As filed with the Securities and Exchange Commission October 24, 2012, Registration No. 333-__________.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
GEO POINT RESOURCES, INC.
(Exact name of registrant as specified in its charter)
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Nevada |
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8711 |
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45-5593622 |
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(State or other jurisdiction of incorporation or organization) |
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(Primary Standard Industrial Classification Code Number) |
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(IRS Employer Identification Number) |
1306 E. Edinger Ace, #C
Santa Ana, California 92705
(714) 665-8777
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Incorp Services, Inc.
2360 Corporate Circle, Ste. 400
Henderson, Nevada 89074-7722
Telephone: (702) 866-2500
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copy To:
Leonard W. Burningham, Esq.
455 East 500 South
Suite 205
Salt Lake City, Utah 84111
Telephone: (801) 363-7411
NO SHARES OF REGISTRANT’S COMMON STOCK WILL BE ISSUED TO ANY HOLDER OF SHARES OF PARENT IN ANY JURISDICTION IN WHICH SUCH ISSUANCE WOULD NOT COMPLY WITH THE LAWS OF THAT JURISDICTION.
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED OFFERING TO THE PUBLIC:
As soon as practicable after the effective date of the 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. o
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) 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. o
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. o
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. o
Indicated by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a small reporting company. See the definitions of “ large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to be Registered |
Amount to be Registered |
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Proposed Maximum Offering Price Per Share (1) |
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Proposed Maximum Aggregate Offering Price (1),(2)
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Amount of Registration Fee (1) |
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Common Stock, par value $0.001 per share |
30,065,000 shares |
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$ - |
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$ - |
$ 0.42 |
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(1) |
Based upon the assumption that there will be 30,065,000 shares of the registrant to be outstanding immediately prior to the declaration of effectiveness of this Registration Statement, based upon an equal amount of outstanding shares of the registrant’s parent, Geo Point Technologies, Inc., a Utah corporation, at that time, which is effecting the spin-off of the registrant to its stockholders hereunder, pro rata. |
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(2) |
Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(f) of the Securities Act of 1933, as amended (the “Securities Act”), based on par value of the assets of the registrant as it had a stockholders’ deficit at its most recently completed fiscal quarter ended June 30, 2012. |
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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 AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
SUBJECT TO COMPLETION: Dated October __, 2012
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PROSPECTUS
GEO POINT RESOURCES, INC.
30,065,000 SHARES OF COMMON STOCK, PAR VALUE $0.001 PER SHARE
The information in this Prospectus is not complete and may be changed. We may not distribute the dividend of these securities until the Registration Statement we have filed with the Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities nor a solicitation of an offer to buy these securities in any state where the offer, sale or dividend is not permitted. There will not be any public market for the shares on the effective date of our Registration Statement.
30,065,000 shares of common stock, par value $0.001 per share, of Geo Point Resources, Inc., a Nevada corporation (“Geo Point Nevada” or the “Registrant” or “we,” “our,” “us” or words of similar import), are being spun-off hereby by Geo Point Technologies, Inc., a Utah corporation (“Geo Point Utah”). Geo Point Nevada is currently a wholly-owned subsidiary of Geo Point Utah, into which Geo Point Utah assigned on June 13, 2012, subject to all related liabilities and certain indemnifications, all of the assets and business of its Environmental and Engineering Divisions, including a License Agreement that is believed to comprise hydrocarbon-indicating methods technology. See the captions “The Spin-Off” (p. 14) and “Geo Point Nevada” (p. 19). Geo Point Nevada will maintain all of the business, assets and liabilities that it holds immediately before the effectuation of the spin-off (and, accordingly, Geo Point Utah post-spin-off will have no business, assets or liabilities of Geo Point Nevada, and will retain and focus its efforts on its oil refining operations in Karatau, Kazakhstan).
Geo Point Nevada is an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. See the heading “Emerging Growth Company,” p. 25.
We are furnishing this Prospectus to provide information to stockholders of Geo Point Utah who will be issued a dividend of Geo Point Nevada shares of common stock in the spin-off. The dividend is not, and is not to be construed as, an inducement or encouragement to buy or sell any of Geo Point Utah’s securities or those of Geo Point Nevada. The information contained in this Prospectus is believed by us to be accurate as of the date set forth on its cover page. Changes may occur after that date, and neither Geo Point Nevada nor Geo Point Utah is required to update the information, except in the normal course of public disclosure obligations and practices.
In reviewing this Prospectus, you should carefully consider the matters described under the caption “Risk Factors” beginning on Page 8.
The Securities and Exchange Commission and state securities regulators have not approved or disapproved any of these securities, or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
No person is authorized to give any information not contained in the Prospectus in connection with this offering and, if given or made, such information or representation must not be relied upon as having been authorized.
UNTILJANUARY 22, 2013 (90 DAYS AFTER THE DATE HEREOF), ANY BROKER-DEALER EFFECTING TRANSACTIONS IN THE SHARES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A CURRENT COPY OF THIS PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A COPY OF THIS PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO ANY UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
The Date of this Prospectus is October __, 2012.
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Table of Contents
GEO POINT NEVADA; AND RELATED GEO POINT UTAH INFORMATION, AS APPLICABLE
MARKET PRICE OF COMMON STOCK AND RELATED MATTERS
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
INDEMNIFICATION OF DIRECTORS AND OFFICERS
RELATIONSHIP BETWEEN GEO POINT NEVADA AND GEO POINT UTAH FOLLOWING THE SPIN-OFF
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 36
ABSENCE OF PUBLIC MARKET AND DIVIDEND POLICY
DETERMINATION OF OFFERING PRICE
INTEREST OF NAMED EXPERTS AND COUNSEL
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
WHERE YOU CAN FIND MORE INFORMATION
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 39
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed information and financial statements appearing elsewhere or incorporated by reference in this Prospectus. All references in this Prospectus to shares are as of October 23, 2012, unless otherwise specified. Prospective investors should carefully consider the information set forth under the caption “Risk Factors,” beginning on p. 8.
The Offering
The following is a summary of some of the information contained in this Prospectus. In addition to this summary, Geo Point Nevada urges you to read the entire Prospectus carefully, including the risks of investing in its common stock discussed under the captions “Risk Factors” (beginning on p. 8), “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (beginning on p. 38) and Financial Statements and the notes thereto (beginning on p. F-1), which are included in this Prospectus. As used in this Prospectus, references to “Geo Point Utah” refer to Geo Point Technologies, Inc. and references to “Geo Point Nevada” refer to “Geo Point Resources, Inc.” These references may be repeated herein when clarity requires. Geo Point Utah is the parent of Geo Point Nevada, which is wholly-owned by it.
Geo Point Utah (See p. 19)
Geo Point Utah is a Utah corporation with its principal executive offices located at 2319 Foothill Drive, Suite 160, Salt Lake City, Utah 84109 (Telephone: (801) 810-4662). Geo Point Utah, through its subsidiary, GSM Oil Holdings Ltd., a limited liability company organized in Cyprus on June 2, 2009 (“GSM”), which owns Sinur Oil LLP, a limited liability company organized in Kazakhstan on January 19, 2007 (“Sinur”), is in the business of operating an oil refining facility in Karatau, Kazakhstan that is designed to process crude oil into diesel; gasoline; and mazut, a fuel oil. Geo Point Utah also offers environmental and engineering services through Geo Point Nevada, primarily in the State of California. Geo Point Utah has been involved in the operations currently carried on through Geo Point Nevada since that business was founded in 1997 as a “DBA” in the State of California by William C. Lachmar, the current President and sole director of Geo Point Nevada; Mr. Lachmar incorporated this business in 2002 in the State of California, and changed its domicile to the State of Utah in 2006. GMS was acquired on October 28, 2010, and GMS had recently acquired Sinur prior to its acquisition by Geo Point Utah.
Relationship between Geo Point Utah and Geo Point Nevada before the Spin-Off (See p. 19)
Currently, Geo Point Nevada is a wholly-owned subsidiary of Geo Point Utah. Geo Point Nevada’s mailing address and telephone number are those of Geo Point Utah listed in the preceding paragraph. In addition, Geo Point Nevada maintains its principal executive offices at other facilities at 1306 E. Edinger Ace, #C, Santa Ana, California 92705 (Telephone: (714) 665-8777). On June 13, 2012, Geo Point Utah transferred to Geo Point Nevada all of the assets and liabilities employed in its Environmental and Engineering Divisions, along with its rights in a License Agreement that is believed to comprise hydrocarbon-indicating methods technology. After the spin-off, Geo Point Nevada will be an independent public company, and any relationship between Geo Point Nevada and Geo Point Utah thereafter will be limited to the terms of the respective Separation Agreement and Tax Matters Agreement between them that are outlined below. For a more detailed description of these relationships, see the caption entitled “Relationship Between Geo Point Nevada and Geo Point Utah Following the Spin-Off,” p. 34.
None.
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The Spin-Off
See the caption “The Spin-Off,” beginning on p. 14, for a more detailed description of the matters described below.
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RISK FACTORS
You should carefully consider each of the following risks and uncertainties associated with the spin-off, purchase or ownership of Geo Point Utah common stock and of Geo Point Nevada common stock and Geo Point Nevada’s business generally, as well as all of the other information set forth in this Prospectus.
Generally
The occurrence of any of the risks or uncertainties described below could significantly and adversely affect our business, prospects, financial condition and operating results. Additional risks and uncertainties not currently known to Geo Point Nevada or Geo Point Utah, or risks that currently are deemed immaterial, may also impair our business. In any event, the trading price of Geo Point Utah’s common stock (and Geo Point Nevada’s common stock, if any trading market develops for such common stock in the future) could decline, and the investor could lose part or all of any investment. The following are representative of those risks. Such summary is not intended to be exhaustive of risks that are or may become relevant.
Investors should carefully consider the information presented below, including risks relating to Geo Point Nevada’s operations, competition, regulation, future capital needs, dependence on key personnel and common stock.
