As filed with the Securities and Exchange Commission on March 1, 2006.
Registration No. 333-130492
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
AMENDMENT NO. 2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ALLMARINE CONSULTANTS CORPORATION
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(Name of small business issuer in its charter)
Nevada 4400 35-2255990
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(State or jurisdiction (Primary Standard (IRS Employer
of incorporation or Industrial Identification
organization) Classification No.)
Code Number)
8601 RR 2222, BLDG. 1 STE. 210
AUSTIN, TEXAS 78730
(512) 689-7787
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(Address and telephone number of principal executive offices and principal place
of business or intended principal place of business)
Michael Chavez, President & Chief Executive Officer
8601 RR 2222, BLDG. 1 STE. 210
AUSTIN, TEXAS 78730
(512) 689-7787
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(Name, address and telephone number of agent for service)
Copies to:
David M. Loev, John S. Gillies
David M. Loev, Attorney at Law David M. Loev, Attorney at Law
2777 Allen Parkway, Suite 1000 & 2777 Allen Parkway, Suite 1000
Houston, Texas 77019 Houston, Texas 77019
Phone: (713) 524-4110 Phone: (713) 524-4110
Fax: (713) 524-4122 Fax: (713) 456-7908
Approximate date of proposed sale to the public: as soon as practicable after
the effective date of this Registration Statement.
If any of the Securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. (X)
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of earlier effective
registration statement for the same offering. ( )
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ( )
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ( )
If delivery of the Prospectus is expected to be made pursuant to Rule 434, check
the following box. ( ).
CALCULATION OF REGISTRATION FEE
Title of Each Amount Being Proposed Maximum Proposed Maximum Amount of
Class of Securities Being Price Per Share(1) Aggregate Price(2) Registration
To be Registered Registered Fee
- ------------------------------------------------------------------------------------------------
Common Stock 1,850,000 $ 0.10 $ 185,000 $ 21.78
$0.001 par value
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Total 1,850,000 $0.10 $ 185,000 $ 21.78
(1) The offering price is the stated, fixed price of $0.10 per share until
the securities are quoted on the OTC Bulletin Board for the purpose of
calculating the registration fee pursuant to Rule 457.
(2) This amount has been calculated based upon Rule 457 and the amount is only
for purposes of determining the registration fee, the actual amount received by
a selling shareholder will be based upon fluctuating market prices once the
securities are quoted on the OTC Bulletin Board.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
PROSPECTUS
ALLMARINE CONSULTANTS CORPORATION
RESALE OF 1,850,000 SHARES OF COMMON STOCK
The selling stockholders listed on page 29 may offer and sell up to
1,850,000 shares of our Common Stock under this Prospectus for their own
account.
We currently lack a public market for our Common Stock. Selling
shareholders will sell at a price of $0.10 per share until our shares are quoted
on the OTC Bulletin Board and thereafter at prevailing market prices or
privately negotiated prices. If before the Company's shares are quoted on the
OTC Bulletin Board, selling shareholders wish to sell at a price different from
$0.10 per share, we will file a post-effective amendment beforehand.
A current Prospectus must be in effect at the time of the sale of the
shares of Common Stock discussed above. The selling stockholders will be
responsible for any commissions or discounts due to brokers or dealers. We will
pay all of the other offering expenses.
Each selling stockholder or dealer selling the Common Stock is required to
deliver a current Prospectus upon the sale. In addition, for the purposes of the
Securities Act of 1933, selling stockholders are deemed underwriters.
The information in this Prospectus is not complete and may be changed. We
may not sell these securities until the Registration Statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES
ONLY IF YOU CAN AFFORD A COMPLETE LOSS. WE URGE YOU TO READ THE "RISK FACTORS"
SECTION BEGINNING ON PAGE 3, ALONG WITH THE REST OF THIS PROSPECTUS BEFORE YOU
MAKE YOUR INVESTMENT DECISION.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 2006
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TABLE OF CONTENTS
Prospectus Summary 1
Summary Financial Data 3
Risk Factors 3
Use of Proceeds 10
Dividend Policy 10
Legal Proceedings 10
Directors and Executive Officers 11
Security Ownership of Certain Beneficial Owners
and Management 13
Interest of Named Experts and Counsel 14
Indemnification of Directors and Officers 14
Description of Business 16
Management's Discussion and Analysis of Financial Condition
and Results of Operations 22
Description of Property 24
Certain Relationships and Related Transactions 25
Executive Compensation 26
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 27
Descriptions of Capital Stock 27
Shares Available for Future Sale 28
Plan of Distribution and Selling Stockholders 29
Market for Common Equity and Related Stockholder Matters 33
Legal Matters 33
Additional Information 34
Financial Statements F-1
Part II 35
PART I - INFORMATION REQUIRED IN PROSPECTUS
PROSPECTUS SUMMARY
The following summary highlights material information found in more detail
elsewhere in the Prospectus. It does not contain all of the information you
should consider. As such, before you decide to buy our Common Stock, in
addition to the following summary, we urge you to carefully read the entire
Prospectus, especially the risks of investing in our Common Stock as discussed
under "Risk Factors." In this Prospectus, the terms "we," "us," "our,"
"Company," and "Allmarine" refer to Allmarine Consultants Corporation, a Nevada
corporation, "Common Stock" refers to the Common Stock, par value $0.001 per
share, of Allmarine Consultants Corporation.
We are a development stage company with limited experience in the marine
consulting business. We have earned no revenues since our formation, have no
current clients and have an accumulated deficit of $31,582 as of November 30,
2005.
We intend to specialize in the administration of ship and corporate
registries and provide maritime services to ship owners and operators including
registration and deletion of merchant vessels, bareboat/dual registry,
registration of mortgages, classification and technical surveys such as load
line and Safety of Life at Sea ("SOLAS"). Additionally, we plan to conduct
pre-purchase, condition and cargo gear surveys, International Safety Management
("ISM") consulting and certificates, International Ship and Port Facility
Security ("ISPS") implementation and certificates and we additionally offer
Continuous Discharge Certificates ("CDC") for seafarers, vessel history &
investigation, marine insurance, corporate formation, and general consultancy to
ship owners and managers through Philtex Corporation, Ltd., a Belize corporation
based in Dubai, United Arab Emirates, with whom we have a Marketing Agreement,
as described below under "Description of Business."
Of the 1,850,000 shares of Common Stock included in this Prospectus,
900,000 shares were issued in connection with services rendered and 950,000
shares were sold pursuant to a private placement of our Common Stock at $0.025
per share.
Our mailing address is 8601 RR 2222, Bldg. 1 Ste. 210, Austin, Texas 78730,
our telephone number is (512) 689-7787, and our fax number is (512) 342-9594.
The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus. The securities offered
hereby are speculative and involve a high degree of risk. See "Risk Factors."
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SUMMARY OF THE OFFERING:
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COMMON STOCK OFFERED: 1,850,000 shares by selling stockholders
COMMON STOCK OUTSTANDING
BEFORE THE OFFERING: 9,950,000 shares
COMMON STOCK OUTSTANDING
AFTER THE OFFERING: 9,950,000 shares
USE OF PROCEEDS: We will not receive any proceeds from the
shares offered by the selling stockholders. See
"Use of Proceeds."
RISK FACTORS: The securities offered hereby involve a high
degree of risk, including risks associated with
our need for additional financing, our ability to
continue as a going concern, that we may not
generate any revenues in the future, that we
depend heavily on our officers and directors, that
our President and Vice President can vote a
majority of our outstanding shares, that we are
highly dependent on our relationship with Philtex
Corporation, Ltd. for our operations, that we have
a limited operating history, that we have a poor
financial position, that we may not be able to
successfully compete in the ship registry and
marine services industry, that we may not be able
to mange our growth, that our operations may be
adversely effected by fluctuations and cyclical
turns in the shipping industry, and with the penny
stock restrictions on our common stock. See "Risk
Factors."
OFFERING PRICE: The offering price of the shares has been
arbitrarily determined by us based on estimates of
the price that purchasers of speculative
securities, such as the shares, will be willing to
pay considering the nature and capital structure
of our Company, the experience of our officers and
Directors and the market conditions for the sale
of equity securities in similar companies. The
offering price of the shares bears no relationship
to the assets, earnings or book value of us, or
any other objective standard of value. We believe
that no shares will be sold by the selling
shareholders prior to us becoming a publicly
traded company, at which time the selling
shareholders will sell shares based on the market
price of such shares. We are not selling any
shares of our common stock, and are only
registering the re-sale of shares of Common Stock
previously sold by us.
NO MARKET: No assurance is provided that a market will
be created for our securities in the future, or at
all. If in the future a market does exist for our
securities, it is likely to be highly illiquid and
sporadic.
[Remainder of page left intentionally blank.]
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SUMMARY FINANCIAL DATA
You should read the unaudited summary financial information presented below
for the six months ended November 30, 2005, and for the period from inception
(May 19, 2005) to November 30, 2005. We derived the summary financial
information from our unaudited financial information for the six months ended
November 30, 2005, appearing elsewhere in this Prospectus. You should read this
summary financial information in conjunction with our plan of operation,
financial statements and related notes to the financial statements, each
appearing elsewhere in this Prospectus.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED INCEPTION (MAY 19,
NOVEMBER 30, 2005 2005) THROUGH
NOVEMBER 30, 2005
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(Unaudited) (Unaudited)
Operating expenses:
Other general and administrative $ 22,282 $ 31,582
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Loss from operations 22,282 31,582
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Net loss $ (22,282) $ (31,582)
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BALANCE SHEET AS OF NOVEMBER 30, 2005
(UNAUDITED)
ASSETS
Current assets:
Cash $ 3,944
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Total current assets $ 3,944
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
--------
Total current liabilities - 0 -
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STOCKHOLDERS' EQUITY:
Preferred stock $.001 par value,
10,000,000 shares authorized, none issued - 0 -
Common stock, $.001 par value,
100,000,000 shares authorized, 9,950,000
shares issued and outstanding 9,950
Additional paid in capital 25,576
Deficit accumulated during the exploration stage (31,582)
Total stockholders' equity 3,944
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Total Liabilities and Stockholders' Equity $ 3,944
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RISK FACTORS
The securities offered herein are highly speculative and should only be
purchased by persons who can afford to lose their entire investment in Allmarine
Consultants Corporation You should carefully consider the following risk
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factors and other information in this Prospectus before deciding to become a
holder of our Common Stock. If any of the following risks actually occur, our
business and financial results could be negatively affected to a significant
extent. References to "our," "we," "Allmarine" and words of similar meaning in
these Risk Factors refer to the Company.
WE MAY NOT BE ABLE TO CONTINUE OUR BUSINESS PLAN WITHOUT ADDITIONAL FINANCING.
We will depend to a great degree on the ability to attract external
financing in order to conduct future business activities. We are currently
funded solely by our shareholders and we believe that we can continue our
business operations for the next six to eight months with financing provided by
such shareholders, due to the fact that our total expenses are low, Michael
Chavez, our sole officer, Director and employee has not been paid any salary to
date and has agreed to provide us additional funding in the future, if needed,
and due to the fact that we are provided office space at no cost to us by Mr.
Chavez. We currently plan to outsource/refer any clients we receive to Philtex;
however, we plan to conduct our own operations in the future through contacts
gained through our Marketing Agreement with Philtex (explained below) and to
operate separately from Philtex in the future, finances permitting. To
accomplish those goals and/or if our expenses rise or our current shareholders
cease funding our operations, we will be forced to raise additional capital
through the sale of debt and/or equity securities. If this happens and we are
unable to raise the additional funds we require, we may be forced to abandon our
current business plan. If you invest in us and we are unable to raise the
required funds, your investment could become worthless.
OUR AUDITORS HAVE EXPRESSED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A
GOING CONCERN.
We have not generated any revenues since inception and have incurred
substantial losses totaling $9,300 as of May 31, 2005, and $31,582 as of
November 30, 2005. We had net working capital of $3,944 as of November 30,
2005. These factors among others indicate that we may be unable to continue as
a going concern, particularly in the event that we cannot generate sufficient
cash flow to conduct our operations and/or obtain additional sources of capital
and financing.
WE MAY NOT GENERATE ANY REVENUES IN THE FUTURE, WHICH MAY FORCE US TO CURTAIL
OUR BUSINESS PLAN.
