U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the Securities Exchange
Act of 1934
Bristol Acquisitions, Inc.
(Exact name of registrant as
specified in its charter)
Delaware
27-3424339
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2005 Merrick Road
Suite 326
Merrick NY
11566
(Address of principal executive
offices)
(Zip Code)
Registrants telephone number, including area code: (212) 367-
7079
Facsimile number: (888) 844-1847
Copies to:
Nelson Shapiro
2005 Merrick Road
Suite 326
Merrick, NY 11566
Telephone Number: (212) 367-7079
Facsimile Number: (888) 844-1847
Securities to be registered under Section 12(b) of the Act:
None
Securities to be registered under Section 12(g) of the
Exchange Act:
Title of each class
to be so registered
Name of Exchange on which each
class is to be registered
Common Stock, $0.001
N/A
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act. (Check
one):
Large
accelerated
filer [ ]
Accelerated
filer [ ]
Non-accelerated
filer [ ]
Smaller reporting
company [X]
EXPLANATORY NOTE
We are voluntarily filing this General Form for
Registration of Securities on Form 10 to register our common
stock, par value $0.001 per share (the Common Stock),
pursuant to Section 12(g) of the Securities Exchange Act of
1934, as amended (the Exchange Act).
Once this registration statement is deemed effective, we
will be subject to the requirements of Regulation 13A under
the Exchange Act, which will require us to file annual reports
on Form 10-K, quarterly reports on Form 10-Q, and current
reports on Form 8-K, and we will be required to comply with
all other obligations of the Exchange Act applicable to
issuers filing registration statements pursuant to Section
12(g) of the Exchange Act.
Unless otherwise noted, references in this registration
statement to the Registrant, the Company, we, our or
us means Bristol Acquisitions, Inc. Our principal place of
business is located at 2005 Merrick Road, Suite 326, Merrick,
NY 11566. Our telephone number is (212) 367-7079.
FORWARD LOOKING STATEMENTS
There are statements in this registration statement that
are not historical facts. These forward-looking statements
can be identified by use of terminology such as believe,
hope, may, anticipate, should, intend, plan,
will, expect, estimate, project, positioned,
strategy and similar expressions. You should be aware that
these forward-looking statements are subject to risks and
uncertainties that are beyond our control. For a discussion
of these risks, you should read this entire Registration
Statement carefully; especially the risks discussed under the
section entitled Risk Factors. Although management believes
that the assumptions underlying the forward looking statements
included in this Registration Statement are reasonable, they
do not guarantee our future performance, and actual results
could differ from those contemplated by these forward looking
statements. The assumptions used for purposes of the forward-
looking statements specified in the following information
represent estimates of future events and are subject to
uncertainty as to possible changes in economic, legislative,
industry, and other circumstances. As a result, the
identification and interpretation of data and other
information and their use in developing and selecting
assumptions from and among reasonable alternatives require the
exercise of judgment. To the extent that the assumed events do
not occur, the outcome may vary substantially from anticipated
or projected results, and, accordingly, no opinion is
expressed on the achievability of those forward-looking
statements. In light of these risks and uncertainties, there
can be no assurance that the results and events contemplated
by the forward-looking statements contained in this
Registration Statement will in fact transpire. You are
cautioned to not place undue reliance on these forward-looking
statements, which speak only as of their dates. We do not
undertake any obligation to update or revise any forward-
looking statements.
Item 1. Business.
Business Development
Bristol Acquisitions, Inc. (we, us, our, the
Company or the Registrant) was incorporated in the State
of Delaware on September 8, 2010. Since inception, the
Company has been engaged in organizational efforts and
obtaining initial financing. The Company was formed as a
vehicle to pursue a business combination and has made no
efforts to identify a possible business combination. As a
result, the Company has not conducted negotiations or entered
into a letter of intent concerning any target business. The
business purpose of the Company is to seek the acquisition of
or merger with, an existing company. The Company intends to
seek a merger to complete a business combination with a
company in any industry, and in any geographical location.
The Company selected June 30 as its fiscal year end.
Business of Issuer
The Company, based on proposed business activities, is a
blank check company. The U.S. Securities and Exchange
Commission (the SEC) defines those companies as any
development stage company that is issuing a penny stock,
within the meaning of Section 3 (a)(51) of the Securities
Exchange Act of 1934, as amended (the Exchange Act), and
that has no specific business plan or purpose, or has
indicated that its business plan is to merge with an
unidentified company or companies. Under SEC Rule 12b-2 under
the Exchange Act, the Company also qualifies as a shell
company, because it has no or nominal assets (other than
cash) and no or nominal operations. Many states have enacted
statutes, rules and regulations limiting the sale of
securities of blank check companies in their respective
jurisdictions. Management does not intend to undertake any
efforts to cause a market to develop in our securities, either
debt or equity, until we have successfully concluded a
business combination. The Company intends to comply with the
periodic reporting requirements of the Exchange Act for so
long as it is subject to those requirements.
The Company was organized as a vehicle to investigate
and, if such investigation warrants, acquire a target company
or business seeking the perceived advantages of being a
publicly held corporation. The Companys principal business
objective for the next 12 months and beyond such time will be
to achieve long-term growth potential through a combination
with a business rather than immediate, short-term earnings.
The Company will not restrict its potential candidate target
companies to any industry and/or location or any other
specific business or geographical location and, thus, may
acquire any type of business.
The analysis of new business opportunities will be
undertaken by or under the supervision of the Companys
officers and directors. As of this date the Company has not
entered into any definitive agreement with any party, nor have
there been any specific discussions with any potential
business combination candidate regarding business
opportunities for the Company. The Registrant has
unrestricted flexibility in seeking, analyzing and
participating in potential business opportunities. In its
efforts to analyze potential acquisition targets, the
Registrant will consider the following kinds of factors:
(a) Potential for growth, indicated by new technology,
anticipated market expansion or new products;
(b) Competitive position as compared to other firms of
similar size and experience within the industry segment as
well as within the industry as a whole;
(c) Strength and diversity of management, either in
place or scheduled for recruitment;
(d) Capital requirements and anticipated availability of
required funds, to be provided by the Registrant or from
operations, through the sale of additional securities, through
joint ventures or similar arrangements or from other sources;
(e) The cost of participation by the Registrant as
compared to the perceived tangible and intangible
values and potentials;
1
(f) The extent to which the business opportunity can be
advanced;
(g) The accessibility of required management expertise,
personnel, raw materials, services, professional assistance and
other required items; and
(h) Other relevant factors.
In applying the foregoing criteria, no one of which will
be controlling, management will attempt to analyze all factors
and circumstances and make a determination based upon
reasonable investigative measures and available data.
Potentially available business opportunities may occur in many
different industries, and at various stages of development,
all of which will make the task of comparative investigation
and analysis of such business opportunities extremely
difficult and complex. Due to the Registrant's lack of capital
available for investigation, the Registrant may not discover
or adequately evaluate adverse facts about the opportunity to
be acquired. In addition, we will be competing against other
entities that possess greater financial, technical and
managerial capabilities for identifying and completing
business combinations. In evaluating a prospective business
combination, we will conduct as extensive a due diligence
review of potential targets as possible given the lack of
information which may be available regarding private
companies, our limited personnel and financial resources and
the inexperience of our management with respect to such
activities. We expect that our due diligence will encompass,
among other things, meetings with the target businesss
incumbent management and inspection of its facilities, as
necessary, as well as a review of financial and other
information which is made available to us. This due diligence
review will be conducted either by our management or by
unaffiliated third parties we may engage. Our lack of funds
and the lack of full-time management will likely make it
impracticable to conduct a complete and exhaustive
investigation and analysis of a target business before we
consummate a business combination. Management decisions,
therefore, will likely be made without detailed feasibility
studies, independent analysis, market surveys and the like
which, if we had more funds available to us, would be
desirable. We will be particularly dependent in making
decisions upon information provided by the promoters, owners,
sponsors or other associated with the target business seeking
our participation.
The time and costs required to select and evaluate a
target business and to structure and complete a business
combination cannot presently be ascertained with any degree of
certainty. Any costs incurred with respect to the
indemnification and evaluation of a prospective business
combination that is not ultimately completed will result in a
loss to us.
