - -------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
- - - -------------------------------------------------------------------------
The OTCBB provides a real-time quotation medium that NASD member firms can
use to enter, update, and retrieve quotation information (including
unpriced indications of interest) for equity securities traded over-the-
counter that are neither listed on Nasdaq nor on a primary national
securities exchange. Eligible securities include national, regional, and
foreign equity issues, warrants, units, Direct Participation Programs
("DPPs") \6\ and American Depositary Receipts ("ADRs") \7\ not listed on
any other U.S. national securities market or exchange. Unlike Nasdaq or
registered exchanges where individual companies apply for listing on the
market--and must meet and maintain strict listing standards--there are no
listing standards for the OTCBB, and there currently is no requirement that
issuers of securities on the OTCBB make current, publicly-available reports
with the SEC or other regulator. In fact, over half of the companies that are
currently quoted on the OTCBB are not subject to any public reporting
requirements.
- - - -------------------------------------------------------------------------
\6\ DPP's are securities offerings that permit investors to directly
participate in the cash flow and tax consequences of the underlying
investments. DPPs provide for the ``flow through'' of tax results. Thus, gains
and losses are taxed to the investor not the issuer of the security.
\7\ ADRs are receipts for shares of foreign corporations that are held by U.S.
banks and bought and sold in the U.S. by investors, without utilizing overseas
markets.
- - - -------------------------------------------------------------------------
The proposed rule change was approved and ordered in an effort to balance the
benefits that the transparency of the OTCBB provides with the public need for
information about the issuers being quoted. The NASD is concerned that where
there is no public information available regarding a security, the broad-based
automated display of quotations in that security creates an unjustified
perception of reliability. While the NASD realizes that the new rule may result
in the lack of real-time quotations for those securities that become ineligible
for the OTCBB, it believes that this loss is outweighted by the benefit to
investors who would, under the proposed rule, have access to information about
the companies in which they may invest. In addition, transactions in securities
ineligible for the OTCBB are still subject to real-time last sale trade
reporting. These reports are publicly disseminated through market data vendors
on a real-time basis.
To remain eligible for quotation on the OTCBB, an issuer must remain current in
its filings with the SEC or applicable regulatory authority. A member is
required to inform the NASD of the issuer's reporting schedule.
Once an issuer is delinquent in filing a required report (e.g., Form 10-K, Form
10-Q, Form 20-F, Insurance Company Annual Statement, or call report), a
security of the issuer may continue to be quoted on the OTCBB for a 30 or 60
calendar day grace period from the due date of the report, depending on the
type of issuer. After the grace period, quotations in the security of the
delinquent issuer are not permitted on the OTCBB.
The Commission believes that the Amendments are consistent with Section 15A of
the Act as it will protect investors and the public interest by requiring
issuers listed on the OTCBB to file reports containing current financial
information with the Commission or appropriate regulatory agency. Specifically,
the Commission believes the proposal is consistent with the requirements of
Section 15A(b)(6) and (11) of the Act.\16\ Section 15A(b)(6) requires, among
other things, that the association's rules be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable principles
of trade, to remove impediments to and perfect the mechanism of a free and
open market and a national market system, and, in general, to protect investors
and the public interest.\17\ Section 15A(b)(11) requires that the rules of the
association be designed to produce fair and informative quotations, to prevent
fictitious or misleading quotations, and to promote orderly procedures for
collecting, distributing, and publishing quotations.\18\
- - - ------------------------------------------------------------------------
\15\ 15 U.S.C. 78o-3.
\16\ 15 U.S.C. 78o-3(b)(6) and (11).
\17\ 15 U.S.C. 78o-3(b)(6).
\18\ 15 U.S.C. 78o-3(b)(11).
- - - ------------------------------------------------------------------------
Market makers will not be permitted to quote OTCBB traded securities unless
the issuer has made current filings with the appropriate regulatory agency.
The filing requirement ensures that companies trading on the OTCBB market will
have current, public information that investors can access, from the
appropriate regulatory agency, when considering whether to invest in an OTCBB
traded security. Rule 6530 should provide investors in OTCBB securities with
more information on which to base investment decisions. The Commission also
believes that limiting quotations on the OTCBB to the securities of issuers
that report to the SEC or applicable regulatory authority may help to reduce
fraud and manipulation. As a result of the reporting requirement, financial
data on issuers is available and issuers that provide false or misleading
informationin their required filings are subject to liability for making
those statements. \19\ The Commission finds that Rule 6530 is consistent with
the Act because itwill protect investors and the public interest.\20\
- - - ------------------------------------------------------------------------
\19\ See, e.g., SEC v. Savoy Industries, Inc., 587 F.2d 1149 (D.C. Cir. 1978),
cert denied, 440 U.S. 913 (1979); Exchange Act Rule 10b-5, 17 CFR 240.10b-5.
\20\ 15 U.S.C. 78o-3(b)(6).
- - - --------------------------------------------------------------------------
Management intends to strongly consider undertaking a transaction with
any merger or acquisition candidate which will allow the Company's securities
to be traded without the aforesaid limitations. However, there can be no
assurances that, upon a successful merger or acquisition, the Company will
qualify its securities for listing on NASDAQ or some other national exchange,
or be able to maintain the maintenance criteria necessary to insure continued
listing. The failure of the Company to qualify its securities or to meet the
relevant maintenance criteria after such qualification in the future may
result in the discontinuance of the inclusion of the Company's securities on a
national exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter market. As a
result, a shareholder may find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of, the Company's securities.
(b) HOLDERS. There are twenty (20) holders of the Company's
Common Stock. Prior to the date of this Registration Statement, the Company
issued to its officers and directors a total of 400,000 shares of Common
Stock for a total services valued at $400. The Company anticipates that
certain potential acquisition or merger candidates might satisfy the
NASDAQ SmallCap requirements, but would need at least one hundred (100)
round-lot holders of their common stock.
Certificates evidencing the Common Stock issued by the Company to these
persons have all been stamped with a restrictive legend, and are subject to
stop transfer orders by the Company. For additional information concerning
restrictions that are imposed upon the securities held by current stockholders,
and the responsibilities of such stockholders to comply with federal
securities laws in the disposition of such Common Stock.
The Company has taken the following action to ensure that a public
re-distribution of the Shares does not take place:
(i) a "restrictive" legend will be placed on each stock certificate issued
to stockholders;
(ii) "stop transfer" order instructions will be placed on each stock
certificate issued;
(iii) stockholders have been placed on notice that their securities will need
to be sold in compliance with Rule 144 of the Act, and may not be
transferred otherwise;
(iv) disclosure has been set forth throughout the Form 10 describing the
above restrictions.
Redistribution - Rule 144
Rule 144 of the Securities Act lists criteria under which
restricted securities and securities held by affiliates or
control persons may be resold without registration. The rule
prevents the creation of public markets in securities when the
issuers have not made adequate current information available to
the public. Preliminary Note to Securities Act Rule 144. The
requirements of Rule 144(b) through (i) include provisions that:
1) current public information be available regarding
the issuer of the securities;
2) at least one year elapse between the time the
securities are acquired from an issuer or affiliate and
the date the securities are resold under the rule;
3) the amount of securities able to be sold is limited,
depending on whether the sale is by an affiliate or
not;
4) the securities be sold in brokers' transactions or
with a market maker;
5) Commission Form 144 be filed depending on the size
of the transaction; and
6) the person filing the form has a bona fide intention
to sell the securities within a reasonable time.
State Exemptions Following the Section 4(2) Exemption:
A number of states exempt from their registration requirements offers and
sales exempt from federal registration by reason of Section 4(2) of the
Securities Act. That provision provides an exemption for transactions not
involving a public offering and constitutes the issuer private placement
exemption. The exemption may explicitly refer to Section 4(2) of the
Securities Act or may exempt non-public offerings. Of course, those
jurisdictions without general securities registration requirements,
including Colorado, District of Columbia, New York, and Nevada may also
rely on the Section 4(2) exemption.
(c) DIVIDENDS. The Registrant has not paid any dividends to date,
and has no plans to do so in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
Since May 7, 2001 (the date of the Company's formation),
the Company has sold its Common Stock to the persons listed in the
table below in transactions summarized as follows:
Name Date of Shares Aggregate Purchase
Sale Purchase Price
Price per Share
Gerard Werner 6/15/03 400,000 $400(1) $0.001
(1) Consideration consisted of pre-incorporation consulting services
rendered to the Registrant related to investigating and developing the
Registrant's proposed business plan and capital structure and
completing the organization and incorporation of the Registrant.
With respect to the sales made, the Registrant relied on Section 4(2) of
the Securities Act of 1933, as amended. No advertising or general
solicitation was employed in offering the shares. The securities were offered
for investment only and not for the purpose of resale or distribution, and the
transfer thereof was appropriately restricted.
In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which
does not exceed the greater of one percent of the then outstanding Common
Stock or the average weekly trading volume during the four calendar weeks
prior to such sale. Rule 144 also permits, under certain circumstances, the
sale of shares without any quantity limitation by a person who has satisfied a
two-year holding period and who is not, and has not been for the preceding
three months, an affiliate of the Company.
Each of the sales listed above was made either for cash or for
services. Sales for which the consideration was services were made in
reliance upon the exemption from registration provided by Rule 701
adopted pursuant to Section 3(b) of the Securities Act of 1933. Sales for
which the consideration was cash were made in reliance upon the
exemption from registration offered by Section 4(2) of the Securities Act
of 1933. Based upon the Preincorporation Consultation and Subscription
Agreement executed by the persons who acquired shares for services, and
the Subscription Agreement and Investment Representations executed by
persons who acquired shares for cash, and based upon the pre-existing
relationship between the cash subscribers and the Company's officers and
directors, the Company had reasonable grounds to believe immediately
prior to making an offer to the private investors, and did in fact believe,
when such subscriptions were accepted, that such purchasers (1) were
purchasing for investment and not with a view to distribution, and (2) had
such knowledge and experience in financial and business matters that they
were capable of evaluating the merits and risks of their investment and
were able to bear those risks. The purchasers had access to pertinent
information enabling them to ask informed questions. The shares were
issued without the benefit of registration. An appropriate restrictive
legend is imprinted upon each of the certificates representing such shares,
and stop-transfer instructions have been entered in the Company's transfer
records. All such sales were effected without the aid of underwriters, and
no sales commissions were paid.
ITEM 11. DESCRIPTION OF SECURITIES TO BE REGISTERED
Common Stock
The Company is authorized to issue 50 million shares of common stock,
no par value, of which 2,000,000 shares are issued and outstanding as of
June 30, 2010. All shares of common stock have equal rights and privileges
with respect to voting, liquidation and dividend rights. Each share of
common stock entitles the holder thereof to
(i) one non-cumulative vote for each share held of record on all
matters submitted to a vote of the stockholders;
(ii) to participate equally and to receive any and all such dividends
as may be declared by the Board of Directors out of funds
legally available therefore; and
(iii) to participate pro rata in any distribution of assets available
for distribution upon liquidation of the Company.
Stockholders of the Company have no preemptive rights to acquire
additional shares of common stock or any other securities. The common stock
is not subject to redemption and carries no subscription or conversion rights.
All outstanding shares of common stock are fully paid and non-assessable.
Preferred Stock
The Company's Articles of Incorporation authorize the issu-
ance of 10,000,000 shares of preferred stock. The Board of Directors
of the Company is authorized to issue the preferred stock from time
to time in series and is further authorized to establish such series, to
fix and determine the variations in the relative rights and preferences
as between series, to fix voting rights, if any, for each series, and to
allow for the conversion of preferred stock into Common Stock. No
preferred stock has been issued by the Company. The Company anti-
cipates that preferred stock may be utilized in making acquisitions.
Transfer Agent
The Company is currently serving as its own transfer agent,
and plans to continue to serve in that capacity until such time as
management believes it is necessary or appropriate to employ an
independent transfer agent in order to facilitate the creation of a public
trading market for the Company's securities. Since the Company does
not currently expect any public market to develop for its securities
until after it has completed a business combination, it does not
currently anticipate that it will seek to employ an independent transfer
agent until it has completed such a transaction.