As a development stage company, we have no revenues or profits to date and
our accumulated deficit as of November 30, 2005, was $31,582. We are currently
being funded by existing shareholders and anticipate being able to continue our
business operations for approximately the next six to eight months due to our
low overhead and the limited expenses that we have. If we do not have enough
money to pay our outstanding liabilities as they become due and/or if we fail to
generate any revenues in the future, we will be forced to curtail or abandon our
business plan and any investment in us may be lost.
-4-
WE DEPEND HEAVILY ON MICHAEL CHAVEZ AND ARTHUR STONE, OUR OFFICERS AND
DIRECTORS, AND IF WE WERE TO LOSE THEIR SERVICES, WE MAY BE FORCED TO ABANDON OR
CURTAIL OUR BUSINESS PLAN AND OPERATIONS.
Our future performance is substantially dependent on the performance of
Michael Chavez, our Chief Executive Officer and President and Arthur Stone, our
Vice President. The loss of the services of Mr. Chavez or Mr. Stone could have
a material adverse effect on our business, results of operations or financial
condition. We do not currently have an employment agreement with or any "key
man" insurance on Mr. Chavez or Mr. Stone. In addition, the absence of Mr.
Chavez or Mr. Stone will force us to seek replacements who may have less
experience or who may not understand our business as well, or we may not be able
to find a suitable replacement. Moving forward, should we lose the services of
Mr. Chavez or Mr. Stone, for any reason, we will incur costs associated with
recruiting a replacement and any delays could harm our operations. If we are
unable to replace Mr. Chavez or Mr. Stone with other suitably trained individual
or individuals, we may be forced to scale back or curtail our business plan and
planned activities, which would likely cause a decrease in the value of our
securities. Additionally, as a result of the loss of Mr. Chavez or Mr. Stone,
we could be forced to abandon or change our current business plan, which
changed business plan could have significant risks associated with it, which are
not contemplated by this Prospectus, and which could cause the value of our
securities to become worthless.
OUR PRESIDENT MICHAEL CHAVEZ AND OUR VICE PRESIDENT, ARTHUR STONE, CAN VOTE AN
AGGREGATE OF 54.2% OF OUR COMMON STOCK AND CAN EXERCISE CONTROL OVER
CORPORATE DECISIONS INCLUDING THE APPOINTMENT OF NEW DIRECTORS.
Our President, Michael Chavez and our Vice President, Arthur Stone,
currently control 5,400,000 shares representing approximately 54.2% of our
outstanding Common Stock. Accordingly, Mr. Chavez and Mr. Stone will exercise
control in determining the outcome of all corporate transactions or other
matters, including the election of directors, mergers, consolidations, the sale
of all or substantially all of our assets, and also the power to prevent or
cause a change in control. Any investors who purchase shares will be minority
shareholders and as such will have little to no say in our direction and the
election of Directors. Additionally, it will be difficult if not impossible for
investors to remove Mr. Chavez and/or Mr. Stone as our Directors, which will
mean they will remain in control of who serves as our officers as well as
whether any changes are made in the Board of Directors. As a potential investor
in us, you should keep in mind that even if you own shares of our Common Stock
and wish to vote them at annual or special shareholder meetings, your shares
will likely have little effect on the outcome of corporate decisions.
[Remainder of page left intentionally blank.]
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WE ARE HIGHLY DEPENDENT ON PHILTEX CORPORATION, LTD. FOR OUR OPERATIONS, AS WE
WILL INITIALLY RUN SUBSTANTIALLY ALL OF OUR OPERATIONS THROUGH PHILTEX
CORPORATION, LTD.
We are currently highly dependent on Philtex Corporation, Ltd., ("Philtex")
as we plan to outsource (i.e. refer) all of our operations and services through
Philtex for approximately the next six (6) to twelve (12) months and use
Philtex's contracts and connections through the Marketing Agreement (described
below) for approximately six (6) to twelve (12) months thereafter, once we have
operations. Additionally, as described below under "Description of Business,"
"Need for Government Approval," we will be dependent on Philtex for Philtex's
ability to sell the registry of several countries which whom Philtex has
government authorization from, as we do not have any ability to sell registries
on our own. We currently have a Marketing Agreement with Philtex (described in
greater detail below) whereby Philtex has granted us the exclusive right to
promote, market and sell Philtex's products and services in North and South
America. We have earned no revenues through our Marketing Agreement with Philtex
as of the date of this Prospectus. Philtex or we may terminate the Marketing
Agreement at any time with or without cause, for any reason, upon delivery of
written notice thereof to the other. If we do not earn any revenues through our
Marketing Agreement in the future, and/or if Philtex was to terminate the
Marketing Agreement and we are unable to offer registry services, and/or if
Philtex was to terminate the Marketing Agreement and compete with us in the same
market, we would likely be forced to abandon our business operations and our
operations would likely fail, causing any investment in us to become worthless.
WE HAVE A LIMITED OPERATING HISTORY AND HAVE NOT GENERATED ANY REVENUES TO DATE
AND BECAUSE OF THIS IT MAY BECOME DIFFICULT TO EVALUATE OUR CHANCE FOR SUCCESS.
We were formed as a Nevada corporation in May 2005. Aside from
organizational costs incurred, we have not incurred significant expenses to
date, but have also not generated any revenues, and we have a limited operating
history. As such, it may be difficult to evaluate our business prospects. We
are a development stage company with limited experience in the marine consulting
business, which plans to outsource (i.e. refer) the majority of our operations
through our Marketing Agreement with Philtex for approximately six (6) to twelve
(12) months and then to use Philtex's contracts and connections for
approximately six (6) to twelve (12) months thereafter; however, we will need to
arrange new agreements, raise needed capital, and pay expenses and general
administrative fees during that time and will need to raise substantial
additional capital to offer services separate from Philtex, which we currently
plan to offer in the future. Although we feel we have experienced officers and
directors, we are a relatively new company and, as such, run a risk of not being
able to compete in the marketplace because of our relatively short existence.
New companies in the competitive environment of marine consulting, such as ours,
may have difficulty in continuing in the highly competitive marine consulting
environment, and as a result, we may be forced to abandon or curtail our
business plan. Under such a circumstance, the value of any investment in us may
become worthless.
-6-
WE HAVE A POOR FINANCIAL POSITION AND IF WE DO NOT GENERATE REVENUES, WE MAY BE
FORCED TO ABANDON OUR BUSINESS PLAN.
We currently have a poor financial position. We have not generated any
revenues to date and have a deficit as of November 30, 2005 of $31,582. There
is a risk that we will not generate any revenues through our Marketing Agreement
with Philtex, and/or that we will never be able to operate separately from
Philtex. If we never generate any revenues, we may be forced to abandon our
business plan and any investment in us may become worthless.
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY IN THE HIGHLY COMPETITIVE SHIP
REGISTRY AND MARINE SERVICES INDUSTRY.
The market for companies offering ship registry and other marine services
is highly competitive and we only expect competition to intensify in the future.
Numerous well-established companies spend significant resources on marketing and
advertising to individuals which we also market services to. Because of these
factors, there is a significant risk that that we will be unable to compete
successfully and that competitive pressures, including possible downward
pressure on the prices we charge for our services, will cause us to curtail or
abandon our current business plans and/or cause us to change our business plan
significantly. If we were forced to abandon, curtail or change our business
plan, any investment in us could become worthless.
IN THE EVENT THAT OUR OPERATIONS AND CONTRACTS GROW, THERE IS A RISK THAT WE
WILL NOT BE ABLE TO MANAGE OUR GROWTH.
Our growth is expected to place a significant strain on our managerial,
operational and financial resources. Further, as we receive additional
contracts, we will be required to manage multiple relationships with various
customers, clients and other third parties. These requirements will be
exacerbated in the event of our further growth. As a result, there is a
significant risk that our systems, procedures or controls will not be adequate
to support our operations and/or that we will not be able to achieve the rapid
execution necessary to successfully offer our services and implement our
business plan. Our future operating results will also depend on our ability to
add additional personnel commensurate with the growth of our business. If we
grow faster than we can manage, our procedures and controls may not be adequate
to support our operations and as a result, we may be forced to scale back our
operations, sell all or a portion of our assets and/or hire additional
management, all of which could cause us significant expense and could cause any
investment in us to decline in value.
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OUR SHIP REGISTRY OPERATIONS MAY BE ADVERSELY EFFECTED BY FLUCTUATIONS AND
CYCLICAL TURNS IN THE SHIPPING INDUSTRY AS A WHOLE.
The shipping business, including the market for ship registry services, has
been cyclical in varying degrees, and has experienced fluctuations in
profitability and demand. These fluctuations, and the demand for ships, in
general, have been influenced by many factors including:
- global and regional economic conditions;
- developments in international trade;
- changes in seaborne and other transportation patterns;
- weather;
- crop yields;
- armed conflicts;
- terrorist activities;
- port congestion;
- canal closures;
- political developments;
- embargoes; and
- strikes.
The demand for maritime shipping services is also greatly affected by the demand
for consumer goods and perishable foods, dry bulk commodities and bagged and
finished products, all of which are highly dependent on the factors described
above, as well as commodity prices, environmental concerns and competition. The
supply of shipping capacity is also a function of the delivery of new vessels
and the number of older vessels scrapped, in lay-up, converted to other uses,
reactivated or removed from active service. Supply may also be affected by
maritime transportation and other types of governmental regulation, including
that of international authorities. These and other factors may cause a decrease
in the demand for the services we provide.
OUR ARTICLES OF INCORPORATION AUTHORIZE US TO ISSUE SHARES OF PREFERRED STOCK,
WHICH SHARES MAY HAVE RIGHTS AND PREFERENCES GREATER THAN THE COMMON STOCK
OFFERED THROUGH THIS PROSPECTUS.
Pursuant to our Articles of Incorporation, we have 100,000,000 shares of
Common Stock and 10,000,000 shares of preferred stock ("Preferred Stock")
authorized. As of the filing of this Registration Statement, we have 9,950,000
shares of Common Stock issued and outstanding and - 0 - shares of Preferred
Stock issued and outstanding. As a result, we have the ability to issue a large
number of additional shares of Common Stock by our Board of Directors without
shareholder approval, which if issued would cause substantial dilution to our
then shareholders. Additionally, shares of Preferred Stock may be issued by our
Board of Directors without shareholder approval with voting powers, and such
preferences and relative, participating, optional or other special rights and
-8-
powers as determined by our Board of Directors. As a result, shares of Preferred
Stock may be issued by our Board of Directors which cause the holders to have
super majority voting power over our shares, provide the holders of the
Preferred Stock the right to convert the shares of Preferred Stock they hold
into shares of our Common Stock, which may cause substantial dilution to our
then Common Stock shareholders and/or have other rights and preferences greater
than those of our Common Stock shareholders. Investors should keep in mind that
the Board of Directors has the authority to issue additional shares of Common
Stock which could cause substantial dilution to our existing shareholders and/or
Preferred Stock, which could cause substantial dilution, give such preferred
shareholders super majority voting rights and/or other rights or preferences
which could provide the preferred shareholders control of us subsequent to this
offering and/or give those holders the power to prevent or cause a change in
control, which could cause the value of our Common Stock to decline or become
worthless.
WE DO NOT CURRENTLY HAVE A PUBLIC MARKET FOR OUR SECURITIES. IF THERE IS A
MARKET FOR OUR COMMON STOCK IN THE FUTURE, OUR STOCK PRICE MAY BE VOLATILE AND
ILLIQUID.
There is currently no public market for our Common Stock. After this
Registration Statement becomes effective, we hope to trade our securities on the
Over-The-Counter Bulletin Board. If there is a market for our Common Stock in
the future, we anticipate that such market would be illiquid and would be
subject to wide fluctuations in response to several factors, including, but not
limited to:
(1) actual or anticipated variations in our results of operations;
(2) our ability or inability to generate new revenues;
(3) increased competition; and
(4) conditions and trends in the ship registry and commercial shipping
industry.
Furthermore, our stock price may be impacted by factors that are unrelated
or disproportionate to our operating performance. These market fluctuations, as
well as general economic, political and market conditions, such as recessions,
interest rates or international currency fluctuations may adversely affect the
market price and liquidity of our Common Stock.