Additionally, the Company is in a highly competitive
market for a small number of business opportunities which
could reduce the likelihood of consummating a successful
business combination. We are, and will continue to be, an
insignificant participant in the business of seeking mergers
with, joint ventures with and acquisitions of small private
and public entities. A large number of established and well-
financed entities, including small public companies and
venture capital firms, are active in mergers and acquisitions
of companies that may be desirable target candidates for us.
Nearly all these entities have significantly greater financial
resources, technical expertise and managerial capabilities
than we do; consequently, we will be at a competitive
disadvantage in identifying possible business opportunities
and successfully completing a business combination. These
competitive factors may reduce the likelihood of our
identifying and consummating a successful business
combination.
Form of Acquisition
The manner in which the Registrant participates in an
opportunity will depend upon the nature of the opportunity,
the respective needs and desires of the Registrant and the
promoters of the opportunity, and the relative negotiating
strength of the Registrant and such promoters.
It is likely that the Registrant will acquire its
participation in a business opportunity through the issuance
of its common stock, par value $.001 per share (the Common
Stock) or other securities of the Registrant. Although the
terms of any such transaction cannot be predicted, it should
be noted that in certain circumstances the criteria for
determining whether or not an acquisition is a so-called tax
free reorganization under Section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the Code) depends upon
whether the owners of the acquired business own 80% or more of
the voting stock of the surviving entity.
2
If a transaction were structured to take advantage of
these provisions rather than other tax free provisions
provided under the Code, all prior stockholders would in such
circumstances retain 20% or less of the total issued and
outstanding shares of the surviving entity. Under other
circumstances, depending upon the relative negotiating
strength of the parties, prior stockholders may retain
substantially less than 20% of the total issued and
outstanding shares of the surviving entity. This could result
in substantial additional dilution to the equity of those who
were stockholders of the Registrant prior to such
reorganization. The Company does not intend to supply
disclosure to shareholders concerning a target company prior
to the consummation of a business combination transaction,
unless required by applicable law or regulation. In the event
a proposed business combination involves a change in majority
of directors of the Company, the Company will file and provide
to shareholders a Schedule 14F-1, which shall include,
information concerning the target company, as required. The
Company will file a current report on Form 8-K, as required,
within four business days of a business combination which
results in the Company ceasing to be a shell company. This
Form 8-K will include complete disclosure of the target
company, including audited financial statements.
The present stockholders of the Registrant will likely
not have control of a majority of the voting securities of the
Registrant following a reorganization transaction. As part of
such a transaction, all or a majority of the Registrants
directors may resign and one or more new directors may be
appointed without any vote by stockholders.
In the case of an acquisition, the transaction may be
accomplished upon the sole determination of management without
any vote or approval by stockholders. In the case of a
statutory merger or consolidation directly involving the
Company, it will likely be necessary to call a stockholders
meeting and obtain the approval of the holders of a majority
of the outstanding securities. The necessity to obtain such
stockholder approval may result in delay and additional
expense in the consummation of any proposed transaction and
will also give rise to certain appraisal rights to dissenting
stockholders. Most likely, management will seek to structure
any such transaction so as not to require stockholder
approval.
The Company intends to search for a target for a business
combination by contacting various sources including, but not
limited to, our affiliates, lenders, investment banking firms,
private equity funds, consultants and attorneys. The
approximate number of persons or entities that will be
contacted is unknown and dependant on whether any
opportunities are presented by the sources that we contact.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of
relevant agreements, disclosure documents and other
instruments will require substantial management time and
attention and substantial cost for accountants, attorneys and
others. If a decision is made not to participate in a specific
business opportunity, the costs theretofore incurred in the
related investigation might not be recoverable. Furthermore,
even if an agreement is reached for the participation in a
specific business opportunity, the failure to consummate that
transaction may result in the loss to the Registrant of the
related costs incurred.
We presently have no employees apart from our management. Our
officers and directors are engaged in outside business
activities and are employed on a full-time basis by another
entity. Our officers and directors anticipate that they will
devote very limited time to our business until the acquisition
of a successful business opportunity has been identified. The
specific amount of time that management will devote to the
Company may vary from week to week or even day to day, and
therefore the specific amount of time that management will
devote to the Company on a weekly basis cannot be ascertained
with any level of certainty. In all cases, management intends
to spend as much time as is necessary to exercise its
fiduciary duties as officer and director of the Company.
We expect no significant changes in the number of our
employees other than such changes, if any, incident to a
business combination.
3
Item 1A. Risk Factors.
An investment in the Company is highly speculative in nature
and involves a high degree of risk.
Risks Related to our Business
There may be conflicts of interest between our management and
the non-management stockholders of the Company.
Currently, an affiliate of one stockholder is also an
officer and director of the Company. However, if in the
future shares of our common stock are held by management
holders, Conflicts of interest create the risk that management
may have an incentive to act adversely to the interests of the
stockholders of the Company. A conflict of interest may arise
between our management's personal pecuniary interest and its
fiduciary duty to our stockholders.
We have a limited operating history.
We have a limited operating history and no revenues or
earnings from operations since inception, and there is a risk
that we will be unable to continue as a going concern and
consummate a business combination. We have no assets or
significant financial resources. We will, in all likelihood,
sustain operating expenses without corresponding revenues, at
least until the consummation of a merger or other business
combination with a private company. This may result in our
incurring a net operating loss that will increase unless we
consummate a business combination with a profitable business.
We cannot assure you that we can identify a suitable business
opportunity and consummate a business combination, or that any
such business will be profitable at the time of its
acquisition by us or ever.
We are likely to incur losses.
As of September 17, 2010, we have incurred a loss of
$13,276 and we expect that we will incur losses at least until
we complete a business combination and perhaps after such
combination as well. There can be no assurances that we will
ever be profitable.
We face a number of risks associated with potential
acquisitions, including the possibility that we may incur
substantial debt which could adversely affect our financial
condition.
We intend to use reasonable efforts to complete a merger
or other business combination with an operating business. Such
combination will be accompanied by risks commonly encountered
in acquisitions, including, but not limited to, difficulties
in integrating the operations, technologies, products and
personnel of the acquired companies and insufficient revenues
to offset increased expenses associated with acquisitions.
Failure to manage and successfully integrate acquisitions we
make could harm our business, our strategy and our operating
results in a material way.
Additionally, completing a business combination is likely
to increase our expenses and it is possible that we may incur
substantial debt in order to complete a business combination,
which could adversely affect our financial condition.
Incurring a substantial amount of debt may require us to use a
significant portion of our cash flow to pay principal and
interest on the debt, which will reduce the amount available
to fund working capital, capital expenditures, and other
general purposes. Any indebtedness may negatively impact our
ability to operate our business and limit our ability to
borrow additional funds by increasing our borrowing costs, and
impact the terms, conditions, and restrictions contained in
possible future debt agreements, including the addition of
more restrictive covenants; impact our flexibility in planning
for and reacting to changes in our business as covenants and
restrictions contained in possible future debt arrangements
may require that we meet certain financial tests and place
restrictions on the incurrence of additional indebtedness and
place us at a disadvantage compared to similar companies in
our industry that have less debt.
4
There is competition for those private companies suitable for
a merger transaction of the type contemplated by management.
The Company is in a highly competitive market for a small
number of business opportunities which could reduce the
likelihood of consummating a successful business combination.
We are and will continue to be an insignificant participant in
the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large
number of established and well-financed entities, including
small public companies and venture capital firms, are active
in mergers and acquisitions of companies that may be desirable
target candidates for us. Nearly all these entities have
significantly greater financial resources, technical expertise
and managerial capabilities than we do; consequently, we will
be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business
combination. These competitive factors may reduce the
likelihood of our identifying and consummating a successful
business combination.
There are relatively low barriers to becoming a blank check
company or shell company, thereby increasing the competitive
market for a small number of business opportunities.