Reports to Stockholders
The Company plans to furnish its stockholders with an annual
report for each fiscal year containing financial statements audited by
its independent certified public accountants. In the event the
Company enters into a business combination with another company,
it is the present intention of management to continue furnishing annual
reports to stockholders. Additionally, the Company may, in its sole
discretion, issue unaudited quarterly or other interim reports to its
stockholders when it deems appropriate. The Company intends to
comply with the periodic reporting requirements of the Securities
Exchange Act of 1934 for so long as it is subject to those
requirements.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850 of the Florida Business Corporation Act provides that
any director or officer of a Florida corporation may be indemnified against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by him in connection with or in defending any action, suit or
proceeding in which he is a party by reason of his position, so long as it
shall be determined that he conducted himself in good faith and that he
reasonably believed that his conduct was in the corporation's best
interest. If a director or officer is wholly successful, on the merits or
otherwise, in connection with such proceeding, such indemnification is
mandatory.
The Company's articles of incorporation and bylaws contain
provisions which provide, among other things, that the Company
shall indemnify certain persons, including officers and directors,
against judgments, fines and amounts paid in settlement actually
and reasonably incurred by such person in connection with any
action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interest of the Company, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was
unlawful. As to any action brought by or in the right of the
Company, such indemnification is limited to expenses (including
attorney's fees) actually and reasonably incurred in connection
with the defense or settlement of the case, and shall not be made,
absent court approval, if it was determined that such person was
liable for negligence or misconduct in the performance of his duty
to the Company.
The Articles of Incorporation and the Bylaws of the Company,
filed as Exhibits 3.1 and 3.2, respectively, provide that the Company
will indemnify its officers and directors for costs and expenses
incurred in connection with the defense of actions, suits, or
proceedings where the officer or director acted in good faith and in a
manner he reasonably believed to be in the Company's best interest
and is a party by reason of his status as an officer or director,
absent a finding of negligence or misconduct in the performance of
duty.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Kohler Capital III, Corporation
Table of Contents
Report of Independent Registered Public Accounting Firm
Balance Sheets
Statements of Operations
Statement of Stockholders' Equity
Statements of Cash Flows
Notes to Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
Kohler Capital III Corp.
(A Development Stage Company)
We have audited the accompanying balance sheets of Kohler
Capital III Corp. (a development stage Company) as of June 30, 2010,
and 2009, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the years then ended, and
the period from inception (May 7, 2001) to June 30, 2010. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting.
Our audits 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 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 by management,
as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Kohler Capital III Corp.
as of June 30, 2010 and 2009, and the results of its operations, and its
cash flows for the years then ended and the period from inception (May 7, 2001)
to June 30, 2010, in conformity with accounting principles generally accepted
in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has incurred significant losses from
operations and has working capital and stockholder deficiencies. These
factors raise substantial doubt about the Company's ability to continue as
a going concern. Management's plans in regard to this matter are also
discussed in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Kingery & Crouse PA
Tampa, Florida
August 18, 2010
KOHLER CAPITAL III, CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
JUNE 30, 2010 JUNE 30, 2009
ASSETS
Current assets
Total current assets $ - $ -
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities
Total current liabilities $ - $ -
Stockholders' Equity
Preferred Stock, no par value,
10,000 shares authorized, none
issued and outstanding
Common Stock, no par value,
50,000,000 shares authorized,
2,000,000 shares issued and outstanding 2,000 2,000
Additional paid in capital 9,250 8,250
(Deficit) accumulated
during the development stage (11,250) (10,250)
Total stockholders' equity - -
TOTAL LIABILITIES AND
STOCKHIOLDERS' EQUITY $ - $ -
See the accompanying notes to the financial statements.
Kohler Capital III Corp.
(A Development Stage Company)
Statements of Operations
For the
Period From
May 7, 2001
(Inception)
Year Ended Year Ended Through
June 30, June 30, June 30,
2010 2009 2010
Revenue $ - $ - $ -
Costs and expenses:
General and administrative 1,000 1,000 11,250
Total costs and expenses 1,000 1,000 11,250
Net loss $(1,000) $(1,000) $(11,250)
Per share information - basic and diluted:
Loss per common share $(0.00) $(0.00)
Weighted average common shares outstanding 2,000,000 2,000,000
See the accompanying notes to the financial statements.
Kohler Capital III Corp.
(A Development Stage Company)
Statements of Changes in Stockholders' Equity
Period From Inception (May 7, 2001) to June 30, 2010
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Par Value Capital Stage Total
Common stock issued to founders
at $.001 per share 1,600,000 $1,600 $ - $ - $1,600
Contributed services - - 250 - 250
Net loss - - - (1,850) (1,850)
Balance - June 30, 2001 1,600,000 1,600 250 (1,850) -
Contributed services - - 1,000 - 1,000
Net loss - - - (1,000) (1,000)
Balance - June 30, 2002 1,600,000 1,600 1,250 (2,850) -
Contributed services - - 1,000 - 1,000
Common shares issued for
services at $.001 per share 400,000 400 - - 400
Net loss - - - (1,400) (1,400)
Balance - June 30, 2003 2,000,000 2,000 2,250 (4,250) -
Contributed services - - 1,000 - 1,000
Net loss - - - (1,000) (1,000)
Balance - June 30, 2004 2,000,000 2,000 3,250 (5,250) -
Contributed services - - 1,000 - 1,000
Net loss - - - (1,000) (1,000)
Balance - June 30, 2005 2,000,000 2,000 4,250 (6,250) -
Contributed services - - 1,000 - 1,000
Net loss - - - (1,000) (1,000)
Balance - June 30, 2006 2,000,000 2,000 5,250 (7,250) -
Contributed services - - 1,000 - 1,000
Net loss - - - (1,000) (1,000)
Balance - June 30, 2007 2,000,000 2,000 6,250 (8,250) -
Contributed services - - 1,000 - 1,000
Net loss - - - (1,000) (1,000)
Balance - June 30, 2008 2,000,000 2,000 7,250 (9,250) -
Contributed services - - 1,000 - 1,000
Net loss - - - (1,000) (1,000)
Balance - June 30, 2009 2,000,000 2,000 8,250 (10,250) -
Contributed services - - 1,000 - 1,000
Net loss - - - (1,000) (1,000)
Balance - June 30, 2010 2,000,000 $2,000 $9,250 $(11,250) $ -
See the accompanying notes to the financial statements.
Kohler Capital III Corp.
(A Development Stage Company)
Statements of Cash Flows
For the
Period From
May 7, 2001
(Inception)
Year Ended Year Ended Through
June 30, June 30, June 30,
2010 2009 2010
Cash flows from operating activities:
Net loss $(1,000) $(1,000) $(11,250)
Adjustments to reconcile net loss to net
cash used in operating activities:
Common shares issued for services - - 2,000
Contributed services 1,000 1,000 9,250
Net cash proviced by (used in) operating activities - - -
Cash flows from investing activities:
Net cash provided by (used in) investing activities - - -
Cash flows from financing activities:
Net cash provided by (used in) financing activities - - -
Net increase (decrease) in cash - - -
Cash - beginning of period - - -
Cash - end of period $ - $ - $ -
Supplemental Cash Flow Information:
Cash paid for interest $ - $ - $ -
Cash paid for income taxes $ - $ - $ -
See the accompanying notes to the financial statements.
Kohler Capital III Corp.
A Development Stage Company
Notes to Financial Statements
June 30, 2010 and 2009
Note 1. Organization and Significant Accounting Policies.
Kohler Capital III Corp. (the Company) was incorporated under the laws of the
State of Florida on May 7, 2001. The Company is a business development Company
with no significant operations. The Company is in the development stage.
Revenue Recognition
In general, the Company records revenue when persuasive evidence of an
arrangement exists, services have been rendered or product delivery has
occurred, the sales price to the customer is fixed or determinable, and
collectability is reasonably assured. The following policies reflect
specific criteria for the various revenues streams of the Company:
Revenue is recognized at the time the product is delivered or the service is
performed. Provision for sales returns will be estimated based on the Company's
historical return experience.
Deferred revenue is recorded for amounts received in advance of the time at
which services are performed and included in revenue at the completion of the
related services.
Cash
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
Intangible Assets and Long Lived Assets
The Company makes reviews for the impairment of long-lived assets and certain
identifiable intangibles whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. An impairment loss
would be recognized when estimated future cash flows expected to result from
the use of the asset and its eventual disposition is less than its carrying
amount.
Estimates
The preparation of the Company's financial statements requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from these estimates.
Fair value of financial instruments
The Company's short-term financial instruments consist of cash. The carrying
amounts of the financial instruments approximate fair value because of their
short-term maturities. The Company does not hold or issue financial
instruments for trading purposes nor does it hold or issue interest rate or
leveraged derivative financial instruments.
Income Taxes
The Company follows ASC 740 Income Taxes for recording the provision for income
taxes. Deferred tax assets and liabilities are computed based upon the
difference between the financial statement and income tax basis of assets and
liabilities using the enacted marginal tax rate applicable when the related
asset or liability is expected to be realized or settled. Deferred income tax
expenses or benefits are based on the changes in the asset or liability each
period. If available evidence suggests that it is more likely than not that
some portion or all of the deferred tax assets will not be realized, a
valuation allowance is required to reduce the deferred tax assets to the amount
that is more likely than not to be realized. Future changes in such valuation
allowance are included in the provision for deferred income taxes in the period
of change.
All tax periods from inception remain open to examination by taxing authorities.
Stock-Based Compensation
The Company accounts for stock based compensation in accordance with ASC 718
Stock Compensation. This Statement requires that the cost resulting from all
share-based transactions be recorded in the financial statements. The
Statement establishes fair value as the measurement objective in accounting for
share-based payment arrangements and requires all entities to apply a fair-
value-based measurement in accounting for share-based payment transactions with
employees. The Statement also establishes fair value as the measurement
objective for transactions in which an entity acquires goods or services from
non-employees in share-based payment transactions.
Net Income (Loss) Per Common Share
Basic earnings (loss) per share are calculated by dividing net income (loss) by
the weighted average number of common shares outstanding for the period.
Diluted earnings (loss) per share is calculated by dividing net income (loss)
by the weighted average number of common shares and dilutive common stock
equivalents outstanding. During periods in which the Company incurs losses
common stock equivalents, if any, are not considered, as their effect would be
anti dilutive.
Recent Pronouncements
Accounting Standards Codification
In June 2009, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 168, The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles (the Codification). This
standard replaces SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles, and establishes only two levels of U.S. generally accepted
accounting principles (GAAP), authoritative and nonauthoritative. The FASB ASC
has become the source of authoritative, nongovernmental GAAP, except for rules
and interpretive releases of the SEC, which are sources of authoritative GAAP
for SEC registrants. All other nongrandfathered, non-SEC accounting literature
not included in the Codification will become nonauthoritative. This standard
is effective for financial statements for interim or annual reporting periods
ending after September 15, 2009. The adoption of the Codification changed the
Company's references to GAAP accounting standards but did not impact the
Company's results of operations, financial position or liquidity.
Participating Securities Granted in Share-Based Transactions
Effective January 1, 2009, the Company adopted a new accounting standard
included in ASC 260, Earnings Per Share (formerly FASB Staff Position (FSP)
Emerging Issues Task Force (EITF) 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities).
The new guidance clarifies that non-vested share-based payment awards that
entitle their holders to receive nonforfeitable dividends or dividend
equivalents before vesting should be considered participating securities and
included in basic earnings per share. The Company's adoption of the new
accounting standard did not have a material effect on previously issued or
current earnings per share.
Business Combinations and Noncontrolling Interests
Effective January 1, 2009, the Company adopted a new accounting standard
included in ASC 805, Business Combinations (formerly SFAS No. 141(R), Business
Combinations). The new standard applies to all transactions or other events
in which an entity obtains control of one or more businesses. Additionally,
the new standard requires the acquiring entity in a business combination to
recognize all (and only) the assets acquired and liabilities assumed in the
transaction; establishes the acquisition-date fair value as the measurement
date for all assets acquired and liabilities assumed; and requires the
acquirer to disclose additional information needed to evaluate and understand
the nature and financial effect of the business combination. The Company's
adoption of the new accounting standard did not have a material effect on
the Company's consolidated financial statements.