INVESTORS MAY FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF OUR COMMON STOCK
DUE TO FEDERAL REGULATIONS OF PENNY STOCKS.
Once our Common Stock is listed on the OTC Bulletin Board, it will be
subject to the requirements of Rule 15(g)9, promulgated under the Securities
Exchange Act as long as the price of our Common Stock is below $5.00 per share.
Under such rule, broker-dealers who recommend low-priced securities to persons
other than established customers and accredited investors must satisfy special
sales practice requirements, including a requirement that they make an
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individualized written suitability determination for the purchaser and receive
the purchaser's consent prior to the transaction. The Securities Enforcement
Remedies and Penny Stock Reform Act of 1990, also requires additional disclosure
in connection with any trades involving a stock defined as a penny stock.
Generally, the Commission defines a penny stock as any equity security not
traded on an exchange or quoted on NASDAQ that has a market price of less than
$5.00 per share. The required penny stock disclosures include the delivery,
prior to any transaction, of a disclosure schedule explaining the penny stock
market and the risks associated with it. Such requirements could severely limit
the market liquidity of the securities and the ability of purchasers to sell
their securities in the secondary market.
USE OF PROCEEDS
We will not receive any proceeds from the resale of Common Stock by the
Selling Stockholders.
DIVIDEND POLICY
To date, we have not declared or paid any dividends on our outstanding
shares. We currently do not anticipate paying any cash dividends in the
foreseeable future on our Common Stock. Although we intend to retain our
earnings to finance our operations and future growth, our Board of Directors
will have discretion to declare and pay dividends in the future. Payment of
dividends in the future will depend upon our earnings, capital requirements and
other factors, which our Board of Directors may deem relevant.
LEGAL PROCEEDINGS
From time to time, we may become party to litigation or other legal
proceedings that we consider to be a part of the ordinary course of our
business. We are not currently involved in legal proceedings that could
reasonably be expected to have a material adverse effect on our business,
prospects, financial condition or results of operations. We may become involved
in material legal proceedings in the future.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK.]
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DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name, age and position of each of our
directors and executive officers. Our officers and directors are as follows:
NAME AGE POSITION
---- --- --------
MICHAEL CHAVEZ 27 PRESIDENT, CHIEF EXECUTIVE OFFICER,
CHIEF FINANCIAL OFFICER,
SECRETARY, TREASURER AND DIRECTOR
ARTHUR STONE 62 VICE PRESIDENT AND DIRECTOR
-------------------------------------------------------------------
MICHAEL CHAVEZ, PRESIDENT, CHIEF EXECUTIVE OFFICER, SECRETARY, TREASURER AND
DIRECTOR
Mr. Chavez has served as our President, Chief Executive Officer, Secretary,
Treasurer and Director since our incorporation on May 19, 2005. He has served
as the owner/president of CCALL, Inc. Insurance ("CCALL") since July 2003 and
currently spends approximately 10 hours per week working for CCALL and
approximately 40-50 hours per week working for us. CCALL is an insurance broker
for property and casualty insurance. He served as the Vice President of
Operations and Business Development of JLML Holdings, Inc. from August 2000 to
July 2003. JLML Holdings, Inc. was a commercial and residential development
company. From June 1999 to August 2000, Mr. Chavez served as the Executive
Manager of CCM Manufacturing Tech ("CCM Tech"). CCM Tech was a certified
electronic manufacturing service company. From May 1996 to June 1999, Mr.
Chavez served as an Account Executive for Micro-Media Solutions ("Micro-Media").
Micro Media was a network integration company. Mr. Chavez is currently an
active member and supporter of the Greater Austin Hispanic Chamber of Commerce,
Texas Association of Mexican American Chamber of Commerce, Member of the
Hispanic Austin Leadership Alumni, and a member of the Mexi-Arte Museum in
Austin, Texas.
ARTHUR STONE, VICE PRESIDENT AND DIRECTOR
Arthur Stone has served as our Vice President and Director since May 19,
2005, and provides advisory services to us on an as needed basis, including
advisory services in connection with marketing, corporate planning and the
identification and introduction of potential strategic partners. Since January
1, 1987, he has served as President of Stone Technologies Corp. ("Stone") and he
currently spends approximately 40 hours per week working for Stone. Stone is a
high-tech research and design company, specializing in wireless communications
equipment, as well as the manufacturing and electronic testing of the equipment.
Since December 2004, he has served as a Director of CLX Investment Company, an
investment company registered under the Investment Company Act of 1940 (publicly
-11-
traded on the OTCBB under the symbol "CLXN"). From July 1975 to January 1987,
he was served as President of ADS Security Systems, Inc ("ADS"). ADS was a
security and fire alarm installation company, which manufactured and tested its
products. From January 1965 to June 1975, he owned and operated Automatic
Detection Systems. Automatic Detection Systems was a security and fire alarm
installation company. From 1961 to 1982, Mr. Stone has completed 60 hours of
Electrical Engineering course work at the University of Texas.
Our Directors are elected annually and hold office until our next annual
meeting of the shareholders and until their successors are elected and
qualified. Officers will hold their positions at the pleasure of the Board of
Directors, absent any employment agreement. Our officers and Directors may
receive compensation as determined by us from time to time by vote of the Board
of Directors. Such compensation might be in the form of stock options. Directors
may be reimbursed by us for expenses incurred in attending meetings of the Board
of Directors. Vacancies in the Board are filled by majority vote of the
remaining directors.
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-12-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table provides the names and addresses of each person known
to own directly or beneficially more than 5% of our outstanding Common Stock (as
determined in accordance with Rule 13d-3 under the Exchange Act) as of March 1,
2006 and by the officers and directors, individually and as a group. Except as
otherwise indicated, all shares are owned directly.
PERCENTAGE
BENEFICIALLY PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL SHARES BENEFICIALLY OWNED BEFORE BENEFICIALLY OWNED
OWNER OWNED OFFERING(1) AFTER OFFERING
------------------------------ ------------------- ------------ ------------------
MICHAEL CHAVEZ(2)
8601 Rr 2222, Bldg. 1 Ste. 210 2,700,000 27.1 % 27.1 %
Austin, Texas 78730
ARTHUR STONE(3)
8601 Rr 2222, Bldg. 1 Ste. 210 2,700,000 27.1 % 27.1 %
Austin, Texas 78730
DAVID LOEV (4)
2777 Allen Parkway, Suite 1000 2,825,000 28.0 %(5) 28.0 %(5)
Houston, Texas 77019
CHRIS WARREN
Level 41, Emirates Tower 900,000 9.5 % 9.5 %
Sheikh Zayed Road
P.O. Box 14069
Dubai, United Arab Emirates
=============================== =================== ============ ==================
ALL OFFICERS AND DIRECTORS AS A
GROUP (2 PERSONS) 5,400,000 54.3 % 54.3 %
(1) Using 9,950,000 shares of Common Stock issued and outstanding as of March
1, 2006.
(2) Michael Chavez is our Chief Executive Officer, Chief Financial Officer,
Secretary, Treasurer and Director.
(3) Arthur Stone is our Vice President and Director.
(4) Includes warrants to purchase 125,000 shares of our Common Stock at $0.025
per share, which are described in greater detail under "Description of
Capital Stock," below.
(5) Using 10,075,000 shares of Common Stock outstanding, assuming the exercise
of the 125,000 warrants held by David Loev.
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INTEREST OF NAMED EXPERTS AND COUNSEL
This Form SB-2 Registration Statement was prepared by our counsel, David M.
Loev, Attorney at Law, who is the beneficial owner of 2,700,000 shares of our
Common Stock, representing 27.1% of our issued and outstanding common stock, and
holds warrants to purchase 125,000 shares of our Common Stock at $0.025 per
shares, which are described in greater detail under "Description of Capital
Stock," below.
EXPERTS
The financial statements of the Company as of as of May 31, 2005 and the
related statements of operations, stockholders' deficit and cash flows for the
period from May 19, 2005 (Inception) through May 31, 2005 included in this
Prospectus have been audited by Lopez, Blevins, Bork & Associates, LLP our
independent auditors, as stated in their report appearing herein and have been
so included in reliance upon the reports of such firm given upon their authority
as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Nevada Revised Statutes and our Articles of Incorporation allow us to
indemnify our officers and directors from certain liabilities and our Bylaws
state that we shall indemnify every (i) present or former Director, advisory
director or officer of us, (ii) any person who while serving in any of the
capacities referred to in clause (i) served at our request as a director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, and (iii) any person
nominated or designated by (or pursuant to authority granted by) the Board of
Directors or any committee thereof to serve in any of the capacities referred to
in clauses (i) or (ii) (each an "Indemnitee").
Our Bylaws provide that we shall indemnify an Indemnitee against all
judgments, penalties (including excise and similar taxes), fines, amounts paid
in settlement and reasonable expenses actually incurred by the Indemnitee in
connection with any proceeding in which he was, is or is threatened to be named
as defendant or respondent, or in which he was or is a witness without being
named a defendant or respondent, by reason, in whole or in part, of his serving
or having served, or having been nominated or designated to serve, if it is
determined that the Indemnitee (a) conducted himself in good faith, (b)
reasonably believed, in the case of conduct in his Official Capacity, that his
conduct was in our best interests and, in all other cases, that his conduct was
at least not opposed to our best interests, and (c) in the case of any criminal
proceeding, had no reasonable cause to believe that his conduct was unlawful;
provided, however, that in the event that an Indemnitee is found liable to us or
is found liable on the basis that personal benefit was improperly received by
the Indemnitee, the indemnification (i) is limited to reasonable expenses
actually incurred by the Indemnitee in connection with the Proceeding and (ii)
shall not be made in respect of any Proceeding in which the Indemnitee shall
have been found liable for willful or intentional misconduct in the performance
of his duty to us.
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Except as provided above, the Bylaws provide that no indemnification shall
be made in respect to any proceeding in which such Indemnitee has been (a) found
liable on the basis that personal benefit was improperly received by him,
whether or not the benefit resulted from an action taken in the Indemnitee's
official capacity, or (b) found liable to us. The termination of any proceeding
by judgment, order, settlement or conviction, or on a plea of nolo contendere or
its equivalent, is not of itself determinative that the Indemnitee did not meet
the requirements set forth in clauses (a) or (b) above. An Indemnitee shall be
deemed to have been found liable in respect of any claim, issue or matter only
after the Indemnitee shall have been so adjudged by a court of competent
jurisdiction after exhaustion of all appeals therefrom. Reasonable expenses
shall, include, without limitation, all court costs and all fees and
disbursements of attorneys for the Indemnitee. The indemnification provided
shall be applicable whether or not negligence or gross negligence of the
Indemnitee is alleged or proven.
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-15-
DESCRIPTION OF BUSINESS
Special Note Regarding Forward-Looking Statements
- -------------------------------------------------
Certain statements in this Form SB-2, including statements under
"Description of Business," and "Management's Discussion and Analysis of
Financial Condition and Results of Operations", constitute forward looking
statements. Certain, but not necessarily all, of such forward-looking statements
can be identified by the use of forward-looking terminology such as "believes",
"expects", "may", "should", or "anticipates", or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy that
involve risks and uncertainties. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Allmarine Consultants Corporation
("Allmarine", "the Company", "we", "us" or "our") to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements.
BUSINESS HISTORY
- ----------------
We were incorporated as "Allmarine Consultants Corporation," in Nevada on
May 19, 2005. To date, we have generated no revenues, have performed no services
and have no clients. Through our Marketing Agreement with Philtex (explained
below), we plan to specialize in the administration of ship and corporate
registries, providing maritime services to ship owners and operators including
registration and deletion of merchant vessels, bareboat/dual registry,
registration of mortgages, classification and technical surveys such as load
line and Safety of Life at Sea ("SOLAS"). Additionally, through Philtex, we plan
to conduct pre-purchase, condition & cargo gear surveys, International Safety
Management ("ISM") consulting and certificates, International Ship and Port
Facility Security ("ISPS") implementation and certificates and we additionally
offer Continuous Discharge Certificates ("CDC") for seafarers, vessel history &
investigation, marine insurance, corporate formation & structure, legal
services, and general consultancy to ships owners and managers. We currently run
all of our operations through our Marketing Agreement with Philtex Corporation,
Ltd., a Dubai, United Arab Emirates corporation ("Philtex"). Philtex's president
is Chris Warren, who holds 900,000 shares of our common stock.