THE SECURITIES OFFERED PURSUANT TO THIS PROSPECTUS ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. RECIPIENTS OF GEO POINT NEVADA SHARES RECEIVED IN THIS SPIN-OFF (AND FUTURE PURCHASERS OF THESE SHARES) SHOULD CAREFULLY READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER MATTERS REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS. EACH OF THESE RISK FACTORS COULD ADVERSELY AFFECT THE VALUE OF AN INVESTMENT IN GEO POINT NEVADA COMMON STOCK.
Risk Factors Relating to the Spin-Off
Geo Point Nevada may be unable to make the changes necessary to operate as an independent entity or may incur greater costs, which could prevent it from operating profitably.
Geo Point Nevada was incorporated in Nevada on June 13, 2012, and has operated as a wholly-owned subsidiary of Geo Point Utah since that time, though the business of the Environmental and Engineering Divisions has been carried on by Geo Point Utah since 1997. Following the spin-off, Geo Point Utah will have no obligation (beyond what is provided in the Separation Agreement and Tax Matters Agreement discussed herein) to provide financial, operational or organizational assistance to Geo Point Nevada. As a consequence, Geo Point Nevada may not be able to implement successfully the changes necessary to operate these Divisions independently, as Geo Point Utah did as a privately-held company between 1997 and 2006. Geo Point Nevada may also incur additional costs relating to operating independently that would cause its limited available cash resources to decline materially, which amounted to $29,756 at June 30, 2012. These costs may include, but are not limited to, salaries for personnel other than William C. Lachmar, its President, Manager and sole director and the person who has been the Manager and primary employee of the Environmental and Engineering Divisions of Geo Point Utah from inception and currently; investor relations; accounting and auditing services and legal fees for securities filings; and transfer agent costs. Geo Point Nevada cannot assure you that once it becomes a stand-alone company, it will be profitable.
Historically, Geo Point Nevada (or Mr. Lachmar, as the Manager of the Environmental and Engineering Divisions of Geo Point Utah) has utilized the executive management team of Geo Point Utah. Many daily functions have been performed by Geo Point Utah, including those related to Securities and Exchange Commission filings and auditing and review by accountants of required financial statements, which will become the responsibility of Geo Point Nevada. In the future, Geo Point Nevada may need to hire new personnel to perform these functions. In addition, there will be a time period during which such new personnel will have to learn the required systems for these functions. Also, Geo Point Utah’s executive team has provided direction and leadership, along with Mr. Lachmar, to the business operations that will comprise those of Geo Point Nevada, and has assisted in previous funding of these business operations while owned and operated by Geo Point Utah. The lack of these relationships may harm Geo Point Nevada’s operating results, financial condition and its ability to raise any required debt or equity funding.
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The spin-off will be taxable to the recipient, as with any dividend.
All stockholders should consult their own tax advisors concerning the specific tax consequences of the spin-off of Geo Point Nevada common stock to holders of Geo Point Utah common stock in light of their particular circumstances. This summary is not intended to be, nor should it be construed to be, legal or tax advice to any particular investor.
Neither Geo Point Utah nor Geo Point Nevada has obtained a ruling from the IRS that the spin-off will qualify as a tax-free transaction under Section 355 of the Code and a tax-free reorganization under Section 368(a)(1)(D) of the Code. On the basis of our position and opinion only and assuming that our common stock is a capital asset in the hands of the Geo Point Utah stockholder on the spin-off date:
·
holders of Geo Point Utah common stock should apportion the tax basis of their Geo Point Utah common stock between such Geo Point Utah common stock and Geo Point Nevada common stock received in the spin-off in proportion to the relative fair market values of such Geo Point Nevada common stock at the time of the spin-off; and
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the holding period for Geo Point Nevada common stock received in the spin-off by holders of Geo Point Utah common stock should include the period during which such holders held the Geo Point Utah common stock with respect to which the spin-off was made.
Each Geo Point Utah stockholder receiving shares of Geo Point Nevada common stock in the spin-off should be treated as if such stockholder had received a distribution in an amount equal to the fair market value of Geo Point Nevada common stock received, which would result in (1) a taxable dividend to the extent of such stockholder’s pro rata share of Geo Point Utah’s current and accumulated earnings and profits; (2) a reduction in such stockholder’s basis in Geo Point Utah common stock to the extent the amount received exceeds such stockholder’s share of earnings and profits; and (3) a taxable gain to the extent the amount received exceeds the sum of the amount treated as a dividend and the stockholder’s basis in the Geo Point Utah common stock. Any such gain would generally be a capital gain if the Geo Point Utah common stock is held as a capital asset on the distribution date.
For a more detailed discussion, see the headings entitled “Certain U.S. Federal Income Tax Consequences of the Spin-Off” (p. 17), “Arrangement Between Geo Point Nevada and Geo Point Utah Relating to the Spin-Off” (p. 35) and “Tax Matters Arrangement” (p. 36).
Registrant’s Accounting and Management Systems and Resources May Be Inadequate.
Geo Point Nevada’s accounting and other management systems and resources may not be adequate to meet the financial reporting and other requirements to which Geo Point Nevada will be subject following the spin-off. If Geo Point Nevada is unable to achieve and maintain effective internal controls, its operating results and financial condition could be harmed.
Prior to the spin-off, Geo Point Nevada was not directly subject to reporting and other requirements of the Securities Exchange Act of 1934 (the “Exchange Act”). As a result of the spin-off, Geo Point Nevada will be directly subject to reporting and other obligations under Section 15(d) of the Exchange Act, including the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). Sarbanes-Oxley will require annual management assessments of the effectiveness of Geo Point Nevada’s internal controls over financial reporting. Geo Point Nevada’s reporting and other obligations will place significant demands on its management and administrative and operational resources, including accounting resources.
To comply with these requirements, Geo Point Nevada may need to upgrade its systems, including information technology, implement additional financial and management controls, reporting systems and procedures and hire additional legal, accounting and finance staff. If Geo Point Nevada is unable to upgrade its systems and procedures in a timely and effective fashion, it may not be able to comply with its financial reporting requirements and other rules that apply to publicly-held companies. In addition, if Geo Point Nevada is unable to conclude that its internal controls over financial reporting are effective, Geo Point Nevada could lose investor confidence in the accuracy and completeness of its financial reports. Any failure to achieve and maintain effective internal controls could harm Geo Point Nevada’s operating results and financial condition.
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Geo Point Nevada’s success will depend on its ability to retain key employees and recruit key management personnel.
One of Geo Point Nevada’s primary assets is its highly-skilled and professional licensed President and Manager, William C. Lachmar. Mr. Lachmar could leave Geo Point Nevada and so deprive Geo Point Nevada of the skill and knowledge essential for performance of its existing and new business. Mr. Lachmar also is the primary reason and contact person customers of the Environmental and Engineering Divisions transferred by Geo Point Utah to Geo Point Nevada refer business to or contract for business with these Divisions. If Mr. Lachmar were to leave or otherwise become unavailable to manage the business operations of Geo Point Nevada for any other reason, it would seriously harm Geo Point Nevada’s current and future business prospects and operating results and financial condition. Mr. Lachmar is believed to be in good health.
The spin-off arrangements between Geo Point Nevada and Geo Point Utah require Geo Point Nevada to indemnify, defend and hold harmless Geo Point Utah and their respective successors.
Geo Point Nevada negotiated and entered into the spin-off arrangements as a subsidiary of Geo Point Utah. Had these arrangements been negotiated with unaffiliated third parties, their terms might have been more favorable to Geo Point Nevada.
Geo Point Nevada shall assume and agree to pay, perform, fulfill and discharge, and Geo Point Utah shall have no responsibility for, (i) all liabilities under any Employee Arrangements; and (ii) all employment or service-related liabilities with respect to: (A) all Geo Point Nevada employees (and their dependents and beneficiaries); (B) former Environmental and Engineering Divisions employees (and their dependents and beneficiaries) whose last employment with Geo Point Utah related primarily to the Geo Point Nevada business; and (C) any individual who is, or was, an independent contractor, temporary employee, consultant, leased employee, or non-payroll worker.
Geo Point Utah and Geo Point Nevada shall each bear its responsibility for payroll tax obligations and for the proper reporting to the appropriate governmental authorities of compensation earned by their respective employees after the spin-off date, including compensation related to the exercise of options.
These arrangements require Geo Point Utah to assume and/or indemnify Geo Point Nevada for, among other things, all past, present and future liabilities related to its business, excluding the Environmental and Engineering Divisions. Geo Point Nevada shall indemnify, defend and hold harmless Geo Point Utah and their respective successors and assigns from, against and in respect of any and all indemnifiable losses arising out of, relating to or directly or indirectly resulting from the Environmental and Engineering Divisions. The liabilities that could arise from these obligations could seriously harm Geo Point Nevada and reduce its limited cash resources, which could result in its inability to continue is business operations. See the heading “Arrangement Between Geo Point Nevada and Geo Point Utah Relating to the Spin-Off,” p. 35.
Risk Factors Relating to Geo Point Nevada Common Stock
There is no public market for Geo Point Nevada’s common stock.
There is currently no public market for Geo Point Nevada’s common stock. Prior to the completion of the spin-off, Geo Point Nevada will request a broker to submit the information that is required by Rule 15c2-11 of the Securities and Exchange Commission to the Financial Industry Regulatory Authority (“FINRA”) to seek quotations of its common stock on the OTCBB or the OTC Market, Inc. “Pink Sheets.” This information will be subject to review and final approval of FINRA, and we cannot assure you as to if and when we will be able to successfully complete this review process. Unless and until we are successful in this regard, there will be extremely limited liquidity for Geo Point Nevada’s shares of common stock. See the caption “Market Price of Common Stock and Related Matters,” beginning on p. 26.
We may be deemed to be an “emerging growth company,” subject to less stringent reporting and regulatory requirements of other publicly-held companies, and this status may have an adverse effect on our ability to attract interest in our common stock.
10
We may be deemed to be an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or “JOBS Act.” As long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting and regulatory requirements that are applicable to other public companies that are not an “emerging growth company.” We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and our stock price may be more volatile. See the heading “Emerging Growth Company,” p. 25.
Our common stock may be deemed to be “Penny Stock,” which will further limit any potential future public market for our shares.