There are relatively low barriers to becoming a blank
check company or shell company. A newly incorporated company
with a single stockholder and sole officer and director may
become a blank check company or shell company by voluntarily
subjecting itself to the SEC reporting requirements by filing
and seeking effectiveness of a Form 10 with the SEC, thereby
registering its common stock pursuant to Section 12(g) of the
Securities Exchange Act of 1934 with the SEC. Assuming no
comments to the Form 10 have been received from the SEC, the
registration statement is automatically deemed effective 60
days after filing the Form 10 with the SEC. The relative ease
and low cost with which a company can become a blank check or
shell company can increase the already highly competitive
market for a limited number of businesses that will consummate
a successful business combination.
Future success is highly dependent on the ability of
management to locate and attract a suitable acquisition.
The nature of our operations is highly speculative, and
there is a consequent risk of loss of an investment in the
Company. The success of our plan of operation will depend to a
great extent on the operations, financial condition and
management of the identified business opportunity. While
management intends to seek business combination(s) with
entities having established operating histories, we cannot
provide any assurance that we will be successful in locating
candidates meeting that criterion. In the event we complete a
business combination, the success of our operations may be
dependent upon management of the successor firm or venture
partner firm and numerous other factors beyond our control.
Management intends to devote only a limited amount of time to
seeking a target company which may adversely impact our
ability to identify a suitable acquisition candidate.
While seeking a business combination, management
anticipates devoting very limited time to the Companys
affairs. Our officers have not entered into written employment
agreements with us and is not expected to do so in the
foreseeable future. This limited commitment may adversely
impact our ability to identify and consummate a successful
business combination.
Management has no prior experience as directors or officers of
a development stage public company.
Our officers and directors have no prior experience
serving as an officer or director of a development stage
public company with the business purpose of acquiring a target
business. The inexperience of our officers and directors and
the fact that the analysis and evaluation of a potential
business combination is to be taken under the supervision of
our directors and officers may adversely impact our ability to
identify and consummate a successful business combination.
5
There can be no assurance that the Company will successfully
consummate a business combination.
We can give no assurances that we will successfully
identify and evaluate suitable business opportunities or that
we will conclude a business combination. Management has not
identified any particular industry or specific business within
an industry for evaluation. We cannot guarantee that we will
be able to negotiate a business combination on favorable
terms.
Our business is difficult to evaluate because we have no
operating history.
As the Company has no operating history or revenue and no
assets, there is a risk that we will be unable to continue as
a going concern and consummate a business combination. The
Company has no recent operating history nor any revenues or
earnings from operations since inception. We have no assets or
significant financial resources. We will, in all likelihood,
sustain operating expenses without corresponding revenues, at
least until the consummation of a business combination. This
may result in our incurring a net operating loss that will
increase continuously until we can consummate a business
combination with a profitable business opportunity. We cannot
assure you that we can identify a suitable business
opportunity and consummate a business combination.
We are a development stage company, and our future success is
highly dependent on the ability of management to locate and
attract a suitable acquisition.
We were incorporated in September 2010 and are considered
to be in the development stage. The nature of our operations
is highly speculative, and there is a consequent risk of loss
of an investment in the Company. The success of our plan of
operation will depend to a great extent on the operations,
financial condition and management of the identified business
opportunity. While management intends to seek business
combination(s) with entities having established operating
histories, we cannot provide any assurance we will be
successful in locating candidates meeting that criterion. In
the event we complete a business combination, the success of
our operations may be dependent upon management of the
successor firm or venture partner firm and numerous other
factors beyond our control.
The Company has not identified a specific potential
acquisition target and there are no existing agreements for a
business combination or other transaction.
We have no arrangement, agreement or understanding with
respect to engaging in a merger with, joint venture with or
acquisition of, a private or public entity. No assurances can
be given that we will successfully identify and evaluate
suitable business opportunities or that we will conclude a
business combination.
Management will not limit its potential target to this
specific industry or location or any other particular
industry, business or location. We cannot guarantee that we
will be able to negotiate a business combination on favorable
terms, and there is consequently a risk that funds allocated
to the purchase of our shares will not be invested in a
company with active business operations. We have virtually
unrestricted flexibility in identifying and selecting a
prospective acquisition candidate. Although our management
will endeavor to evaluate the risks inherent in a particular
target business, we cannot assure that we will properly
ascertain or assess all significant risk factors.
Reporting requirements under the Exchange Act and compliance
with the Sarbanes-Oxley Act of 2002, including establishing
and maintaining acceptable internal controls over financial
reporting, are costly.
The Company has no business that produces revenues,
however, the rules and regulations pursuant to the Exchange
Act require a public company to provide periodic reports which
will require that the Company engage legal, accounting and
auditing services. The engagement of such services can be
costly and the Company is likely to incur losses which may
adversely affect the Companys ability to continue as a going
concern. Additionally, the Sarbanes-Oxley Act of 2002 will
require that the Company establish and maintain adequate
internal controls and procedures over financial reporting.
6
The costs of complying with the Sarbanes-Oxley Act of
2002 and the limited time that management will devote to the
Company may make it difficult for the Company to establish and
maintain adequate internal controls over financial reporting.
In the event the Company fails to maintain an effective system
of internal controls or discover material weaknesses in our
internal controls, we may not be able to produce reliable
financial reports or report fraud, which may harm our
financial condition and result in loss of investor confidence
and a decline in our share price.
The time and cost of preparing a private company to become a
public reporting company may preclude us from entering into a
merger or acquisition with the most attractive private
companies.
Target companies that fail to comply with SEC reporting
requirements may delay or preclude acquisition. Sections 13
and 15(d) of the Exchange Act require reporting companies to
provide certain information about significant acquisitions,
including certified financial statements for the company
acquired, covering one, two, or three years, depending on the
relative size of the acquisition. The time and additional
costs that may be incurred by some target entities to prepare
these statements may significantly delay or essentially
preclude consummation of an acquisition. Otherwise suitable
acquisition prospects that do not have or are unable to obtain
the required audited statements may be inappropriate for
acquisition so long as the reporting requirements of the
Exchange Act are applicable.
The Company may be subject to further government regulation
which would adversely affect our operations.
Although we will be subject to the reporting requirements
under the Exchange Act, management believes we will not be
subject to regulation under the Investment Company Act of
1940, as amended (the Investment Company Act), since we will
not be engaged in the business of investing or trading in
securities. If we engage in business combinations which result
in our holding passive investment interests in a number of
entities, we could be subject to regulation under the
Investment Company Act. If so, we would be required to
register as an investment company and could be expected to
incur significant registration and compliance costs. We have
obtained no formal determination from the SEC as to our status
under the Investment Company Act and, consequently, violation
of the Investment Company Act could subject us to material
adverse consequences.
Any potential acquisition or merger with a foreign company may
subject us to additional risks.
If we enter into a business combination with a foreign
company, we will be subject to risks inherent in business
operations outside of the United States. These risks include,
for example, currency fluctuations, regulatory problems,
punitive tariffs, unstable local tax policies, trade
embargoes, risks related to shipment of raw materials and
finished goods across national borders and cultural and
language differences. Foreign economies may differ favorably
or unfavorably from the United States economy in growth of
gross national product, rate of inflation, market development,
rate of savings, and capital investment, resource self-
sufficiency and balance of payments positions, and in other
respects.
The Company may be subject to certain tax consequences in our
business, which may increase our cost of doing business.
We may not be able to structure our acquisition to result
in tax-free treatment for the companies or their stockholders,
which could deter third parties from entering into certain
business combinations with us or result in being taxed on
consideration received in a transaction. Currently, a
transaction may be structured so as to result in tax-free
treatment to both companies, as prescribed by various federal
and state tax provisions. We intend to structure any business
combination so as to minimize the federal and state tax
consequences to both us and the target entity; however, we
cannot guarantee that the business combination will meet the
statutory requirements of a tax-free reorganization or that
the parties will obtain the intended tax-free treatment upon a
transfer of stock or assets. A non-qualifying reorganization
could result in the imposition of both federal and state taxes
that may have an adverse effect on both parties to the
transaction.
7
Our business may have no revenue unless and until we merge
with or acquire an operating business.
We are a development stage company and have had no
revenue from operations. We may not realize any revenue unless
and until we successfully merge with or acquire an operating
business.
The Company has conducted no market research or identification
of business opportunities, which may affect our ability to
identify a business to merge with or acquire.