BUSINESS OPERATIONS
- -------------------
According to the fundamental principles of public international law, all
vessels using the high seas must possess a national character; a stateless ship
enjoys no protection under international law. "Vessel registration", meaning the
entry of a ship in the public records of a State, is the process by which a ship
takes on a national character. Every "Flag State" maintains a register in which
the particulars of merchant vessels possessing the nationality of that State are
entered. Upon registration, a vessel is entitled to hoist the national flag and
will be issued vessel documents attesting to its nationality.
-16-
Once a vessel is registered, there are several rights which are conferred
to the vessel, including the right to diplomatic protection and consular
assistance by the Flag State; the right to naval protection by the Flag State,
and, in some cases, the right to engage in certain activities within the
territorial waters of the Flag State (e.g. fishing or trading between the ports
of the Flag State). The title of the registered owner is protected, and the
priorities among persons holding security interests over the vessel, such as
mortgagees, may be preserved.
Every sovereign State may decide to whom it will accord the right to fly
its flag and may prescribe the rules governing such grants. Generally, the
traditional maritime nations limit those who may register a vessel to nationals
of that nation or to entities incorporated or organized in that nation. These
"national flags" account for over 50% of the world's oceangoing fleet in terms
of deadweight tonnage (Institute of Shipping Economics and Logistics Market
Analysis 2005, Ownership Patterns of the World Merchant Fleet, April 2005,
www.isl.org). They are protected as arms of national defense, sources of jobs,
and territorial pride. Cargoes are reserved for them, fishing rights belong to
them, and tax and subsidy benefits accrue to them.
Several Flag States have offered their maritime flag registration to owners
from another country. These "open registers" generally offer simple registration
procedures, low or nonexistent taxes, and no practical restrictions on
nationality of crew.
We, through our Marketing Agreement with Philtex, work under the
authorization of countries who offer "open" registration of merchant ships to
foreign people and companies. Through our Marketing Agreement with Philtex, we
will market ship and corporate registration and carryout statutory requirements
on behalf of the International Maritime Organization, a government body of the
United Nations which regulates Flag States ("IMO") and other recognized
classification societies accepted from member Flag States. Additionally, through
our Marketing Agreement with Philtex, we will be able to provide our clients
with surveyors which are approved by port authorities in most major ports
throughout the Middle East, India, Europe, and the United States of America.
The nature of the relationship between us and Philtex is limited to the
terms and conditions of the Marketing Agreement (described below). Philtex and
us will have complete autonomy, but will engage in similar business activities
involving the registration and classification of merchant ships and company
formation under various nationalities. For approximately the next six (6) to
twelve (12) months, we plan to focus on building our client base in North and
South America, and Philtex has agreed through the Marketing Agreement to allow
us to outsource work through it, for additional fees to be paid on a sale by
sale basis, during that time. Additionally, Philtex has agreed to perform the
majority of the administrative duties on our ship registry services, until such
time as we are able to handle our own registration processing, which we
anticipate being in the 3rd or 4th quarters of 2007. Until such time as we are
able to perform registration services on an independent basis apart from
Philtex, we will rely on Philtex to perform such registrations.
-17-
Through Philtex we will also offer independent surveys, registration
services, negotiating protection and claim handling. Additionally, we can
provide our clients with ship classification services including technical
assessment, verification services as well as certification and consultancy
services. We also plan to occasionally act as a broker between buyers and
sellers of vessels and we plan to outsource (i.e. refer out the work to Philtex,
for it to complete) marine insurance services including hull and machinery,
protection and indemnification and cargo insurance, to third parties through our
Marketing Agreement with Philtex.
MARKETING AGREEMENT
On August 15, 2005, we entered into a Marketing Agreement with Philtex.
Pursuant to the Marketing Agreement, Philtex agreed to grant us the exclusive
right to promote, market and sell Philtex's products and services to customers
in North and South America (the "Americas"), where Philtex does not currently
provide services; however, under the Marketing Agreement, Philtex may directly
promote, market and sell its services in the Americas and/or contract with other
parties to promote, market and sell its products outside of the Americas. Under
the Marketing Agreement, the relationship between Philtex and us is one of an
independent contractor.
Under the Marketing Agreement, Philtex shall pay us a fee of ninety percent
(90%) of the gross revenue from all sales of Philtex's products which are
directly or substantially attributable to our efforts to market, promote, or
sell any of Philtex's products, regardless of whether the sale is consummated
during the term of the Marketing Agreement. Philtex agreed to pay us such fee
on a monthly basis.
Additionally, pursuant to the Marketing Agreement, Philtex granted us a
non-exclusive revocable license to:
(i) utilize Philtex's trade name and any trademarks and service marks
associated with Philtex or Philtex's products;
(ii) identify the origin of any of Philtex's products in advertising
and promotional materials;
(iii) reasonably use Philtex's name in advertising and promotional
materials;
(iv) provide links to Philtex's internet site(s); and
(v) disclose and advertise the existence of a business relationship
between the parties.
The term of the Marketing Agreement is three years, and shall renew
automatically for successive one-year terms. However, the Marketing Agreement
may be terminated at any time with or without cause by either party, upon
delivery of written notice to the other party. Upon termination of the
Marketing Agreement, each party is required to pay to the other, all
compensation and monies due or which may become due, within thirty (30) days
after the effective date of the termination of the Marketing Agreement.
-18-
The products and services which are subject to the Marketing Agreement
include:
o registration of merchant ships;
o surveying and technical assessments;
o company formation and registration; and
o ship brokerage (sales and charter).
On February 22, 2006, we entered into "Amendment No. 1 to Marketing
Agreement" (the "Marketing Agreement Amendment") with Philtex. The Marketing
Agreement Amendment was effective as of the date of the original Marketing
Agreement dated August 15, 2005. Pursuant to the Marketing Agreement Amendment,
we and Philtex amended the Marketing Agreement to include a list of the services
which Philtex granted us the right to promote, market and sell pursuant to the
Marketing Agreement Amendment, which list was mistakenly left out of the
original Marketing Agreement. Additionally, the Marketing Agreement Amendment
included a provision which provided that until such time as we are able to offer
services, that we may refer/outsource services through Philtex, and that in
consideration for the work performed in connection with such referral that
Philtex will retain a greater percentage of the gross revenues of any sale,
which percentage will be determined on a sale by sale basis after taking into
account Philtex's cost of services performed. Throughout this Prospectus
references to the Marketing Agreement include the amendments affected by the
Marketing Agreement Amendment, unless otherwise stated.
Until we are able to offer services on our own, we will rely on Philtex's
experience, representation agreements and government relations, and will
outsource the majority of our operations through Philtex, and will retain 90% of
the revenues of such operations minus a fee to be paid to Philtex which will be
determined on a sale by sale basis in connection with the cost of the services
performed by Philtex. After paying fees to Philtex, we anticipate retaining
approximately 50% of the total revenues from any sale which we outsource through
Philtex although this percentage may be greater or less depending upon our
negotiations with Philtex. We hope to be able to offer our own services without
the help of Philtex in approximately six (6) to twelve (12) months, at which
time we still rely on Philtex's contacts and contracts through the Marketing
Agreement and will pay Philtex 10% of any revenues we receive pursuant to the
Marketing Agreement.
Additionally, we plan to terminate the Marketing Agreement in the future,
assuming we are able to establish relationships with government bodies in
certain Flag States, as well as establishing relationships with insurance
companies which provide marine insurance for hull and machinery, protection and
indemnity and cargo insurance, as well as contracts with surveyors. We hope to
have established these relationships within approximately eighteen (18) to
twenty-four (24) months, at which time we plan to offer products and services
without the help and/or guidance of Philtex and plan to terminate the Marketing
Agreement at that time, pursuant to the termination provisions of the Marketing
Agreement (described below under "Marketing Agreement"). If we are able to
offer services on our own and terminate the Marketing Agreement, we will retain
100% of the revenues we receive, if any. We plan to receive fees from our
clients at the time we are engaged by such clients.
-19-
DEPENDENCE ON ONE OR A FEW MAJOR CLIENTS
Currently, we have not generated any revenues and have no clients. We do
depend heavily on our relationship with Philtex however, as all of our services
are offered through our Marketing Agreement with Philtex.
COMPETITION
Companies in the ship registry and marine services industries compete with
each other through advertisements in industry publications; internet based
registration of ships and yachts; internet based formation and registration of
companies, partnerships and limited liability companies, and word of mouth among
ship owners, among others. The market for companies offering ship registry and
other marine services is highly competitive. We expect competition to intensify
in the future. Numerous well-established companies spend significant resources
on marketing and advertising to individuals which we also market services to.
Therefore, we may be unable to compete successfully in the marketplace and
competitive pressures, including possible downward pressure on the prices we
charge for our services, may adversely affect our business, results of
operations and financial condition.
Under our current Marketing Agreement with Philtex, we have the exclusive
right to promote, market and sell Philtex's products in the North and South
America (the "Americas"). The term of the Marketing Agreement is three years,
and it renews automatically for successive one-year terms. However, the
Marketing Agreement may be terminated at any time with or without cause by
either party, upon delivery of written notice to the other party. Because the
Marketing Agreement is easily terminated by Philtex, there is a chance that
Philtex will terminate the Marketing Agreement and provide its own services or
through another company in the Americas. If this were to happen and we were
not able to provide services without the help of Philtex, we could be forced to
curtail or abandon our operations until we could find another marketing partner,
if ever, which marketing partner could charge substantially more than Philtex.
EMPLOYEES
We currently have one employee, our Chief Executive Officer, Michael
Chavez, who manages our operations who works for us approximately 40-50 hours
per week.
PATENTS, TRADEMARKS AND LICENSES
We have no patents, trademarks or licenses.
-20-
NEED FOR GOVERNMENT APPROVAL
Government appointments are critical in the ship registry industry as give
companies the right to market and sell the registry of a particular country. We
do not individually hold any appointments and are not able to offer any
registries on our own; however, through our Marketing Agreement with Philtex (as
described above in greater detail under "Marketing Agreement"), we are able to
act through Philtex and use Philtex's government authorizations and private
agreements to allow us to offer registration in several flag states to our
clients including the countries of Panama, Belize, Tonga, Vanuatu, and the
Democratic Peoples Republic of Korea.
[Remainder of page left intentionally blank.]
-21-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our financial
statements.
PLAN OF OPERATION
- -------------------
We are currently funded solely through our shareholders. We believe that
we can continue our operations, which operations currently include working to
solicit business and establishing contracts, for approximately six to eight
months through funding provided by our existing shareholders, if we are unable
to raise revenues through our Marketing Agreement with Philtex. This estimate
assumes that we keep our expenses at their current levels as our Chief Executive
Officer and sole employee, Michael Chavez draws no salary and provides us office
space free of charge, and as a result of our low overhead. Additionally, it is
anticipated that Mr. Chavez will provide us with additional funding if required
prior to the effectiveness of our Registration Statement.
We currently plan to outsource (i.e. refer out the work to Philtex, for it
to complete) all of our services to Philtex, with whom we have a Marketing
Agreement (as described above); however; the Marketing Agreement may be
terminated by either party at any time, with or without cause, upon written
notice to the other party. If Philtex was to stop providing us with outsourcing
services, we could be forced to curtail or abandon our business operations.
We currently have limited operations which include working to establish
contacts and solicit business. We have been promoting and marketing our services
since the effective date of the Marketing Agreement with Philtex, however, we
have not generated any revenues, and have not performed any services under the
Marketing Agreement and have no clients as of the date of this Prospectus. We
believe that it takes time for any new company with limited experience, which is
offering services in a new industry, such as the Marine Services industry, to
gain acceptance in the industry and generate relationships and eventually
revenues. As such, we anticipate beginning to generate revenues and outsource
the majority of our operations through Philtex in approximately the 2nd quarter
of 2006. We plan to pay Philtex additional fees in connection with their
outsourcing of certain work on a sale by sale basis (as described above under
"Marketing Agreement"). We anticipate retaining approximately 50% of the total
revenues from any sale which we outsource through Philtex which percentage may
be greater or less depending upon our negotiations with Philtex. We anticipate
the average cost of each sale, including registry services, insurance brokering
and surveying to be approximately $20,000 to $25,000. In approximately six (6)
to twelve (12) months, we hope to offer services separate from Philtex, at which
time we will no longer need to outsource work though Philtex and will receive
90% of the revenues received through such sales pursuant to the Marketing
Agreement.