Our common stock may be deemed to be “penny stock” as that term is defined in Rule 3a51-1 of the Securities and Exchange Commission. Penny stocks are stocks (i) with a price of less than $5 per share; (ii) that are not traded on a “recognized” national exchange; (iii) whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ-listed stocks must still meet requirement (i) above); or (iv) in issuers with net tangible assets less than $2,000,000 (if the issuer has been in continuous operation for at least three years); or $5,000,000 (if in continuous operation for less than three years); or with average revenues of less than $6,000,000 for the last three years.
Section 15(g) of the Exchange Act and Rule 15g-2 of the Securities and Exchange Commission require broker dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor’s account. Potential investors in our common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to be penny stock.
Rule 15g-9 of the Securities and Exchange Commission requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his, her or its financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor, and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for investors in our common stock to resell their shares to third parties or to otherwise dispose of them.
The market price and trading volume of Geo Point Nevada common stock may be volatile and may face negative pressure.
Before the spin-off, there was a trading market for Geo Point Utah’s common stock, but not for the shares of the Geo Point Nevada common stock. Geo Point Utah’s common stock will continue to be traded publicly while the Geo Point Nevada shares issued in the spin-off will trade publicly for the first time following the completion of the spin-off (assuming quotations are granted by FINRA as indicated above). Until, and possibly even after orderly trading markets develop for Geo Point Nevada common stock, if at all, there may be significant fluctuations in price. Investors’ interest may not lead to a liquid trading market and the market price of Geo Point Nevada common stock may be volatile. This may result in short-term or long-term negative pressure on the trading price of shares of Geo Point Nevada common stock, or that of Geo Point Utah.
The market price of Geo Point Nevada’s common stock may be volatile due to the risks and uncertainties described in this “Risk Factors” caption, as well as other factors that may affect the market price, such as:
·
Conditions and publicity regarding the environmental and related engineering industries generally;
·
Price and volume fluctuations in the stock market at large, which do not relate to Geo Point Nevada’s operating performance; and
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·
Comments by securities analysts or government officials, including those with regard to the viability or profitability of the environmental remediation industry generally or with regard to our ability to meet market expectations.
The stock market has from time to time experienced extreme price and volume fluctuations that are unrelated to the operating performance of particular companies.
The market value of a share of Geo Point Nevada common stock received in the spin-off should be substantially less than the market value of a share of Geo Point Utah before the spin-off.
If the spin-off is completed as currently contemplated, holders of shares of Geo Point Utah common stock will, after the spin-off date, hold common stock of both Geo Point Utah and Geo Point Nevada. Because the two companies will largely be independent of each other thereafter, Geo Point Nevada cannot assure you that the public market for its common stock will be similar to the public market for that of Geo Point Utah. Ultimately, the value of each share of Geo Point Nevada common stock will be principally determined in trading markets and could be influenced by many factors, including Geo Point Nevada’s business operations; the growth and expansion of its business; investors’ expectations of its prospects; its credit worthiness; trends and uncertainties affecting the industries in which Geo Point Nevada competes; future issuances or repurchases of Geo Point Nevada common stock; and general economic and other conditions. The market value of Geo Point Nevada’s common stock could be less than the market value before the spin-off, if there is any pre-spin-off date market (which is not expected) or that of Geo Point Utah’s market value aggregated with that of Geo Point Nevada. In addition, the trading price of Geo Point Utah’s common stock may decline following the spin-off.
Failure to meet financial expectations could have an adverse impact on the market price of Geo Point Nevada’s common stock.
Geo Point Nevada’s ability to achieve past financial results expressed herein is subject to a number of risks, uncertainties and other factors affecting its business and environmental and the related engineering industries generally, many of which are beyond Geo Point Nevada’s control. These factors may cause actual results to differ materially. Geo Point Nevada describes a number of these factors throughout this document, including in these Risk Factors and in the captions entitled “Special Note Regarding Forward-Looking Statements” (p. 20) and “Management’s Discussion and Analysis or Results of Operations” (p. 38). Geo Point Nevada cannot assure you that it will meet these past results or expectations, and its failure to do so could harm the market price of its common stock and its business operations may fail.
Future sales of Geo Point Nevada stock could adversely affect its stock price and its ability to raise capital in the future.
Sales of substantial amounts of Geo Point Nevada common stock could harm the market price of its common stock. This also could harm Geo Point Nevada’s ability to raise capital in the future. The shares issued in the spin-off will be freely tradable without restriction under the Securities Act by persons other than “affiliates,” as defined under the Securities Act. Any sales of substantial amounts of Geo Point Nevada common stock in the public market, or the perception that those sales might occur, could harm the market price of Geo Point Nevada’s common stock. 10,000,000 of these shares or approximately 33.3% of the spin-off shares will be held by the current Chairman of the Board of Directors of Geo Point Utah. See the captions “Market Price of Common Stock and Related Matters” (beginning on p. 26) and “Security Ownership of Certain Beneficial Owners and Management” (p. 31).
Neither Geo Point Nevada nor Geo Point Utah will solicit the approval of its stockholders for the issuance of authorized but unissued shares of Geo Point Nevada common stock unless this approval is deemed advisable by our board of directors or is required by applicable law, regulation or any applicable stock exchange listing requirements. The issuance of those shares could dilute the value of Geo Point Nevada’s outstanding shares of common stock.
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Risk Factors Relating to Geo Point Nevada’s Business
Our auditors have added a “going concern” qualification to their Independent Auditor’s Report issued for our fiscal years ended March 31, 2012, and 2011.
Our Independent Auditor’s Report dated October 19, 2012, issued in connection with our audited financial statements for the fiscal years ended March 31, 2012, and 2011, stated that “the Company has incurred significant losses and negative cash flows from operating activities, has negative working capital and an accumulated deficit, and is dependent on additional debt or equity financing in order to continue its operations. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern.” See the Index to Financial Statements, attached hereto as Appendix F of this Prospectus, and Note 2 of our financial statements.
We have experienced continuing losses on our operations.
Our business revenues have been reasonably constant during the quarters ended June 30, 2012, and 2011, and the fiscal years ended March 31, 2012, and 2011 ($27,154 and $26,511 for the quarters ended June 30, 2012, and 2011, respectively; and $126,459 and $135,370 for the fiscal years ended March 31, 2012, and 2011, respectively); however, we continue to incur losses on our operations ($40,496 and $37,266 for the quarters ended June 30, 2012, and 2011, respectively; and $77,607 and $101,090 for the fiscal years ended March 31, 2012, and 2011, respectively). If the pressure placed on the construction industry due to pricing competition does not abate, and we continue to have a limited amount of financing available to us, we may not be able to continue our business operations. See the caption “Financial Statements” beginning on p. F-1.
William C. Lachmar is essential to the continuation of our current business operations.
Mr. Lachmar is our only employee, and he has been the owner or Manager of the Environmental and Engineering Divisions of Geo Point Nevada since 1997. His background, experience, contacts and professional licenses in this industry are essential to our business. The loss of Mr. Lachmar services for any reason could result in our cessation of business operations while we would attempt to seek a replacement with the necessary qualifications, and all current projects and contacts could be put in serious jeopardy, resulting is a total loss of our business. We do not have any employment agreement with Mr. Lachmar.
Our growth is presently limited to the projects within the time constraints of Mr. Lachmar’s services.
Unless we hire and train additional employees that can provide the services necessary for us to increase our business, our potential growth is limited by the time that Mr. Lachmar has available for these activities, and Mr. Lachmar’s current Manager responsibilities for us are on a “full-time” basis. To date, we refer excess projects that we do not have the manpower to complete.
Our present business and revenues are dependent upon one or two major customers.
During our quarterly periods ended June 30, 2012, and 2011, and our fiscal years ended March 31, 2012, and 2012, substantially all of our revenues and business was attributable to three customers. The loss of any of these customers could have a substantial and materially adverse effect on our business, and our business may fail, unless we are successful in replacing these customers, of which no assurance can be given. See the heading “Dependence on One or a Few Major Customers” (p.22) and Note 2 to our financial statements (p. F-8).
Geo Point Nevada may pursue acquisitions, investments or other strategic relationships or alliances, which may consume significant resources, may be unsuccessful and could dilute holders of its common stock.
Acquisitions, investments and other strategic relationships and alliances, if pursued, may involve significant cash expenditures, debt incurrence, operating losses and expenses that could have a material adverse effect on Geo Point Nevada’s financial condition and operating results. Acquisitions involve numerous other risks, including:
·
Diversion of management time and attention from daily operations;
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Difficulties integrating acquired businesses, technologies and personnel into Geo Point Nevada’s business;
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·
Inability to obtain required regulatory approvals and/or required financing on favorable terms;
·
Entry into new markets in which Geo Point Nevada has little previous experience;
·
Potential loss of key employees, key contractual relationships or key customers of acquired companies or of Geo Point Nevada; and
·
Assumption of the liabilities and exposure to unforeseen liabilities of acquired companies.
If these types of transactions are pursued, it may be difficult for Geo Point Nevada to complete these transactions quickly and to integrate these acquired operations efficiently into its current business operations. Any acquisitions, investments or other strategic relationships and alliances by Geo Point Nevada may ultimately harm our business and financial condition. In addition, future acquisitions may not be as successful as originally anticipated and may result in impairment charges.
Geo Point Nevada’s business activities are highly regulated and new and proposed government regulation or legislative reforms could increase Geo Point Nevada’s cost of doing business, reduce its revenues and liquidity, increase its losses or subject it to additional liability.
Geo Point Nevada’s business is subject to substantial regulation in the fields in which it operates. In the United States, it deals with numerous U.S. and California state governmental agencies and entities, including the U.S. Environmental Protection Agency, the Carpenter-Presley-Tanner Hazardous Substance Account Act (the “California Superfund Act”) the Porter-Cologne Water Quality Control Act (the “California Water Control Act”) and California Air Resources Board (“CARB”). When working with these governmental agencies and entities, it must comply with laws and regulations relating to the formation, administration and performance of contracts. See the heading “Effect of Existing or Probable Governmental Regulations on Our Business, p. 24.