The Company has not conducted market research concerning
prospective business opportunities, nor have others made the
results of such market research available to the Company.
Therefore, we have no assurances that market demand exists for
a merger or acquisition as contemplated by us. Our management
has not identified any specific business combination or other
transactions for formal evaluation by us, such that it may be
expected that any such target business or transaction will
present such a level of risk that conventional private or
public offerings of securities or conventional bank financing
will not be available. There is no assurance that we will be
able to acquire a business opportunity on terms favorable to
us. Decisions as to which business opportunity to participate
in will be unilaterally made by our management, which may act
without the consent, vote or approval of our stockholders.
Because we may seek to complete a business combination through
a reverse merger, following such a transaction we may not be
able to attract the attention of major brokerage firms.
Additional risks may exist since it is likely that we
will assist a privately held business to become public through
a reverse merger. Securities analysts of major brokerage
firms may not provide coverage of our Company since there is
no incentive to brokerage firms to recommend the purchase of
our Common Stock. No assurance can be given that brokerage
firms will want to conduct any secondary offerings on behalf
of our post-merger company in the future.
We cannot assure you that following a business combination
with an operating business, the Common Stock will be listed on
NASDAQ or any other securities exchange.
Following a business combination, we may seek the listing
of the Common Stock on NASDAQ or the NYSE AMEX. However, we
cannot assure you that following such a transaction, we will
be able to meet the initial listing standards of either of
those or any other stock exchange, or that we will be able to
maintain a listing of the Common Stock on either of those or
any other stock exchange. After completing a business
combination, until the Common Stock is listed on the NASDAQ or
another stock exchange, we expect that the Common Stock would
be eligible to trade on the OTC Bulletin Board, another over-
the-counter quotation system, or on the pink sheets, where
our stockholders may find it more difficult to dispose of
shares or obtain accurate quotations as to the market value of
the Common Stock. In addition, we would be subject to an SEC
rule that, if it failed to meet the criteria set forth in such
rule, imposes various practice requirements on broker-dealers
who sell securities governed by the rule to persons other than
established customers and accredited investors. Consequently,
such rule may deter broker-dealers from recommending or
selling the Common Stock, which may further affect its
liquidity. This would also make it more difficult for us to
raise additional capital following a business combination.
Risks Related to our Stockholders and Shares of Common Stock
Our stockholders may have a minority interest in the Company
following a business combination.
If we enter into a business combination with a company
with a value in excess of the value of our Company, and issue
shares of our Common Stock to the stockholders of such company
as consideration for merging with us, our stockholders will
likely own less than 50% of the Company after the business
combination. The stockholders of the acquired company would
therefore be able to control the election of our board of
directors (the Board of Directors) and control our Company.
8
There is currently no trading market for our Common Stock, and
liquidity of shares of our Common Stock is limited.
Shares of our Common Stock are not registered under the
securities laws of any state or other jurisdiction, and
accordingly there is no public trading market for the Common
Stock. Further, no public trading market is expected to
develop in the foreseeable future unless and until the Company
completes a business combination with an operating business
and the Company thereafter files and obtains effectiveness of
a registration statement under the Securities Act of 1933, as
amended (the Securities Act). Therefore, outstanding shares
of Common Stock cannot be offered, sold, pledged or otherwise
transferred unless subsequently registered pursuant to, or
exempt from registration under, the Securities Act and any
other applicable federal or state securities laws or
regulations. Shares of Common Stock cannot be sold under the
exemption from registration provided by Section 4(1) of the
Securities Act in accordance with the letter from Richard K.
Wulff, Chief of the Office of Small Business Policy of the
Securities and Exchange Commissions Division of Corporation
Finance, to Ken Worm of NASD Regulation, dated January 21,
2000 (the Wulff Letter). The Wulff Letter provides that
certain private transfers of the shares of common stock issued
by a blank check company may be prohibited without
registration under federal securities laws. Further,
stockholders may rely on the exemption from registration
provided by Rule 144 of the Securities Act (Rule 144),
subject to certain restrictions, starting one year after (i)
the completion of a business combination with a private
company in a reverse merger or reverse takeover transaction
after which the Company would cease to be a shell company
(as defined in Rule 12b-2 under the Exchange Act) and (ii) the
disclosure of certain information on a Current Report on Form
8-K within four business days thereafter, and only if the
Company has been current in all of its periodic SEC filings
for the 12 months preceding the contemplated sale of stock.
Compliance with the criteria for securing exemptions under
federal securities laws and the securities laws of the various
states is extremely complex, especially in respect of those
exemptions affording flexibility and the elimination of
trading restrictions in respect of securities received in
exempt transactions and subsequently disposed of without
registration under the Securities Act or state securities
laws.
It is likely that our Common Stock will be considered penny
stock, which may make it more difficult for investors to sell
their shares due to suitability requirements.
Our Common Stock may be deemed to be penny stock as
that term is defined under the Exchange Act. Penny stocks
generally are equity securities with a price of less than
$5.00 (other than securities registered on certain national
securities exchanges or quoted on the NASDAQ system, provided
that current price and volume information with respect to
transactions in such securities is provided by the exchange or
system). Penny stock rules impose additional sales practice
requirements on broker-dealers who sell to persons other than
established customers and accredited investors. The term
accredited investor refers generally to institutions with
assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or an annual income exceeding $200,000
or $300,000 jointly with their spouse.
The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the
rules, to deliver a standardized disclosure document in a form
prepared by the SEC, which provides information about penny
stocks and the nature and level of risks in the penny stock
market. Moreover, broker/dealers are required to determine
whether an investment in a penny stock is a suitable
investment for a prospective investor. A broker/dealer must
receive a written agreement to the transaction from the
investor setting forth the identity and quantity of the penny
stock to be purchased. These requirements may reduce the
potential market for our Common Stock by reducing the number
of potential investors. This may make it more difficult for
investors in our common stock to sell shares to third parties
or to otherwise dispose of them. This could cause our stock
price to decline.
9
There are issues impacting liquidity of our securities with
respect to the SECs review of a future resale registration
statement.
Since our shares of Common Stock issued prior to a
business combination or reverse merger cannot currently, nor
will they for a considerable period of time after we complete
a business combination, be available to be offered, sold,
pledged or otherwise transferred without being registered
pursuant to the Securities Act, we will likely file a resale
registration statement on Form S-1, or some other available
form, to register for resale such shares of Common Stock. We
cannot control this future registration process in all
respects as some matters are outside our control. Even if we
are successful in causing the effectiveness of the resale
registration statement, there can be no assurances that the
occurrence of subsequent events may not preclude our ability
to maintain the effectiveness of the registration statement.
Any of the foregoing items could have adverse effects on the
liquidity of our shares of Common Stock.
In addition, the SEC has recently disclosed that it has
developed internal informal guidelines concerning the use of a
resale registration statement to register the securities
issued to certain investors in private investment in public
equity (PIPE) transactions, where the issuer has a market
capitalization of less than $75 million and, in general, does
not qualify to file a Registration Statement on Form S-3 to
register its securities. The SEC has taken the position that
these smaller issuers may not be able to rely on Rule 415
under the Securities Act (Rule 415), which generally permits
the offer and sale of securities on a continued or delayed
basis over a period of time, but instead would require that
the issuer offer and sell such securities in a direct or
primary public offering, at a fixed price, if the facts and
circumstances are such that the SEC believes the investors
seeking to have their shares registered are underwriters
and/or affiliates of the issuer.
It appears that the SEC in most cases will permit a
registration for resale of up to one third of the total number
of shares of common stock then currently owned by persons who
are not affiliates of such issuer and, in some cases, a larger
percentage depending on the facts and circumstances. Staff
members also have indicated that an issuer in most cases will
have to wait until the later of six months after effectiveness
of the first registration or such time as substantially all
securities registered in the first registration are sold
before filing a subsequent registration on behalf of the same
investors.
Since, following a reverse merger or business
combination, we may have little or no tradable shares of
Common Stock, it is unclear as to how many, if any, shares of
Common Stock the SEC will permit us to register for resale,
but SEC staff members have indicated a willingness to consider
a higher percentage in connection with registrations following
reverse mergers with shell companies such as the Company.