-22-
Additionally, we have plans to generate revenues separate from Philtex, in
approximately the 3rd or 4th quarter of 2007, if we are able to add clients and
contracts, and raise additional capital subsequent to the effectiveness of this
Registration Statement to operate separate from Philtex, of which there is no
assurance, at which time we plan to terminate the Marketing Agreement pursuant
to the termination provisions of the Marketing Agreement (described above under
"Marketing Agreement").
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED NOVEMBER 30, 2005.
We generated no revenues during the six months ended November 30, 2005, and
have generated no revenues since our inception on May 19, 2005.
We had total operating expenses of $22,282 for the six months ended
November 30, 2005, which operating expenses consisted solely of general and
administrative expenses.
We had a net loss of $22,282 for the six months ended November 30, 2005,
which was due to the $22,282 of operations expenses and the fact that we
generated $-0- in revenues during the six months ended November 30, 2005.
RESULTS OF OPERATIONS FOR THE PERIOD FROM MAY 19, 2005 (INCEPTION) TO THE YEAR
ENDED MAY 31, 2005.
We have generated no revenues since our inception on May 19, 2005.
We had a $9,300 loss from operations from May 19, 2005 (inception) to May
31, 2005, which was solely attributable to general and administrative expenses.
We had a $9,300 net loss for the period from May 19, 2005 (inception) to
May 31, 2005.
LIQUIDITY AND CAPITAL RESOURCES
We had total assets of $3,944 at November 30, 2005, which consisted solely
of current assets consisting of cash.
We had net working capital of $3,944 as of November 30, 2005 and a deficit
accumulated during the development stage of $31,582 as of November 30, 2005.
Our net cash used in operating activities was $19,506 for the six months
ended November 30, 2005, which included net loss of $22,282 and stock warrants
issued for services of $2,776.
We had $23,350 of cash flows from financing activities for the six months
ended November 30, 2005, which included ($400) of advances from related parties,
which amount was advanced by our Chief Executive Officer and Director, Michael
-23-
Chavez and $23,750 of stock issued for cash in connection with our sale of
950,000 shares of our Common Stock to thirty-six (36) investors for aggregate
consideration of $23,750 (or $0.025 per share) during the three months ended
November 30, 2005.
Pursuant to our Engagement Agreement with our legal counsel, David M. Loev,
entered into prior to our raising any money through our Private Placement, we
agreed to issue Mr. Loev 2,700,000 shares of our Common Stock, warrants to
purchase 125,000 shares of our Common Stock at $0.025 per share, and to pay Mr.
Loev $25,000 for legal work to be completed in connection with our Private
Placement and this Form SB-2 Registration Statement. We have issued Mr. Loev his
2,700,000 shares of Common Stock, issued him 125,000 warrants and have paid Mr.
Loev $10,000 to date. On February 22, 2005, effective as of May 13, 2005, we
entered into a Promissory Note with Mr. Loev to evidence the $15,000, which we
owed Mr. Loev pursuant to the Engagement Agreement as of that date. Pursuant to
the Promissory Note, we agreed to pay Mr. Loev $15,000 in $5,000 increments as
follows (the "Goals"):
o $5,000 upon us raising a total of $50,000;
o $5,000 upon us raising a total of $75,000; and
o $5,000 upon us raising a total of $100,000.
Additionally, under the Promissory Note, we agreed to pay Mr. Loev the
$15,000 which he is still owed pursuant to the Engagement Agreement by May 13,
2006, regardless of whether the Goals are met. Any amounts not paid when due
under the Promissory Note bear interest at seven percent (7.0%) per year until
paid in full, which interest is payable monthly in arrears, calculated based on
a 360 day year. We may pay the Promissory Note in whole or in part, at any time,
without penalty.
It is anticipated that Michael Chavez, our Chief Executive Officer will
provide us with additional funding, when and if we require additional capital
prior to the effectiveness of this Registration Statement. Other than the
commitment of Mr. Chavez, we have no other commitments from our officers and
Directors or any of our shareholders to supplement our operations or provide us
with financing in the future. If we are unable to raise additional capital from
conventional sources and/or additional sales of additional stock, we may be
forced to curtail or cease our operations. Even if we are able to continue our
operations, the failure to obtain financing could have a substantial adverse
effect on our business and financial results.
In the future, we may be required to seek additional capital by selling
debt or equity securities, selling assets, or otherwise be required to bring
cash flows in balance when we approach a condition of cash insufficiency. The
sale of additional equity securities, if accomplished, may result in dilution to
our then shareholders. We cannot assure you, that financing will be available in
amounts or on terms acceptable to us, or at all.
DESCRIPTION OF PROPERTY
We are provided the use of office space by our Chief Executive Officer,
Michael Chavez, at 8601 RR 2222, Bldg. 1 Ste. 210, Austin, Texas, 78730, for no
cost to us. Mr. Chavez currently has no plans to stop providing us office space
or to require us to pay for the use of such office space and we have no reason
to believe that such office space will not be provided to us free of charge
indefinitely.
-24-
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
On May 24, 2005, we issued 2,700,000 shares of our restricted Common Stock
to Michael Chavez, our Chief Executive Officer, President, Treasurer, Secretary
and Director in consideration for services rendered to us in connection with his
positions as Chief Executive Officer, President, Treasurer, Secretary and
Director; 2,700,000 shares of our restricted Common Stock to Arthur Stone, our
Vice President and Director in consideration for consulting services he rendered
to us in connection with marketing, planning and identification and introduction
to strategic partners; 2,700,000 shares of our restricted Common Stock and
warrants to purchase 125,000 shares of our Common Stock at $0.025 per share to
our attorney, David M. Loev in consideration for legal services rendered to us
in connection with the drafting of legal documents in connection with our
private placement and this Form SB-2 Registration Statement; and 900,000 shares
of our restricted common stock to Chris Warren, the president of Philtex, in
consideration for consulting services rendered to us in connection with the
registration of shipping vessels and with providing maritime services in the
Americas. The aggregate of 9,000,000 shares of our Common Stock which were
issued to Messrs. Chavez, Stone, Loev and Warren were valued at $9,000 or $0.001
per share.
On August 15, 2005, we entered into a Marketing Agreement with Philtex
Consultants Corporation ("Philtex"), whose president is Chris Warren, who holds
900,000 shares of our Common Stock, representing 9.5% of our issued and
outstanding Common Stock as of the filing of this report. The Marketing
Agreement has a term of three (3) years and shall automatically renew for
additional one year terms unless terminated earlier by written notice from
either party with our without cause. The Marketing Agreement gives us exclusive
right to promote, market and sell Philtex's products and services to customers
in North and South America, and for Philtex to pay us a fee of ninety percent
(90%) of the gross revenue of our sales of Philex's products (the Marking
Agreement is described in greater detail above under "Description of Business,"
under "Marketing Agreement").
On February 22, 2006, we entered into "Amendment No. 1 to Marketing
Agreement" (the "Marketing Agreement Amendment") with Philtex. The Marketing
Agreement Amendment was effective as of the date of the original Marketing
Agreement dated August 15, 2005. Pursuant to the Marketing Agreement Amendment,
we and Philtex amended the Marketing Agreement to include a list of the services
which Philtex granted us the right to promote, market and sell pursuant to the
Marketing Agreement Amendment, which list was mistakenly left out of the
original Marketing Agreement. Additionally, the Marketing Agreement Amendment
included a provision which provided that until such time as we are able to offer
services, that we may refer/outsource services through Philtex, and that in
consideration for the work performed in connection with such referral that
Philtex will retain a greater percentage of the gross revenues of any sale,
which percentage will be determined on a sale by sale basis after taking into
account Philtex's cost of services performed. Throughout this Prospectus
references to the Marketing Agreement include the amendments affected by the
Marketing Agreement Amendment, unless otherwise stated.
On February 22, 2005, effective as of May 13, 2005, we entered into a
Promissory Note with David M. Loev, Attorney at Law, our attorney, to evidence
the $15,000, which we owed Mr. Loev pursuant to our Engagement Agreement with
Mr. Loev as of that date (explained in greater detail under "Liquidity and
Capital Resources," above). Pursuant to the Promissory Note, we agreed to pay
Mr. Loev $15,000 in $5,000 increments as follows (the "Goals"):
o $5,000 upon us raising a total of $50,000;
o $5,000 upon us raising a total of $75,000; and
o $5,000 upon us raising a total of $100,000.
Additionally, under the Promissory Note, we agreed to pay Mr. Loev the
$15,000 which he is still owed pursuant to the Engagement Agreement by May 31,
2006, regardless of whether the Goals are met. Any amounts not paid when due
under the Promissory Note bear interest at seven percent (7.0%) per year until
paid in full, which interest is payable monthly in arrears, calculated based on
a 360 day year. We may pay the Promissory Note in whole or in part, at any time,
without penalty.
-25-
EXECUTIVE COMPENSATION
Other
Annual Restricted
Name & Principal Compen- Options Stock
Position Year Salary ($) sation SARs Awards
- ----------------- ------ ----------- -------- --------- -----------
Michael Chavez 2005 $-0- (1) -0- -0- 2,700,000 shares (2)
President,
Chief Executive Officer,
Secretary, Treasurer
and Director
Salaries above do not include perquisites and other personal benefits in amounts
less than 10% of the total annual salary and other compensation.
No executive employees have received more than $100,000 in compensation,
including bonuses and options, since our inception.
(1) We have not paid Mr. Chavez any salary since our incorporation and no
salary is being accrued. We do not anticipate paying him any salary for the
fiscal year ended May 31, 2006. If we reach profitable operations and/or raise
substantial additional funds in the future, our Board of Directors will
determine whether it is in our best interests to provide a salary to Mr. Chavez.
(2) Mr. Chavez was issued 2,700,000 shares of our restricted Common Stock on
May 24, 2005, in consideration for services he had provided and continues to
provide to us as our President, Chief Executive Officer, Secretary, Treasurer
and Director. We do not currently have an employment agreement with Mr. Chavez.
-26-
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
DESCRIPTION OF CAPITAL STOCK
We have authorized capital stock consisting of 100,000,000 shares of Common
Stock, $0.001 par value per share ("Common Stock") and 10,000,000 shares of
preferred stock, $0.001 par value per share ("Preferred Stock"). As of March 1,
2006, we had 9,950,000 shares of Common Stock issued and outstanding and - 0 -
shares of Preferred Stock issued and outstanding.
COMMON STOCK
The holders of outstanding shares of Common Stock are entitled to receive
dividends out of assets or funds legally available for the payment of dividends
of such times and in such amounts as the board from time to time may determine.
Holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of shareholders. There is no cumulative voting of
the election of directors then standing for election. The Common Stock is not
entitled to pre-emptive rights and is not subject to conversion or redemption.
Upon liquidation, dissolution or winding up of our company, the assets legally
available for distribution to stockholders are distributable ratably among the
holders of the Common Stock after payment of liquidation preferences, if any, on
any outstanding payment of other claims of creditors. Each outstanding share of
Common Stock is, and all shares of Common Stock to be outstanding upon
completion of this Offering will upon payment therefore be, duly and validly
issued, fully paid and non-assessable.
PREFERRED STOCK
Shares of Preferred Stock may be issued from time to time in one or more
series, each of which shall have such distinctive designation or title as shall
be determined by our Board of Directors ("Board of Directors") prior to the
issuance of any shares thereof. Preferred Stock shall have such voting powers,
full or limited, or no voting powers, and such preferences and relative,
participating, optional or other special rights and such qualifications,
limitations or restrictions thereof, as shall be stated in such resolution or
resolutions providing for the issue of such class or series of Preferred Stock
-27-
as may be adopted from time to time by the Board of Directors prior to the
issuance of any shares thereof. The number of authorized shares of Preferred
Stock may be increased or decreased (but not below the number of shares thereof
then outstanding) by the affirmative vote of the holders of a majority of the
voting power of all the then outstanding shares of our capital stock entitled to
vote generally in the election of the directors, voting together as a single
class, without a separate vote of the holders of the Preferred Stock, or any
series thereof, unless a vote of any such holders is required pursuant to any
Preferred Stock Designation.