Although Geo Point Nevada believes it has structured its operations to comply with the laws and regulations applicable to it, government officials charged with responsibility for enforcing such laws and regulations are entitled to audit Geo Point Nevada’s operations and may in the future assert that Geo Point Nevada (or transactions in which it is involved) are in violation of these laws, or courts may ultimately interpret such laws in a manner inconsistent with Geo Point Nevada’s interpretation. Therefore, it is possible that future legislation and regulation and the interpretation of existing and future laws and regulations could have a material adverse effect on Geo Point Nevada’s results of operations and business.
Geo Point Nevada’s products and services compete in segments of the environmental and related engineering industries that are highly competitive.
Our competitors include most large and well funded entities whose businesses and subsidiaries focus solely on the industries in which we operate. In this respect, we are at a distinct disadvantage to these competitors. Our services may be limited to smaller projects by reason of our limited financial resources. We believe our competitive position in this industry as a whole is not presently significant. See the heading “Competitive Business Conditions and Our Competitive Position in the Industry and Methods of Competition,” p. 22.
THE SPIN-OFF
Description of the Spin-Off/Restructuring Process of Geo Point Nevada
On June 13, 2012, Geo Point Utah formed Geo Point Nevada and assigned all of the assets and business of its Environmental and Engineering Divisions, including a License Agreement that is believed to comprise hydrocarbon-indicating methods technology, and subject to all related liabilities and certain indemnifications, to Geo Point Nevada. The Environmental and Engineering Divisions had been carried on as part of Geo Point Utah’s business since 1997. Geo Point Nevada was formed and these assets were transferred to it by Geo Point Utah in order to separate these business operations from those carried on by Geo Point Utah in Kazakhstan.
Reasons for the Spin-Off
The Geo Point Utah Board of Directors cited the following business purposes that would be accomplished by their board resolutions and the stock dividend resulting in the spin-off:
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(i)
to protect Geo Point Utah’s Kazakhstan oil refining operations from exposure to potential lawsuits and claims against the Environmental and Engineering Divisions under the U.S. environmental regulatory laws, rules and regulations, violations of which can sometimes result in extreme liability for damages or fines, and clients of these Divisions may have greater incentive to seek recovery from it and its Kazakhstan operations;
(ii)
to allow the respective management of the Environmental and Engineering Divisions and our Kazakhstan operations to focus on their separate enterprises, rather than the combined operations of these businesses;
(iii)
to facilitate each of the respective entities’ abilities to grow and attract funding on their own merits without the complication of explaining unrelated operations, when potential investors in environmental remediation are not necessarily interested in oil refining operations in Kazakhstan and similarly, potential investors in the oil trading and refining business in Kazakhstan may not like the uncertainty associated with an environmental remediation firm in the U.S; and
(iv)
to reduce the logistics associated with managing two separate and distinct businesses that are so geographically distant.
Pro Rata, on a One for One Basis
The spin-off will be pro rata, effected through a stock dividend, based on a one for one ratio of the only class of outstanding securities of Geo Point Utah, common stock, amounting presently to 30,065,000 shares; no change in this number of our outstanding shares is expected to occur prior to the record date, which will be a date that is 10 days from the effective date of our Registration Statement to which this Prospectus is a part or November __, 2012.
Each stockholder at the close of business on the record date will receive one share of Geo Point Nevada common stock for every one share of Geo Point Utah held. Based upon discussions with representatives of FINRA, it is anticipated that FINRA will set an ex-dividend date just prior to the record date, following our advice to them of (i) the effective date of our Registration Statement; (ii) the record date; and (iii) the offering price of our shares contained in this Prospectus. In addition, Geo Point Utah stockholders rights as holders of common stock of Geo Point Utah will continue.
Jeffrey R. Brimhall, the Secretary of Geo Point Nevada, has been appointed to respond to any shareholder questions about the spin-off. Questions and requests for assistance and additional copies of this Prospectus should be directed to Mr. Brimhall, at (801) 810-4662.
Registration Statement and Coordinated Filing with the Utah Division
The spin-off payment date will be on the date that FINRA approves quotations of our common stock on the OTCBB or the OTC Markets, Inc. “Pink Sheets,” which date will be after the effective date of our Registration Statement filed with the Securities and Exchange Commission to which this Prospectus is an Exhibit, and subject to our being given an effective date on our coordinated filing of our Registration Statement by the Utah Division of Securities (the “Utah Division”). We are filing our Registration Statement with the State of Utah because Geo Point Utah has stockholders who are Utah residents, and the Utah Uniform Securities Act, Section 61-1-13(1)(bb), defines an offer or sale of a security to include a “dividend of a security of another issuer,” which would include Geo Point Utah’s dividend by spin-off of the shares of its wholly-owned subsidiary, Geo Point Nevada. We believe that the dividend of Geo Point Nevada shares is exempt from registration in all other states where the stockholders of Geo Point Utah reside.
We have made preliminary filings with FINRA regarding the stock dividend and will advise FINRA’s OTC Corporate Actions unit of the matters outlined in the foregoing paragraph when applicable. FINRA’s OTC Corporate Actions unit has advised us that is has completed the review of our filings and is waiting further advice from us with respect to these matters and the record date and spin-off payment date.
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Book-Entry System of Dividend by Transfer Agent
The shares comprising the stock dividend of Geo Point Nevada common stock will be held in a “book-entry” share transfer and registration system. Instead of receiving physical stock certificates, stockholders on the record date who currently hold stock certificates representing shares of Geo Point Utah common stock will receive (excluding any purchaser after the ex-dividend date), for every share of common stock of Geo Point Utah held, one share of Geo Point Nevada common stock credited to the book-entry accounts established for them by Geo Point Nevada’s transfer and registrar agent, Interwest Transfer Co. Inc. (“Interwest Transfer Company”), whose address and telephone numbers are, respectively: 1981 East Murray-Holladay Road, Salt Lake City, Utah 85117; and 801-272-9294.
Following the spin-off payment date, Interwest Transfer Company will mail an account statement to each registered holder stating the number of shares of Geo Point Nevada common stock credited to such holder’s account. After the spin-off payment date, such holders may request that their shares of Geo Point Nevada common stock be transferred to a brokerage or other account at any time without charge on a one time basis. For stockholders who own Geo Point Utah common stock through a broker or other nominee, their shares of Geo Point Nevada common stock will be credited to their account by the broker or other nominee. All “affiliate” stock certificates issued will bear a “control” legend; and the transfer agent’s records will reflect that those shares are “control” shares subject to resale under Rule 144. All non-“affiliate” share stock certificates will be issued without any legend that would prohibit their sale, hypothecation or other disposition on the effective date of the Registration Statement and the spin-off date. See the caption “Market Price of Common Stock and Related Matters,” p. 26.
No Dissenters’ Rights
Geo Point Utah is not seeking stockholder approval of the spin-off, and holders of Geo Point Utah have no appraisal rights in connection with the spin-off prior to or from and after the spin-off date.
Reason for Furnishing this Prospectus
We are furnishing this Prospectus to provide information to holders of Geo Point Utah who will be issued Geo Point Nevada shares in the spin-off. It is not, and is not to be construed as, an inducement or encouragement to buy or sell any of Geo Point Nevada’s securities or those of Geo Point Utah. The information contained in this Prospectus is believed by us to be accurate as of the date set forth on its cover. Changes may occur after that date, and neither Geo Point Nevada nor Geo Point Utah are required to update the information, except in the normal course of our public disclosure obligations and practices.
Expenses
The expenses of the spin-off are estimated to be approximately $68,500. These expenses will be borne by Geo Point Utah to the spin-off payment date and will primarily include legal fees, accounting fees and transfer agent fees.
Accounting Consequences of the Spin-Off
Following the spin-off, Geo Point Nevada will account for its assets and liabilities based on the historical values at which they were carried by Geo Point Utah immediately prior to the spin-off, as reflected in the financial statements of Geo Point Nevada that accompany this Prospectus (and deducted from Geo Point Utah’s financials statements in such amount).
No Public Market
It is not anticipated that there will be any public market for the Geo Point Nevada shares until the spin-off payment date. See the caption “Market Price of Common Stock and Related Matters,” p. 26.
On the effective date of our Registration Statement and advice in that respect from the Securities and Exchange Commission and the Utah Division, Geo Point Nevada intends to seek public quotations of its common stock on the OTCBB or the OTC Markets, Inc. “Pink Sheets.” Neither Geo Point Utah nor Geo Point Nevada presently has any
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arrangement or understanding with any registered broker-dealer to file a Form 211 with FINRA to seek such quotations; however, Geo Point Nevada intends to contact broker-dealers following the filing of its Registration Statement in this regard, and, to the extent possible, induce any interested broker-dealer to commence the required “due diligence” process necessary for the filing of a Form 211 on our behalf, once our Registration Statement is declared effective by the Securities and Exchange Commission and the Utah Division. There is also no assurance that if any such public quotations of Geo Point Nevada’s common stock are granted, that any viable public trading market will result or become established, nor that these shares will become eligible for deposit with DTC, the lack of which would make any market that may commence or develop be even less viable or liquid.
The spin-off may have a negative effect on the present public market for Geo Point Utah’s shares, which is not an “established trading market,” because the spin-off will reduce the assets and revenue of Geo Point Utah. Geo Point Utah’s shares are presently quoted on the OTCBB under the trading symbol “GNNC.”
If and when quotations are granted by FINRA for the Geo Point Nevada shares on either the OTCBB or the OTC Markets, Inc. “Pink Sheets,” the spin-off payment date shall become effective, and the Geo Point Nevada common stock will be issued to the Geo Point Utah stockholders entitled to such dividend, in book-entry form, with advice from our transfer agent to follow directly, as outlined above.
No Relinquishment in Our Stockholders’ Holdings in Geo Point Utah
Geo Point Utah stockholders will not have to relinquish any of their stockholdings in Geo Point Utah to receive the stock dividend in Geo Point Nevada or to provide any consideration for the shares of Geo Point Nevada they will receive in the spin-off. From and after the spin-off date, stockholders of Geo Point Utah on the record date (excluding any purchaser after the ex-dividend date) will become stockholders of Geo Point Nevada common stock, and their rights as stockholders of Geo Point Utah will continue. Geo Point Nevada will conduct the business operations of the Environmental and Engineering Divisions formerly conducted by Geo Point Utah; and Geo Point Utah will continue to conduct its remaining business operations, primarily consisting of its oil refining facility in Karatau, Kazakhstan.
