U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-12G
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934
HENRY COUNTY PLYWOOD CORPORATION
(Name of Small Business Issuer in its charter)
Nevada 54-0484915
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5353 Manhattan Circle, Suite 101
Boulder, Colorado 80303
(Address of Principal Executive Offices)
Registrants telephone number: (303) 499-6000
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on
to be so registered which each class is to be registered
Not Applicable
Securities to be registered under Section 12(g) of the Act:
Common Stock
(Title of class)
Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definitions of "large accelerated filer," and "smaller reporting company" in
Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ]
Smaller Reporting Company [ ]
(Do not check if a smaller reporting company)
ITEM 1. DESCRIPTION OF BUSINESS
Henry County Plywood Corporation, (the "Registrant" or "Company") was
incorporated under the laws of the State of Virginia in May, 1948. The Company
was formed to purchase, lease, sell, manufacture and deal in lumber, and other
wood products.
The Company created a Plan of Liquidation on September 2, 2004, but never
formally dissolved the Company with the state of Virginia. Instead, the Company
was terminated administratively on September 30, 2005 for failure to file annual
reports. The Company has since paid the necessary fees to the State of Virginia
to become an active corporation again.
On August 29, 2006, W.L. Kirby III resigned as a director of the Company. On
November 2, 2006, W.J. Gravely also resigned, followed by the last five
remaining Board Members, G.W. Whitemore, R.W. Critz, E.M. Gravely, J.M. Cassady,
and R.T. Shropshire on November 3, 2006. Prior to resigning, the Board appointed
Michael Friess, Sanford Schwartz, and John Venette making Michael Friess
President and John Venette Secretary and Treasurer of the Company.
On October 23, 2007 the Board accepted Michael Friess' resignation and appointed
David Lilja to fill his vacancy. Also on October 23, 2007 the Board accepted
Sanford Schwartz's resignation. The Company has opted to become a "blank check"
company and to further engage in any lawful corporate undertaking, including,
but not limited to, selected mergers and acquisitions.
On October 1, 2007 the Company issued 650,000 shares of its common stock to two
individuals, (Sanford Schwartz and Michael Friess). On March 18, 2008 the Board
of Directors issued an additional 2,016,076 shares to these two individuals,
resulting in a total aggregate issuance of 2,666,076 shares of its common stock
for consideration of $25,000 in stock subscriptions.
The Company held a shareholder meeting on March 3, 2008 to reincorporate the
Company in the State of Nevada and amend the Articles of Incorporation to
increase the authorized capital stock of the Company to seven hundred eighty
million (780,000,000) shares of common stock and twenty million (20,000,000)
preferred shares. The motion carried and the Company became a Nevada corporation
on March 18, 2008.
Since July 2004, the Company has not engaged in any operations and has been
dormant. As such, the Company may presently be defined as a "shell" company,
whose sole purpose at this time is to locate and consummate a merger or
acquisition with a private entity. The Company maintains its headquarters at the
office of its majority shareholders. The Company's website is
www.henrycountyplywood.com.
The Company has opted to register its common stock pursuant to section 12(g) of
the Securities Exchange Act of 1934 in an effort to maximize shareholder value.
The best use and primary attraction of the Company as a merger partner or
acquisition vehicle will be its status as a reporting public company. Any
business combination or transaction may potentially result in a significant
issuance of shares and substantial dilution to present stockholders of the
Company.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any offering of the
Company's securities, either debt or equity, until such time as the Company has
successfully implemented its business plan described herein.
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Employees
We currently have no regular employees. Our management expects to use outside
consultants, attorneys and accountants as necessary, and does not anticipate a
need to engage any full-time employees so long as we are seeking and evaluating
business opportunities. The need for employees and their availability will be
addressed in connection with the decision whether or not to acquire or
participate in specific business opportunities.
ITEM 1A. RISK FACTORS
A. Conflicts of Interest. There are certain conflicts of interest between us and
our officers and directors as they have other business interests to which they
currently devote attention, and may be expected to continue to do so. As a
result, conflicts of interest may arise that can be resolved only through their
exercise of judgment in a manner which is consistent with their fiduciary duties
to the Company.
It is anticipated that our principal shareholders may actively negotiate or
otherwise consent to the purchase of a portion of their common stock as a
condition to, or in connection with, a proposed merger or acquisition
transaction. In this process, our principal shareholders may consider their own
personal pecuniary benefit rather than the best interests of other shareholders,
and the other shareholders are not expected to be afforded the opportunity to
approve or consent to any particular stock buy-out transaction.
B. Need for Additional Financing. We have very limited financial resources, and
such resources are unlikely to be adequate to take advantage of any available
business opportunities. Even if our financial resources prove to be sufficient
to acquire an interest in, or complete a transaction with, a business
opportunity, we may not have enough capital to exploit the opportunity. Our
ultimate success may depend upon our ability to raise additional capital. We
have not investigated the availability, source, or terms that might govern the
acquisition of additional capital and will not do so until we determine 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 us. If such funds are not available, our operations will be
limited to those that can be financed with our modest capital.
C. Regulation of Penny Stocks. Our 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 our securities and also may affect
the ability of our shareholders to sell their securities in any market that
might develop.
Shareholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered 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
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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 with consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although we do 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 our securities.
D. No Operating History or Revenue and Minimal Assets. The Company has had no
operating history nor any revenues or earnings from operations since it ceased
operations in July 2004. The Company has no assets or significant financial
resources. The Company will, in all likelihood, sustain operating expenses
without corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss which
will increase continuously until the Company can consummate a business
combination with a profitable business opportunity. There is no assurance that
the Company can identify such a business opportunity and consummate such a
business combination.
E. No Assurance of Success or Profitability. There is no assurance that we will
acquire a business opportunity. Even if we should become involved in a business
opportunity, there is no assurance that it will generate revenues or profits, or
that the market price of our common stock will be increased thereby.
F. Possible
Business - Not Identified and Highly Risky. We have not identified and have no
commitments to enter into or acquire a specific business opportunity. Therefore,
we can disclose the risks and hazards of a business or opportunity that we may
enter into in only a general manner, and cannot disclose the risks and hazards
of any specific business or opportunity. An investor can expect a potential
business opportunity to be quite risky. Our acquisition of or participation in a
business opportunity will likely be highly illiquid and could result in a total
loss to us and our shareholders if the business or opportunity proves to be
unsuccessful.