The issuance of such Preferred Stock could adversely affect the rights of
the holders of Common Stock and, therefore, reduce the value of the Common
Stock. It is not possible to state the actual effect of the issuance of any
shares of Preferred Stock on the rights of holders of the Common Stock until the
board of directors determines the specific rights of the holders of the
Preferred Stock. However, these effects may include:
o Restricting dividends on the Common Stock;
o Diluting the voting power of the Common Stock;
o Impairing the liquidation rights of the Common Stock; and
o Delaying or preventing a change in control of the Company without
further action by the stockholders.
Risks associated with the issuance of such Preferred Stock is disclosed under
the section entitled "Risk Factors," described above.
WARRANTS
On August 8, 2005, we granted David M. Loev, our attorney, warrants to
purchase 125,000 shares of our Common Stock at $0.025 per share. The warrants
are valid for a period of five (5) years from the date of issuance and contain a
cashless exercise provision, which, according to the terms of the Warrant
Agreement, allows Mr. Loev to pay no money to us for the exercise of the
warrants, but instead pay for the exercise of the warrants in shares of our
Common Stock.
Other than the warrants described above, we have no options, warrants or
other convertible securities outstanding.
SHARES AVAILABLE FOR FUTURE SALE
Upon the date of this Prospectus, there are 9,950,000 shares of Common
Stock issued and outstanding. Upon the effectiveness of this Registration
Statement, 1,850,000 shares of Common Stock to be resold pursuant to this
Prospectus will be eligible for immediate resale in the public market if and
when any market for the Common Stock develops, without limitation. There
currently exists no public market for the Company's Common Stock.
The remaining 8,100,000 shares of our issued and outstanding Common Stock
which are not being registered pursuant to this Registration Statement and the
-28-
900,000 shares being registered on behalf of Chris Warren, will be subject to
the resale provisions of Rule 144. Sales of shares of Common Stock in the public
markets may have an adverse effect on prevailing market prices for the Common
Stock.
Rule 144 governs resale of "restricted securities" for the account of any
person (other than an issuer), and restricted and unrestricted securities for
the account of an "affiliate" of the issuer. Restricted securities generally
include any securities acquired directly or indirectly from an issuer or its
affiliates which were not issued or sold in connection with a public offering
registered under the Securities Act. An affiliate of the issuer is any person
who directly or indirectly controls, is controlled by, or is under common
control with, the issuer. Affiliates of the Company may include its directors,
executive officers, and persons directly or indirectly owning 10% or more of the
outstanding Common Stock. Under Rule 144 unregistered resales of restricted
Common Stock cannot be made until it has been held for one year from the later
of its acquisition from us or an affiliate of us.
Thereafter, shares of Common Stock may be resold without registration
subject to Rule 144's volume limitation, aggregation, broker transaction, notice
filing requirements, and requirements concerning publicly available information
about us ("Applicable Requirements"). Resales by our affiliates of restricted
and unrestricted Common Stock are subject to the Applicable Requirements. The
volume limitations provide that a person (or persons who must aggregate their
sales) cannot, within any three-month period, sell more than the greater of one
percent of the then outstanding shares, or the average weekly reported trading
volume during the four calendar weeks preceding each such sale. A non-affiliate
may resell restricted Common Stock which has been held for two years free of the
Applicable Requirements.
PLAN OF DISTRIBUTION AND SELLING STOCKHOLDERS
This Prospectus relates to the resale of 1,850,000 shares of Common Stock
by the selling stockholders and their transferees, pledges, donees or other
successors (collectively "selling shareholders"). The table below sets forth
information with respect to the resale of shares of Common Stock by the selling
stockholders. We will not receive any proceeds from the resale of Common Stock
by the selling stockholders for shares currently outstanding. None of the
selling stockholders are broker-dealers or affiliates of broker-dealers. We plan
to file a Prospectus supplement to name successors to any named selling
stockholders who are able to use the Prospectus to sell the securities.
SELLING STOCKHOLDERS
------------------------------------------
AMOUNT OFFERED
SHARES (ASSUMING ALL SHARES
BENEFICIALLY SHARES BENEFICIALLY
DATE SHARES OWNED IMMEDIATELY OWNED AFTER
SHAREHOLDER WERE ACQUIRED(1) BEFORE RESALE SOLD) RESALE(2)
- ------------------------- ---------------- ------------- ------------- ------------
ANDREW VASQUEZ October 2005 10,000 10,000 --
ARTURO BARRAZA September 2005 160,000 160,000 --
-29-
CHAD TONJES October 2005 10,000 10,000 --
CHRIS DIXON October 2005 10,000 10,000 --
CHRIS WARREN May 2005 900,000 900,000 --
CHRISTINA STORER September 2005 10,000 10,000 --
CRYSTAL GREEN October 2005 10,000 10,000 --
DAN HALL November 2005 10,000 10,000 --
DANIEL LOGAN October 2005 10,000 10,000 --
DAVID CHO September 2005 10,000 10,000 --
DORIS ROBITAILLE October 2005 10,000 10,000 --
EDUARDO MUNOZ October 2005 20,000 20,000 --
ERIC SHEPHARD October 2005 10,000 10,000 --
JAMES CAWOOD September 2005 100,000 100,000 --
JAMES ETHERIDGE October 2005 10,000 10,000 --
JAMES HOLLAND October 2005 10,000 10,000 --
JAMES PACEY September 2005 10,000 10,000 --
JASON OTTESON October 2005 20,000 20,000 --
JEFFREY HOWARD October 2005 10,000 10,000 --
JOCELYN ACOSTA October 2005 120,000 120,000 --
JOHN SHIPLEY September 2005 10,000 10,000 --
JONATHAN GRIEGO September 2005 20,000 20,000 --
JUNE JOHN October 2005 10,000 10,000 --
KEVIN MCADAMS November 2005 10,000 10,000 --
MATTHEW MENA September 2005 10,000 10,000 --
MATTHEW WETZEL September 2005 20,000 20,000 --
MERCEDES MCCLOUGHAN September 2005 20,000 20,000 --
NATASHA GASTON October 2005 10,000 10,000 --
PALISADES CAPITAL, LLC(3) November 2005 10,000 10,000 --
PATSY AKIN October 2005 10,000 10,000 --
-30-
PAUL GUERRERO October 2005 10,000 10,000 --
PETER WAINSCOTT September 2005 200,000 200,000 --
PILAR COLMENERO October 2005 10,000 10,000 --
ROSEMARY VAUGHN November 2005 10,000 10,000 --
VICKI BUCH September 2005 10,000 10,000 --
WILLIAM BROOKER September 2005 10,000 10,000 --
WILLIAM MCLEAN October 2005 10,000 10,000 --
========================= ================ ============= ============= ============
TOTALS -- 1,850,000 1,850,000 --
(1) All shares being registered pursuant to this Prospectus were purchased by
the Selling Stockholders pursuant to an exemption from registration
provided by Rule 506 and Regulation S of the Securities Act of 1933 for
$0.025 per share (as described in greater detail below under "Item 26.
Recent Sales of Unregistered Securities"), other than the 900,000 shares
which are held by Chris Warren, who was issued shares in consideration for
services provided to us pursuant to an exemption provided by Section 4(2)
of the Securities Act of 1933.
(2) Assuming all shares registered are sold.
(3) The beneficial owner of Palisades Capital, LLC is Diane Breitman, the
trustee of the Morpheus Trust, which owns 97% of Palisades Capital, LLC.
Other than Chris Warren, who controls Philtex, with whom we are party to the
Marketing Agreement described above under "Description of Business," none of the
selling shareholders listed above have had a material relationship with us
within the past three years.
--------------------------------------------------
Upon the effectiveness of this Registration Statement, the 8,100,000 shares
of our outstanding Common Stock not being registered in this Registration
Statement and 900,000 shares of Common Stock held by Chris Warren will be
subject to the resale provisions of Rule 144. The 1,850,000 remaining shares
offered by the selling stockholders pursuant to this Prospectus may be sold by
one or more of the following methods, without limitation:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits the purchaser;
-31-
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately-negotiated transactions;
o broker-dealers may agree with the Selling Security Holders to
sell a specified number of such shares at a stipulated price per
share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The Selling Security Holders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this Prospectus.
We currently lack a public market for our Common Stock. Selling
shareholders will sell at a price of $0.10 per share until our shares are quoted
on the OTC Bulletin Board and thereafter at prevailing market prices or
privately negotiated prices.
The offering price of the shares has been arbitrarily determined by us
based on estimates of the price that purchasers of speculative securities, such
as the shares offered herein, will be willing to pay considering the nature and
capital structure of our Company, the experience of the officers and Directors,
and the market conditions for the sale of equity securities in similar
companies. The offering price of the shares bears no relationship to the
assets, earnings or book value of our Company, or any other objective standard
of value. We believe that only a small number of shares, if any, will be sold
by the selling shareholders, prior to the time our Common Stock is quoted on the
OTC Bulletin Board, at which time the selling shareholders will sell their
shares based on the market price of such shares. We are not selling any shares
pursuant to this Registration Statement and are only registering the re-sale of
securities previously purchased from us.
The Selling Security Holders may pledge their shares to their brokers under
the margin provisions of customer agreements. If a Selling Security Holder
defaults on a margin loan, the broker may, from time to time, offer and sell the
pledged shares.
The Selling Security Holders may sell their shares of Common Stock short
and redeliver our Common Stock to close out such short positions; however, the
Selling Security Holders may not use shares of our Common Stock being registered
-32-
in the Registration Statement to which this Prospectus is a part to cover any
short positions entered into prior to the effectiveness of such Registration
Statement. If the Selling Security Holders or others engage in short selling it
may adversely affect the market price of our Common Stock.
Broker-dealers engaged by the Selling Security Holders may arrange for
other broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Security Holders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated. It is not expected that these commissions and
discounts will exceed what is customary in the types of transactions involved.
We will advise the Selling Security Holders that if a particular offer of
Common Stock is to be made on terms materially different from the information
set forth in this Plan of Distribution, then a post-effective amendment to the
accompanying Registration Statement must be filed with the Securities and
Exchange Commission.
The Selling Security Holders may be deemed to be an "underwriter" within
the meaning of the Securities Act in connection with such sales. Therefore, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
We are required to pay all fees and expenses incident to the registration
of the shares, including fees and disbursements of counsel to the Selling
Security Holders, but excluding brokerage commissions or underwriter discounts.
The Selling Security Holders and we have agreed to indemnify each other against
certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.
MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
No established public trading market exists for our Common Stock. In the
future, we hope to trade our securities on the Over-The-Counter Bulletin Board.
We have no shares of Common Stock subject to outstanding options or securities
convertible into our Common Stock, but have warrants to purchase 125,000 shares
of our Common Stock at $.025 per share outstanding. We have no outstanding
shares of Preferred Stock. Except for this offering, there is no Common Stock
that is being, or has been proposed to be, publicly offered. As of March 31,
2006, there were 9,950,000 shares of Common Stock outstanding, held by 40
shareholders of record.
LEGAL MATTERS
Certain legal matters with respect to the issuance of shares of Common
Stock offered hereby will be passed upon by David M. Loev, Attorney at Law,
Houston, Texas.
-33-
ADDITIONAL INFORMATION
Our fiscal year ends on May 31. We intend to furnish our shareholders
annual reports containing audited financial statements and other appropriate
reports. In addition, we intend to become a reporting company and file annual,
quarterly and current reports, proxy statements, or other information with the
SEC. The public may read and copy any materials we file with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Investors may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an
Internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC
(http://www.sec.gov), where investors can view information we electronically
file with the SEC.
[Remainder of page left intentionally blank.]
-34-
FINANCIAL STATEMENTS
The Financial Statements required by Item 310 of Regulation S-B are stated
in U.S. dollars and are prepared in accordance with U.S. Generally Accepted
Accounting Principles. The following financial statements pertaining to
Allmarine Consultants Corporation are filed as part of this Prospectus.