Effective January 1, 2009, the Company adopted a new accounting standard
included in ASC 810, Consolidations (formerly SFAS 160, Noncontrolling
Interests in Consolidated Financial Statements). The new accounting
standard establishes accounting and reporting standards for the
noncontrolling interest (or minority interests) in a subsidiary and for
the deconsolidation of a subsidiary by requiring all noncontrolling
interests in subsidiaries be reported in the same way, as equity in the
consolidated financial statements. As such, this guidance has eliminated
the diversity in accounting for transactions between an entity and
noncontrolling interests by requiring they be treated as equity
transactions. The Company's adoption of this new accounting standard did
not have a material effect on the Company's consolidated financial
statements.
Fair Value Measurement and Disclosure
Effective January 1, 2009, the Company adopted a new accounting standard
included in ASC 820, Fair Value Measurements and Disclosures (ASC 820)
(formerly FASB FSP No 157-2, Effective Date of FASB Statement No. 157),
which delayed the effective date for disclosing all non-financial assets
and non-financial liabilities, except for items that are recognized or
disclosed at fair value on a recurring basis (at least annually). This
standard did not have a material impact on the Company's consolidated
financial statements.
In April 2009, the FASB issued new guidance for determining when a
transaction is not orderly and for estimating fair value when there has
been a significant decrease in the volume and level of activity for an
asset or liability. The new guidance, which is now part of ASC 820
(formerly FSP 157-4, Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly), requires disclosure of
the inputs and valuation techniques used, as well as any changes in
valuation techniques and inputs used during the period, to measure fair
value in interim and annual periods. In addition, the presentation of
the fair value hierarchy is required to be presented by major security
type as described in ASC 320, Investments - Debt and Equity Securities.
The provisions of the new standard were effective for interim periods
ending after June 15, 2009. The adoption of the new standard on April 1,
2009 did not have a material on the Company's consolidated financial
statements.
In April 2009, the Company adopted a new accounting standard included in
ASC 820, (formerly FSP 107-1 and Accounting Principles Board (APB) 28-1,
Interim Disclosures about Fair Value of Financial Instruments). The
new standard requires disclosures of the fair value of financial
instruments for interim reporting periods of publicly traded companies
in addition to the annual disclosure required at year-end. The provisions
of the new standard were effective for the interim periods ending after
June 15, 2009. The Company's adoption of this new accounting standard
did not have a material effect on the Company's consolidated financial
statements.
In August 2009, the FASB issued new guidance relating to the accounting for
the fair value measurement of liabilities. The new guidance, which is now
part of ASC 820, provides clarification that in certain circumstances in
which a quoted price in an active market for the identical liability is not
available, a company is required to measure fair value using one or more
of the following valuation techniques: the quoted price of the identical
liability when traded as an asset, the quoted prices for similar
liabilities or similar liabilities when traded as assets, or another
valuation technique that is consistent with the principles of fair value
measurements. The new guidance clarifies that a company is not required
to include an adjustment for restrictions that prevent the transfer of the
liability and if an adjustment is applied to the quoted price used in a
valuation technique, the result is a Level 2 or 3 fair value measurement.
The new guidance is effective for interim and annual periods beginning
after August 27, 2009. The Company's adoption of the new guidance did
not have a material effect on the Company's consolidated financial
statements.
Derivative Instruments and Hedging Activities
Effective January 1, 2009, the Company adopted a new accounting standard
included in ASC 815, Derivatives and Hedging (SFAS No. 161, Disclosures
about Derivative Instruments and Hedging Activities, an amendment of
SFAS No.133). The new accounting standard requires enhanced disclosures
about an entity's derivative and hedging activities and is effective for
fiscal years and interim periods beginning after November 15, 2008. Since
the new accounting standard only required additional disclosure, the
adoption did not impact the Company's consolidated financial statements.
Other-Than-Temporary Impairments
In April 2009, the FASB issued new guidance for the accounting for other-than-
temporary impairments. Under the new guidance, which is part of ASC 320,
Investments Debt and Equity Securities (formerly FSP 115-2 and 124-2,
Recognition and Presentation of Other-Than-Temporary Impairments), and other
than-temporary impairment is recognized when an entity has the intent to
sell a debt security or when it is more likely than not that an entity will
be required to sell the debt security before its anticipated recovery in
value. The new guidance does not amend existing recognition and measurement
guidance related to other-than-temporary impairments of equity securities
and is effective for interim and annual reporting periods ending after
June 15, 2009. The Company's adoption of the new guidance did not have a
material effect on the Company's consolidated financial statements.
Subsequent Events
In May 2009, the FASB issued new guidance for subsequent events. The new
guidance, which is part of ASC 855, Subsequent Events (formerly SFAS No. 165,
Subsequent Events) is intended to establish general standards of accounting
for and disclosure of events that occur after the balance sheet date but
before financial statements are issued or are available to be issued.
Specifically, this guidance sets forth the period after the balance sheet
date during which management of a reporting entity should evaluate events or
transactions that may occur for potential recognition or disclosure in the
financial statements, the circumstances under which an entity should recognize
events or transactions occurring after the balance sheet date in its financial
statements, and the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date. The new guidance is
effective for fiscal years and interim periods ended after June 15, 2009 and
will be applied prospectively. The Company's adoption of the new guidance
did not have a material effect on the Company's consolidated financial
statements.
Accounting for the Transfers of Financial Assets
In June 2009, the FASB issued new guidance relating to the accounting for
transfers of financial assets. The new guidance, which was issued as SFAS
No. 166, Accounting for Transfers of Financial Assets, an amendment to
SFAS No. 140, was adopted into Codification in December 2009 through the
issuance of Accounting Standards Updated (ASU) 2009-16. The new standard
eliminates the concept of a qualifying special-purpose entity, changes the
requirements for derecognizing financial assets, and requires additional
disclosures in order to enhance information reported to users of financial
statements by providing greater transparency about transfers of financial
assets, including securitization transactions, and an entity's continuing
involvement in and exposure to the risks related to transferred financial
assets. The new guidance is effective for fiscal years beginning after
November 15, 2009. The Company will adopt the new guidance in 2010 and is
evaluating the impact it will have to the Company's consolidated financial
statements.
Accounting for Variable Interest Entities
In June 2009, the FASB issued revised guidance on the accounting for variable
interest entities. The revised guidance, which was issued as SFAS No. 167,
Amending FASB Interpretation No. 46(R), was adopted into Codification in
December 2009 through the issuance of ASU 2009-17. The revised guidance amends
FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, in
determining whether an enterprise has a controlling financial interest in a
variable interest entity. This determination identifies the primary
beneficiary of a variable interest entity as the enterprise that has both the
power to direct the activities of a variable interest entity that most
significantly impacts the entity's economic performance, and the obligation
to absorb losses or the right to receive benefits of the entity that could
potentially be significant to the variable interest entity. The revised
guidance requires ongoing reassessments of whether an enterprise is the
primary beneficiary and eliminates the quantitative approach previously
required for determining the primary beneficiary. The Company does not
expect that the provisions of the new guidance will have a material effect
on its consolidated financial statements.
Revenue Recognition
In October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable Revenue
Arrangements. The new standard changes the requirements for establishing
separate units of accounting in a multiple element arrangement and requires
the allocation of arrangement consideration to each deliverable based on the
relative selling price. The selling price for each deliverable is based on
vendor-specific objective evidence (VSOE) if available, third-party evidence
if VSOE is not available, or estimated selling price if neither VSOE or
third-party evidence is available. ASU 2009-13 is effective for revenue
arrangements entered into in fiscal years beginning on or after June 15, 2010.
The Company does not expect that the provisions of the new guidance will have
a material effect on its consolidated financial statements.
Fair Value Measurements
In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and
Disclosures (ASC Topic 820) Improving Disclosures About Fair Value
Measurements. The ASU requires new disclosures about transfers into and out of
Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and
settlements relating to Level 3 measurements. It also clarifies existing fair
value disclosures about the level of disaggregation and about inputs and
valuation techniques used to measure fair value. The new disclosures and
clarifications of existing disclosures are effective for the Company's third
quarter of fiscal year 2010, except for the disclosures about purchases,
sales, issuances, and settlements relating to Level 3 measurements, which are
effective for the Company's first quarter of fiscal year 2012. Other than
requiring additional disclosures, the adoption of this new guidance did not
and will not have a material impact on the Company's consolidated financial
statements.
In February 2010, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update (ASU) No. 2010-09, Subsequent Events (Topic 855);
Amendments to Certain Recognition and Disclosure Requirements, effective upon
issuance, which removed the requirement for an SEC filer to disclose the date
through which subsequent events have been evaluated in both issued and revised
financial statements.
Note 2. Basis of Reporting
The Company's financial statements are presented on a going concern basis,
which contemplates the realization of assets and satisfaction of liabilities
in the normal course of business.
The Company has experienced a loss from operations as a result of its
investment necessary to achieve its operating plan, which is long-range in
nature. The Company incurred net losses from inception to June 30, 2010,
aggregating $11,250, has no revenue generating operations and is in the
development stage.
The Company's ability to continue as a going concern is contingent upon its
ability to secure additional financing, increase ownership equity and develop
profitable operations. In addition, the Company's ability to continue as a
going concern must be considered in light of the problems, expenses and
complications frequently encountered by entrance into established markets
and the competitive environment in which the Company operates.
The Company is pursuing financing for its operations and seeking additional
private investments. In addition, the Company is seeking to find a merger
candidate. Failure to secure such financing or to raise additional equity
capital or to locate a merger candidate may result in the Company having to
discontinue its operations.
The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets
or the amounts and classification of liabilities that may result from the
possible inability of the Company to continue as a going concern.
Note 3. Stockholders' Equity
During the year ended June 30, 2001, the Company issued 1,600,000 shares of
common stock to its founders at $0.001 per share for services.
During the year ended June 30, 2003, the Company issued 400,000 shares of
common stock for services at $0.001 per share.
During the years ended June 30, 2010, and 2009, and the period from inception
to June 30, 2010, affiliates of the Company contributed services with a fair
value of $1,000, $1,000 and $9,250 to the capital of the Company.
Note 4. Income Taxes
Deferred tax assets and liabilities are recorded based on the differences
between the tax bases of assets and liabilities and their carrying amounts
for financial reporting purposes, referred to as temporary differences.
Deferred tax assets and liabilities at the end of each period are determined
using the currently enacted tax rates applied to taxable income in the
periods in which the deferred tax assets and liabilities are expected to be
settled or realized.
The provision for income taxes differs from the amount computed by applying the
statutory federal income tax rate to income before provision for income taxes
for the years ended June 30, 2010 and 2009. The sources and tax effects of the
differences are as follows:
Income tax provision at the federal statutory rate 34%
Effect of operating losses (34)%
-----
0%
===
As of December 31, 2009, the Company has a net operating loss carry forward of
approximately $0. The principal difference between the accumulated deficit for
income tax purposes and the accumulated deficit for financial reporting
purposes results from stock compensation and contributed services.
ITEM 14 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
N/A
ITEM 15 EXHIBITS
(b) Exhibits
3(a) Articles of Incorporation
3(b) Bylaws
4(a) Agreements Defining Certain Rights of Shareholders
7 Not applicable
9 Not applicable
10(a) Pre-incorporation Consultation and
Subscription Agreement
11 Not applicable
14 Not applicable
16 Not applicable
21 Not applicable
23.1 Consent of Counsel, Gerard Werner, Esq.
24 Not applicable
28 Not applicable
99 Not applicable
ITEM 2. DESCRIPTION OF EXHIBITS
See Item I above.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
KOHLER CAPITAL III, CORPORATION
By: /s/ Gerard M. Werner
________________________________
Gerard M. Werner
General Counsel and Director
Date: September 20, 2010
ARTICLES OF INCORPORATION
OF
KOHLER CAPITAL III, INC.