G. Type of Business Acquired. The type of business to be acquired may be one
that desires to avoid affecting its own public offering and the accompanying
expense, delays, uncertainties, and federal and state requirements which purport
to protect investors. Because of our limited capital, it is more likely than not
that any acquisition 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.
H. Impracticability of Exhaustive Investigation. Our 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 we
commit our capital or other resources to such opportunity. Management decisions,
therefore, will likely be made without detailed feasibility studies, independent
analysis, market surveys and the like, which, if we had more funds, would be
desirable. We will be particularly dependent in making decisions upon
information provided by the promoter, owner, sponsor, or others associated with
the business opportunity seeking our participation. A significant portion of our
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.
I. Lack of Diversification. Because of our limited financial resources, it is
unlikely that we will be able to diversify our acquisitions or operations. This
probable inability to diversify our activities into more than one area will
subject us to economic fluctuations within a particular business or industry and
therefore increase the risks associated with our operations.
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J. Requirement of Audited Financial Statements May Disqualify Business
Opportunities. Management of the Company believes that any potential business
opportunity must provide audited financial statements for review, and for the
protection of all parties to the business combination. One or more attractive
business opportunities may choose to forego the possibility of a business
combination with the Company, rather than incur the expenses associated with
preparing audited financial statements.
K. Other Regulation. An acquisition we make 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 our other investment opportunities.
L. Dependence Upon Management; Limited Participation of Management. We will be
heavily dependent upon the skills, talents, and abilities of our officers and
directors to implement our business plan, and may, from time to time, find that
the inability of such persons to devote their full-time attention to our
business results in a delay in progress toward implementing our business plan.
Furthermore, we will be entirely dependent upon the experience of our officers
and directors in seeking, investigating, and acquiring a business and in making
decisions regarding our operations. Because investors will not be able to
evaluate the merits of our possible business acquisitions, they should
critically assess the information concerning our officers and directors.
M. Lack of Continuity in Management. The Company does not have an employment
agreement with any of its officers or directors, and as a result, there is no
assurance that they will continue to manage the Company in the future. In
connection with the acquisition of a business opportunity, it is likely the
current officers and directors of the Company will 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
shareholders of the Company.
N. Indemnification of Officers and Directors. Our Articles of Incorporation
provide that we may indemnify our directors, officers, employees, and agents to
the fullest extent permitted by Nevada law. We will also bear the expenses of
such litigation for any of our directors, officers, employees, or agents, upon
such person's promise to repay us if it is ultimately determined that any such
person shall not have been entitled to indemnification. This indemnification
policy could result in substantial expenditures which we may be unable to
recoup.
O. Dependence Upon Outside Advisors. To supplement the business experience of
our officers and directors, we 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 our officers without any input from
shareholders. 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. In the event management considers it necessary to hire outside
advisors, they may elect to hire persons who are affiliates of our officers and
directors, if they are able to provide the required services.
P. Leveraged Transactions. There is a possibility that any acquisition of a
business opportunity we make may be leveraged, i.e., we 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 our exposure to 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.
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Q. Competition. The search for potentially profitable business opportunities is
intensely competitive. We expect to be at a disadvantage when competing with
many firms that have substantially greater financial and management resources
and capabilities than we do. These competitive conditions will exist in any
industry in which we may become interested.
R. No Foreseeable Dividends. We have not paid cash dividends on our common stock
and do not anticipate paying such dividends in the foreseeable future.
S. Loss of Control by Present Management and Shareholders. We may consider an
acquisition in which we would issue as consideration for the business
opportunity to be acquired, an amount of our 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 shareholders and management would control the Company,
and our management could be replaced by persons unknown at this time. Such a
merger would result in a greatly reduced percentage of ownership by our current
shareholders.
T. Limited Public Market Exists. There is only a very limited public market for
our common stock, and no assurance can be given that an active 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 our securities.
Because of 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 our 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.
ITEM 2. FINANCIAL INFORMATION
General Business Plan
At this time, the Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business opportunities presented
to it by persons or firms who or which desire to seek the perceived advantages
of an Exchange Act registered corporation. The Company will not restrict its
search to any specific business, industry, or geographical location and the
Company may participate in a business venture of virtually any kind or nature.
This discussion of the proposed business is intentionally general and is not
meant to be restrictive of the Company's virtually unlimited discretion to
search for and enter into potential business opportunities. Management
anticipates that it may be able to participate in only one potential business
venture because the Company has nominal assets and limited financial resources.
See "FINANCIAL STATEMENTS." This lack of diversification should be considered a
substantial risk to shareholders of the Company because it will not permit the
Company to offset potential losses from one venture against gains from another.
The Company may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes. The Company
may acquire assets and establish wholly-owned subsidiaries in various businesses
or acquire existing businesses as subsidiaries.
The Company intends to advertise and promote the Company privately. The Company
has not yet prepared any notices or advertisements.
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The Company anticipates that the selection of a business opportunity in which to
participate will be complex and extremely risky. Due to general economic
conditions, rapid technological advances being made in some industries and
shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes), for all shareholders and other factors.
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.
The Company has, and will continue to have, little or no 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-Q's, agreements and related reports and
documents. The Securities Exchange Act of 1934 (the "Exchange 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 Exchange Act. Nevertheless, the officers and directors of the Company have
not conducted market research and are not aware of statistical data which would
support the perceived benefits of a merger or acquisition transaction for the
owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under the
supervision of, the officers and directors of the Company. Management intends to
concentrate on identifying preliminary prospective business opportunities, which
may be brought to its attention through present associations of the Company's
officers and directors. In analyzing prospective business opportunities,
management will consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition of acceptance of products, services, or trades; name
identification; and other relevant factors. The Company will not acquire or
merge with any company for which audited financial statements cannot be obtained
prior to the closing of the proposed transaction.
The Officers of the Company have limited experience in managing companies
similar to the Company and shall rely upon their own efforts, in accomplishing
the business purposes of the Company. The Company may from time to time utilize
outside consultants or advisors to effectuate its business purposes described
herein. 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. However, because of the limited resources of the Company,
it is likely that any such fee the Company agrees to pay would be paid in stock
and not in cash.
The Company will not restrict its search for any specific kind of firms, but may
acquire a venture which is in its preliminary or development stage, which is
already in operation, or in essentially any stage of its corporate life. It is
impossible to predict at this time the status of any business in which the
Company may become engaged, in that such business may need to seek additional
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capital, may desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer. However, the Company does not
intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein. The Company has limited
capital with which to pay these anticipated expenses.