The SEC may require as a condition to the declaration of
effectiveness of a resale registration statement that we
reduce or cut back the number of shares of Common Stock to
be registered in such registration statement. The result of
the foregoing is that a stockholders liquidity in our Common
Stock may be adversely affected in the event the SEC requires
a cut back of the securities as a condition to allow the
Company to rely on Rule 415 with respect to a resale
registration statement, or, if the SEC requires us to file a
primary registration statement.
We are controlled by our management.
An affiliate of our management and an individual on our
management team currently beneficially own and vote 100% of
all the issued and outstanding Common Stock of the Company.
Consequently, management has the ability to influence control
of the operations of the Company and, acting together, will
have the ability to influence or control substantially all
matters submitted to stockholders for approval, including:
Election of our board of directors (the Board of
Directors);
Removal of directors;
Amendment to the Companys certificate of
incorporation or bylaws; and
Adoption of measures that could delay or prevent a
change in control or impede a merger, takeover or
other business combination.
10
These stockholders have complete control over our
affairs. Accordingly, this concentration of ownership by
itself may have the effect of impeding a merger,
consolidation, takeover or other business consolidation, or
discouraging a potential acquirer from making a tender offer
for the Common Stock.
We have never paid dividends on our Common Stock.
We have never paid dividends on our Common Stock and do
not presently intend to pay any dividends in the foreseeable
future. We anticipate that any funds available for payment of
dividends will be re-invested into the Company to further its
business strategy.
The Company expects to issue more shares in a merger or
acquisition, which will result in substantial dilution.
Our Certificate of Incorporation, as amended, authorizes
the issuance of a maximum of 100,000,000 shares of Common
Stock, par value $0.001 (the Common Stock), and a maximum of
10,000,000 shares of preferred stock, par value $0.001 per
share (the Preferred Stock). Any merger or acquisition
effected by us may result in the issuance of additional
securities without stockholder approval and may result in
substantial dilution in the percentage of our Common Stock
held by our then existing stockholders. Moreover, the Common
Stock issued in any such merger or acquisition transaction may
be valued on an arbitrary or non-arms-length basis by our
management, resulting in an additional reduction in the
percentage of Common Stock held by our then existing
stockholders. Our Board of Directors has the power to issue
any or all of such authorized but unissued shares without
stockholder approval. To the extent that additional shares of
Common Stock or Preferred Stock are issued in connection with
a business combination or otherwise, dilution to the interests
of our stockholders will occur and the rights of the holders
of Common Stock might be materially adversely affected.
Our stockholders may engage in a transaction to cause the
Company to repurchase its shares of Common Stock.
In order to provide an interest in the Company to third
parties, our stockholders may choose to cause the Company to
sell Company securities to one or more third parties, with the
proceeds of such sale(s) being utilized by the Company to
repurchase shares of Common Stock held by it. As a result of
such transaction(s), our management, stockholder(s) and Board
of Directors may change.
We may issue Preferred Stock.
Our Certificate of Incorporation, as amended, authorizes
the issuance of up to 10,000,000 shares of Preferred Stock
with designations, rights and preferences determined from time
to time by the Board of Directors. Accordingly, our Board of
Directors is empowered, without stockholder approval, to issue
Preferred Stock with dividend, liquidation, conversion,
voting, or other rights which could adversely affect the
voting power or other rights of the holders of the Common
Stock. In the event of issuance, the Preferred Stock could be
utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of
the Company. Although we have no present intention to issue
any shares of its authorized Preferred Stock, there can be no
assurance that the Company will not do so in the future.
There is no guaranty that anyone will act a market maker for
the companys stock.
If the Company is unable to secure a market maker for its
stock, the Company will not be able to obtain listing on the
OTCBB and the liquidity of the companys stock will be
significantly limited.
Item 2. Financial Information.
11
Managements Discussion and Analysis of Financial Condition
and Results of Operation.
The Company was organized as a vehicle to investigate
and, if such investigation warrants, acquire a target company
or business seeking the perceived advantages of being a
publicly held corporation. Our principal business objective
for the next 12 months and beyond such time will be to achieve
long-term growth potential through a combination with a
business rather than immediate, short-term earnings.
The Company will not restrict our potential candidate
target companies to any specific business, industry or
geographical location and, thus, may acquire any type of
business.
The Company does not currently engage in any business
activities that provide cash flow. As of the date of this
filing, we have no funds in our treasury. We expect that the
costs of investigating and analyzing business combinations for
the next 12 months and beyond such time will be paid with
amounts that may be loaned to or invested in us by our
stockholder, management or other investors.
During the next 12 months we anticipate incurring costs
related to:
(i) filing of Exchange Act reports, and
(ii) investigating, analyzing and consummating an
acquisition.
Currently, however our ability to continue as a going
concern is dependent upon our ability to generate future
profitable operations and/or to obtain the necessary financing
to meet our obligations and repay our liabilities arising from
normal business operations when they come due. Our ability to
continue as a going concern is also dependant on our ability
to find a suitable target company and enter into a possible
reverse merger with such company. Managements plan includes
obtaining additional funds by equity financing through a
reverse merger transaction and/or related party advances;
however there is no assurance of additional funding being
available.
The Company is in the development stage and has not
earned any revenues from operations to date. These conditions
raise substantial doubt about our ability to continue as a
going concern. The Company is currently devoting its efforts
to locating merger candidates. The Companys ability to
continue as a going concern is dependent upon our ability to
develop additional sources of capital, locate and complete a
merger with another company, and ultimately, achieve
profitable operations.
The Company may consider a business which has recently
commenced operations, is a developing company in need of
additional funds for expansion into new products or markets,
is seeking to develop a new product or service, or is an
established business which may be experiencing financial or
operating difficulties and is in need of additional capital.
In the alternative, a business combination may involve the
acquisition of, or merger with, a company which does not need
substantial additional capital, but which desires to establish
a public trading market for its shares, while avoiding, among
other things, the time delays, significant expense, and loss
of voting control which may occur in a public offering.
Our officers and directors have not had any preliminary
contact or discussions with any representative of any other
entity regarding a business combination with us. Any target
business that is selected may be a financially unstable
company or an entity in its early stages of development or
growth, including entities without established records of
sales or earnings. In that event, we will be subject to
numerous risks inherent in the business and operations of
financially unstable and early stage or potential emerging
growth companies. In addition, we may effect a business
combination with an entity in an industry characterized by a
high level of risk, and, although our management will endeavor
to evaluate the risks inherent in a particular target
business, there can be no assurance that we will properly
ascertain or assess all significant risks.
Our management anticipates that it will likely be able to
effect only one business combination, due primarily to our
limited financing and the dilution of interest for present and
prospective stockholders, which is likely to occur as a result
of our managements plan to offer a controlling interest to a
target business in order to achieve a tax-free reorganization.
This lack of diversification should be considered a
substantial risk in investing in
12
us, because it will not permit us to offset potential losses
from one venture against gains from another.
The Company anticipates that the selection of a business
combination will be complex and extremely risky. Because of
general economic conditions, rapid technological advances
being made in some industries and shortages of available
capital, our management believes that there are numerous firms
seeking the benefits of a business combination with an SEC
reporting company and/or the perceived benefits of becoming a
publicly traded corporation. Such perceived benefits of
becoming a publicly traded corporation include, among other
things, facilitating or improving the terms on which
additional equity financing may be obtained, providing
liquidity for the principals of and investors in a business,
creating a means for providing incentive stock options or
similar benefits to key employees, and offering greater
flexibility in structuring acquisitions, joint ventures and
the like through the issuance of stock. Potentially available
business combinations may occur in many different industries
and at various stages of development, all of which will make
the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet
arrangements that have or are reasonably likely to have a
current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital
resources and would be considered material to investors.
Item 3. Properties.
The Company neither rents nor owns any properties. The
Company utilizes the office space and equipment of its
management at no charge. The Company currently has no policy
with respect to investments or interests in real estate, real
estate mortgages or securities of, or interests in, persons
primarily engaged in real estate activities.