TABLE OF CONTENTS TO FINANCIAL STATEMENTS
Unaudited Financial Information for the Six Months Ended November 30, 2005
-----------------------------------------------------------------
BALANCE SHEETS -
November 30, 2005 (unaudited) and May 31, 2005 (audited) F-1
STATEMENTS OF OPERATIONS -
Six months ended November 30, 2005 and period from
May 19, 2005 (Inception) through November 30, 2005 (unaudited) F-2
STATEMENTS OF CASH FLOWS -
Six months ended November 30, 2005 and period from
May 19, 2005 (Inception) through November 30, 2005 (unaudited) F-3
NOTES TO FINANCIAL STATEMENTS F-4
Audited Financial Information for the period from
May 19, 2005 (Inception) through May 31, 2005
--------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-6
BALANCE SHEET -
May 31, 2005 F-7
STATEMENTS OF OPERATIONS -
Period from May 19, 2005 (Inception) through May 31, 2005 F-8
STATEMENTS OF STOCKHOLDERS' DEFICIT -
Period from May 19, 2005 (Inception) through May 31, 2005 F-9
STATEMENTS OF CASH FLOWS -
Period from May 19, 2005 (Inception) through May 31, 2005 F-10
NOTES TO FINANCIAL STATEMENTS F-11
ALLMARINE CONSULTANTS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
November 30, May 31,
2005 2005
----------- --------
ASSETS (Unaudited)
Current assets
Cash $ 3,944 $ 100
----------- --------
Total Assets $ 3,944 $ 100
=========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Advances from related parties $ - $ 400
----------- --------
Total current liabilities - 400
----------- --------
Commitments
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value, 10,000,000 shares
authorized, 0 shares issued and outstanding - -
Common stock, $.001 par value, 100,000,000 shares
authorized, 9,950,000 shares issued and outstanding 9,950 9,000
Additional paid in capital 25,576 -
Deficit accumulated during the development stage (31,582) (9,300)
----------- --------
Total stockholders' equity (deficit) 3,944 (300)
----------- --------
Total Liabilities and Stockholders' Equity (Deficit) $ 3,944 $ 100
=========== ========
The accompanying notes are an integral part of these financial statements.
F-1
ALLMARINE CONSULTANTS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 2005
AND PERIOD FROM MAY 19, 2005 (INCEPTION) THROUGH NOVEMBER 30, 2005
(UNAUDITED)
Six Months Inception
Ended Through
November 30, November 30,
2005 2005
----------- ------------
Operating expenses:
General and administrative $ 22,282 $ 31,582
---------- ------------
Loss from operations 22,282 31,582
Interest expense - -
---------- ------------
Net loss $ (22,282) $ (31,582)
========== ============
Net loss per share:
Basic and diluted $ (0.00)
==========
Weighted average shares outstanding:
Basic and diluted 9,252,240
==========
The accompanying notes are an integral part of these financial statements.
F-2
ALLMARINE CONSULTANTS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED NOVEMBER 30, 2005
AND PERIOD FROM MAY 19, 2005 (INCEPTION) THROUGH NOVEMBER 30, 2005
(UNAUDITED)
Six Months Inception
Ended Through
November 30, November 30,
2005 2005
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (22,282) $ (31,582)
Adjustments to reconcile net income to net cash
provided by operating activities:
Common shares issued for services - 9,000
Stock warrants issued for service 2,776 2,776
----------- ------------
NET CASH USED IN OPERATING ACTIVITIES (19,506) (19,806)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from related parties, net (400) --
Stock issued for cash 23,750 23,750
----------- ------------
NET CASH USED IN FINANCING ACTIVITIES 23,350 23,750
----------- ------------
NET CHANGE IN CASH 3,844 3,944
Cash, beginning of period 100 -
----------- ------------
Cash, end of period $ 3,944 $ 3,944
=========== ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ - $ -
Income taxes paid $ - $ -
=========== ============
The accompanying notes are an integral part of these financial statements.
F-3
ALLMARINE CONSULTANTS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Allmarine Consultants
Corporation have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission ("SEC"), and should be read in conjunction
with the audited financial statements and notes thereto contained in the
Company's registration statement filed with the SEC on Form SB-2. In the opinion
of management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of
operations for the interim periods presented have been reflected herein. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the full year. Notes to the financial statements
which would substantially duplicate the disclosure contained in the audited
financial statements for the most recent fiscal year 2005 as reported in Form
SB-2, have been omitted.
NOTE 2 - RELATED PARTY TRANSACTIONS
Allmarine neither owns nor leases any real or personal property, an officer has
provided office services without charge. Such costs are immaterial to the
financial statements and accordingly are not reflected herein. The officers and
directors are involved in other business activities and most likely will become
involved in other business activities in the future.
Philtex's president is Chris Warren, who holds 900,000 shares of our common
stock.
NOTE 3 - AGREEMENTS
In August 2005 Allmarine entered into a three year agreement with Philtex,
a Belize corporation, to promote, market and sell Philtex's products and
services in exchange for a fee. Philtex will pay Allmarine 90% of the gross
revenue from all sales which are directly attributable to Allmarine's efforts to
market, promote, or sell the products on a monthly basis.
NOTE 4 - COMMITMENTS
Pursuant to the Company's Engagement Agreement with its legal counsel David M.
Loev, entered into prior to the Company raising any money through its Private
Placement, it agreed to issue Mr. Loev 2,700,000 shares of its common stock,
warrants to purchase 125,000 shares of its common stock at $0.025 per share, and
to pay Mr. Loev $25,000 for legal work to be completed in connection with its
Private Placement and Form SB-2 Registration Statement. The Company has paid Mr.
Loev $5,000 prior to August 31, 2005 and owed Mr. Love $20,000 as of August 31,
2005, and $15,000 as of November 30, 2005 which is to be earned and paid to Mr.
Love in $5,000 increments as follows:
F-4
o $5,000 upon the Company raising a total of $50,000;
o $5,000 upon the Company raising a total of $75,000; and
o $5,000 upon the Company raising a total of $100,000.
The Company authorized the officer of the Company to enter into a Warrant
Agreement with David Loev to issue Mr. Loev warrants to purchase 125,000 shares
of the Company's common stock at the exercise price of $.025 per share according
to the terms of the Warrant Agreement. The value of the warrants when granted on
August 8, 2005 was $2,776. The fair value was determined using a Black-Scholes
pricing model with the following assumptions: Divided yield - 0.00%, volatility
- - 137%, Risk Free Interest Rate - 4.5%, Expected Life - 5 years.
NOTE 5 - COMMON STOCK
In the six months ending November 30, 2005, Allmarine issued 950,000 shares of
common stock as part of a private placement for $23,750 cash proceeds.
F-5
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Board of Directors
Allmarine Consultants Corp.
(A Development Stage Company)
Austin, Texas
We have audited the accompanying consolidated balance sheet of Allmarine
Consultants Corp. as of May 31, 2005, and the related statements of operations,
stockholders' equity, and cash flows for the period from May 19, 2005
(Inception) through May 31, 2005. These financial statements are the
responsibility of 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Allmarine Consultants Corp. as
of May 31, 2005, and the results of its operations and its cash flows for the
period from May 19, 2005 (Inception) through May 31, 2005, in conformity with
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that Allmarine
Consultants Corp. will continue as a going concern. As discussed in Note 2 to
the financial statements, Allmarine Consultants Corp. has incurred losses
through May 31, 2005 totaling $9,300, and at May 31, 2005 had a working
capital deficit of $300. Allmarine Consultants Corp. will require additional
working capital to develop its business until Allmarine Consultants Corp. either
(1) achieves a level of revenues adequate to generate sufficient cash flows from
operations; or (2) obtains additional financing necessary to support its working
capital requirements. These conditions raise substantial doubt about Allmarine
Consultants' ability to continue as a going concern. Management's plans in
regard to this matter are also described in Note 2. The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
Lopez, Blevins, Bork & Associates, LLP
Houston, Texas
July 5, 2005
F-6
CAPTION>
ALLMARINE CONSULTANTS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
May 31,
2005
-------
ASSETS
Current assets
Cash $ 100
-------
Total Assets $ 100
=======
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Advances from related parties $ 400
-------
Total current liabilities 400
-------
Commitments
STOCKHOLDERS' DEFICIT:
Preferred stock, $.001 par value, 10,000,000 authorized,
0 shares issued and outstanding -
Common stock, $.001 par value, 100,000,000 shares authorized,
9,000,000 shares issued and outstanding 9,000
Deficit accumulated during the development stage (9,300)
-------
Total stockholders' deficit (300)
-------
Total Liabilities and Stockholders' Deficit $ 100
=======
See accompanying summary of accounting policies and notes to financial
statements.
F-7
ALLMARINE CONSULTANTS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
PERIOD FROM MAY 19, 2005 (INCEPTION) THROUGH MAY 31, 2005
Period Ended
May 31,
2005
------------
Operating expenses:
General and administrative $ 9,300
------------
Loss from operations 9,300
Interest expense -
------------
Net loss $ (9,300)
============
Net loss per share:
Basic and diluted $ (0.00)
============
Weighted average shares outstanding:
Basic and diluted 9,000,000
============
See accompanying summary of accounting policies and
notes to financial statements.
F-8
ALLMARINE CONSULTANTS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
PERIOD FROM MAY 19, 2005 (INCEPTION) THROUGH MAY 31, 2005
Deficit
accumulated
Common stock Additional during the
---------------------- paid-in exploration
Shares Amount capital stage Total
--------- -------- ---------- ----------- ----------
Capital stock issued for
services 9,000,000 $ 9,000 $ - $ - $ 9,000
--------- -------- ---------- ----------- -----------
Net loss - - - (9,300) (9,300)
--------- -------- ---------- ----------- -----------
Balance,
May 31, 2005 9,000,000 $ 9,000 $ - $ (9,300) $ (300)
========= ======== ========== ========== ===========
See accompanying summary of accounting policies and
notes to financial statements.
F-9
ALLMARINE CONSULTANTS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
PERIOD FROM MAY 19, 2005 (INCEPTION) THROUGH MAY 31, 2005
Period Ended
May 31,
2005
------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (9,300)
Adjustments to reconcile net income to net cash
provided by operating activities:
Common shares issued for services 9,000
Changes in:
Accounts payable & accrued liabilities -
------------
NET CASH USED IN OPERATING ACTIVITIES (300)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from related parties 400
------------
NET CHANGE IN CASH 100
Cash, beginning of period -
------------
Cash, end of period $ 100
============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ -
============
Income taxes paid $ -
============
See accompanying summary of accounting policies and
notes to financial statements.
F-10
ALLMARINE CONSULTANTS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
---------------------------------------
Allmarine Consultants Corporation ("Company") was incorporated on May 19, 2005
under the laws of Nevada to engage in any lawful activity for which Corporations
may be incorporated under the Nevada General Corporation Law. The Company
specializes in the administration of ship and corporate registry providing
maritime services to ship owners and operators including registration and
deletion of merchant vessels, bareboat/dual registry, registration of mortgages,
classification and technical surveys such as load line and SOLAS. The Company
conducts pre-purchases, condition and cargo gear surveys, ISM consulting and
certificates, ISPS implementation and certificates. Additional services include
CDC for seafarers, vessel history & investigation, marine insurance, corporate
formation & structure, legal services, and general consultancy to ship owners
and managers.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the balance sheet. Actual results could differ from those estimates.
Basic Loss Per Share
Basic loss per share has been calculated based on the weighted average number of
shares of common stock outstanding during the period.
Income Taxes
The asset and liability approach is used to account for income taxes by
recognizing deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying amounts and the tax
basis of assets and liabilities. The Company records a valuation allowance to
reduce any deferred tax assets to the amount that is more likely than not to be
realized.
Financial Instruments
The Company's financial instruments consist of cash, accounts payable and
accrued liabilities. Unless otherwise noted, it is management's opinion that the
Company is not exposed to significant interest, currency or credit risks arising
from these financial instruments. The fair value of these financial instruments
approximate their carrying values, unless otherwise noted.
The fair value of the amounts due to parties is not determinable as they have no
repayment terms.
F-11
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flow.
NOTE 2 - FINANCIAL CONDITION AND GOING CONCERN
For the period ended May 31, 2005, the Company incurred losses totaling $9,300,
and at May 31, 2005 had a working capital deficit of $300. Because of these
recurring losses, the Company will require additional working capital to develop
and/or renew its business operations.