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. It may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is probable that the present management and shareholders of the Company will
no longer be in control of the Company. In addition, the Company's directors
may, as part of the terms of the acquisition transaction, resign and be replaced
by new directors without a vote of the Company's shareholders or may sell their
stock in the Company. Any and all such sales will only be made in compliance
with the securities laws of the United States and any applicable state.
It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon exemption from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of its transaction, the Company may agree to register all or a part of such
securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, of which there can be no
assurance, it will be undertaken by the surviving entity after the Company has
successfully consummated a merger or acquisition and the Company is no longer
considered a "shell" company. The issuance of substantial additional securities
and their potential sale into any trading market which may develop in the
Company's securities may have a depressive effect on the value of the Company's
securities in the future, if such a market develops, of which there is no
assurance.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would retain less than
20% of the issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.
With respect to any merger or acquisition, the negotiations with target company
management is expected to focus on the percentage of the Company which the
target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may be
subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's then shareholders.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
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specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.
As stated hereinabove, the Company will not acquire or merge with any entity
which cannot provide independent audited financial statements prior to the
closing of the proposed transaction. Upon the effective date of this
registration statement, the Company will be subject to all of the reporting
requirements included in the Exchange 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. The Company
does not intend to provide the Company's security holders with any disclosure
documents, including audited financial statements, concerning an acquisition or
merger candidate and its business prior to the consummation of any acquisition
or merger transaction.
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
ITEM 3. PROPERTIES
The Company has no properties and at this time has no agreements to acquire any
properties. The Company currently maintains a mailing address at 5353 Manhattan
Circle, Suite 101, Boulder, CO 80303. 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.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal Stockholders
The following table sets forth certain information as of March 18, 2008
regarding the beneficial ownership of the Company's common stock by (i) each
stockholder known by the Company to be the beneficial owner of more than 5% of
the Company's common stock, (ii) by each director and executive officer of the
Company and (iii) by all executive officer's and directors of the Company as a
group. Each of the persons named in the table has sole voting and investment
power with respect to common stock beneficially owned.
NAME AND ADDRESS NUMBER OF PERCENTAGE
SHARES OWNED OF SHARES
OR CONTROLLED OWNED
Michael Friess 1,333,038 40.00%
5353 Manhattan Circle Ste 101
Boulder, Colorado 80303
Sanford Schwartz 1,333,038 40.00%
5353 Manhattan Circle Ste 101
Boulder, Colorado 80303
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John Venette 0 0.00%
3333 E San Remo Ave
Gilbert, AZ 85234
David Lilja 0 0.00%
2505 W 8th Ave
Denver, CO 80204
All Officers and Directors 0 0.00%
as a Group
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
Officers and Directors
The following table sets forth certain information concerning each of the
Company's directors and executive officers:
NAME AGE POSITION
David Lilja 38 Chairman of the Board
President and CEO
John Venette 42 Treasurer, Secretary,
Director and CFO
There is no family relationship between any director or executive officer of the
Company.
The Board of Directors presently has no committees.
Set forth below are the names of all directors and executive officers of the
Company, all positions and offices with the Company held by each such person,
the period during which he has served as such, and the business experience of
such persons during at least the last five years:
David Lilja has been President of C4S Group, a provider of telematics and
electronics for OEM automakers and fleet operators throughout North America,
since 1999. Prior to 1999 Mr. Lilja was President of Wall Street Financial, a
financial consulting firm specializing in emerging growth companies. Mr. Lilja
has served as a Director and an Officer of the Company since October 1, 2007.
John Venette joined the Company as an Officer and Director in August 2006. For
the past ten years Mr. Venette has been a business development consultant, a
financial research consultant, and has partnered on many projects with Creative
Business Strategies Inc., a business consulting firm.
Previous Blank-Check Experience
Mr. John Venette, Secretary and Treasurer and executive officer of the Company,
has been involved either as an officer or director, or both, with other
blank-check companies, which have completed some form of corporate
reorganization. David Lilja, President, and a director of the Company, has not
been involved in any blank check companies. The officers and directors of the
Company intend to work on developing additional registered blank check
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companies. The following is a list of the blank-check companies with which the
Company's officers and directors have previously been involved during the last
five years:
Hemcure, Inc. (HMCU), Commission File #000-51543, had its initial public
offering in May of 1987, and the registrant was organized to provide
administrative and marketing services to physicians or physician groups who
emphasize outpatient non-surgical treatment for hemorrhoids. During June 2006,
majority ownership and control of HMCU changed. Current officers and directors
of Henry County Plywood Corporation are not currently officers, directors or
employees of HMCU and therefore have no direct knowledge of the business
operations or possible pending acquisition, business combinations or mergers of
HMCU. HMCU appears to be current in all of its filings with the SEC.
Implant Technologies, Inc. (IMLT), Commission File #000-17064, had its initial
public offering in 1980, and was formed for the purpose of developing and
marketing medical products. From April 2006 to July, 2007, John Venette served
as Secretary and Treasurer of IMLT. During July 2007, majority ownership and
control of IMLT changed. John Venette is the only current officer and director
of the Company who is currently CFO and a director of IMLT, which is now Oasis
Online Technologies Corp listed on the OTCBB symbol (OOLN), a company that is
planning acquisitions in the online security and authentication market. Oasis
Online Technologies Corp is current in its filings with the SEC.
Discovery Technologies, Inc. (DSVY), Commission File #000-18606, had its initial
public offering in 1987 was formed to design manufacture and market video
products that transmit pictures over standard voice-grade telephone lines. In
June 2006, John Venette, an officer and director of the Company, was elected an
officer and director of Discovery Technologies, Inc. Discovery Technologies,
Inc.'s sole purpose at this time is to locate and consummate a merger or
acquisition with a private entity. During December 2007, majority ownership and
control of DSVY changed. Current officers and directors of the Company are not
currently officers or directors or employees of DSVY and, therefore, have no
direct knowledge of the business operations or possible pending acquisitions,
business combinations or mergers of DSVY. Discovery Technologies, Inc. appears
to be current in its filings with the SEC.
Conflicts of Interest
The Company's officers and directors have in the past and may in the future be
officers and directors of other companies of a similar nature and with a similar
purpose as the Company. Consequently, there are potential inherent conflicts of
interest in Mr. Venette and Mr. Lilja serving as officers and directors of the
Company. Insofar as the officers and directors are engaged in other business
activities, management anticipates it will devote only a minor amount of time to
the Company's affairs. The officers and directors of the Company may in the
future become shareholders, officers or directors of other companies which may
be formed for the purpose of engaging in business activities similar to those
conducted by the Company. The Company does not currently have a right of first
refusal pertaining to opportunities that come to management's attention even if
the opportunities relate to the Company's proposed business operations.