Certain U.S. Federal Income Tax Consequences of the Spin-Off
The following is a summary of certain material U.S. federal income tax consequences relating to the spin-off. The summary is based on the Internal Revenue Code (the “Code”), the Treasury regulations promulgated thereunder (the “Treasury Regulations”) and interpretations of the Code and Treasury Regulations by the courts and the Internal Revenue Service (the “IRS”), all as they exist as of the date of this Prospectus and all of which are subject to change at any time, possibly with retroactive effect.
This summary does not discuss all tax considerations that may be relevant to stockholders in light of their particular circumstances, nor does it address the consequences to stockholders subject to special treatment under the U.S. federal income tax laws, including, without limitation:
·
Non-U.S. persons;
·
Insurance companies;
·
Dealers or brokers in securities or currencies;
·
Tax-exempt organizations;
·
Financial institutions;
·
Mutual funds;
·
Pass-through entities and investors in such entities;
·
Holders who hold their shares as a hedge or as part of a hedging, straddle, conversion, synthetic security, integrated investment or other-risk reduction transaction;
·
Holders who are subject to the alternative minimum tax; or
·
Holders who acquired their shares upon the exercise of employee stock options or otherwise as compensation.
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In addition, this summary does not address the U.S. federal income tax consequences to Geo Point Utah stockholders who do not hold their shares of common stock as a capital asset. Finally, this summary does not address any state, local or foreign tax consequences.
Geo Point Utah stockholders are urged to consult their own tax advisor concerning the U.S. federal, state and local and any non-U.S. tax consequences of the spin-off.
All Geo Point Utah stockholders should consult their own tax advisors concerning the specific tax consequences of the spin-off of Geo Point Nevada common stock to our stockholders in light of their particular circumstances. This summary is not intended to be, nor should it be construed to be, legal or tax advice to any particular investor.
Geo Point Utah stockholder receiving shares Geo Point Nevada common stock in the spin-off should be treated as if such stockholder had received a distribution in an amount equal to the fair market value of Geo Point Nevada common stock received, which would result in: (1) a taxable dividend to the extent of such stockholder’s pro rata share of Geo Point Utah’s current and accumulated earnings and profits; (2) a reduction in such stockholder’s basis in Geo Point Utah common stock to the extent the amount received exceeds such stockholder’s share of earnings and profits; and (3) a taxable gain to the extent the amount received exceeds the sum of the amount treated as a dividend and the stockholder’s basis in the Geo Point Utah common stock. Any such gain would generally be a capital gain if the Geo Point Utah common stock is held as a capital asset on the distribution date. In addition, Geo Point Utah would recognize a taxable gain to the extent the fair market value of Geo Point Nevada common stock distributed in the spin-off exceeded its tax basis in such common stock.
In connection with the spin-off, Geo Point Utah and Geo Point Nevada will enter into a Tax Matters Agreement under which each will agree to be responsible for certain liabilities and obligations following the spin-off. In general, under the terms of the Tax Matters Agreement, in the event that the spin-off, together were to result in greater taxes as a result of the failure of one party to act or an omission, the party responsible for such failure or omission would be responsible for all taxes imposed on the other resulting from such actions or inactions. For a more detailed discussion, see the caption “Relationship between Geo Point Nevada and Geo Point Utah Following the Spin-Off,” beginning on p. 34. The indemnification obligations of each to the other and its subsidiaries, officers and directors are not limited in amount or subject to any cap. If required to pay on the indemnity under the circumstances set forth in the Tax Matters Agreement, either may be subject to substantial liabilities.
Results of the Spin-Off
Upon completion of the spin-off, Geo Point Nevada will be an independent public company, which will continue to operate its Environmental and Engineering Divisions, while Geo Point Utah will have ownership in its other operating subsidiary, Sinur, through GSM in Karatau, Kazakhstan. For a discussion of the post spin-off businesses, with emphasis on that of Geo Point Nevada, see the heading “Geo Point Nevada; and Related Geo Point Utah Information, as Applicable,” beginning on p. 19. Immediately after the spin-off, Geo Point Nevada expects it will have approximately 158 common shareholders of record of shares of its common stock and approximately 30,065,000 shares of common stock outstanding. The exact number of shares to be issued in the spin-off will be determined based on the number of shares of Geo Point Utah outstanding on the spin-off date. The exact number of Geo Point Nevada shares that will be outstanding immediately after the spin-off will also be known at that time.
DIVIDEND POLICY
Geo Point Nevada does not anticipate, following the spin-off, paying any dividends on its common stock in the foreseeable future because it expects to retain its earnings for use in the operation and expansion of its business. Any such payment and amount of dividends will be subject to the discretion of Geo Point Nevada’s Board of Directors and will depend, among other things, on its financial condition, results of operations, cash requirements, future prospects and other factors that may be considered relevant by Geo Point Nevada’s Board of Directors.
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RELATED PARTY TRANSACTIONS
While the respective Geo Point Nevada and/or Geo Point Utah Boards have not adopted a written Related Party Transaction Policy for the review, approval and ratification of transactions involving the “related parties” of Geo Point Nevada, related parties are deemed to be directors and nominees for director, executive officers and immediate family members of the foregoing, as well as security holders known to beneficially own more than five percent of the common stock. Related party transactions are administered by the appropriate Board acting as a committee of the whole.
In determining whether to approve or ratify a related party transaction, the appropriate Board will consider whether or not the transaction is in, or not inconsistent with, the best interests of the appropriate company. In making this determination, the appropriate Board is required to consider all of the relevant facts and circumstances in light of the following factors and any other factors to the extent deemed pertinent by the committee:
·
The position within or relationship of the related party with Geo Point Nevada and/or Geo Point Utah;
·
The materiality of the transaction to the related party and Geo Point Nevada and/or Geo Point Utah, including the dollar value of the transaction, without regard to profit or loss;
·
The business purpose for and reasonableness of the transaction, taken in the context of the alternatives available for attaining the purposes of the transaction;
·
Whether the transaction is comparable to a transaction that could be available on an arms-length basis or is on terms and conditions offered generally to parties that are not related parties;
·
Whether the transaction is in the ordinary course of Geo Point Nevada and/or Geo Point Utah business and was proposed and considered in the ordinary course of business; and
·
The effect of the transaction on Geo Point Nevada and/or Geo Point Utah business and operations, including on internal control over financial reporting and system of disclosure controls or procedures, and any additional conditions or controls (including reporting and review requirements) that should be applied to such transactions.
Geo Point Utah and Geo Point Nevada believe that any past transactions with their “affiliates” have been at prices and on terms no less favorable to Geo Point Nevada than transactions with independent third parties. Geo Point Nevada may enter into transactions with its “affiliates” in the future. It has only one director, Mr. Lachmar. As such, it intends to continue to enter into such transactions only at prices and on terms no less favorable to Geo Point Nevada than transactions with independent third parties. We have no transactions that require disclosure under Item 404 of Regulation S-K.
GEO POINT NEVADA; AND RELATED GEO POINT UTAH INFORMATION, AS APPLICABLE
The following information is primarily about Geo Point Nevada, and where it is believed to be required or applicable for a better understanding of the information presented, information about similar matters is included regarding Geo Point Utah.
GEO POINT UTAH OVERVIEW
Geo Point Utah was formed as a DBA of its founder, William C. Lachmar, in 1997 and then incorporated under the laws of the State of California in 2002. In October 2006, it changed its state of incorporation from California to Utah by merging with a wholly-owned Utah subsidiary formed for that purpose. In May, 2010, it entered into a Share Exchange Agreement by which it acquired GSM, which had recently acquired Sinur Oil LLP, a Kazakhstan oil refining company with operations in southern Kazakhstan.
Prior to the acquisition of GSM and its succession to the Sinur operations, Geo Point Utah was primarily engaged in the Environmental and Engineering Divisions’ business operations that were transferred to Geo Point Nevada on June 13, 2012, and which are described below in the “Geo Point Nevada Overview.”
Following the spin-off, Geo Point Utah intends to continue to operate and expand its oil refining facility located in Karatau, Kazakhstan. The refinery is designed to process crude oil into diesel; gasoline; and mazut, a fuel oil. It
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currently sells the refined products domestically, and if and when current export restrictions are lifted, it intends to export these products to the surrounding regions as well.
Its primary objective will be the achievement of profitability and self-sustaining growth by:
·
sourcing high-quality crude oil at favorable prices from local oil fields;
·
refining oil at our Karatau, Kazakhstan, micro-refinery; and
·
selling the finished products, which consist of diesel, petroleum, and mazut, both to domestic and international customers.
Geo Point Utah is a “reporting issuer” under the Exchange Act, and is required to file reports with the Securities and Exchange Commission under Section 13 of the Exchange Act.
GEO POINT NEVADA
Special Note Regarding Forward-Looking Statements
This Prospectus includes forward-looking statements based on management’s beliefs, assumptions and plans for the future, information currently available to management and other statements that are not historical in nature. Forward-looking statements include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” estimate,” “consider,” or similar expressions are used. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions, including among others: a general economic downturn; a downturn in the securities markets; regulations that affect trading in the securities of “penny stocks”; the enactment of United States or foreign laws, rules and regulations that could have a materially adverse impact on current and intended operations; and other risks and uncertainties.
Our future results and stockholder values may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results and values are beyond our ability to control or predict. We may be required to update these forward-looking statements from time to time as circumstances change.
References to “we,” “our” or “us” and words of similar import under this heading refer to “Geo Point Nevada,” unless the context implies otherwise.
BUSINESS
The Environmental and Engineering Divisions comprised the initial operations of Geo Point Utah at its inception and were commenced as a “DBA” in 1997, by Geo Point Utah’s founder, William C. Lachmar, our President and sole director.