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned incorporator, being a natural person of the age of
eighteen (18) years or more, and desiring to form a corporation under the laws
of the State of Florida, does hereby sign, verify and deliver in duplicate
to the Secretary of State of the State of Florida these Articles of
Incorporation.
ARTICLE I
NAME
The name of the corporation shall be KOHLER CAPITAL III, INC.
ARTICLE II
PRINCIPAL OFFICE
The principal place of business is Tower Floor, 1415 West
22nd Street, Oak Brook, IL 60523.
ARTICLE III
PURPOSE
The purpose for which the corporation is organized is:
Business Development Company
ARTICLE IV
SHARES
The number of shares of stock authorized is:
50,000,000 common shares- no par value
10,000,000 preferred shares- no par value
ARTICLE V
INITIAL OFFICER/ DIRECTOR
Chris Werner shall serve as the Company's initial
director and President.
ARTICLE VI
REGISTERED AGENT
The name and Florida street address of the registered agent is:
Charles Holland
231 Lexington Drive
Daytona Beach, FL 32114
ARTICLE VII
INCORPORATOR
The name and address of the Incorporator is:
Christopher Werner
P.O. Box 216
Kohler, WI 53044
- - --------------------------------------------
BYLAWS
OF
KOHLER CAPITAL III, Corporation
ARTICLE I
OFFICES
Section 1.1 PRINCIPAL OFFICE. The principal office of the corporation
shall be located in the City of Sheboygan, Wisconsin. The corporation may
have such other offices, either within or outside of the State of Florida,
as the Board of Directors may designate, or as the business of the
corporation may require from time to time.
Section 1.2 REGISTERED OFFICE. The registered office of the corporation,
required by the Florida Business Corporation Act to be maintained in the
State of Florida, may be, but need not be, identical with the principal
office. The company's registered agent within the State of Florida is Mr.
Charles Holland, 231 Lexington Drive, Daytona Beach, Florida 32114. The
address of the registered office/ registered agent may be changed from time
to time by the Board of Directors.
ARTICLE II
SHAREHOLDERS
Section 2.1 ANNUAL MEETING. The annual meeting of the shareholders shall
be held on the last Tuesday of May in each year, commencing with the year
2001, at the hour of 10:00 A.M., or at such other time on such other day as
shall be fixed by the Board of Directors, for the purpose of electing
directors and for the transaction of such other business as may come before
the meeting. If the day fixed for the annual meeting shall be a legal holiday
in the State of Florida, such meeting shall be held on the next succeeding
business day. If the election of directors shall not be held on the day
designated herein for any annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be
held at a special meeting of the shareholders as soon thereafter as may be
convenient.
A shareholder may apply to the district court in the county in Florida
where the corporation's principal office is located or, if the corporation has
no principal office in Florida, to the district court of the county in which
the corporation's registered office is located to seek an order that a
shareholder meeting be held (i) if an annual meeting was not held within six
months after the close of the corporation's most recently ended fiscal year or
fifteen months after its last annual meeting, whichever is earlier, or (ii) if
the shareholder participated in a proper call or of proper demand for a
special meeting and notice of the special meeting was not given within thirty
days after the date of the call or the date the last of the demands necessary
to require calling of the meeting was received by the corporation in
accordance with the notice.
Section 2.2 SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the President or by the Board of Directors, and shall be called by the
President upon the receipt of one or more written demands for a special
meeting, stating the purpose or purposes for which it is to be held, signed
and dated by the holders of shares representing at least ten percent of all
the votes entitled to be cast on any issue proposed to be considered at the
meeting.
Section 2.3 PLACE OF MEETINGS. The Board of Directors may designate any
place, either within or outside of the State of Florida, as the place of
meeting for any annual meeting or for any special meeting called by the Board
of Directors. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal office of the corporation
in the State of Florida.
Section 2.4 NOTICE OF MEETING. Written notice stating the place, day and
hour of the meeting of shareholders and, in case of a special meeting, the
purpose or purposes for which the meeting is called, shall, unless otherwise
prescribed by statute, be delivered not less than ten nor more than sixty days
before the date of the meeting, either personally or by mail, by or at the
direction of the President, or the Secretary, or the officer or other persons
calling the meeting, to each shareholder of record entitled to vote at such
meeting; provided, however, that if the number of authorized shares is to be
increased, at least thirty days' notice shall be given.
Notice of a special meeting shall include a description of the purpose or
purposes of the meeting. Notice of an annual meeting need not include a
description of the purpose or purposes of the meeting except the purpose or
purposes shall be stated with respect to (i) an amendment to the articles of
incorporation of the corporation, (ii) a merger or share exchange in which the
corporation is a party and, with respect to a share exchange, in which the
corporation's shares will be acquired, (iii) a sale, lease, exchange or other
disposition, other than in the usual and regular course of business, of all or
substantially all of the property of the corporation or of another entity
which this corporation controls, in each case with or without the goodwill,
(iv) a dissolution of the corporation, or (v) any other purpose for which a
statement of purpose is required by the Florida Business Corporation Act.
Notice shall be given personally or by mail, private carrier, telegraph,
teletype, electronically transmitted facsimile or other form of wire or
wireless communication by or at the direction of the president, the secretary,
or the officer or persons calling the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed and if in a comprehensible form,
such notice shall be deemed to be given and effective when deposited in the
United States mail, addressed to the shareholder at his address as it appears
in the corporation's current record of shareholders, with postage prepaid. If
notice is given other than by mail, and provided that such notice is in a
comprehensible form, the notice is given and effective on the date received
by the shareholder.
If requested by the person or persons lawfully calling such meeting, the
notice shall be given at corporate expense.
When a meeting is adjourned to another date, time or place, notice need
not be given of the new date, time or place if the new date, time or place of
such meeting is announced before adjournment at the meeting at which the
adjournment is taken. At the adjourned meeting the corporation may transact
any business which may have been transacted at the original meeting. If the
adjournment is for more than 120 days, or if a new record date is fixed for
the adjourned meeting, a new notice of the adjourned meeting shall be given
to each shareholder of record entitled to vote at the meeting as of the new
record date.
A shareholder may waive notice of a meeting before or after the time and
date of the meeting by a writing signed by such shareholder. Such waiver shall
be delivered to the corporation for filing with the corporate records.
Further, by attending a meeting either in person or by proxy, a shareholder
waives objection to lack of notice or defective notice of the meeting unless
the shareholder objects at the beginning of the meeting to the holding of the
meeting or the transaction of business at the meeting because of lack of
notice or defective notice. By attending the meeting, the shareholder also
waives any objection to consideration in the meeting of a particular matter
not within the purpose or purposes described in the meeting notice unless the
shareholder objects to considering the matter when it is presented.
No notice need be sent to any shareholder if three successive notices
mailed to the last known address of such shareholder have been returned as
undeliverable until such time as another address for such shareholder is made
known to the corporation by such shareholder. In order to be entitled to
receive notice of any meeting, a shareholder shall advise the corporation in
writing of any change in such shareholder's mailing address as shown on the
corporation's books and records.
Section 2.5 MEETING OF ALL SHAREHOLDERS. If all of the shareholders shall
meet at any time and place, either within or outside of the State of Florida,
and consent to the holding of a meeting at such time and place, such meeting
shall be valid without call or notice, and at such meeting any corporate
action may be taken.
Section 2.6 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled
to receive payment of any distribution, or in order to make a determination of
shareholders for any other purpose, the Board of Directors of the corporation
may provide that the share transfer books shall be closed for a stated period
but not to exceed, in any case, seventy days. If the share transfer books
shall be closed for the purpose of determining shareholders entitled to notice
of or to vote at a meeting of shareholders, such books shall be closed for at
least ten days immediately preceding such meeting. In lieu of closing the
share transfer books, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date in any case
to be not more than seventy days and, in case of a meeting of shareholders,
not less than ten days prior to the date on which the particular action,
requiring such determination of shareholders, is to be taken. If the share
transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a distribution,
the date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such distribution is adopted,
as the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof unless the meeting is
adjourned to a date more than one hundred twenty days after the date fixed for
the original meeting, in which case the Board of Directors shall make a new
determination as provided in this section.
Section 2.7 VOTING RECORD. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten
days before such meeting of shareholders, a complete record of the
shareholders entitled to vote at each meeting of shareholders or any
adjournment thereof, arranged by voting groups and within each voting group by
class or series of shares, in alphabetical order within each class or series,
with the address of and the number of shares held by each shareholder in each
class or series. For a period beginning the earlier of ten days before the
meeting for which the record was prepared or two business days after notice of
the meeting is given and continuing through the meeting, the record shall be
kept on file at the principal office of the corporation or at a place
identified in the notice of the meeting in the city where the meeting will be
held, whether within or outside of the State of Florida, and shall be subject
to inspection by any shareholder upon written demand at any time during usual
business hours. Such record shall be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting for the purposes thereof.
The original stock transfer books shall be the prima facie evidence as to
who are the shareholders entitled to examine the record or transfer books or
to vote at any meeting of shareholders.
Section 2.8 QUORUM. A majority of the votes entitled to be cast on the
matter by a voting group, represented in person or by proxy, constitutes a
quorum of that voting group for action on that matter. If no specific voting
group is designated in the Articles of Incorporation or under the Florida
Business Corporation Act for a particular matter, all outstanding shares of
the corporation entitled to vote, represented in person or by proxy, shall
constitute a voting group. In the absence of a quorum at any such meeting, a
majority of the shares so represented may adjourn the meeting from time to
time for a period not to exceed one hundred twenty days without further
notice. However, if the adjournment is for more than one hundred twenty days,
or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each shareholder
of record entitled to vote at the meeting.
At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted
at the meeting as originally noticed. The shareholders present at a duly
organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal during such meeting of that number of
shareholders whose absence would cause there to be less than a quorum.
Section 2.9 MANNER OF ACTING. If a quorum is present, an action is
approved if the votes cast favoring the action exceed the votes cast within
the voting group opposing the action and such action shall be the act of the
shareholders, unless the vote of a greater proportion or number or voting by
groups is otherwise required by the Florida Business Corporation Act, the
Articles of Incorporation or these Bylaws.
Section 2.10 PROXIES. At all meetings of shareholders a shareholder may
vote by proxy by signing an appointment form or similar writing, either
personally or by his or her duly authorized attorney-in-fact. A shareholder
may also appoint a proxy by transmitting or authorizing the transmission of a
telegram, teletype, or other electronic transmission providing a written
statement of the appointment to the proxy, a proxy solicitor, proxy support
service organization, or other person duly authorized by the proxy to receive
appointments as agent for the proxy, or to the corporation. The transmitted
appointment shall set forth or be transmitted with written evidence from which
it can be determined that the shareholder transmitted or authorized the
transmission of the appointment. The proxy appointment form or similar writing
shall be filed with the secretary of the corporation before or at the time of
the meeting. The appointment of a proxy is effective when received by the
corporation and is valid for eleven months unless a different period is
expressly provided in the appointment form or similar writing.
Any complete copy, including an electronically transmitted facsimile, of
an appointment of a proxy may be substituted for or used in lieu of the
original appointment for any purpose for which the original appointment could
be used.
Revocation of a proxy does not affect the right of the corporation to
accept the proxy's authority unless (i) the corporation had notice that the
appointment was coupled with an interest and notice that such interest is
extinguished is received by the secretary or other officer or agent authorized
to tabulate votes before the proxy exercises his or her authority under the
appointment, or (ii) other notice of the revocation of the appointment is
received by the secretary or other officer or agent authorized to tabulate
votes before the proxy exercises his or her authority under the appointment.
Other notice of revocation may, in the discretion of the corporation, be
deemed to include the appearance at a shareholders' meeting of the shareholder
who granted the proxy and his or her voting in person on any matter subject
to a vote at such meeting.
The death or incapacity of the shareholder appointing a proxy does not
affect the right of the corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the secretary or other
officer or agent authorized to tabulate votes before the proxy exercises his
or her authority under the appointment.