The officers and directors are, so long as they are officers or directors of the
Company, subject to the restriction that all opportunities contemplated by the
Company's plan of operation which come to their attention in the performance of
their duties as officers and directors of the Company will be considered
opportunities of, and be made available to the Company. However, they are under
no obligation to make any opportunities that come to their attention in the
performance of their duties for any other companies or in any other manner
available to the Company. Except as set forth above, the Company has not adopted
any other conflict of interest policy with respect to such transactions.
10
Investment Company Act of 1940
Management believes the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not be engaged in
the business of investing or trading in securities. In the event the Company
engages in business combinations, which result in the Company holding passive
investment interests in a number of entities, the Company could be subject to
regulation under the Investment Company Act of 1940. In such event, the Company
would be required to register as an investment company and could be expected to
incur significant registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission as to the
status of the Company under the Investment Company Act of 1940. Any violation of
such Act would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
The Company has agreed to compensate the current officers for their roles in the
Company in the form of a one time payment of $5,000 each for future services
(subsequent to registration with the Securities and Exchange Commission),
through December 31, 2010. As of the date of this registration statement, the
Company has no funds available to pay directors.
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.
It is possible that persons associated with management may refer a prospective
merger or acquisition candidate to the Company. In the event the Company
consummates a transaction with any entity referred by associates of management,
it is possible that such an associate will be compensated for their referral. It
is anticipated that this compensation would be either in the form of restricted
common stock issued by the Company as part of the terms of the proposed
transaction, or will be in the form of cash consideration. However, if such
compensation is in the form of cash, such payment will be tendered by the
acquisition or merger candidate, because the Company has minimal cash available.
The amount of such compensation, if any, cannot be determined as of the date of
this registration statement.
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Registrant for the benefit of
its employees.
ITEM 7. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
No officer, director, promoter, or affiliate of the Company has or
proposes to have any direct or indirect material interest in any asset that we
propose to acquire through security holdings, contracts, options, or otherwise.
We may pay any consulting or finder's fee for consulting services to assist
management in evaluating a prospective business opportunity in stock or in cash.
Any such issuance of stock would be made on an ad hoc basis. Accordingly, we are
11
unable to predict whether or in what amount such a stock issuance might be made.
We maintain our offices at the offices of our majority shareholders, for which
we pay no rent. We anticipate that following the consummation of a business
combination with an acquisition candidate, our office will be moved, but cannot
predict future office or facility arrangements with our officers, directors or
affiliates.
Although we have no current plans to do so, it is possible that we may enter
into an agreement with an acquisition candidate requiring the sale of all or a
portion of the common stock held by our current shareholders to the acquisition
candidate or principals thereof, or to other individuals or business entities,
or requiring some other form of payment to our current shareholders, 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 our current
shareholders to an acquisition candidate would be at a price substantially
higher than that originally paid by such shareholders. Any payment to current
shareholders in the context of an acquisition in which we are involved would be
determined entirely by the largely unforeseeable terms of a future agreement
with an unidentified business entity.
On October 1, 2007 the Company issued 650,000 shares of its common stock to two
individuals, (Sanford Schwartz and Michael Friess). On March 18, 2008 the Board
of Directors issued an additional 2,016,076 shares in addition to the 650,000
shares resulting in a total aggregate issuance of 2,666,076 shares of its common
stock for consideration of $25,000 in stock subscriptions.
Securities issued by blank check companies cannot be resold under Rule 144 so
long as the company remains a blank check company but must be registered under
the Securities Act of 1933. The Company has no obligation to register these or
any other shares under the Securities Act of 1933.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend at this time to 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.
ITEM 8. LEGAL PROCEEDINGS
None.
ITEM 9. MARKET, PRICE OF AND DIVIDENDS ON REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a) Market Information.
There is only a very limited market for the Company's securities. During the
past two years, there have been a few transactions in the company's common stock
reported in the so-called "Pink Sheets" at prices ranging from $.005 to $.03 per
share. There are no outstanding options or warrants to purchase shares of common
stock or securities convertible into shares of the Company's common stock. The
Company has no obligations to register any of its shares of common stock under
the Securities Act of 1933. 322,574 of the Company's outstanding shares eligible
for transfer without registration under the Securities Act.
12
(b) Holders.
As of March 18, 2008, there were approximately 127 holders of the Company's
Common Stock. (c) Dividends. No dividends have been paid by the Company on any
of its securities since the renewal of its charter and such dividends are not
contemplated in the foreseeable future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
On October 1, 2007 the Company issued 650,000 shares of its common stock to two
individuals, (Sanford Schwartz and Michael Friess). On March 18, 2008 the Board
of Directors issued an additional 2,016,076 shares resulting in a total
aggregate issuance of 2,666,076 shares of its common stock for consideration of
$25,000 in stock subscriptions. The capital will be used to pay for the
preparation of documents necessary to register the Company's common stock
pursuant to Section 12 (g) of the Securities Exchange Act of 1934. This
transaction resulted in a change in control of the Company. In both transactions
the shares were issued without registration under the Securities Act of 1933 in
reliance upon Section 4(2) of the Act. No underwriters were involved and no
commissions or other consideration was paid in connection with these
transactions.
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES
Common Stock
Our Articles of Incorporation in Nevada authorize the issuance of 780,000,000
shares of common stock, with a par value of $.001 per share. As of March 18,
2008, there were 3,332,595 shares of common stock issued and outstanding. Each
record holder of common stock is entitled to one vote for each share held on all
matters properly submitted to the shareholders for their vote. Cumulative voting
for the election of directors is not permitted by the Articles of Incorporation.
Holders of outstanding shares of common stock are entitled to such dividends as
may be declared from time to time by the Board of Directors out of legally
available funds; and, in the event of liquidation, dissolution or winding up of
our affairs, holders are entitled to receive, ratably, the net assets of the
Company available to stockholders. All of the issued and outstanding shares of
common stock are, and all unissued shares when offered and sold will be, duly
authorized, validly issued, fully paid, and nonassessable. To the extent we
issue additional shares of our common stock, the relative interests of then
existing shareholders may be diluted.