Item 4. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth, as of September 17, 2010,
the number of shares of Common Stock owned of record and
beneficially by executive officers, directors and persons who
beneficially own more than 5% of the outstanding shares of
Common Stock of the Company.
Name and Address
Amount and
Nature of
Beneficial
Ownership
Percentag
e
of Class
BlackPool Corporate Advisors, LLC.
575 Madison Avenue, 10th Floor
New York, New York 10022
1,500,000
50%
Brook Cross (1)
631 Vista Bonita
Newport Beach CA 92660
1,500,000
50%
Nelson Shapiro (2)
1,500,000 (3)
50%
All Directors and Officers as a
Group (2 individuals)
3,000,000
100%
(1) Mr. Cross serves as an officer and director of the
Company.
(2) Mr. Shapiro serves as a director of the Company.
(3) Includes 1,500,000 shares of Common Stock owned of
record by BlackPool Corporate Advisors, LLC., Mr.
Shapiro, as the sole officer, director and shareholder of
BlackPool Corporate Advisors, LLC., may be deemed
to be the indirect beneficial owner of these securities since
he has sole voting and investment control over the
securities.
13
Item 5. Directors and Executive Officers.
(a) Identification of Directors and Executive Officers.
Our officers and directors and additional information
concerning them are as follows:
Name
Age
Position
Brook Cross
59
President,
Secretary and
Director
Nelson
Shapiro
60
Director
Brook Cross
Mr. Cross has assisted entrepreneurs and companies for over 20
years, providing strategic planning and management consulting
expertise. Since 2005, Mr. Cross has been the Principal of
Cross Consulting and a Senior Consultant with Small Business
Development Centers. Brook is a graduate of Stanford
University with a Masters from the University of California
and is a nationally ranked Masters swimmer.
Nelson Shapiro
Mr. Shapiro has been a CPA since 1977. Since 2008, he has been
the President and CEO of BlackPool Corporate Advisors, LLC.,
and has also owned his own tax practice, Nelson Shapiro, CPA
since 2000. Prior to this role, Mr. Shapiro served as Partner
in Louis Sturz & Co., as a Partner at Grossman, Russo &
Shapiro, and as a Partner at Russo & Shapiro, CPAs.
(b) Significant Employees.
None.
(c) Family Relationships.
None.
(d) Involvement in Certain Legal Proceedings.
There have been no events under any bankruptcy act, no
criminal proceedings and no judgments, injunctions, orders or
decrees material to the evaluation of the ability and
integrity of any director, executive officer, promoter or
control person of the Registrant during the past five years
except as follows:
Mr. Shapiro is a principal of a consulting firm, BlackPool
Corporate Advisors, LLC, a New York limited liability company
(BlackPool). In or about June of 2009, BlackPool was sued
in the Circuit Court of the 11th Judicial Circuit in and for
Miami-Dade County, Florida under Index No. 09-47657 for
alleged breach of contract by a former client, Brampton Crest
International, Inc. (Brampton). It is BlackPools
understanding and contention that pursuant to the parties
agreement, any dispute was to be litigated in New York.
Brampton instead elected to institute its action in Florida.
Upon advice of counsel, the Company took a wait and see
approach and elected to press its counterclaims and defenses
against Brampton if and when they attempted to domesticate
their judgment in New York, the situs and legal domicile of
BlackPool. As a result, Brampton obtained a default judgment
against BlackPool in the sum of $33,403.75. To the best of
the Companys knowledge, Brampton has not undertaken any
enforcement action to date.
(e) Prior Blank Check Company Experience.
None.
14
Item 6. Executive Compensation.
The following compensation discussion addresses all
compensation awarded to, earned by, or paid to the Companys
named executive officer. The Companys sole officer and
director has not received any cash or other remuneration since
inception. He will not receive any remuneration until the
consummation of an acquisition. No remuneration of any nature
has been paid for on account of services rendered by a
director in such capacity. Our sole officer and director
intend to devote very limited time to our affairs.
It is possible that, after the Company successfully
consummates a business combination with an unaffiliated
entity, that entity may desire to employ or retain members of
our management for the purposes of providing services to the
surviving entity. However, the Company has adopted a policy
whereby the offer of any post-transaction employment to
members of management will not be a consideration in our
decision whether to undertake any proposed transaction.
No retirement, pension, profit sharing, stock option or
insurance programs or other similar programs have been adopted
by the Company for the benefit of its employees.
There are no understandings or agreements regarding
compensation our management will receive after a business
combination that is required to be disclosed.
The Company does not have a standing compensation
committee or a committee performing similar functions, since
the Board of Directors has determined not to compensate the
officers and directors until such time that the Company
completes a reverse merger or business combination.
Item 7. Certain Relationships and Related Transactions, and
Director Independence.
Certain Relationships and Related Transactions
On September 13, 2010, the Company offered and sold an
aggregate of 1,500,000 shares of Common Stock to BlackPool
Corporate Advisors, LLC., an entity formed in New York, for an
aggregate purchase price equal to $25,000.
On September 13, 2010, the Company offered and sold an
aggregate of 1,500,000 shares of Common Stock to Brook Cross,
for an aggregate purchase price equal to $25,000.
The shares owned by BlackPool Corporate Advisors, LLC.,
and Mr. Cross represent all of the issued and outstanding
shares of the Company. Mr. Shapiro, an officer and director
of the Company since inception, is also a principal of
BlackPool Corporate Advisors, LLC., and may be deemed to
beneficially own the shares of common stock held of record by
BlackPool Corporate Advisors, LLC.
Certain fees and expenses related to the formation of the
Company and the professional fees and expenses associated with
the preparation and filing of the Companys formation and
registration of Form 10 have been advanced to the Company by
BlackPool Corporate Advisors, LLC. BlackPool Corporate
Advisors, LLC., seeks to assist small and medium sized
businesses go public.
As of the date of this filing, the Company has verbally
agreed to repay BlackPool Corporate Advisors, LLC., an
aggregate of $2,751 for the fees and expenses that have been
advanced on behalf of the Company; however, there is no
written agreement in effect. As a result, BlackPool Corporate
Advisors, LLC., which participated in the founding and
organizing of the Company, may be deemed to be a promoter of
the Company.
Director Independence
Our Common Stock is not quoted or listed on any national
exchange or interdealer quotation system with a
15
requirement that a majority of our board of directors be
independent therefore the Company is not subject to any
director independence requirements. Under NASDAQ Rule
4200(a)(15), a director is not considered to be independent if
he or she also is an executive officer or employee of the
corporation. Under such definition our sole officer and
director would not be considered an independent director.
Except as otherwise indicated herein, there have been no
other related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 404
and Item 407(a) of Regulation S-K.
Item 8. Legal Proceedings.
To the best knowledge of our sole officer and director,
there are presently no material pending legal proceedings to
which the Registrant, any executive officer, any owner of
record or beneficially of more than five percent of any class
of voting securities is a party or as to which any of its
property is subject, and no such proceedings are known to the
Registrant to be threatened or contemplated against it.
Item 9. Market Price of and Dividends on the Registrants
Common Equity and Related Stockholder Matters.
(a) Market Information.
The Common Stock is not trading on any stock exchange.
The Company is not aware of any market activity in its Common
Stock since its inception through the date of this filing.
(b) Holders.
As of September 17, 2010, there were two record holders
of an aggregate of 3,000,000 shares of the Common Stock issued
and outstanding.
(c) Dividends.
The Registrant has not paid any cash dividends to date
and does not anticipate or contemplate paying dividends in the
foreseeable future. It is the present intention of management
to utilize all available funds for the development of the
Registrant's business.
(d) Securities Authorized for Issuance under Equity
Compensation Plans.
None.
Item 10. Recent Sales of Unregistered Securities.
On September 13, 2010, the Company offered and sold an
aggregate of 1,500,000 shares of Common Stock to BlackPool
Corporate Advisors, LLC., an entity formed in New York, for an
aggregate purchase price equal to $25,000, pursuant to the
terms and conditions set forth in that certain common stock
purchase agreement (the Common Stock Purchase Agreement).