The corporation shall not be required to recognize an appointment made
irrevocable if it has received a writing revoking the appointment signed by
the shareholder (including a shareholder who is a successor to the shareholder
who granted the proxy) either personally or by his or her attorney-in-fact,
notwithstanding that the revocation may be a breach of an obligation of the
shareholder to another person not to revoke the appointment.
Section 2.11 VOTING OF SHARES. Unless otherwise provided by these Bylaws
or the Articles of Incorporation, each outstanding share entitled to vote
shall be entitled to one vote upon each matter submitted to a vote at a
meeting of shareholders, and each fractional share shall be entitled to a
corresponding fractional vote on each such matter. Only shares are entitled
to vote.
Section 2.12 VOTING OF SHARES BY CERTAIN SHAREHOLDERS. If the name on a
vote, consent, waiver, proxy appointment, or proxy appointment revocation
corresponds to the name of a shareholder, the corporation, if acting in good
faith, is entitled to accept the vote, consent, waiver, proxy appointment or
proxy appointment revocation and give it effect as the act of the shareholder.
If the name signed on a vote, consent, waiver, proxy appointment or proxy
appointment revocation does not correspond to the name of a shareholder, the
corporation, if acting in good faith, is nevertheless entitled to accept the
vote, consent, waiver, proxy appointment or proxy appointment revocation and
to give it effect as the act of the shareholder if:
(i) the shareholder is an entity and the name signed purports to be that
of an officer or agent of the entity;
(ii) the name signed purports to be that of an administrator, executor,
guardian or conservator representing the shareholder and, if the corporation
requests, evidence of fiduciary status acceptable to the corporation has been
presented with respect to the vote, consent, waiver, proxy appointment or
proxy appointment revocation;
(iii) the name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the corporation requests, evidence of
this status acceptable to the corporation has been presented with respect to
the vote, consent, waiver, proxy appointment or proxy appointment revocation;
(iv) the name signed purports to be that of a pledgee, beneficial owner
or attorney-in-fact of the shareholder and, if the corporation requests,
evidence acceptable to the corporation of the signatory's authority to sign
for the shareholder has been presented with respect to the vote, consent,
waiver, proxy appointment or proxy appointment revocation;
(v) two or more persons are the shareholder as co-tenants or fiduciaries
and the name signed purports to be the name of at least one of the co-tenants
or fiduciaries, and the person signing appears to be acting on behalf of all
the co-tenants or fiduciaries; or
(vi) the acceptance of the vote, consent, waiver, proxy appointment or
proxy appointment revocation is otherwise proper under rules established by
the corporation that are not inconsistent with this Section 2.12.
The corporation is entitled to reject a vote, consent, waiver, proxy
appointment or proxy appointment revocation if the secretary or other officer
or agent authorized to tabulate votes, acting in good faith, has reasonable
basis for doubt about the validity of the signature on it or about the
signatory's authority to sign for the shareholder.
Neither the corporation nor any of its directors, officers, employees, or
agents who accepts or rejects a vote, consent, waiver, proxy appointment or
proxy appointment revocation in good faith and in accordance with the
standards of this Section is liable in damages for the consequences of the
acceptance or rejection.
Redeemable shares are not entitled to be voted after notice of redemption
is mailed to the holders and a sum sufficient to redeem the shares has been
deposited with a bank, trust company or other financial institution under an
irrevocable obligation to pay the holders of the redemption price on
surrender of the shares.
Section 2.13 ACTION BY SHAREHOLDERS WITHOUT A MEETING. Unless the
Articles of Incorporation or these Bylaws provide otherwise, action required
or permitted to be taken at a meeting of shareholders may be taken without a
meeting if the action is evidenced by one or more written consents describing
the action taken, signed by each shareholder entitled to vote and delivered to
the Secretary of the corporation for inclusion in the minutes or for filing
with the corporate records. Action taken under this section is effective when
all shareholders entitled to vote have signed the consent, unless the consent
specifies a different effective date.
Any such writing may be received by the corporation by electronically
transmitted facsimile or other form of wire or wireless communication
providing the corporation with a complete copy thereof, including a copy of
the signature thereto. The shareholder so transmitting such a writing shall
furnish an original of such writing to the corporation, but the failure of the
corporation to receive or record such original writing shall not affect the
action so taken.
The record date for determining shareholders entitled to take action
without a meeting shall be the date the written consent is first received by
the corporation.
Section 2.14 VOTING BY BALLOT. Voting on any question or in any election
may be by voice vote unless the presiding officer shall order or any
shareholder shall demand that voting be by ballot.
Section 2.15 NO CUMULATIVE VOTING. No shareholder shall be permitted to
cumulate his or her votes.
Section 2.16 WAIVER OF NOTICE. When any notice is required to be given to
any shareholder, a waiver thereof in writing signed by the person entitled to
such notice, whether before, at, or after the time stated therein, shall be
equivalent to the giving of such notice.
The attendance of a shareholder at any meeting shall constitute a waiver
of notice, waiver of objection to defective notice of such meeting, or a
waiver of objection to the consideration of a particular matter at the
shareholder meeting unless the shareholder, at the beginning of the meeting,
objects to the holding of the meeting, the transaction of business at the
meeting, or the consideration of a particular matter at the time it is
presented at the meeting.
Section 2.17 PARTICIPATION BY ELECTRONIC MEANS. Any shareholder may
participate in any meeting of the shareholders by means of telephone
conference or similar communications equipment by which all persons
participating in the meeting can hear each other at the same time. Such
participation shall constitute presence in person at the meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 3.1 GENERAL POWERS. The business and affairs of the corporation
shall be managed by its Board of Directors.
Section 3.2 PERFORMANCE OF DUTIES. A director of the corporation shall
perform his or her duties as a director, including his or her duties as a
member of any committee of the board upon which he or she may serve, in good
faith, in a manner he or she reasonably believes to be in the best interests
of the corporation, and with such care as an ordinarily prudent person in a
like position would use under similar circumstances. In performing his duties,
a director shall be entitled to rely on information, opinions, reports, or
statements, including financial statements and other financial data, in each
case prepared or presented by persons and groups listed in paragraphs (a),
(b), and (c) of this Section 3.2; but he or she shall not be considered to be
acting in good faith if he or she has knowledge concerning the matter in
question that would cause such reliance to be unwarranted. A person who so
performs his or her other duties shall not have any liability by reason of
being or having been a director of the corporation. Those persons and groups
on whose information, opinions, reports, and statements a director is
entitled to rely are:
(a) One or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented;
(b) Legal counsel, public accountants, or other persons as to matters
which the director reasonably believes to be within such persons'
professional or expert competence; or
(c) A committee of the board upon which he or she does not serve, duly
designated in accordance with the provision of the Articles of Incorporation
or the Bylaws, as to matters within its designated authority, which committee
the director reasonably believes to merit confidence.
Section 3.3 NUMBER, TENURE AND QUALIFICATIONS. The number of directors
of the corporation shall be fixed from time to time by resolution of the Board
of Directors, but in no instance shall there be less than one director. Each
director shall hold office as prescribed by written agreement, or until the
next annual meeting of shareholders, or until his or her successor shall have
been elected and qualified. Directors need not be residents of the State of
Florida or shareholders of the corporation.
There shall be a Chairman of the Board, who has been elected from among
the directors. He or she shall preside at all meetings of the stockholders and
of the Board of Directors. He or she shall have such other powers and duties
as may be prescribed by the Board of Directors.
Section 3.4 REGULAR MEETINGS. A regular meeting of the Board of Directors
shall be held without other notice than this Bylaw immediately after, and at
the same place as, the annual meeting of shareholders. The Board of Directors
may provide, by resolution, the time and place, either within or without the
State of Florida, for the holding of additional regular meetings without
other notice than such resolution.
Section 3.5 SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the President or any two directors. The
person or persons authorized to call special meetings of the Board of
Directors may fix any place, either within or without the State of Florida,
as the place for holding any special meeting of the Board of Directors called
by them.
Section 3.6 NOTICE. Written notice of any special meeting of directors
shall be given as follows:
By mail to each director at his or her business address at least two
days prior to the meeting; or
By personal delivery, facsimile or telegram at least twenty-four hours
prior to the meeting to the business address of each director, or in the event
such notice is given on a Saturday, Sunday or holiday, to the residence
address of each director. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, so addressed, with postage
thereon prepaid. If notice is given by facsimile, such notice shall be deemed
to be delivered when a confirmation of the transmission of the facsimile has
been received by the sender. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered to the telegraph
company.
Any director may waive notice of any meeting.
The attendance of a director at any meeting shall constitute a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any regular
or special meeting of the Board of Directors need be specified in the notice
or waiver of notice of such meeting.
When any notice is required to be given to a director, a waiver thereof
in writing signed by such director, whether before, at or after the time
stated therein, shall constitute the giving of such notice.
Section 3.7 QUORUM. A majority of the number of directors fixed by or
pursuant to Section 3.2 of this Article III, or if no such number is fixed, a
majority of the number of directors in office immediately before the meeting
begins, shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, but if less than such majority is present
at a meeting, a majority of the directors present may adjourn the meeting
from time to time without further notice.
Section 3.8 MANNER OF ACTING. Except as otherwise required by law or by
the Articles of Incorporation, the affirmative vote of the majority of the
directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors.
Section 3.9 INFORMAL ACTION BY DIRECTORS OR COMMITTEE MEMBERS. Unless
the Articles of Incorporation or these By-laws provide otherwise, any action
required or permitted to be taken at a meeting of the board of directors or
any committee designated by said board may be taken without a meeting if the
action is evidenced by one or more written consents describing the action
taken, signed by each director or committee member, and delivered to the
Secretary for inclusion in the minutes or for filing with the corporate
records. Action taken under this section is effective when all directors or
committee members have signed the consent, unless the consent specifies a
different effective date. Such consent has the same force and effect as a
unanimous vote of the directors or committee members and may be stated as
such in any document.
Section 3.10 PARTICIPATION BY ELECTRONIC MEANS. Any members of the Board
of Directors or any committee designated by such Board may participate in a
meeting of the Board of Directors or committee by means of telephone
conference or similar communications equipment by which all persons
participating in the meeting can hear each other at the same time. Such
participation shall constitute presence in person at the meeting.
Section 3.11 VACANCIES. Any vacancy on the Board of Directors may be
filled by the affirmative vote of a majority of the shareholders or the Board
of Directors. If the directors remaining in office constitute fewer than a
quorum of the board, the directors may fill the vacancy by the affirmative
vote of a majority of all the directors remaining in office.
If elected by the directors, the director shall hold office until the
next annual shareholders' meeting at which directors are elected. If elected
by the shareholders, the director shall hold office for the unexpired term of
his or her predecessor in office; except that, if the director's predecessor
was elected by the directors to fill a vacancy, the director elected by the
shareholders shall hold the office for the unexpired term of the last
predecessor elected by the shareholders.
If the vacant office was held by a director elected by a voting group of
shareholders, only the holders of shares of that voting group are entitled to
vote to fill the vacancy if it is filled by the shareholders, and, if one or
more of the remaining directors were elected by the same voting group, only
such directors are entitled to vote to fill the vacancy if it is filled by
the directors.
Section 3.12 RESIGNATION. Any director of the corporation may resign at
any time by giving written notice to the Secretary of the corporation. The
resignation of any director shall take effect upon receipt of notice thereof
or at such later time as shall be specified in such notice; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. When one or more directors shall resign from
the board, effective at a future date, a majority of the directors then in
office, including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such resignation
or resignations shall become effective.
Section 3.13 REMOVAL. Subject to any limitations contained in the
Articles of Incorporation, any director or directors of the corporation may be
removed at any time, with or without cause, in the manner provided in the
Florida Business Corporation Act.
Section 3.14 COMMITTEES. By resolution adopted by a majority of the Board
of Directors, the directors may designate two or more directors to constitute
a committee, any of which shall have such authority in the management of the
corporation as the Board of Directors shall designate and as shall be
prescribed by the Florida Business Corporation Act and Article XI of these
Bylaws.