Preferred Stock
The Company's Articles of Incorporation authorize the issuance of 20,000,000
shares of preferred stock with a par value of $.001. There are no shares of
preferred stock issued and outstanding as of March 18, 2008.
Transfer Agent
The Company's transfer agent is Corporate Stock Transfer, Inc. in Cherry Creek
Colorado.
13
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The By-Laws of the Company provide that the Company shall indemnify its officers
and directors to the fullest extent permitted by Nevada law. In addition, the
Articles of Incorporation provide that a director of the Company shall not be
personally liable to the Company or its shareholders for monetary damages for
breach of fiduciary duty as a director, except for (i) liability based on a
breach of the duty of loyalty to the Company or the shareholders; (ii) liability
for acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law; (iii) liability based on the payment of an
improper dividend or an improper repurchase of the Company's stock under the
Nevada General Corporation Code; or (iv) liability for any transaction from
which the director derived an improper personal benefit.
14
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
INDEX TO FINANCIAL STATEMENTS
HENRY COUNTY PLYWOOD CORPORATION.
(A Development Stage Company)
FINANCIAL STATEMENTS
with
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Report of Independent Registered Public Accounting Firm F-2
Financial Statements:
Balance Sheets F-3
Statements of Operations F-4 & F-5
Statement of Changes in Stockholders' (Deficit) F-6
Statements of Cash Flows F-7 & F-8
Notes to Financial Statements F-9
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Henry County Plywood Corporation.
We have audited the accompanying balance sheets of Henry County Plywood
Corporation (A Development Stage Company) as of May 31, 2007 and 2006, and the
related statements of operations, stockholders' (deficit), and cash flows for
the two years ended May 31, 2007 and 2006, and for the period from August 28,
2006 (date of commencement of development stage) through May 31, 2007. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Henry County Plywood
Corporation (a Development Stage Company) as of May 31, 2007 and 2006, and the
results of its operations and its cash flows for the two years ended May 31,
2007 and 2006, and for the period from August 28, 2006 (date of commencement of
development stage) through May 31, 2007, 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 described in Note 1, the Company
has no business operations and has negative working capital and stockholders'
deficits, which raise substantial doubt about its ability to continue as a going
concern. Management's plan in regard to this matter is also discussed in Note 1.
The financial statements do not include any adjustments that might result from
the outcome of these uncertainties.
/s/ Schumacher & Associates, Inc.
Schumacher & Associates, Inc.
Certified Public Accountants
2525 Fifteenth Street, Suite 3H
Denver, Colorado 80211
April 18, 2008
F-2
HENRY COUNTY PLYWOOD CORPORATION
(A Development Stage Company)
BALANCE SHEETS
ASSETS
February 29,
2008 May 31, May 31,
(Unaudited) 2007 2006
----------- ----------- -----------
Current Assets:
-- -- --
----------- ----------- -----------
TOTAL ASSETS $ -- $ -- $ --
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable $ 31,580 $ 25,159 $ 415,248
Accrued expenses 7,000 3,740 1,870
Advance from Affiliates 9,924 477 --
----------- ----------- -----------
Total Current Liabilities 48,504 29,376 417,118
----------- ----------- -----------
TOTAL LIABILITIES 48,504 29,376 417,118
----------- ----------- -----------
Commitments and contingencies
(Notes 1,2,3,4,5 and 6)
Stockholders' (Deficit)
Preferred Stock, $.001 par value
20,000,000 shares authorized;
No shares issued and outstanding (Note 3)
Common stock, $.001 par value
780,000,000 shares authorized,
3,332,595, 666,519, and 322,574
issued and outstanding at
February 29, 2008, May 31, 2007
and May 31, 2006, respectively
(Note 3) 3,333 667 323
Additional paid-in capital 347,337 325,003 322,251
Stock subscriptions receivable (25,000) -- --
Accumulated (Deficit) (739,692) (739,692) (739,692)
Retained earnings during the
development stage 365,518 384,646 --
----------- ----------- -----------
TOTAL STOCKHOLDERS' (DEFICIT) (48,504) (29,376) (417,118)
----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' (DEFICIT) $ -- $ -- $ --
=========== =========== ===========
The accompanying notes are an integral part of the financial statements.
F-3
HENRY COUNTY PLYWOOD CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Period From
August 28,
2006
(date of
commencement
of
Nine Months Nine Months development
Ended Ended stage) to
February 29, February 28, February 29,
2008 2007 2008
------------ ------------ ------------
Revenues $ -- $ -- $ --
------------ ------------ ------------
Expenses:
Audit fees 7,000 -- 7,000
Attorney Fees 7,338 415 9,522
Corporate Fees 1,970 -- 3,840
Printing and Mailing Fees 853 -- 853
Transfer Agent Fees 1,627 -- 1,627
Other 340 62 397
------------ ------------ ------------
Total Expenses 19,128 477 23,239
------------ ------------ ------------
Net Operating (Loss) (19,128) (477) (23,239)
------------ ------------ ------------
Other Income/Expense:
Other Income
Forgiveness of debt (Note 5) -- 388,757 388,757
------------ ------------ ------------
Total Other Income/Expense -- 388,757 388,757
------------ ------------ ------------
Net Income (Loss) $ (19,128) $ 388,280 $ 365,518
============ ============ ============
Per Share $ (.01) $ 0.50 $ 0.27
============ ============ ============
Weighted Average Shares
Outstanding 2,135,780 779,907 1,339,695
============ ============ ============
The accompanying notes are an integral part of the financial statements.
F-4
HENRY COUNTY PLYWOOD CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Period from
August 28,
2006(date of
commencement
of
development
For the Year Ended stage) to
May 31, May 31,
2007 2006 2007
------------ ------------ ------------
Revenue $ -- $ -- $ --
------------ ------------ ------------
Expenses:
Attorney fees 2,184 2,349 2,184
Corporate fees 1,870 1,870 1,870
Other 57 -- 57
------------ ------------ ------------
Total Expenses 4,111 4,219 4,111
------------ ------------ ------------
Net Operating (Loss) (4,111) (4,219) (4,111)
------------ ------------ ------------
Other Income:
Other Income
Forgiveness of debt (Note 5) 388,757 -- 388,757
------------ ------------ ------------
Total Other Income 388,757 -- 388,757
------------ ------------ ------------
Net Income (Loss) $ 384,646 $ (4,219) $ 384,646
============ ============ ============
Per Share $ .78 $ (0.01) $ .70
============ ============ ============
Weighted Average Shares
Outstanding 494,075 322,574 549,378
============ ============ ============
The accompanying notes are an integral part of the financial statements.