Also on September 13, 2010, the Company offered and sold an
aggregate of 1,500,000 shares of Common Stock to Brook Cross,
for an aggregate purchase price equal to $25,000, pursuant to
the terms and conditions set forth in that certain common
stock purchase agreement (the Common Stock Purchase
Agreement).The shares owned by BlackPool Corporate Advisors,
LLC., and Mr. Cross represent all of the issued and
outstanding shares of the capital stock of the Company. Mr.
Nelson Shapiro, an officer and director of the Company since
inception, is also a principal of BlackPool Corporate
Advisors, LLC., and may be deemed to beneficially own the
shares of common stock held of record by BlackPool Corporate
Advisors, LLC., The Company sold these shares of Common Stock
under the exemption from registration provided by Section 4(2)
of the
16
Securities Act. Forms of the Common Stock Purchase Agreement
are attached as Exhibit 10.1 and Exhibit 10.2 hereto.
No securities have been issued for services. Neither the
Registrant nor any person acting on its behalf offered or sold
the securities by means of any form of general solicitation or
general advertising. No services were performed by any
purchaser as consideration for the shares issued.
Item 11. Description of Registrants Securities to be
Registered.
(a) Capital Stock.
The Company is authorized by its Certificate of
Incorporation, as amended, to issue an aggregate of
110,000,000 shares of capital stock, of which 100,000,000 are
shares of Common Stock and 10,000,000 are shares of Preferred
Stock. As of September 17, 2010, 3,000,000 shares of Common
Stock and zero shares of Preferred Stock were issued and
outstanding.
Common Stock
All outstanding shares of Common Stock are of the same
class and have equal rights and attributes. The holders of
Common Stock are entitled to one vote per share on all matters
submitted to a vote of stockholders of the Company.
All stockholders are entitled to share equally in
dividends, if any, as may be declared from time to time by the
Board of Directors out of funds legally available. In the
event of liquidation, the holders of Common Stock are entitled
to share ratably in all assets remaining after payment of all
liabilities. The stockholders do not have cumulative or
preemptive rights.
Preferred Stock
Our Certificate of Incorporation authorizes the issuance
of up to 10,000,000 shares of Preferred Stock with
designations, rights and preferences determined from time to
time by our Board of Directors. Accordingly, our Board of
Directors is empowered, without stockholder approval, to issue
Preferred Stock with dividend, liquidation, conversion,
voting, or other rights which could adversely affect the
voting power or other rights of the holders of the Common
Stock. In the event of issuance, the Preferred Stock could be
utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of
the Company. Although we have no present intention to issue
any shares of our authorized Preferred Stock, there can be no
assurance that the Company will not do so in the future.
The description of certain matters relating to the
securities of the Company is a summary and is qualified in its
entirety by the provisions of the Companys Certificate of
Incorporation and By-Laws, copies of which have been filed as
exhibits to this Form 10.
(b) Debt Securities.
None.
(c) Warrants
None.
(d) Other Securities to Be Registered.
None.
17
Item 12. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law
provides that a corporation may indemnify directors and
officers as well as other employees and individuals against
expenses including attorneys fees, judgments, fines and
amounts paid in settlement in connection with various actions,
suits or proceedings, whether civil, criminal, administrative
or investigative other than an action by or in the right of
the corporation, a derivative action, if they acted in good
faith and in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, if they had no
reasonable cause to believe their conduct was unlawful. A
similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses
including attorneys fees incurred in connection with the
defense or settlement of such actions, and the statute
requires court approval before there can be any
indemnification where the person seeking indemnification has
been found liable to the corporation. The statute provides
that it is not exclusive of other indemnification that may be
granted by a corporations certificate of incorporation,
bylaws, agreement, a vote of stockholders or disinterested
directors or otherwise.
The Companys Certificate of Incorporation provides that
it will indemnify and hold harmless, to the fullest extent
permitted by Section 145 of the Delaware General Corporation
Law, as amended from time to time, each person that such
section grants us the power to indemnify.
The Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation
that a director of the corporation shall not be personally
liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability for:
any breach of the directors duty of loyalty to the
corporation or its stockholders;
acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
payments of unlawful dividends or unlawful stock
repurchases or redemptions; or
any transaction from which the director derived an
improper personal benefit.
The Companys Certificate of Incorporation provides that,
to the fullest extent permitted by applicable law, none of our
directors will be personally liable to us or our stockholders
for monetary damages for breach of fiduciary duty as a
director. Any repeal or modification of this provision will be
prospective only and will not adversely affect any limitation,
right or protection of a director of our company existing at
the time of such repeal or modification.
(Balance of page intentionally left blank.)
18
Item 13. Financial Statements and Supplementary Data.
We set forth below a list of our audited financial
statements included in this Registration Statement on Form 10.
Statement
Page*
Report of Independent Registered Public Accounting Firm
F-1
Balance Sheet as of September 17, 2010
F-2
Statement of Operations for the period from September 8,
2010 (Date of Inception) to September 17, 2010
F-3
Statement of Stockholders Deficit as of September 17,
2010
F-4
Statement of Cash Flows for the period from September 8,
2010 (Date of Inception) to September 17, 2010
F-5
Notes to Financial Statements
F-6-
F-9
*Page F-1 follows page 20 to this Registration Statement on
Form 10.
Item 14. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
There are not and have not been any disagreements between
the Registrant and its accountants on any matter of accounting
principles, practices or financial statement disclosure.
Item 15. Financial Statements and Exhibits.
(a) Financial Statements.
The financial statements included in this Registration
Statement on Form 10 are listed in Item 13 and commence
following page 20.
(b) Exhibits.
Exhibit
Number
Description
3.1
Certificate of Incorporation
3.2
Amendment to the Certificate of Incorporation
3.3
By-Laws
10.1
Form of Common Stock Purchase Agreement
10.2
Form of Common Stock Purchase Agreement
19
SIGNATURES
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly
caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: September 17, 2010
Bristol Acquisitions, Inc.
By: /s/ Brook Cross
Brook Cross
President and Director
Principal Executive Officer
20
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Boards of Directors
Bristol Acquisitions Corp.
Merrick, New York
We have audited the accompanying balance sheet of Bristol
Acquisitions Corp. as of September 17, 2010, and the related
statements of operations, stockholders deficit, and cash
flows for the period from September 8, 2010 (date of
inception) to September 17, 2010. These financial statements
are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company has
determined that it is not required to have, nor were we
engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Companys internal control
over financial reporting. Accordingly, we express no such
opinion. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates 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 Bristol Acquisitions Corp. as of September 17,
2010 and the results of its operations and cash flows for the
period from September 8, 2010 (date of inception) to September
17, 2010, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared
assuming that Bristol Acquisitions Corp. will continue as a
going concern. As discussed in Note 6 to the financial
statements, the Company has incurred losses since inception,
has negative working capital, has not yet received revenues
from sales of services or products, and is in need of
additional capital to grow its operations so that it can
become profitable. These factors raise substantial doubt
about the Companys ability to continue as a going concern.
Managements plans with regard to these matters are described
in Note 6. The accompanying financial statements do not
include any adjustments that might result from the outcome of
this uncertainty.