Section 3.15 COMPENSATION. By resolution of the Board of Directors and
irrespective of any personal interest of any of the members, or the Board of
Directors, each director may be paid his or her expenses, if any, of
attendance at each meeting of the Board of Directors, and may be paid a stated
salary as director or a fixed sum for attendance at each meeting of the Board
of Directors or both. No such payment shall preclude any director from serving
the corporation in any other capacity and receiving compensation therefor.
Section 3.16 PRESUMPTION OF ASSENT. A director of the corporation who is
present at a meeting of the Board of Directors or committee of the board at
which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless (i) the director objects at the beginning
of the meeting, or promptly upon his or her arrival, to the holding of the
meeting or the transaction of business at the meeting and does not thereafter
vote for or assent to any action taken at the meeting, (ii) the director
contemporaneously requests that his or her dissent or abstention as to any
specific action taken be entered in the minutes of the meeting, or (iii) the
director causes written notice of his or her dissent or abstention as to any
specific action to be received by the presiding officer or the meeting before
its adjournment or by the corporation promptly after the adjournment of the
meeting. A director may dissent to a specific action at a meeting, while
assenting to others. The right to dissent to a specific action taken at a
meeting of the Board of Directors or a committee of the board shall not be
available to a director who voted in favor of such action.
ARTICLE IV
OFFICERS
Section 4.1 NUMBER. The officers of the corporation shall be a President,
a Secretary, and a Treasurer, each of whom must be a natural person who is
eighteen years or older and shall be elected by the Board of Directors. Such
other officers and assistant officers as may be deemed necessary may be
elected or appointed by the Board of Directors. Any two or more offices may
be held by the same person.
Section 4.2 ELECTION AND TERM OF OFFICE. The officers of the corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the first meeting of the Board of Directors held after the
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
practicable. Each officer shall hold office until his successor shall have
been duly elected and shall have qualified or until his or her death or until
he shall resign or shall have been removed in the manner hereinafter provided.
Section 4.3 REMOVAL AND RESIGNATION. Any officer or agent may be removed
by the Board of Directors at any time, with or without cause, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed. Election or appointment of an officer or agent shall not of itself
create contract rights.
An officer or agent may resign at any time by giving written notice of
resignation to the Secretary of the corporation. The resignation is effective
when the notice is received by the corporation unless the notice specifies a
later effective date.
Section 4.4 VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
Section 4.5 PRESIDENT. The President shall be the chief executive officer
of the corporation and, subject to the control of the Board of Directors,
shall, in general, supervise and control all of the business and affairs of
the corporation. He or she shall, when present, and in the absence of a Chair
of the Board, preside at all meetings of the shareholders and of the Board of
Directors. He or she may sign, with the Secretary or any other proper officer
of the corporation thereunto authorized by the Board of Directors,
certificates for shares of the corporation and deeds, mortgages, bonds,
contracts, or other instruments which the Board of Directors has authorized to
be executed, except in cases where the signing and execution thereof shall be
expressly delegated by the Board of Directors or by these Bylaws to some other
officer or agent of the corporation, or shall be required by law to be
otherwise signed or executed; and in general shall perform all duties incident
to the office of President and such other duties as may be prescribed by the
Board of Directors from time to time.
Section 4.6 VICE PRESIDENT. If elected or appointed by the Board of
Directors, the Vice President (or in the event there be more than one vice
president, the vice presidents in the order designated at the time of their
election, or in the absence of any designation, then in the order of their
election) shall, in the absence of the President or in the event of his or her
death, inability or refusal to act, perform all duties of the President, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the President. Any Vice President may sign, with the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary, certificates for shares of the corporation; and shall perform such
other duties as from time to time may be assigned to him by the President or
by the Board of Directors.
Section 4.7 SECRETARY. The Secretary shall: (a) prepare and maintain as
permanent records the minutes of the proceedings of the shareholders and the
Board of Directors, a record of all actions taken by the shareholders or Board
of Directors without a meeting, a record of all actions taken by a committee
of the Board of Directors in place of the Board of Directors on behalf of the
corporation, and a record of all waivers of notice and meetings of
shareholders and of the Board of Directors or any committee thereof (b) ensure
that all notices are duly given in accordance with the provisions of these
Bylaws and as required by law, (c) serve as custodian of the corporate records
and of the seal of the corporation and affix the seal to all documents when
authorized by the Board of Directors, (d) keep at the corporation's registered
office or principal place of business a record containing the names and
addresses of all shareholders in a form that permits preparation of a list of
shareholders arranged by voting group and by class or series of shares within
each voting group, that is alphabetical within each class or series and that
shows the address of, and the number of shares of each class or series held
by, each shareholder, unless such a record shall be kept at the office of the
corporation's transfer agent or registrar, (e) maintain at the corporation's
principal office the originals or copies of the corporation's Articles of
Incorporation, Bylaws, minutes of all shareholders' meetings and records of
all action taken by shareholders without a meeting for the past three years,
all written communications within the past three years to shareholders as a
group or to the holders of any class or series of shares as a group, a list of
the names and business addresses of the current directors and officers, a copy
of the corporation's most recent corporate report filed with the Secretary of
State, and financial statements showing in reasonable detail the corporation's
assets and liabilities and results of operations for the last three years, (f)
have general charge of the stock transfer books of the corporation, unless the
corporation has a transfer agent, (g) authenticate records of the corporation,
and (h) in general, perform all duties incident to the office of secretary and
such other duties as from time to time may be assigned to him by the president
or by the board of the Board of Directors. Assistant Secretaries, if any,
shall have the same duties and powers, subject to supervision by the
Secretary. The directors and/or shareholders may however respectively
designate a person other than the Secretary or Assistant Secretary to keep
the minutes of their respective meetings.
Any books, records, or minutes of the corporation may be in written form
or in any form capable of being converted into written form within a
reasonable time.
Section 4.8 TREASURER. The Treasurer shall: (a) have charge and custody
of and be responsible for all funds and securities of the corporation; (b)
receive and give receipts for moneys due and payable to the corporation from
any source whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositories as shall be
selected in accordance with the provisions of Article V of these Bylaws; and
(c) in general perform all of the duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to him or her by
the President or by the Board of Directors.
Section 4.9 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS.
The Assistant Secretaries, when authorized by the Board of Directors, may sign
with the Chair or Vice Chair of the Board of Directors or the President or a
Vice President certificates for shares of the corporation the issuance of which
shall have been authorized by a resolution of the Board of Directors. The
Assistant Secretaries and Assistant Treasurers, in general, shall perform such
duties as shall be assigned to them by the Secretary or the Treasurer,
respectively, or by the President or the Board of Directors.
Section 4.10 BONDS. If the Board of Directors by resolution shall so
require, any officer or agent of the corporation shall give bond to the
corporation in such amount and with such surety as the Board of Directors may
deem sufficient, conditioned upon the faithful performance of their
respective duties and offices.
Section 4.11 SALARIES. The salaries of the officers shall be fixed from
time to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 5.1 CONTRACTS. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the corporation, and
such authority may be general or confined to specific instances.
Section 5.2 LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. Such authority
may be general or confined to specific instances.
Section 5.3 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
Section 5.4 DEPOSITS. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE VI
SHARES, CERTIFICATES FOR SHARES
AND TRANSFER OF SHARES
Section 6.1 REGULATION. The Board of Directors may make such rules and
regulations as it may deem appropriate concerning the issuance, transfer and
registration of certificates for shares of the corporation, including the
appointment of transfer agents and registrars.
Section 6.2 SHARES WITHOUT CERTIFICATES. Unless otherwise provided by the
Articles of Incorporation or these Bylaws, the board of directors may
authorize the issuance of any of its classes or series of shares without
certificates. Such authorization shall not affect shares already represented
by certificates until they are surrendered to the corporation.
Within a reasonable time following the issue or transfer of shares
without certificates, the corporation shall send the shareholder a complete
written statement of the information required on certificates by the Florida
Business Corporation Act.
Section 6.3 CERTIFICATES FOR SHARES. If shares of the corporation are
represented by certificates, the certificates shall be respectively numbered
serially for each class of shares, or series thereof, as they are issued,
shall be impressed with the corporate seal or a facsimile thereof, and shall
be signed by the Chair or Vice Chair of the Board of Directors or by the
President or a Vice President and by the Treasurer or an Assistant Treasurer
or by the Secretary or an Assistant Secretary; provided that such signatures
may be facsimile if the certificate is countersigned by a transfer agent, or
registered by a registrar other than the corporation itself or its employee.
Each certificate shall state the name of the corporation, the fact that the
corporation is organized or incorporated under the laws of the State of
Florida, the name of the person to whom issued, the date of issue, the class
(or series of any class), and the number of shares represented thereby. A
statement of the designations, preferences, qualifications, limitations,
restrictions and special or relative rights of the shares of each class shall
be set forth in full or summarized on the face or back of the certificates
which the corporation shall issue, or in lieu thereof, the certificate may set
forth that such a statement or summary will be furnished to any shareholder
upon request without charge. Each certificate shall be otherwise in such form
as may be prescribed by the Board of Directors and as shall conform to the
rules of any stock exchange on which the shares may be listed.
The corporation shall not issue certificates representing fractional
shares and shall not be obligated to make any transfers creating a fractional
interest in a share of stock. The corporation may, but shall not be obligated
to, issue scrip in lieu of any fractional shares, such scrip to have terms
and conditions specified by the Board of Directors.
Section 6.4 CANCELLATION OF CERTIFICATES. All certificates surrendered to
the corporation for transfer shall be canceled and no new certificates shall
be issued in lieu thereof until the former certificate for a like number of
shares shall have been surrendered and canceled, except as herein provided
with respect to lost, stolen or destroyed certificates.
Section 6.5 LOST, STOLEN OR DESTROYED CERTIFICATES. Any shareholder
claiming that his certificate for shares is lost, stolen or destroyed may make
an affidavit or affirmation of that fact and lodge the same with the
Secretary of the corporation, accompanied by a signed application for a new
certificate.
Thereupon, and upon the giving of a satisfactory bond of indemnity to the
corporation not exceeding an amount double the value of the shares as
represented by such certificate (the necessity for such bond and the amount
required to be determined by the President and Treasurer of the corporation),
a new certificate may be issued of the same tenor and representing the same
number, class and series of shares as were represented by the certificate
alleged to be lost, stolen or destroyed.
Section 6.6 TRANSFER OF SHARES. Subject to the terms of any shareholder
agreement relating to the transfer of shares or other transfer restrictions
contained in the Articles of Incorporation or authorized therein, shares of
the corporation shall be transferable on the books of the corporation by the
holder thereof in person or by his duly authorized attorney, upon the
surrender and cancellation of a certificate or certificates for a like number
of shares. Upon presentation and surrender of a certificate for shares
properly endorsed and payment of all taxes therefor, the transferee shall be
entitled to a new certificate or certificates in lieu thereof. As against the
corporation, a transfer of shares can be made only on the books of the
corporation and in the manner hereinabove provided, and the corporation shall
be entitled to treat the holder of record of any share as the owner thereof
and shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, whether or not it
shall have express or other notice thereof, save as expressly provided by the
statutes of the State of Florida.
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall end on the 30th day of June
in each calendar year.
ARTICLE VIII
DISTRIBUTIONS
The Board of Directors may from time to time declare, and the corporation
may pay, distributions on its outstanding shares in the manner and upon the
terms and conditions provided by the Florida Business Corporation Act and
its Articles of Incorporation.
ARTICLE IX
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words "CORPORATE SEAL."
ARTICLE X
The Board of Directors shall have power, to the maximum extent permitted
by the Florida Business Corporation Act, to make, amend and repeal the Bylaws
of the corporation at any regular or special meeting of the board unless the
shareholders, in making, amending or repealing a particular Bylaw, expressly
provide that the directors may not amend or repeal such Bylaw. The
shareholders also shall have the power to make, amend or repeal the Bylaws of
the corporation at any annual meeting or at any special meeting called for
that purpose.