F-5
HENRY COUNTY PLYWOOD CORPORATION
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)
For the Period from June 1, 2005 through February 29, 2008
(Period from June 1, 2007 to February 29, 2008 is unaudited)
Accumulated
Retained
Earnings
Additional Stock During
Common Stock Paid In Subscriptions Accumulated Development
Shares Amount Capital Receivable Deficit Stage Total
----------- ----------- ---------- ------------- ----------- ----------- -----------
Balance
June 1, 2005 322,574 $ 323 $ 322,251 -- $ (735,473) -- $ (412,899)
Net loss - year
ended May 31, 2006 -- -- -- -- (4,219) -- (4,219)
----------- ----------- ---------- ------------- ----------- ----------- -----------
Balance
May 31, 2006 322,574 323 322,251 -- (739,692) -- (417,118)
Debt conversion
(Note 5) 343,945 344 2,752 -- -- -- 3,096
Net Income - year
ended May 31, 2007 -- -- -- -- -- 384,646 384,646
----------- ----------- ---------- ------------- ----------- ----------- -----------
Balance
May 31, 2007 666,519 667 325,003 -- (739,692) 384,646 (29,376)
Stock issuance
for stock
subscriptions
receivable at $.009
per share 2,666,076 2,666 22,334 (25,000) -- -- --
Net Loss - period
ended February 29,
2008 (unaudited) -- -- -- -- -- (19,128) (19,128)
----------- ----------- ---------- ------------- ----------- ----------- -----------
Balance
February 29, 2008
(unaudited) 3,332,595 $ 3,333 $ 347,337 $ (25,000) $ (739,692) $ 365,518 $ (48,504)
=========== =========== ========== ============= =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
F-6
HENRY COUNTY PLYWOOD CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Period From
August 28,
2006 (date of
commencement
of
Nine Months Nine Months development
Ended Ended stage) to
February 29, February 28, February 29,
2008 2007 2008
------------ ------------ ------------
Cash Flows from Operating
Activities:
Net Income (Loss) $ (19,128) $ 388,280 $ 365,518
Forgiveness of debt -- (388,757) (388,757)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Increase (decrease) in accounts
payable and accrued expenses 9,681 -- 13,315
------------ ------------ ------------
Net Cash (Used in) Operating
Activities (9,447) (477) (9,924)
------------ ------------ ------------
Cash Flows from Investing
Activities -- -- --
------------ ------------ ------------
Cash Flows from Financing
Activities:
Advance from affiliates 9,447 477 9,924
------------ ------------ ------------
Net Cash Provided by Financing
Activities 9,447 477 9,924
------------ ------------ ------------
Increase in Cash -- -- --
------------ ------------ ------------
Cash, Beginning of Period -- -- --
------------ ------------ ------------
Cash, End of Period $ -- $ -- $ --
============ ============ ============
Interest Paid $ -- $ -- $ --
============ ============ ============
Income Taxes Paid $ -- $ -- $ --
============ ============ ============
Supplemental Disclosure of
Non-Cash Transactions:
Issuance of stock for stock
subscriptions receivable $ 25,000 $ -- $ 25,000
Conversion of debt for stock and
forgiveness of debt 343,936 343,936 343,936
The accompanying notes are an integral part of the financial statements.
F-7
HENRY COUNTY PLYWOOD CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Period from
August 28,
2006 (date of
Development
For the Year Ended stage) to
May 31, May 31,
2007 2006 2007
----------- ----------- -------------
Cash Flows from Operating
Activities:
Net Income (Loss) $ 384,646 $ (4,219) $ 384,646
Forgiveness of debt (388,757) -- (388,757)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Increase (decrease) in accounts
payable and accrued expenses 3,634 4,219 3,634
----------- ----------- -------------
Net Cash (Used in) Operating
Activities (477) -- (477)
----------- ----------- -------------
Cash Flows from Investing
Activities -- -- --
----------- ----------- -------------
Cash Flows from Financing
Activities:
Advance from affiliates 477 -- 477
----------- ----------- -------------
Net Cash Provided by Financing
Activities 477 -- 477
----------- ----------- -------------
Increase in Cash -- -- --
----------- ----------- -------------
Cash, Beginning of Period -- -- --
----------- ----------- -------------
Cash, End of Period $ -- $ -- $ --
=========== =========== =============
Interest Paid $ -- $ -- $ --
=========== =========== =============
Income Taxes Paid $ -- $ -- $ --
=========== =========== =============
Supplemental Disclosure of
Non-Cash Transactions:
Conversion of debt for stock and
forgiveness of debt 343,936 -- 343,936
The accompanying notes are an integral part of the financial statements.
F-8
HENRY COUNTY PLYWOOD CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2007 and 2006
(References to February 29, 2008 are unaudited)
(1) Summary of Accounting Policies, and Description of Business
This summary of significant accounting policies of Henry County Plywood
Corporation (Company), a "Development Stage Company", is presented to assist in
understanding the Company's financial statements. The financial statements and
notes are representations of the Company's management who is responsible for
their integrity and objectivity. These accounting policies conform to generally
accepted accounting principles in the United States of America and have been
consistently applied in the preparation of the financial statements.
(a) Organization and Description of Business
The Company was incorporated as Henry County Plywood Corporation in 1948 under
the laws of the State of Virginia. On September 30, 2005, the Company was
terminated, by administrative action of the Commonwealth of Virginia as a result
of non-filing of required documents with the State of Virginia. Effective
December 2007, the Company reinstated its charter. On March 3, 2008, the Company
held a shareholder meeting approving a migratory merger to Nevada, which became
effective March 17, 2008.
Since July 2004, the Company has not engaged in any operations.
Effective August 28, 2006, the Company commenced activities to become a
reporting company with the Securities and Exchange Commission ("SEC") with the
intention to become a publicly trading company.
(b) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
(c) Per Share Information
Earnings (loss) per share of common stock is computed by dividing the net
earnings (loss) by the weighted average number of common shares outstanding
during the period. Diluted earnings per share is not shown for periods in which
the Company incurs a loss because it would be anti-dilutive.
(d) Basis of Presentation - Going Concern
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America, which
contemplates continuation of the Company as a going concern. However, the
Company has no business operations and has negative working capital and
stockholders' deficits, which raise substantial doubt about its ability to
continue as a going concern.