The business operations of the Environmental Division are primarily comprised of services related to identifying any recognized environmental condition (“REC”) or the lack thereof as provided by the federal, state or local governmental agencies in any real property of any owner, potential owner or lender, governmental agency or other person that may have a concern or may have or be seeking an interest in the subject property. If an REC is identified to exist, then we will provide project management and engineering conclusions and recommendations necessary to remediate the property and bring it back into regulatory compliance based upon the California tables of acceptable levels of product contamination. Acceptable levels are further qualified based upon residential, commercial and industrial zoned properties, with the residential levels being the most stringent. Examples of contaminations that result in concern include those that are inadvertently or otherwise inoculated into the shallow subsurface soils or groundwater, like gasoline, diesel fuel, dry cleaning fluid, rocket fuel, arsenic, mercury, lead and other toxic substances.
The Engineering Division has provided consulting and compliance services for new utility installation and general site erosion control for housing tracts and updating service station underground storage tanks and dispensing systems to comply with continually changing California Air Resources Board (“CARB”) regulations. These services mostly comprise subsurface trench work where underground utilities are installed such as electrical, fiber optic, water and gas. Other engineering services are for gasoline service stations where updated monitoring
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equipment must be installed or the monitoring equipment shows an error code that needs to be corrected before the gas station can begin to pump gas again; or where more crash posts must be installed around a propane tank, other fuel or similar dispenser island or a like setting.
The Environmental and Engineering Divisions’ revenues represented approximately 11% and 34% of Geo Point Utah’s revenues for the quarter ended June 30, 2012, and the fiscal year ended March 31, 2012. See the caption “Financial Statements” below.
Geo Point Nevada intends to continue the business operations previously conducted by Geo Point Utah through the Environmental and Engineering Divisions, along with attempting to fund additional research of the HI Technology (as defined below), as to which no assurance can be given.
Principal Products or Services and their Markets
These Divisions’ services generally include:
·
Construction and Emergency Response;
·
Demolition, Remediation and Restoration;
·
Subsurface Investigation;
·
Water and Wastewater Treatment;
·
Engineering and Environmental Consulting;
·
Environmental Permitting and Compliance; and
·
Litigation Support.
Distribution Methods of the Products or Services
We do not advertise our services in any publications, and we rely primarily on past customers for repeat business, including large property management companies, wholesale fuel distributors and automobile dealers, among others, for referrals. Most of our referrals come from two long standing clients; or three major commercial real estate management companies in California; or two health specialists to whom we pay commissions for referrals.
Typically, a client contacts us about an environmental related issue on a particular parcel of real property. The client could be the property owner or lender, seeking information on whether there is an adverse environmental issue related to the real property, and if so, how it can be remediated; or a prospective purchaser of the particular parcel of real property or a governmental agency, seeking similar information. We receive contacts on properties that have known contamination and those desiring to determine if there is any contamination. If engaged, we develop an environmentally sound investigation to be conducted under our direction as a HAZ-MAT specialist contractor with a Licensed Professional Geologist on staff, like our President, William C. Lachmar. Once the investigational strategy is developed, and we are engaged, necessary soil samples are taken and submitted by us to a California Certified Environmental Laboratory.
All field work that requires a drill rig is subcontracted, though some drill work can be hand drilled through the use of a rotor hammer, which is operated by Mr. Lachmar.
All chemicals required for our services are supplied by subcontractors and are readily available; we do not store any regulated chemicals or waste at our facilities; nor do we manufacture any such products.
We have no real suppliers of products other than some environmental hand held equipment that is competitively marketed by numerous distributors, and there is little chance that any equipment that is necessary to conduct our environmental services would not be available to rent or purchase.
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Competitive Business Conditions and Our Competitive Position in the Industry and Methods of Competition
Our competitors include most large and well funded entities whose businesses and subsidiaries focus solely on the industries in which we operate. In this respect, we are at a distinct disadvantage to these competitors. Our services may be limited to smaller projects by reason of our limited financial resources and staff. We believe our competitive position in this industry as a whole is not presently significant.
We also believe our fees for these services are usually lower than what the larger companies in this industry charge for similar services because of our lower overhead costs; and our lower costs for professional oversight, which is provided by our President, Mr. Lachmar. With just one employee, who overseas our projects, the number of projects we can handle at one time is limited, based upon oversight requirements.
Our principal competitors are AECOM Technology Corporation, URS, Kleinfelter, Levine Fricke, CH2M Hill Companies, Ltd., The Reynolds Group and Geosyntec, most all of which are larger, well financed multinational publicly-held companies or are divisions or subsidiaries of large, well financed multinational companies.
Seasonal Nature of Our Business
The second quarter of our fiscal year (July 1 to September 30) is typically our strongest quarter. The U.S. federal government has historically authorized more work during the period preceding the end of its fiscal year, September 30. In addition, many U.S. state governments with fiscal years ending on June 30 have historically accelerated spending during the fiscal first quarter when new funding budgets become available. There is no assurance that this trend will continue.
Insurance and Risk Management
Risk management is an integral part of our project management approach and our project execution process. We maintain insurance covering professional liability and claims involving bodily injury and property damage, with a maximum of $1,000,000 per occurrence and $2,000,000 in the aggregate. We consider our present limits of coverage, deductibles and reserves to be more than adequate for our present business operations, based upon our assessment of the small number (one claim during the past two fiscal years and to the date hereof) of past claims made against us; this particular claim was resolved for approximately $2,800. Wherever possible, we endeavor to eliminate or reduce the risk of loss on a project through the use of quality assurance/control, risk management, workplace safety and similar methods. Our subcontractors are also all required to maintain adequate insurance on our projects.
Dependence on One or a Few Major Customers
During the quarter ended June 30, 2012, services provided to two customers accounted for 85% and 15% of total revenues. During the quarter ended June 30, 2011, services provided to two customers accounted for 56.9% and 33.5% of total revenues. As of June 30, 2012, one customer accounted for 100% of the accounts receivable balance.
During the fiscal year ended March 31, 2012, services provided to one customer accounted for 49.8% of total revenues. During the year ended March 31, 2011, services provided to three customers accounted for 41.6%, 16.7% and 11.3% of total revenues. As of March 31, 2011, three customers accounted for 53%, 19.8% and 19.6% of the accounts receivable balance. Management believes the loss of these customers would not have a material impact on us.
See Note 2 of our financial statements, which accompany this Prospectus as Appendix F.
We have two main subcontractors that are almost always a part of any environmental services conducted by us, which are the drillers and sample analysis laboratories; however, there are numerous companies that provide these services, and we would always be able to subcontract these services to others because the drilling and sample analysis businesses are very competitive, along with the prices for these services. We do not anticipate any adverse effect if our main subcontractors ceased operations. There are many other subcontractors that would be available to
22
provide these services. Our current principal subcontractors are ASTECH Environmental Services, Inc., a drilling contractor, and Alpha Scientific Corporation, a laboratory analysis contractor.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, including Duration
We are a California General Engineering, Construction and Hazardous Materials Contractor (License No. 920887).
We do not hold any patents; however, we have proprietary technology applications related to our hydrocarbon- indicating methods and technology (the “HI Technology”), which was licensed by Mr. Lachmar to our predecessor parent, Geo Point Utah and assigned to us on our formation on June 13, 2012.
The material terms of the License Agreement are as follows:
Mr. Lachmar granted to us an exclusive, world-wide license to use the HI Technology for commercial exploitation, including subleasing the HI Technology to other parties.
The intellectual property associated with the HI Technology, as well as any additional related intellectual property developed by Mr. Lachmar, is included within the scope of the license. Currently, the intellectual property is maintained as trade secrets and protected by the confidentiality provisions of the License Agreement; however, any patents, trademarks or copyrights or applications therefor, related to the HI Technology, will also be included within the scope of the License Agreement.
Upon execution of the License Agreement, our predecessor paid Mr. Lachmar a one-time license fee of $125,000.
Mr. Lachmar retained the right to exploit the Hi Technology and processes.
The License Agreement may be terminated by either party, subject to a 60-day notice period, upon a breach of the License Agreement that remains uncured during the notice period.
The License Agreement may be terminated by Mr. Lachmar in the event we become insolvent or unable to pay our debts as they come due, become the subject of a bankruptcy proceeding (voluntary or involuntary), other than a reorganization, or enter into a general assignment for the benefit of our creditors.
The HI Technology underlying the License Agreement, which is related to petroleum geology, has not been promoted to customers and requires substantial research and development of hydrocarbon-indicating methods and technology. No funds were expended for research and development of the HI Technology during the fiscal years ended March 31, 2012, and 2011. We intend to use our proprietary HI Technology to become a technology leader in oil and gas exploration services. Following such research and development, as we enter the commercialization stage of the HI Technology development, we must acquire projects and business opportunities that build the credibility of the HI Technology and develop our ability to deliver quality oil and gas exploration prospect areas. Substantial additional funding will be required for research and development respecting the efficacy of the HI Technology to locate oil and gas prospect areas. It is estimated that approximately $15,000 will be needed for laboratory equipment to analyze attendant microwaves produced by the attendant process; and that an additional sum of approximately $80,000 will be needed for testing and software development for fast video processing boards. Even then, assuming the HI Technology functions as hoped, the process to determine the best locations to drill for oil and gas will take about two years, after recording data and quantifying it, following the examination of zones or areas in oil and gas fields that are known to have oil and gas reserves. The professional we had intended to utilize for our research and development of this technology has been and continues to be seriously ill. We are attempting to find another person whom we believe has the qualifications necessary to assist in the research and development of this technology; however, with funding constraints, it is not anticipated that this research and development will begin in the near future.
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Need for any Governmental Approval of Principal Products or Services
We have the necessary licenses and qualifications, singly or through our subcontractors, to conduct our business operations, without government approval, except to the extent of compliance with applicable governmental regulations related to our business, which are summarized below under the heading “Effect of Existing or Probable Governmental Regulations on Our Business,” below.
Effect of Existing or Probable Governmental Regulations on Our Business
Federal and State Law
We are regulated in a number of fields in which we operate. In the United States, we deal with numerous U.S. and California state governmental agencies and entities, including the U.S. Environmental Protection Agency, the Carpenter-Presley-Tanner Hazardous Substance Account Act (the “California Superfund Act”), the Porter-Cologne Water Quality Control Act (the “California Water Control Act”) and CARB. When working with these governmental agencies and entities, we must comply with laws and regulations relating to the formation, administration and performance of our contracts.