The Company intends to raise additional working capital either through private
placements, public offerings and/or bank financing.
There are no assurances that the Company will be able to either (1) achieve a
level of revenues adequate to generate sufficient cash flow from operations; or
(2) obtain additional financing through either private placement, public
offerings and/or bank financing necessary to support the Company's, working
capital requirements. To the extent that funds generated from any private
placements, public offerings and/or bank financing are insufficient, the Company
will have to raise additional working capital. No assurance can be given that
additional financing will be available, or if available, will be on terms
acceptable to the Company. If adequate working capital is not available, the
Company may not renew its operations.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. The financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.
NOTE 3- ADVANCES - RELATED PARTIES
Advances - related parties are from one director consisting of cash advances. As
of May 31, 2005, $400 is outstanding. The advances are unsecured and are due
upon demand.
NOTE 4 - CAPITAL STOCK
The Company authorized capital stock consists of 100,000,000 shares of common
stock, with a par value of $0.001 per share and 10,000,000 shares of preferred
stock with a par value of $.001 per share. All shares of common stock have equal
voting rights and, when validly issued and outstanding, are entitled to one
non-cumulative vote per share in all matters to be voted upon by shareholders.
The shares of common stock have no pre-emptive, subscription, conversion or
redemption rights and may be issued only as fully paid and non-assessable
shares. Holders of the common stock are entitled to equal ratable rights to
dividends and distributions with respect to the common stock, as may be declared
by the Board of Directors out of funds legally available.
F-12
Shares of Preferred Stock of the Company may be issued from time to time in one
or more series, each of which shall have such distinctive designation or title
as shall be determined by the Board of Directors of the Company prior to the
issuance of any shares thereof. Preferred Stock shall have such voting powers,
full or limited, or no voting powers, and such preferences and relative,
participating, optional or other special rights and such qualifications,
limitations, or restrictions, thereof, as shall be stated in such resolutions or
resolution providing for the issue of such class or series of Preferred stock as
may be adopted from time to time by the Board of Directors prior to the issuance
of any shares thereof. The number of authorized shares of Preferred Stock may be
increased or decreased (but not below the number of shares thereof then
outstanding)by the affirmative vote of the holders of a majority of the voting
power of all the then outstanding shares of capital stock of the corporation
entitled to vote generally in the election of the directors(the "Voting Stock"),
voting together as a single class, without the separate vote of the holders of
the Preferred Stock, or any series thereof, unless a vote of any such holders is
required pursuant to any Preferred Stock Designation.
In May 2005, the Company issued 9,000,000 shares of common shares for services
provided by officers and directors valued at $9,000.
NOTE 5 - INCOME TAXES
The Company follows Statement of Financial Accounting Standards Number 109 (SFAS
109), "Accounting for Income Taxes." Deferred income taxes reflect the net
effect of (a) temporary difference between carrying amounts of assets and
liabilities for financial purposes and the amounts used for income tax reporting
purposes, and (b) net operating loss carryforwards. No net provision for
refundable Federal income tax has been made in the accompanying statement of
loss because no recoverable taxes were paid previously. Similarly, no deferred
tax asset attributable to the net operating loss carryforward has been
recognized, as it is not deemed likely to be realized.
The provision for refundable Federal income tax consists of the following:
May 31,
2005
-------
Refundable Federal income tax attributable to:
Current Operations $ 3,162
Less, Change in valuation allowance (3,162)
-------
Net refundable amount $ -
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
May 31,
2005
-------
Deferred tax asset attributable to:
Net operating loss carryover $ 3,162
Less, Change in valuation allowance (3,162)
-------
Net deferred tax asset $ -
At May 31, 2005, we had an unused net operating loss carryover approximating
$9,300 that is available to offset future taxable income; it expires beginning
in 2025.
F-13
NOTE 6 - RELATED PARTY TRANSACTIONS
Allmarine neither owns nor leases any real or personal property, an officer has
provided office services without charge. Such costs are immaterial to the
financial statements and accordingly are not reflected herein. The officers and
directors are involved in other business activities and most likely will become
involved in other business activities in the future.
NOTE 7 - COMMITMENTS
Pursuant to the Companys Engagement Agreement with its legal counsel David M.
Loev, entered into prior to the Company raising any money through its Private
Placement, it agreed to issue Mr. Loev 2,700,000 shares of its common stock,
warrants to purchase 125,000 shares of its common stock at $0.025 per share, and
to pay Mr. Loev $25,000 for legal work to be completed in connection with its
Private Placement and Form SB-2 Registration Statement. The Company has paid Mr.
Loev $5,000 prior to August 31, 2005, which has been included in the Company's
expenses. The remaining $20,000 will be earned and paid to Mr. Loev upon the
following milestones:
o $5,000 upon the Company raising a total of $25,000
o $5,000 upon the Company raising a total of $50,000;
o $5,000 upon the Company raising a total of $75,000; and
o $5,000 upon the Company raising a total of $100,000.
The Company authorized the officer of the Company to enter into a Warrant
Agreement with David Loev to issue Mr. Loev warrants to purchase 125,000 shares
of the Company's common stock at the exercise price of $.025 per share according
to the terms of the Warrant Agreement. The value of the warrants when granted on
August 8, 2005 was $2,776. The fair value was determined using a Black-Scholes
pricing model with the following assumptions: Divided yield - 0.00%, volitilaty
- - 137%, Risk Free Interest Rate - 4.5%, Expected Life - 5 years.
NOTE 8 - SUBSEQUENT EVENT (UNAUDITED)
The Company authorized the officer of the Company to enter into a Warrant
Agreement with David Loev to issue Mr. Loev warrants to purchase 125,000 shares
of the Corporations common stock at the exercise price of $0.025 per share
according to the terms of the Warrant Agreement. The Warrants will be valued on
August 8 which is the date the warrants were granted.
F-14
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
See Indemnification of Directors and Officers above.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection with this
Registration Statement. All of such expenses are estimates, other than the
filing fees payable to the Securities and Exchange Commission.
Description Amount to be Paid
------------------------------------------------ ------------------
Filing Fee - Securities and Exchange Commission $ 21.78
Attorney's fees and expenses 25,000*
Accountant's fees and expenses 10,000*
Transfer agent's and registrar fees and expenses 1,500*
Printing and engraving expenses 1,500*
Miscellaneous expenses 2,000*
------------------
Total $ 40,021.78*
==================
* Estimated
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On May 24, 2005, we issued an aggregate of 9,000,000 shares of our
restricted common stock to four (4) individuals as follows:
o 2,700,000 shares of our restricted Common Stock to our Chief
Executive Officer, Secretary, Treasurer and Director, Michael Chavez a
sophisticated investor, in consideration for services rendered to the
Company in connection with his positions as Chief Executive Officer,
President, Treasurer, Secretary and Director of the Company, which
shares were valued at 2,700 or $0.001 per share;
o 2,700,000 shares of our restricted Common Stock to our Vice
President and Director, Arthur Stone, an accredited investor, in
consideration for consulting services he rendered to us in connection
with marketing, planning and identification and introduction to
strategic partners, which shares were valued at 2,700 or $0.001 per
share;
o 2,700,000 shares of our restricted Common Stock valued at 2,700
(or $0.001 per share) and 125,000 warrants to purchase shares of our
Common Stock at $0.025 per share, which warrants were valued at
$2,776, to our legal counsel, David M. Loev, an accredited investor,
in consideration for legal services rendered to the Company in
connection with the drafting of legal documents in connection with our
private placement and this Form SB-2 Registration Statement; and
o 900,000 shares of our restricted Common Stock to Chris Warren,
who is the President of Philtex (with whom we have a Marketing
Agreement, as described above under "Description of Business,"
"Marketing Agreement"), a sophisticated investor, in consideration for
consulting services rendered to us in connection with the registration
of shipping vessels and with providing maritime services in the
Americas, which shares were valued at $900 or $0.001 per share.
-35-
We claim an exemption from registration afforded by Section 4(2) of the
Securities Act of 1933 (the "Act") for the above issuance, because those
issuances did not involve a public offering, the recipients had access to
information that would be included in a registration statement, the recipients
took the shares for investment and not resale and we took appropriate measures
to restrict the transfer of the shares. Additionally, the recipients had
sufficient knowledge and experience in financial and business matters that they
were able to evaluate the merits and risks of an investment in the Company, and
the transactions were non-recurring and privately negotiated.
During September through November 2005, we issued an aggregate of 830,000
shares of our restricted common stock to an aggregate of thirty five (35)
shareholders, of which fifteen were "Accredited Investors" as defined in the Act
and twenty were non-accredited investors, who paid us an aggregate consideration
of $20,750, or $0.025 per share. We claim an exemption from registration
afforded by Rule 506 of Regulation D under the Act for the issuances of these
shares.
In October 2005, we issued 120,000 shares of our restricted common stock to
an off-shore shareholder who paid us consideration of $3,000 (or $0.025 per
share). We claim an exemption from registration afforded by Regulation S of the
Act ("Regulation S") for the above issuance since the issuance was made to a
non-U.S. person (as defined under Rule 902 section (k)(2)(i) of Regulation S),
pursuant to an offshore transaction, and no directed selling efforts were made
in the United States by us, a distributor, any respective affiliates, or any
person acting on behalf of any of the foregoing.
ITEM 27. EXHIBITS
Exhibit Number Description
------------- -----------------------------------------
Exhibit 3.1(1) Articles of Incorporation
Exhibit 3.2(1) Bylaws
Exhibit 5.1* Opinion and consent of David M. Loev,
Attorney at Law re: the legality of the
shares being registered
-36-
Exhibit 10.1(1) Marketing Agreement
Exhibit 10.2* Amendment No. 1 to the Marketing Agreement
Exhibit 10.3* Promissory Note with David Loev
Exhibit 23.1* Consent of Lopez, Blevins, Bork &
Associates, LLP, Certified Public
Accountants
Exhibit 23.2* Consent of David M. Loev, Attorney at
Law (included in Exhibit 5.1)
Exhibit 99.1(1) Warrant Agreement with David M. Loev
* Filed as an exhibit to this SB-2/A Registration Statement
(1) Filed as exhibits to our Form SB-2 Registration Statement, filed with the
Commission on December 20, 2005 and incorporated herein by reference.
ITEM 28. UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(b) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in the
volume and rise represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
and
(c) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration
Statement or any material changes as such information in the
Registration Statement.
-37-
2. For determining any liability under the Securities Act, to treat
each post-effective amendment as a new registration statement relating
to the securities offered herein, and the offering of the securities
at the time as the initial bona fide offering of those securities.
3. To file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
4. For determining liability of the undersigned small business
issuer under the Securities Act to any purchaser in the initial
distribution of the securities, the undersigned small business issuer
undertakes that in a primary offering of securities of the undersigned
small business issuer pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to
the purchaser, if the securities are offered or sold to such purchaser
by means of any of the following communications, the undersigned small
business issuer will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
i. Any preliminary prospectus or prospecuts of the
undersigned small business issuer relating to the offering
required to be filed pursuant to Rule 424;
ii. Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned small business
issuer or used or referred to by the undersigned small
business issuer;
iii. The portion of any other free writing prospectus
relating to the offering containing material information
about the undersigned small business issuer or its
securities provided by or on behalf of the undersigned small
business issuer; and
iv. Any other communication that is an offer in the
offering made by the undersigned small business issuer to
the purchaser.
5. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer of controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
6. For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant under Rule 424(b)(1) or (4)
or 497(h) under the Securities Act as part of this registration
statement as of the time the Commission declared it effective.
-38-
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned in the City of Austin,
Texas, March 1, 2006.
ALLMARINE CONSULTANTS CORPORATION
By: /s/ Michael Chavez
- ------------------------------------------
Michael Chavez, Chief Executive Officer, Principal Accounting Officer,
Secretary, Treasurer and Chief Financial Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
/s/ Michael Chavez
- ------------------------------------------
Michael Chavez
Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer,
Treasurer, Secretary and Director
March 1, 2006
/s/ Arthur Stone
- ------------------------------------------
Arthur Stone
Vice President and Director
March 1, 2006
-39-