In view of these matters, continuation as a going concern is dependent upon
continued operations of the Company, which in turn is dependent upon the
Company's ability to meet its financial requirements, raise additional capital,
and the success of its future operations.
Management has opted to register the Company's common stock under the Securities
Exchange Act of 1934 and to begin the filing of SEC reporting documentation and
then to seek a business combination. Management believes that this plan provides
an opportunity for the Company to continue as a going concern.
F-9
HENRY COUNTY PLYWOOD CORPORATION.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2007 and 2006
(References to February 29, 2008 are unaudited)
(1) Summary of Accounting Policies, Continued
(e) Recent Accounting Pronouncements
There were various accounting standards and interpretations issued during 2008,
2007 and 2006, none of which are expected to a have a material impact on the
Company's consolidated financial position, operations or cash flows.
(f) Risks and Uncertainties
The Company is subject to substantial business risks and uncertainties inherent
in starting a new business. There is no assurance that the Company will be able
to complete a business combination.
(g) Revenue Recognition
The Company has had no revenue during its development stage. It is the Company's
policy that revenues will be recognized in accordance with SEC Staff Accounting
Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements." Under
SAB 101, product revenues (or service revenues) are recognized when persuasive
evidence of an arrangement exists, delivery has occurred (or service has been
performed), the sales price is fixed and determinable and collectibility is
reasonably assured.
(h) Cash and Cash Equivalents
The Company considers cash and cash equivalents to consist of cash on hand and
demand deposits in banks with an initial maturity of 90 days or less.
(i) Fair Value of Financial Instruments
Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards No. 107 ("SFAS 107"), "Disclosures About Fair Value of
Financial Instruments." SFAS 107 requires disclosure of fair value information
about financial instruments when it is practicable to estimate that value. The
carrying amount of the Company's accounts payable and accounts payable-related
party approximate their estimated fair values due to their short-term
maturities.
(j) Income Taxes
The Company records deferred taxes in accordance with Statement of Financial
Accounting Standards (SFAS) 109, "Accounting for Income Taxes." The statement
requires recognition of deferred tax assets and liabilities for temporary
differences between the tax bases of assets and liabilities and the amounts at
which they are carried in the financial statements, the effect of net operating
losses, based upon the enacted tax rates in effect for the year in which the
differences are expected to reverse. A valuation allowance is established when
necessary to reduce deferred tax assets to the amount expected to be realized.
(k) Development stage
Based upon the Company's business plan, it became a development stage enterprise
effective August 28, 2006 when it commenced activities to become a reporting
company with the SEC. Planned principal operations have not yet commenced.
Accordingly, the Company presents its financial statements in conformity with
the accounting principals generally accepted in the United States of America
that apply in establishing operating enterprises. As a development state
enterprise, the Company discloses the deficit accumulated during the development
stage and the cumulative statements of operations and cash flows from
commencement of development stage to the current balance sheet date.
F-10
HENRY COUNTY PLYWOOD CORPORATION.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2007 and 2006
(References to February 29, 2008 are unaudited)
(1) Summary of Accounting Policies, Continued
(l) Concentrations
Financial instruments that potentially subject the company to concentrations of
credit risk consist principally of cash and cash equivalents. At May 31, 2007
and February 29, 2008, the Company had no amounts of cash or cash equivalents in
financial institutions in excess of amounts insured by agencies of the U.S.
Government.
(m) Unaudited Financial Statements
The balance sheet as of February 29, 2008, the statements of operations and cash
flows for the nine month periods ended February 29, 2008 and 2007, and the
statement of stockholders' (deficit) for the nine month period ended February
29, 2008, have been prepared by the Company without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures, normally included in the financial statements prepared
in accordance with accounting principles generally accepted in the United States
of America, have been condensed or omitted as allowed by such rules and
regulations, and the Company believes that the disclosures are adequate to make
the information presented not misleading. The results of operations for the nine
months ended February 29, 2008 are not necessarily indicative of results
expected for the full year ending May 31, 2008. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and changes in
financial position at February 29, 2008 and for all periods presented, have been
made.
(n) Other
The Company has selected May 31 as its fiscal year end.
The Company has paid no dividends.
No advertising expense has been incurred.
The Company consists of one reportable business segment.
The Company has not entered into any leases.
(2) Income Taxes
Deferred income taxes arise from temporary timing differences in the recognition
of income and expenses for financial reporting and tax purposes. The Company's
deferred tax assets consist entirely of the benefit from net operating loss
(NOL) carry forwards, limited by the value of the shell. The net operating loss
carry forward if not used, will expire in various years through 2027, and is
severely restricted as per the Internal Revenue code if there is a change in
ownership. The Company's deferred tax assets are offset by a valuation allowance
due to the uncertainty of the realization of the net operating loss carry
forwards. Net operating loss carry forwards may be further limited by other
provisions of the tax laws.
The Company's deferred tax assets, valuation allowance, and change in valuation
allowance are as follows:
Estimated
NOL Estimated Change in
Carry- NOL Tax Benefit Valuation Valuation Net Tax
Period Ending forward Expires from NOL Allowance Allowance Benefit
- ----------------- --------- ------- ----------- --------- --------- -------
May 31, 2006 500,000 2026 75,000 (75,000) (-) --
May 31, 2007 355,046 2027 53,257 (53,257) 21,743 --
February 29, 2008 374,174 2027 56,126 (56,126) (2,869) --
F-11
HENRY COUNTY PLYWOOD CORPORATION.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2007 and 2006
(References to February 29, 2008 are unaudited)
(2) Income Taxes, continued
Income taxes at the statutory rate are reconciled to the Company's
actual income taxes as follows:
Income tax benefit at statutory rate resulting from net
operating loss carry forward (15.0%)
Deferred income tax valuation allowance 15.0%
------------
Actual tax rate 0%
============
(3) Common Stock and Migratory Merger
Pursuant to the articles of incorporation in Nevada, the Company is authorized
to issue 780,000,000 common shares with $.001 par value. There were 322,574
shares of common stock issued and outstanding at May 31, 2005. During the year
ended May 31, 2007, the Company agreed to issue 343,945 shares of common stock
as settlement for outstanding debt totaling $343,936. Management determined that
the value per share was $.009, for a total value of $3,096, resulting in
forgiveness of debt of $340,840. These shares were issued in March 2008,
subsequent to the increase in authorized shares, however, since the shares were
approved prior to May 31, 2007, the 343,945 shares are included in the 666,519
total outstanding shares as of May 31, 2007. Subsequent to May 31, 2007, a total
of 2,666,076 shares of common stock were issued to two individuals, 650,000 in
October 2007 and 2,016,076 in March 2008, for stock subscriptions receivable
totaling $25,000 plus an agreement to fund the Company's registration expenses
in excess of $25,000. This resulted in a change in control of the Company. The
650,000 shares were issued when the Company was incorporated in Virginia with a
par value of $1.00, resulting in a discount on stock. Effective March 17, 2008,
the Company was reincorporated in Nevada with a par value of $.001. The
2,016,076 shares were issued in March 2008, subsequent to the increase in
authorized shares, however, since the shares were part of the original plan to
issue 80% of the outstanding stock to the two individuals, the 2,016,076 shares
are included in the 3,332,595 total outstanding shares as of February 29, 2008.