AMENDMENTS
ARTICLE XI
EXECUTIVE COMMITTEE
Section 11.1 APPOINTMENT. The Board of Directors by resolution adopted by
a majority of the full Board, may designate two or more of its members to
constitute an Executive Committee. The designation of such Committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed by law.
Section 11.2 AUTHORITY. The Executive Committee, when the Board of
Directors is not in session, shall have and may exercise all of the authority
of the Board of Directors except to the extent, if any, that such authority
shall be limited by the resolution appointing the Executive Committee and
except also that the Executive Committee shall not have the authority of the
Board of Directors in reference to authorizing distributions, filling
vacancies on the Board of Directors, authorizing reacquisition of shares,
authorizing and determining rights for shares, amending the Articles of
Incorporation, adopting a plan of merger or consolidation, recommending to the
shareholders the sale, lease or other disposition of all or substantially all
of the property and assets of the corporation otherwise than in the usual and
regular course of its business, recommending to the shareholders a voluntary
dissolution of the corporation or a revocation thereof, or amending the
Bylaws of the corporation.
Section 11.3 TENURE AND QUALIFICATIONS. Each member of the Executive
Committee shall hold office until the next regular annual meeting of the Board
of Directors following his or her designation and until his or her successor
is designated as a member of the Executive Committee and is elected and
qualified.
Section 11.4 MEETINGS. Regular meetings of the Executive Committee may be
held without notice at such time and places as the Executive Committee may fix
from time to time by resolution. Special meetings of the Executive Committee
may be called by any member thereof upon not less than one day's notice
stating the place, date and hour of the meeting, which notice may be written
or oral, and if mailed, shall be deemed to be delivered when deposited in the
United States mail addressed to the member of the Executive Committee at his
or her business address. Any member of the Executive Committee may waive
notice of any meeting and no notice of any meeting need be given to any member
thereof who attends in person. The notice of a meeting of the Executive
Committee need not state the business proposed to be transacted at the
meeting.
Section 11.5 QUORUM. A majority of the members of the Executive Committee
shall constitute a quorum for the transaction of business at any meeting
thereof, and action of the Executive Committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.
Section 11.6 INFORMAL ACTION BY EXECUTIVE COMMITTEE. Any action required
or permitted to be taken by the Executive Committee at a meeting may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the members of the Executive Committee entitled to
vote with respect to the subject matter thereof.
Section 11.7 VACANCIES. Any vacancy in the Executive Committee may be
filled by a resolution adopted by a majority of the full Board of Directors.
Section 11.8 RESIGNATIONS AND REMOVAL. Any member of the Executive
Committee may be removed at any time with or without cause by resolution
adopted by a majority of the full Board of Directors. Any member of the
Executive Committee may resign from the Executive Committee at any time by
giving written notice to the President or Secretary of the corporation, and
unless otherwise specified therein, the acceptance of such resignation shall
not be necessary to make it effective.
Section 11.9 PROCEDURE. The Executive Committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall
not be inconsistent with these Bylaws. It shall keep regular minutes of its
proceedings and report the same to the Board of Directors for its information
at the meeting thereof held next after the proceedings shall have been taken.
ARTICLE XII
EMERGENCY BY-LAWS
The Emergency Bylaws provided in this Article XII shall be operative
during any emergency in the conduct of the business of the corporation
resulting from a catastrophic event that prevents the normal functioning of
the offices of the Corporation, notwithstanding any different provision in the
preceding articles of the Bylaws or in the Articles of Incorporation of the
corporation or in the Florida Business Corporation Act. To the extent not
inconsistent with the provisions of this Article, the Bylaws provided in the
preceding articles shall remain in effect during such emergency and upon its
termination the Emergency Bylaws shall cease to be operative.
During any such emergency:
(a) A meeting of the Board of Directors may be called by any officer or
director of the corporation. Notice of the time and place of the meeting shall
be given by the person calling the meeting to such of the directors as it may
be feasible to reach by any available means of communication. Such notice
shall be given at such time in advance of the meeting as circumstances permit
in the judgment of the person calling the meeting.
(b) At any such meeting of the Board of Directors, a quorum shall consist
of the number of directors in attendance at such meeting.
(c) The Board of Directors, either before or during any such emergency,
may, effective in the emergency, change the principal office or designate
several alternative principal offices or regional offices, or authorize the
officers so to do.
(d) The Board of Directors, either before or during any such emergency,
may provide, and from time to time modify, lines of succession in the event
that during such an emergency any or all officers or agents of the corporation
shall for any reason be rendered incapable of discharging their duties.
(e) No officer, director or employee acting in accordance with these
Emergency Bylaws shall be liable except for willful misconduct.
(f) These Emergency Bylaws shall be subject to repeal or change by
further action of the Board of Directors or by action of the shareholders, but
no such repeal or change shall modify the provisions of the next preceding
paragraph with regard to action taken prior to the time of such repeal or
change. Any amendment of these Emergency Bylaws may make any further or
different provision that may be practical and necessary for the circumstances
of the emergency.
CERTIFICATE
I hereby certify that the foregoing Amended Bylaws constitute the
Bylaws of Kohler Capital III, Corporation, adopted by the Board of Directors
and Shareholders of the corporation as of May 7, 2001.
/s/ Christopher Werner
_______________________________
CHRISTOPHER WERNER,
President
UNANIMOUS CONSENT MINUTES OF
THE BOARD OF DIRECTORS OF
KOHLER CAPITAL III, Corporation
May 7, 2001
Pursuant to the provisions of the Florida Business Corporation Act, the
undersigned, being all of the Directors of KOHLER CAPITAL III, Corporation, do
hereby waive any and all notice that may be required to be given with respect to
a meeting of the Directors of the Corporation and do hereby unanimously take,
ratify, confirm and approve the following actions, as of May 7, 2001:
1.RESOLVED, that these Minutes of action shall constitute the record of an
Annual Meeting of the Board of Directors of KOHLER CAPITAL III, Corporation, and
when signed by all of the Directors, the Secretary of the Corporation, or any
other proper officer, is hereby authorized to certify any of the actions
hereinafter taken of this Corporation, on the date hereof, in accordance with
the requirements established by law.
2.RESOLVED, that the following provision is hereby adopted for the purpose of
defining, limiting and regulating the powers of the Corporation and of the
directors and stockholders:
The Board of Directors of the Corporation is hereby empowered to fix the value
of and to authorize the issuance from time to time of shares of its stock of
any class, whether now or hereafter authorized, or securities convertible
into shares of its stock of any class or classes, whether now or hereafter
authorized.
3.RESOLVED, that all other actions taken by the officers of the Corporation
since the date of the last Annual Minutes of the Board of Directors are
hereby ratified, approved and confirmed.
IN WITNESS WHEREOF, the undersigned Director has evidenced his
approval of the above proceedings as of the date first above mentioned.
/s/ Christopher Werner
_____________________________
CHRISTOPHER WERNER
UNANIMOUS CONSENT MINUTES OF
THE BOARD OF DIRECTORS OF
KOHLER CAPITAL III, Corporation
May 7, 2001
Pursuant to the provisions of the Florida Business Corporation Act, the
undersigned, being all of the Directors of KOHLER CAPITAL III, Corpoation, do
hereby waive any and all notice that may be required to be given with respect
to a meeting of the Directors of the Corporation and do hereby unanimously take,
ratify, confirm and approve the following actions, as of May 7, 2001:
1.RESOLVED, that these Minutes of action shall constitute the record of an
Annual Meeting of the Board of Directors of KOHLER CAPITAL III, Corporation, and
when signed by all of the Directors, the Secretary of the Corporation, or any
other proper officer, is hereby authorized to certify any of the actions
hereinafter taken of this Corporation, on the date hereof, in accordance with
the requirements established by law.
2.RESOLVED, that the following provision is hereby adopted for the purpose of
defining, limiting and regulating the powers of the Corporation and of the
directors and stockholders:
The Board of Directors may classify or reclassify any unissued stock by
setting or changing in any one or more respects, from time to time before
issuance of such stock, the preferences, conversion or other rights, voting
powers, restrictions, limitations as to distributions, qualifications, and
terms or conditions of redemption of such stock.
3.RESOLVED, that all other actions taken by the officers of the Corporation
since the date of the last Annual Minutes of the Board of Directors are
hereby ratified, approved and confirmed.
IN WITNESS WHEREOF, the undersigned Directors has evidenced his approval
of the above proceedings as of the date first above mentioned.
/s/ Christopher Werner
____________________________
CHRISTOPHER WERNER
UNANIMOUS CONSENT MINUTES OF
THE BOARD OF DIRECTORS OF
KOHLER CAPITAL III, Corporation
May 7, 2001
Pursuant to the provisions of the Florida Business Corporation Act, the
undersigned, being all of the Directors of KOHLER CAPITAL III, Corporation, do
hereby waive any and all notice that may be required to be given with respect to
a meeting of the Directors of the Corporation and do hereby unanimously take,
ratify, confirm and approve the following actions, as of May 7, 2001:
1.RESOLVED, that these Minutes of action shall constitute the record of an
Annual Meeting of the Board of Directors of KOHLER CAPITAL III, Corporation, and
when signed by all of the Directors, the Secretary of the Corporation, or any
other proper officer, is hereby authorized to certify any of the actions
hereinafter taken of this Corporation, on the date hereof, in accordance with
the requirements established by law.
2.RESOLVED, that the following provision is hereby adopted for the purpose of
defining, limiting and regulating the powers of the Corporation and of the
directors and stockholders:
The Corporation shall issue shares of stock of any class now or hereafter
authorized, or any securities exchangeable for, or convertible into such
shares, or warrants or other instruments evidencing rights or options to
subscribe for, or otherwise acquire such shares, only if the issuance of such
shares or such securities exchangeable for, or convertible into such shares,
or such warrants or any other instruments evidencing rights or options to
subscribe for, purchase or otherwise acquire such shares, shall be authorized
by the unanimous vote of all of the directors comprising the Board of
Directors of the Corporation.
In the event that the issuance of such shares, or such securities exchangeable
for, or convertible into such shares, or such warrants or any other
instruments evidencing rights or options to subscribe for, purchase or
otherwise acquire such shares, shall be authorized by the unanimous vote of
all of the directors comprising the Board of Directors of the Corporation, the
issuance of such shares or such securities exchangeable for, or convertible
into such shares, or such warrants or, any other instruments evidencing rights
or options to subscribe for, purchase or otherwise acquire such shares, shall
be made for such consideration as the Board of Directors of the Corporation by
the unanimous vote of all of the directors thereof shall deem advisable.
3.RESOLVED, that all other actions taken by the officers of the Corporation
since the date of the last Annual Minutes of the Board of Directors are
hereby ratified, approved and confirmed.
IN WITNESS WHEREOF, the undersigned Director has evidenced his
approval of the above proceedings as of the date first above mentioned.
/s/ Christopher Werner
____________________________
CHRISTOPHER WERNER
UNANIMOUS CONSENT MINUTES OF
THE BOARD OF DIRECTORS OF
KOHLER CAPITAL III, Corporation
May 7, 2001
Pursuant to the provisions of the Florida Business Corporation Act, the
undersigned, being all of the Directors of KOHLER CAPITAL III, Corporation, do
hereby waive any and all notice that may be required to be given with respect to
a meeting of the Directors of the Corporation and do hereby unanimously take,
ratify, confirm and approve the following actions, as of May 7, 2001:
1.RESOLVED, that these Minutes of action shall constitute the record of an
Annual Meeting of the Board of Directors of KOHLER CAPITAL III, Corporation, and
when signed by all of the Directors, the Secretary of the Corporation, or any
other proper officer, is hereby authorized to certify any of the actions
hereinafter taken of this Corporation, on the date hereof, in accordance with
the requirements established by law.
2.RESOLVED, that newly created directorships resulting from any increase of
the authorized number of Directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause shall be filled by a majority vote of the remaining
Directors, though less than a quorum, and the Directors so chosen shall hold
office for a term expiring at the next annual meeting of shareholders at which
a successor shall be elected and shall qualify. The shareholders shall not
be entitled to fill a vacancy created on the Board of Directors.