/s/ Silberstein Ungar, PLLC
Silberstein Ungar, PLLC
Bingham Farms, Michigan
September 21, 2010
F-1
BRISTOL ACQUISITIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF SEPTEMBER 17, 2010
ASSETS
Current Assets
Cash and equivalents
$
100
TOTAL ASSETS
$
100
LIABILITIES AND STOCKHOLDERS
DEFICIT
Liabilities
Current Liabilities
Accrued expenses
$
10,625
Loan payable - related party
2,751
Total Liabilities
13,376
Stockholders Deficit
Common Stock, $.001 par value,
100,000,000 shares authorized,
3,000,000 shares issued and
outstanding
3,000
Preferred Stock, $.001 par value,
10,000,000 shares
authorized, -0- shares issued and
outstanding
0
Additional paid-in capital
47,000
Stock subscription receivable
(50,000)
Deficit accumulated during the
development stage
(13,276)
Total Stockholders Deficit
(13,276)
TOTAL LIABILITIES AND STOCKHOLDERS
DEFICIT
$
100
See accompanying notes to financial statements
F-2
BRISTOL ACQUISITIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
PERIOD FROM SEPTEMBER 8, 2010 (INCEPTION) TO SEPTEMBER 17,
2010
REVENUES
$
0
OPERATING EXPENSES
Incorporation costs
1,026
Professional fees
12,250
TOTAL OPERATING EXPENSES
13,276
LOSS FROM OPERATIONS
(13,276)
PROVISION FOR INCOME TAXES
0
NET LOSS
$
(13,276)
NET LOSS PER SHARE: BASIC AND
DILUTED
$
(0.01)
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: BASIC AND DILUTED
1,500,00
0
See accompanying notes to financial statements
F-3
BRISTOL ACQUISITIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS DEFICIT
PERIOD FROM SEPTEMBER 8, 2010 (INCEPTION) TO SEPTEMBER 17,
2010
Common Stock
Additio
nal
paid-in
Stock
subscrip
tion
Deficit
accumulate
d during
the
developmen
t
Shares
Amount
capital
receiva
ble
stage
Total
Inception,
September 8,
2010
0
$
0
$
0
$
0
$
0
$
0
Shares issued
for subscription
receivable
3,000,000
3,000
47,000
(50,000
)
- -
0
Net loss for the
period ended
September 17,
2010
- -
- -
- -
- -
(13,276)
(13,276
)
Balance,
September 17,
2010
3,000,000
$
3,000
$
47,000
$
(50,000
)
$
(13,276)
$
(13,276
)
See accompanying notes to financial statements
F-4
BRISTOL ACQUISITIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
PERIOD FROM SEPTEMBER 8, 2010 (INCEPTION) TO SEPTEMBER 17,
2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period
$
(13,276)
Change in non-cash working capital
items
Changes in assets and liabilities:
Increase in accrued expenses
10,625
NET CASH USED BY OPERATING ACTIVITIES
(2,651)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan received from related party
2,751
NET CASH PROVIDED BY FINANCING
ACTIVITIES
2,751
NET INCREASE IN CASH
100
Cash, beginning of period
0
Cash, end of period
$
100
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid
$
0
Income taxes paid
$
0
SUPPLEMENTAL NON-CASH INVESTING AND
FINANCING INFORMATION:
Shares issued for subscription
receivable
$
50,000
See accompanying notes to financial statements
F-5
BRISTOL ACQUISITIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 17, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Bristol Acquisitions, Inc. (Bristol and the Company) was
incorporated in the State of Delaware on September 8, 2010.
Since inception, the Company has been engaged in
organizational efforts and obtaining initial financing. The
Company was formed as a vehicle to pursue a business
combination. The business purpose of the Company is to seek
the acquisition of, or merger with, an operating company.
Development Stage Company
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles
related to development-stage companies. A development-stage
company is one in which planned principal operations have not
commenced or if its operations have commenced, there has been
no significant revenues there from.
Basis of Presentation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in
the United States of America and are presented in US dollars.
Accounting Basis
The Company uses the accrual basis of accounting and
accounting principles generally accepted in the United States
of America (GAAP accounting). The Company has adopted a
June 30 fiscal year end.
Cash and Cash Equivalents
Bristol considers all highly liquid investments with
maturities of three months or less to be cash equivalents. At
September 17, 2010, the Company had $100 of cash.
Fair Value of Financial Instruments
The Companys financial instruments consist of cash and cash
equivalents, accrued expenses and loans payable to a related
party. The carrying amount of these financial instruments
approximates fair value due either to length of maturity or
interest rates that approximate prevailing market rates unless
otherwise disclosed in these financial statements.
Income Taxes
Income taxes are computed using the asset and liability
method. Under the asset and liability method, deferred income
tax assets and liabilities are determined based on the
differences between the financial reporting and tax bases of
assets and liabilities and are measured using the currently
enacted tax rates and laws. A valuation allowance is provided
for the amount of deferred tax assets that, based on available
evidence, are not expected to be realized.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date the financial statements
and the reported amount of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
F-6
BRISTOL ACQUISITIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 17, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue Recognition
The Company will recognize revenue when products are fully
delivered or services have been provided and collection is
reasonably assured.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the
Companys net loss applicable to common shareholders by the
weighted average number of common shares during the period.
Diluted earnings per share is calculated by dividing the
Companys net income available to common shareholders by the
diluted weighted average number of shares outstanding during
the year. The diluted weighted average number of shares
outstanding is the basic weighted number of shares adjusted
for any potentially dilutive debt or equity. There are no such
common stock equivalents outstanding as of September 17, 2010.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in
accordance with SFAS No. 123 and 123 (R) (ASC 718). To date,
the Company has not adopted a stock option plan and has not
granted any stock options. As of September 17, 2010, the
Company has not issued any stock-based payments to its
employees.
Recent Accounting Pronouncements
Bristol does not expect the adoption of recently issued
accounting pronouncements to have a significant impact on the
Companys results of operations, financial position or cash
flow.
NOTE 2 - ACCRUED EXPENSES
Accrued expenses at July 31, 2010 consisted of amounts owed to
the Companys outside independent auditors and the firm
assisting in taking the company public.
NOTE 3 - LOAN PAYABLE - RELATED PARTY
The Company received a loan from a related party to be used
for working capital. The loan is due upon demand, non-
interest bearing, and unsecured. The balance due on the loan
was $2,751 as of September 17, 2010.
NOTE 4 - STOCKHOLDERS DEFICIT
The Company has 100,000,000 shares of $0.001 par value common
stock and 10,000,000 shares of $0.001 par value preferred
stock authorized.
During the period ended September 17, 2010 the Company issued
3,000,000 shares of common stock at approximately $0.0167 per
share for a subscription receivable of $50,000.
As of September 17, 2010, the Company has 3,000,000 shares of
common stock issued and outstanding.
F-7
BRISTOL ACQUISITIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 17, 2010
NOTE 5 - INCOME TAXES
As of September 17, 2010, the Company had net operating loss
carry forwards of approximately $13,276 that may be available
to reduce future years taxable income through 2030. Future
tax benefits which may arise as a result of these losses have
not been recognized in these financial statements, as their
realization is determined not likely to occur and accordingly,
the Company has recorded a valuation allowance for the
deferred tax asset relating to these tax loss carry-forwards.
The provision for Federal income tax consists of the
following:
September
17, 2010
Refundable Federal income tax
attributable to:
Current operations
$
4,514
Less: valuation allowance
(4,514)
Net provision for Federal
income taxes
$
0
The cumulative tax effect at the expected rate of 34% of
significant items comprising our net deferred tax amount is as
follows:
September
17, 2010
Deferred tax asset
attributable to:
Net operating loss
carryover
$ 4,514
Less: valuation
allowance
(4,514)
Net deferred tax asset
$
0
Due to the change in ownership provisions of the Tax Reform
Act of 1986, net operating loss carry forwards of $13,276 for
Federal income tax reporting purposes are subject to annual
limitations. Should a change in ownership occur net operating
loss carry forwards may be limited as to use in future years.
NOTE 6 - LIQUIDITY AND GOING CONCERN
Bristol Acquisitions has negative working capital, has
incurred losses since inception, and has not yet received
revenues from sales of products or services. These factors
create substantial doubt about the Companys ability to
continue as a going concern. The financial statements do not
include any adjustment that might be necessary if the Company
is unable to continue as a going concern.
The ability of Bristol Acquisitions to continue as a going
concern is dependent on the Company generating cash from the
sale of its common stock and/or obtaining debt financing and
attaining future profitable operations. Managements plans
include selling its equity securities and obtaining debt
financing to fund its capital requirement and ongoing
operations; however, there can be no assurance the Company
will be successful in these efforts.
F-8
BRISTOL ACQUISITIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 17, 2010
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company received a loan from a related party to be used
for working capital. The loan is due upon demand, non-
interest bearing, and unsecured. The balance due on the loan
was $2,751 as of September 17, 2010. See note 3.
The Company has also accrued $9,000 of professional fees to
the same related party for assistance in taking the company
public.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or personal
property. A related party has provided office services without
charge. There is no obligation for this arrangement to
continue. 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 9 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through September
21, 2010 and has determined it does not have any material
subsequent events to disclose.
F-9