On January 28, 2008, the Board of Directors unanimously adopted resolutions to
reincorporate Henry County Plywood Corporation in the State of Nevada by merger
with and into a Nevada corporation with the same name ("Henry County Plywood
Nevada") which Henry County Plywood Corporation formed for such purpose (the
"Migratory Merger"). Effective March 3, 2008, shareholders approved the
Agreement and Plan of Merger.
In accordance with the Agreement and Plan of Merger, effective March 17, 2008,
Henry County Plywood adopted the capital structure of Henry County Plywood
Nevada, which includes total authorized capital stock of 800,000,000 shares, of
which 780,000,000 are common stock, with a par value of $.001 per share (the
"Henry County Plywood Nevada Common Stock") and 20,000,000 shares are blank
check preferred stock, with a par value of $.001 per share (the "Preferred
Stock"). In addition, on March 18, 2008, the issued and outstanding shares of
our common stock automatically converted into shares of Henry County Plywood
Nevada common stock at a ratio of one (1) share of our currently outstanding
common stock for one (1) share of Henry County Plywood Nevada common stock.
All references in the accompanying financial statements to the number of shares
authorized and outstanding have been retroactively adjusted to reflect the new
capital structure and par values effective March 17, 2008.
(4) Related Party Transactions
The Company uses the offices of its majority shareholders for its minimal office
facility needs for no consideration. No provision for these costs has been
provided since it has been determined that they are immaterial.
At May 31, 2007, the Company agreed to issue $133,739 shares in exchange for
debt of $133,739 to a former director of the Company. These shares were issued
to the Director on March 18, 2008 relieving the Company of the debt.
At May 31, 2007 and February 29, 2008, the Company owed $477 and $9,924,
respectively, to a related party for expenses of the Company. The advances are
uncollateralized, bear no interest and are due on demand.
F-12
HENRY COUNTY PLYWOOD CORPORATION.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2007 and 2006
(References to February 29, 2008 are unaudited)
(4) Related Party Transactions, continued
The Company entered into a verbal agreement with its two existing directors
whereby the Company will pay $5,000 to each director for future services to be
performed subsequent to the Company's registration with the Securities and
Exchange Commission.
Subsequent to May 31, 2007, a total of 2,666,076 shares of common stock were
issued to two individuals, 650,000 in October 2007 and 2,016,076 in March 2008,
for stock subscriptions receivable totaling $25,000 plus an agreement to fund
the Company's registration expenses in excess of $25,000.
(5) Debt Settlement
During the year ended May 31, 2007, a portion of the Company's creditors
confirmed a zero balance owed by the Company, resulting in a write off of prior
payables of $24,168. Additionally, a portion of the remaining Company's
creditors agreed to write off a portion of their balance in exchange for a
reduced future payment in cash, resulting in debt forgiveness of $23,749.
In addition, the Company received debt settlement agreements to issue 343,945
shares of the Company's common stock in exchange for debt totaling $343,936.
Management determined that the value per share was $.009, for a total value of
$3,096, resulting in forgiveness of debt of $340,840. According to the debt
settlement agreements, the stock was to have been issued in 2007, resulting in
the Company being delinquent in the issuance of stock in exchange for debt. The
Company has since executed addendums to the debt settlement agreements extending
the time period until April 30, 2008. On March 3, 2008, the Company held a
shareholder meeting authorizing an increase in common stock, and giving the
Company the ability to issue shares to all creditors. On March 18, 2008, each
creditor was issued shares per their agreement. Those creditors which have not
settled with the Company comprise $21,040 of the balance in accounts payable.
The following summarizes debt forgiveness during the year ended May 31, 2007:
Write off of prior payables $ 24,168
Cash settlement 23,749
Conversion to stock 340,840
----------
Total debt forgiveness $ 388,757
==========
(6) Subsequent Events
On January 28, 2008 the Board of Directors unanimously adopted resolutions
announcing a special meeting of shareholders to consider and act upon a proposed
Agreement and Plan of Merger, to reincorporate Henry County Plywood Corporation
in the State of Nevada by merger with and into a Nevada corporation with the
same name ("Henry County Plywood Nevada") which Henry County Plywood formed for
such purpose (the "Migratory Merger"). Effective March 3, 2008, shareholders
approved the Agreement and Plan of Merger.
In accordance with the Agreement and Plan of Merger, effective March 17, 2008,
Henry County Plywood Corporation adopted the capital structure of Henry County
Plywood Nevada, which includes total authorized capital stock of 800,000,000
shares, of which 780,000,000 are common stock, with a par value of $.001 per
share (the "Henry County Plywood Nevada Common Stock") and 20,000,000 shares are
blank check preferred stock, with a par value of $.001 per share. In addition,
on March 17, 2008, the issued and outstanding shares of our common stock
automatically will convert into shares of Henry County Plywood Nevada common
stock at a ratio of one (1) share of our currently outstanding common stock for
one (1) share of Henry County Plywood Nevada common stock.
F-13
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
There are no disagreements with the accountants on accounting and financial
disclosures.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit Index
3.1 Articles of Incorporation with Amendments
3.2 Bylaws of the Company
4.1 Specimen Stock Certificate
4.2 Stock Subscription Agreements
10.1 Equity for Debt Exchange Agreements and Debt Settlement Agreements with
Creditors
15
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REGISTRANT HENRY COUNTY PLYWOOD CORPORATION.
(Date) April 30, 2008
BY(Signature) /s/ David Lilja
(Name and Title) David Lilja
President, Chief Executive Officer
(Date) April 30, 2008
BY(Signature) /s/ John Venette
(Name and Title) John Venette
Treasurer, Secretary and Chief
Financial Officer