Risk assessment practices under these acts include the most current sound scientific methods for data evaluation, exposure assessment, toxicity assessment and risk characterization, documentation of all assumptions, methods, models and calculations used in the assessment including any health risk assessment. These assessments generally include:
·
Evaluation of risks posed by acutely toxic hazardous substances based on levels at which no known or anticipated adverse effects on health will occur, with an adequate margin of safety.
·
Evaluation of risks posed by carcinogens or other hazardous substances that may cause chronic disease based on a level that does not pose any significant risk to health.
·
Consideration of possible synergistic effects resulting from exposure to, or interaction with, two or more hazardous substances.
·
Consideration of the effect of hazardous substances upon subgroups that comprise a meaningful portion of the general population, including, but not limited to, infants, children, pregnant women, the elderly, individuals with a history of serious illness, or other subpopulations, that are identifiable as being at greater risk of adverse health effects due to exposure to hazardous substances than the general population.
·
Consideration of exposure and body burden level that alter physiological function or structure in a manner that may significantly increase the risk of illness and of exposure to hazardous substances in all media, including, but not limited to, exposures in drinking water, food, ambient and indoor air, and soil.
·
If currently available scientific data is insufficient to determine the level of a hazardous substance at which no known or anticipated adverse effects on health will occur, with an adequate margin of safety, or the level that poses no significant risk to public health, the risk assessment prepared in conjunction with a response action taken or approved shall be based on the level that is protective of public health, with an adequate margin of safety. This level shall be based exclusively on public health considerations; shall, to the extent scientific data are available, take into account the factors set forth; and shall be based on the most current principles, practices and methods used by public health professionals who are experienced practitioners in the fields of epidemiology, risk assessment, fate and transport analysis, and toxicology.
Compliance with federal, state and local laws enacted for the protection of the environment has to date had no significant effect on our capital expenditures, earnings or competitive position. These costs are an integral part of the services that we provide. In the future, compliance with environmental laws could materially adversely affect us. We will continue to monitor the impact of such laws on our business and will develop appropriate compliance programs.
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Exchange Act
Emerging Growth Company
We may be deemed to be an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or “JOBS Act.” As long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not an “emerging growth company,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and exemptions from the requirements of holding an annual nonbinding advisory vote on executive compensation and seeking nonbinding stockholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”
Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
We will remain an “emerging growth company” for up to five years, although we would cease to be an “emerging growth company” prior to such time if we have more than $1 billion in annual revenue, more than $700 million in market value of our common stock is held by non-“affiliates” or we issue more than $1 billion of non-convertible debt over a three-year period.
We will become subject to the reporting requirements of Section 15(d) of the Exchange Act, subject to the disclosure requirements of Regulation S-K of the Securities and Exchange Commission, as a “smaller reporting company,” on the effective date of our Registration Statement. The designation of being a “smaller reporting company” will relieve us of some of the more detailed informational requirements of Regulation S-K.
Sarbanes/Oxley Act
We will also become subject to the Sarbanes-Oxley Act of 2002. The Sarbanes/Oxley Act created a strong and independent accounting oversight board to oversee the conduct of auditors of public companies and strengthens auditor independence. It also requires steps to enhance the direct responsibility of senior members of management for financial reporting and for the quality of financial disclosures made by public companies; establishes clear statutory rules to limit, and to expose to public view, possible conflicts of interest affecting securities analysts; creates guidelines for audit committee members’ appointment, compensation and oversight of the work of public companies’ auditors; management assessment of our internal controls; prohibits certain insider trading during pension fund blackout periods; requires companies and auditors to evaluate internal controls and procedures; and establishes a federal crime of securities fraud, among other provisions. Compliance with the requirements of the Sarbanes/Oxley Act will substantially increase our legal and accounting costs.
Exchange Act Reporting Requirements
Section 15(d) of the Exchange Act requires all companies that have filed a registration statement under the Securities Act to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the Securities and Exchange Commission for a period of one year from the effective date of the Registration Statement, and we will be required to timely disclose certain material events (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a Current Report on Form 8-K. We intend to file a Form 8-A with the Securities and Exchange Commission before the expiration of this one year period so that we will become a “reporting issuer” under Section 13 of the Exchange Act.
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Research and Development Costs During the Last Two Fiscal Years
We had no research and development costs during quarter ended June 30, 2012, or our last two fiscal years ended March 31, 2012, and 2011.
Cost and Effects of Compliance with Environmental Laws
We do not maintain any hazardous chemicals on-site, and those chemicals we utilize in our remediation services are shipped directly to the impacted site from the supplier of chemicals, with all the proper manifests by a certified Hazardous Materials transporter. These chemicals are available from a wide array of suppliers.
We neither store nor manufacture any materials that require us to maintain any federal, state or local permits.
Accordingly, the cost and effects of compliance with environmental laws on our business is negligible.
Employees
We have only one employee, Mr. Lachmar, our President; our services are primarily subcontracted, and are performed under the supervision of Mr. Lachmar, a Registered Geologist in the States of California and Texas.
PROPERTIES
Our facilities are located at 1306 E. Edinger Ace, #C, Santa Ana, California 92705. Our telephone and facsimile numbers are, respectively, (714) 665-8777; and (714) 665-8778. These facilities consist of approximately 800 square feet of office space, 2,000 square feet of work shop and 2,000 square feet of fenced and protected yard space, all leased on a month-to-month basis, for a total of $1,000 per month. These facilities are shared with one of our suppliers of drilling and soil samples for our Environmental Division’s remediation business operations.
LEGAL PROCEEDINGS
We are not a party to any pending legal proceeding. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against us. No director, executive officer or “affiliate” of ours or owner of record or beneficially of more than 5% of our common stock is a party adverse to us or has a material interest adverse to us in any proceeding.
MARKET PRICE OF COMMON STOCK AND RELATED MATTERS
Market Information
We intend to seek public quotations of our common stock on the OTCBB or the OTC Markets, Inc. “Pink Sheets” and may request that a registered broker-dealer to conduct its required “due diligence” on us and our business operations and submit required documentation to FINRA during the review of our Registration Statement by the Securities and Exchange Commission and the Utah Division; however, no assurance can be given that any registered broker-dealer will agree to commence any “due diligence” review of us or file a Form 211 with FINRA prior to the effective date of our Registration Statement, or that if any such broker-dealer does make such a filing, that FINRA would review the Form 211 until our Registration Statement was effective. We do not presently have any arrangement or understanding with any registered broker-dealer to file a Form 211 with FINRA to seek such quotations. There is also no assurance that if any such public quotations of our common stock are granted, that any viable public trading market will result or become established, nor that these shares will become eligible for deposit with the DTC, the lack of which would make any market that may commence or develop be even less viable or liquid. We believe, based upon conversations with DTC, that we will have the same DTC eligibility as Geo Point Utah, “Full DTC Fast,” assuming that our Registration Statement is declared effective by the Securities and Exchange Commission and FINRA allows us to have our common stock quoted on the OTCBB or the OTC Markets, Inc. “Pink Sheets.”
For additional information about any public market that may commence on our common stock, see the caption “The Spin-Off,” beginning on p. 14.
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Shares Eligible for Future Sales
After completion of the spin-off, there will be approximately 30,065,000 Geo Point Nevada shares of its common stock outstanding, based upon the number of shares of Geo Point Utah’s common stock outstanding on the date of this Prospectus. All of these shares will be freely transferable without restriction under the Securities Act except for shares that are owned by our “affiliates,” as that term is defined in Rule 144 under the Securities Act, which includes Geo Point Nevada’s directors, executive officers and significant stockholders. Shares of Geo Point Nevada’s common stock held by “affiliates” may not be sold unless they are registered under the Securities Act or are sold pursuant to an exemption from registration, including an exemption contained in Rule 144 under the Securities Act. The spin-off shares are being registered, and therefore, the holding period under Rule 144 is not applicable to the shares of Geo Point Nevada being received in the spin-off. For further information on Rule 144 resale limitations in general and those specifically related to “affiliates,” see the heading “Rule 144,” which follows directly. Gafur Kassymov, the Chairman of the Board of Directors of Geo Point Utah, will own 10,000,000 shares or approximately 33.3% of the outstanding common stock of Geo Point Nevada following the completion of the spin-off. The sale of any of these shares could have a substantial adverse impact on any public market that develops for our shares; and the possibility of the sale of any of Mr. Kassymov’s shares could pose an adverse ceiling on the trading price of our shares.
Rule 144
The following is a summary the terms and provisions of Rule 144, which is modified in its entirety by reference to Rule 144, which can be accessed in the Securities and Exchange Commission website at www.sec.gov:
|
|
Affiliate or Person Selling on Behalf of an Affiliate |
Non-Affiliate (and has not been an Affiliate During the Prior Three Months) |
|
Restricted Securities of Reporting Issuers |
During six-month holding period – no resales under Rule 144 Permitted.
After Six-month holding period – may resell in accordance with all Rule 144 requirements including: · Current public information, · Volume limitations, · Manner of sale requirements for equity securities, and · Filing of Form 144. |
During six- month holding period – no resales under Rule 144 permitted.
After six-month holding period but before one year – unlimited public resales under Rule 144 except that the current public information requirement still applies.
After one-year holding period – unlimited public resales under Rule 144; need not comply with any other Rule 144 requirements. |
|
Restricted Securities of Non-Reporting Issuers |
During one-year holding period – no resales under Rule 144 permitted.
After one-year holding period – may resell in accordance with all Rule 144 requirements including: · Current public information, · Volume limitations, · Manner of sale requirements for equity securities, and · Filing of Form 144.
|
During one-year holding period – no resales under Rule 144 permitted.
After one-year holding period – unlimited public resales under Rule 144; need not comply with any other Rule 144 requirements. |
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In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated), including an “affiliate,” who beneficially owns “restricted securities” of a “reporting company” may not sell these securities until the person has beneficially owned them for at least six months. Thereafter, “affiliates” may not sell within any three-month period a number of shares in excess of the greater of: (i) 1% of the then outstanding shares of common stock as shown by the most recent report or statement published by the issuer; and (ii) the average weekly reported trading volume in such securities during the four preceding calendar weeks.