3.RESOLVED, that all other actions taken by the officers of the Corporation
since the date of the last Annual Minutes of the Board of Directors are
hereby ratified, approved and confirmed.
IN WITNESS WHEREOF, the undersigned Directors have evidenced their
approval of the above proceedings as of the date first above mentioned.
/s/ Christopher Werner
_________________________
CHRISTOPHER WERNER
UNANIMOUS CONSENT MINUTES OF
THE BOARD OF DIRECTORS OF
KOHLER CAPITAL III, Corporation
May 7, 2001
Pursuant to the provisions of the Florida Business Corporation Act, the
undersigned, being all of the Directors of KOHLER CAPITAL III, Corporation, do
hereby waive any and all notice that may be required to be given with respect to
a meeting of the Directors of the Corporation and do hereby unanimously take,
ratify, confirm and approve the following actions, as of May 7, 2001:
1.RESOLVED, that these Minutes of action shall constitute the record of an
Annual Meeting of the Board of Directors of KOHLER CAPITAL III, Corporation, and
when signed by all of the Directors, the Secretary of the Corporation, or any
other proper officer, is hereby authorized to certify any of the actions
hereinafter taken of this Corporation, on the date hereof, in accordance with
the requirements established by law.
2.RESOLVED, that the officers shall be elected annually by the Board of
Directors at its first meeting following the annual meeting of stockholders,
except where a longer term is expressly provided in an employment contract
duly authorized and approved by the Board of Directors. In any such employment
contract, an officer may be employed for a term in excess of one year and for
so long a term as shall be determined by the Board of Directors otherwise in
accordance with the Florida Business Corporation Act.
3.RESOLVED, that all other actions taken by the officers of the Corporation
since the date of the last Annual Minutes of the Board of Directors are
hereby ratified, approved and confirmed.
IN WITNESS WHEREOF, the undersigned Director has evidenced his
approval of the above proceedings as of the date first above mentioned.
/s/ Christopher Werner
_________________________
CHRISTOPHER WERNER
UNANIMOUS CONSENT MINUTES OF
THE BOARD OF DIRECTORS OF
KOHLER CAPITAL III, Corporation
May 7, 2001
Pursuant to the provisions of the Florida Business Corporation Act, the
undersigned, being all of the Directors of KOHLER CAPITAL III, Corporation, do
hereby waive any and all notice that may be required to be given with respect to
a meeting of the Directors of the Corporation and do hereby unanimously take,
ratify, confirm and approve the following actions, as of May 7, 2001:
1.RESOLVED, that these Minutes of action shall constitute the record of an
Annual Meeting of the Board of Directors of KOHLER CAPITAL III, Corporation, and
when signed by all of the Directors, the Secretary of the Corporation, or any
other proper officer, is hereby authorized to certify any of the actions
hereinafter taken of this Corporation, on the date hereof, in accordance
with the requirements established by law.
2.RESOLVED, that Members of the Board of Directors and the shareholders at any
annual or special meeting may participate in a meeting by means of a
conference telephone, videolink or similar communications equipment if all
persons participating in the meeting can hear and speak to each other at the
same time. Participation in a meeting by these means constitutes presence in
person at a meeting.
3.RESOLVED, that all other actions taken by the officers of the Corporation
since the date of the last Annual Minutes of the Board of Directors are
hereby ratified, approved and confirmed.
IN WITNESS WHEREOF, the undersigned Director has evidenced his
approval of the above proceedings as of the date first above mentioned.
/s/ Christopher Werner
_________________________
CHRISTOPHER WERNER
UNANIMOUS CONSENT MINUTES OF
THE BOARD OF DIRECTORS OF
KOHLER CAPITAL III, Corporation
May 7, 2001
KOHLER CAPITAL III, Corporation
THIS PRE-INCORPORATION CONSULTATION AND
SUBSCRIPTION AGREEMENT ("Agreement") is made and entered into
this 7th day of May, 2001, by and between Gerard Werner,
Christopher Werner, and KOHLER CAPITAL
WHEREAS, the parties desire to form a corporation pursuant to
the laws of the State of Florida, under the name of Kohler Capital
III, Corporation, (the "Company"), to engage, in the business of acting as a
capital market access vehicle by registering its securities with the U.S.
Securities and Exchange Commission under the Securities Exchange Act
of 1934, and thereafter seeking to acquire one or more existing businesses
through merger or acquisition; and
WHEREAS, the parties desire to subscribe for the acquisition of
stock to be issued upon formation of the Company, and have mutually
agreed that the consideration for the issuance of such shares shall be pre-
incorporation services and assistance to the Company relating to its
formation, determination of an appropriate capital structure, and in
developing its business plan.
NOW, THEREFORE, in consideration of the foregoing, and in
consideration of the mutual covenants and promises hereinafter set forth,
it is agreed as follows:
1. Agreement to Form Corporation. The undersigned parties hereby
agree to form a corporation pursuant to the laws of the State of Florida,
under the name of KOHLER CAPITAL III, Corporation, (the "Company"). The
corporation shall be formed for the purpose of acting as a capital market
access vehicle by registering its securities with the U.S. Securities and
Exchange Commission under the Securities Exchange Act of 1934, and
thereafter seeking to acquire one or more existing businesses through
merger or acquisition.
2. Preincorporation Services. By execution of this Agreement, each of
the undersigned hereby agrees to provide such services as may be
necessary or appropriate prior to the incorporation of the Company, for
purposes of determining the feasibility of, and completing, the Company's
business plan, including, but not limited to, determining the Company's
capital needs, establishing an appropriate capital structure, investigating
the likelihood of finding a suitable merger or acquisition target, reviewing
applicable legal and regulatory restrictions imposed by the Securities and
Exchange Commission, the National Association of Securities Dealers,
and other governmental or regulatory organizations, and the like.
3. Agreement to Serve as Incorporator. By execution of this Agreement,
Chris Werner hereby agrees to serve as incorporator of the Company and
to provide services in conjunction with its incorporation and in
conjunction with the preparation of all necessary organizational
documents, including, but not limited to, articles of incorporation, bylaws,
subscription agreements, organizational meeting minutes, and the like.
4. Agreement to Serve as Officers and Directors. By execution of this
Agreement, Gerard Werner hereby agrees to serve as officer and director
of the Company following its incorporation, and in that capacity, to assume
responsibility for implementation of the Company's business plan.
5. Consideration. As consideration for the services described herein,
upon formation of the Company, the undersigned shall cause the
Company to issue and deliver to each of the parties hereto, and each of
the parties hereto hereby agrees to accept the following as full
consideration for the services rendered:
Description of
Name Securities Value
Gerard Werner 400,000 Units $400
Total 400,000 Units $400
<FN>
<F1>Each unit consists of one share of Common Stock.
<F2>The agreed upon fair market value of the Units for purposes of this
Agreement is $0.001 per Unit. Accordingly, upon issuance such Units
shall be valued on the books of the Company at $0.001 per Unit.
</FN>
6. Exemption from Registration. The parties hereto intend and agree that
this Agreement shall serve as a written compensatory contract which,
upon formation of the Company, satisfies the requirements of Rule 701
adopted by the Securities and Exchange Commission under the Securities
Act of 1933, as amended. Accordingly, it is the intent of the parties that
the exemption from registration provided by Rule 701 shall be applicable
to the issuance of the Units.
7. Representations and Acknowledgments. The parties hereto make the
following representations and acknowledgments:
(a) Neither the Units, nor the underlying securities shall, upon
issuance, have been registered under the Securities Act of 1933, as
amended (the "Act"), or under any State Blue Sky or securities laws and
only the Company can register such securities under the Act or under
applicable State Blue Sky or securities laws.
(b) Upon issuance, the Units and the underlying securities shall
constitute "restricted securities" as that term is defined in Rule 144 under
the Act.
(c) Following issuance, neither the Units nor the underlying securities
may be sold or transferred for value without registration under the
Securities Act of 1933, as amended, or under applicable State blue sky or
securities laws, or in the absence of an opinion of counsel acceptable to
the Company that such registration is not required under such Act or
Acts, and it is not anticipated that the Company will, at any time, seek to
register the Units or the underlying securities under the Act or under any
applicable state blue sky or securities laws.
(d) Following its formation and the issuance of the Units, the
Company may, from time to time, make stop transfer notations in the
Company's records to assure compliance with the Act and any applicable
State blue sky or securities laws.
(e) In accordance with the foregoing restrictions, the parties hereby
agree that a legend substantially to the effect of the following may be
placed upon all certificates representing the shares and the warrants
comprising the Units:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER
OTHER SECURITIES LAWS. SUCH SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (i)
THEY SHALL HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE
SECURITIES ACT, OR (ii) THE COMPANY SHALL HAVE BEEN
FURNISHED WITH AN OPINION OF COUNSEL, SATISFACTORY
TO COUNSEL FOR THE COMPANY, THAT REGISTRATION IS
NOT REQUIRED UNDER ANY OF SUCH ACTS."
(f) The parties hereto are acquiring the Units upon issuance solely for
their own account and not on behalf of any other person.
(g) The parties hereto are acquiring the Units upon issuance for
investment purposes and not with the present intent of reselling or
otherwise distributing the Units or the underlying securities.
(h) By execution of this Agreement, the parties hereto agree to
execute and deliver to the Company, following its formation, any
document, or do any other act or thing, which the Company may
reasonably request in connection with the acquisition of the Units.
8. Assignment. None of the parties hereto, or their heirs, executors,
representatives or assigns shall sell, assign, create a security interest in,
pledge, or otherwise transfer or encumber the Units to be issued
hereunder, or the underlying securities, without the express prior written
consent of each of the other parties hereto.
9. Florida Law. This Agreement shall be governed by, and construed
in accordance with the laws of the State of Florida.
10. Binding Effect. This Agreement shall inure to the benefit of, and be
binding upon the parties, and their respective heirs, executors,
representatives and permitted assigns.
11. Entire Agreement. This Agreement supersedes all agreements
previously made between the parties relating to its subject matter. There
are no other understandings or agreements between the parties.
IN WITNESS WHEREOF, this Preincorporation Consultation and
Subscription Agreement Regarding KOHLER CAPITAL III, Corporation, has been
executed as of the day and year first above written.
/s/Gerard Werner
By:___________________
GERARD WERNER
CONSENT OF COUNSEL
I hereby consent to the use of my name as legal counsel in the Form
10-12G Registration Statement filed pursuant to Section 12 of the
Securities Exchange Act of 1934 by KOHLER CAPITAL III, Corporation
GERARD M. WERNER, Esq.
/s/ Gerard M. Werner
By:___________________
GERARD M. WERNER, ESQ.
Sheboygan, WI
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
KOHLER CAPITAL III, CORPORATION
By: /s/ Gerard M. Werner
________________________________
Gerard M. Werner
President and Director
Date: September 3, 2010
EXHIBIT 99.1
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
SAFE HARBOR COMPLIANCE STATEMENT
FOR FORWARD-LOOKING STATEMENTS
In passing the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"), 15 U.S.C.A. Sections 77z-2 and 78u-5 (Supp. 1996), Congress
encouraged public companies to make "forward-looking statements" by creating a
safe harbor to protect companies from securities law liability in connection
with forward-looking statements. Kohler Capital III, Corporation ("Kohler"
or the "Company") intends to qualify both its written and oral forward-looking
statements for protection under the Reform Act and any other similar safe
harbor provisions.
"Forward-looking statements" are defined by the Reform Act. Generally,
forward-looking statements include expressed expectations of future events and
the assumptions on which the expressed expectations are based. All
forward-looking statements are inherently uncertain as they are based on various
expectations and assumptions concerning future events and they are subject to
numerous known and unknown risks and uncertainties which could cause actual
events or results to differ materially from those projected. Due to those
uncertainties and risks, the investment community is urged not to place undue
reliance on written or oral forward-looking statements of Kohler. The
Company undertakes no obligation to update or revise this Safe Harbor
Compliance Statement for Forward-Looking Statements (the "Safe Harbor
Statement") to reflect future developments. In addition, Kohler
undertakes no obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events or
changes to future operating results over time.