Sales under Rule 144 by Geo Point Nevada’s “affiliates” also will be subject to restrictions relating to manner of sale, notice and the availability of current public information about us and may be effected only through unsolicited brokers’ transactions. For the purpose of determining whether Geo Point Nevada has the “current public information” publicly available as required for sales under Rule 144 by “affiliates,” Geo Point Nevada must have been subject to the reporting requirements of the Exchange Act for at least 90 days and then be “current” in all of its required annual and quarterly report filings. To comply with this requirement, no “affiliate” can sell any of the Geo Point Nevada shares until the passage of 90 days from the effective date of this Registration Statement, and Geo Point Nevada must then be “current” in its required filings.
Persons not deemed to be Geo Point Nevada’s “affiliates” who have beneficially owned “restricted securities” for at least six months but for less than one year may sell these securities, provided that current public information about Geo Point Nevada is also publicly available. After beneficially owning “restricted securities” for one year, Geo Point Nevada’s non-“affiliates” stockholders may engage in unlimited resales of such shares.
Neither “affiliates” nor non-“affiliates” need to comply with the holding period requirements of Rule 144 with respect to the shares of Geo Point Nevada received in the spin-off.
Shares received by Geo Point Nevada’s “affiliates” in the spin-off may be “controlled securities” rather than “restricted securities.” “Controlled securities” are subject to the same volume limitations as “restricted securities” but also are not subject to holding period requirements.
No prediction can be made as to the effect, if any, that market sales of restricted or freely trading shares will have on the market price of its common stock prevailing from time to time. Nevertheless, sales of substantial amounts of common stock, or the perception that such sales could occur, could adversely affect prevailing market prices for Geo Point Nevada’s common stock and could impair its future ability to raise capital through an offering of its equity securities.
Approximate Number of Stockholders
Following the spin-off, we will have approximately 158 stockholders of record.
Dividends
We have not declared any cash dividends with respect to our common stock, and do not intend to declare dividends in the foreseeable future. Our dividend policy cannot be ascertained with any certainty at this time because of our potential lack of any profitable operations. There are no material restrictions limiting, or that are likely to limit, our ability to pay dividends.
Securities Authorized for Issuance under Equity Compensation Plans
We have no equity, incentive, pension or other compensatory plans that have or are presently contemplated to be adopted by our Board of Directors; however, we may adopt one or more of these equity compensation plans in the future to maintain or attract key personnel.
Recent Sales of Unregistered Securities
With the exception of the issuance of 1,000 shares of our common stock at inception to Geo Point Utah in consideration of the transfer of the Environmental and Engineering Divisions and the HI Technology License Agreement, subject to all liabilities and our indemnification of Geo Point Utah from and against all liabilities of our
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Environmental and Engineering Divisions, we have not issued any other shares of our common stock. The Board Resolutions provided for the forward split of the initial 1,000 shares issued in a ratio that would be equal to the number of outstanding shares of Geo Point Utah so that the stock dividend of our common stock to Geo Point Utah’s stockholders would be on a one share for one share basis, or a total of 30,065,000 shares, based upon the number of outstanding shares of Geo Point Utah common stock on the date of this Prospectus.
The shares issued at our inception were issued pursuant to Section 4(2) of the Securities Act, which provides an exemption from the registration provisions of Section 5 of the Securities Act for “transactions by an issuer not involving a public offering.” The Company is a Utah corporation. Section 61-1-14(2)(i) of the Utah Uniform Securities Act exempts “an offer or sale of a preorganization certificate or subscription,” which is the method utilized by us in issuing our original shares to Geo Point Utah.
We have had no other transactions in our shares.
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS
Our executive officers and directors and their respective ages, positions and biographical information are set forth below.
|
Name |
Positions Held |
Date of Election or Designation |
Date of Termination or Resignation |
|
William C. Lachmar |
President Director and Treasurer |
June 13, 2012 |
* |
|
Jeffrey R. Brimhall |
Secretary |
June 13, 2012 |
* |
*
Presently serve in the capacities indicated.
Background and Business Experience
William C. Lachmar. Mr. Lachmar served as the Manager of the Environmental and Engineering Divisions of Geo Point Utah and served as its President and a director from its inception in 1997 to his respective resignations from these positions on October 28, 2010, and March 29, 2010. He also served as its CEO, CFO and Secretary from May 9, 2006, until his resignations on March 29, 2010 (as CEO and CFO) and August 14, 2007 (Secretary). Mr. Lachmar is a registered geologist in both California and Texas, and is a member of the American Association of Petroleum Geologists, the Association of Ground Water Scientists and Engineers, the Society of Environmental Geoscientists, and the Houston Geological Society. Mr. Lachmar received a B.S. in geology from the University of California at Los Angeles in 1979. Mr. Lachmar is 56 years of age.
Jeffrey R. Brimhall. Mr. Brimhall currently serves as our Secretary and is a director of Geo Point Utah and its Secretary. He served as the CFO of Geo Point Utah from March 29, 2010, until December 14, 2010. Mr. Brimhall has several years of accounting and financial reporting experience. He is currently a Financial Reporting Supervisor with Resolute Energy Corp. of Denver, Colorado, and was previously an audit supervisor and audit associate with Hein & Associates LLP and Grant Thornton LLP, respectively. Mr. Brimhall earned his B.S. in Accounting from Brigham Young University in 2005 and is a Certified Public Accountant licensed in the State of Colorado. Mr. Brimhall is also a director of Caspian Services, Inc. Mr. Brimhall is 31 years of age.
Key Employees
William C. Lachmar, in addition to be our President, Manager and sole director, is also the primary reason and contact person customers of the Environmental and Engineering Divisions transferred by Geo Point Utah to Geo Point Nevada refer business to or contract for business with these Divisions. If Mr. Lachmar were to leave or otherwise become unavailable to manage the business operations of Geo Point Nevada for any other reason, it would seriously harm Geo Point Nevada’s current and future business prospects and operating results and financial condition.
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Family Relationships
There are no family relationships between our directors and executive officers.
Involvement in Certain Legal Proceedings
During the past 10 years, neither Mr. Lachmar nor Mr. Brimhall: has filed a petition under federal bankruptcy laws or any state insolvency laws, nor had a receiver, fiscal agent or similar officer appointed by a court for either or any business either had an interest in or in which either was an executive officer at or within two years before the time of such filing; was convicted in a criminal proceeding or is named in a pending criminal proceeding (excluding traffic violations and other minor offenses); was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining either from any violations of any activity regulated by the Commodity Futures Trading Commission, FINRA or any other self regulatory agency, the Securities and Exchange Commission, the banking or savings and loan industries or the insurance industry or engaging in any type of business practice; or was found by a court of competent jurisdiction in a civil action by the Securities and Exchange Commission, the Commodity Future Trading Commission or other agency or person to have violated any federal or state securities, commodities, banking regulation or law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been subsequently reversed, suspended, or vacated.
Directorships in other Companies
William C. Lachmar served on the Board of Directors of Geo Point Utah from its inception as a corporation in 2002 until March 29, 2010. Geo Point Utah became a “reporting issuer” under the Exchange Act in 2008.
Jeffrey R. Brimhall has served as a director of Geo Point Utah since March 29, 2010; and has served on the Board of Directors of Caspian Services, Inc., a “reporting issuer” under the Exchange Act, since 2010.
Promoters and Control Persons
Based upon the disclosures of Geo Point Utah filed in its reports and registration statements with the Securities and Exchange Commission and information provided by the directors and executive officers of Geo Point Utah and Mr. Lachmar, any of whom may be deemed to be or have been a promoter or control person of Geo Point Utah or Geo Point Nevada from their respective inceptions, during the past 10 years, none of these persons has been the subject of any of the legal proceedings described under the heading “Involvement in Certain Legal Proceedings” above.
Corporate Governance
Nominating Committee. We have not established a Nominating Committee because we have only one director and two executive officers, and we believe that we are able to effectively manage the issues normally considered by a Nominating Committee.
If we do establish a Nominating Committee, we will disclose this change to our procedures in recommending nominees to our board of directors.
Audit Committee. We have not established an Audit Committee because we have only one director and two executive officers and our business operations are conducted in one facility. We believe that we are able to effectively manage the issues normally considered by an Audit Committee.
If we do establish an Audit Committee, we will disclose this change to our procedures in recommending nominees to our board of directors.
Compensation Committee. We have not established a Compensation Committee or committee performing similar functions. We believe that we are able to effectively manage the issues normally considered by a Compensation Committee where we only have one employee, our President and Manager, William C. Lachmar, who is also our sole director.
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EXECUTIVE COMPENSATION
Executive Officers and Directors
William C. Lachmar received compensation as the Manager of Geo Point Utah’s Environmental and Engineering Divisions of $7,500 during the quarter ended June 30, 2012; $30,000 during the fiscal year ended March 31, 2012; and $20,353 during the fiscal year ended March 31, 2011. We anticipate that Mr. Lachmar will receive approximately the same compensation that he was paid in fiscal 2012 by Geo Point Utah in fiscal 2013 for his service as our President and Manager. Mr. Lachmar is the sole director of Geo Point Nevada, and it is not anticipated that he will receive any compensation for his services as a director. Medical insurance was provided to Mr. Lachmar during the quarter ended June 30, 2012, and the fiscal years ended March 31, 2012, and 2011, respectively, of $1,758, $3,516 and $3,516.
Jeffrey R. Brimhall was not compensated for his services to Geo Point Utah as a director or as its Secretary in fiscal 2012 or fiscal 2011; and there are no present arrangements or understandings with Mr. Brimhall regarding payment of compensation for his services as our Secretary of Geo Point Nevada during fiscal 2013.
The following Summary Compensation Table reflects the aggregate executive compensation paid by Geo Point Nevada during the last two fiscal years ended March 31, 2012, and 2011, and the position for which such compensation was paid:
Summary Compensation Table
|
Name and Principal Position
(a) |
Year or Period
(b) |
Salary ($)
(c) |
Bonus ($)
(d) |
Stock Awards ($)
(e) |
Option Awards ($)
(f) |
Non-Equity Incentive Plan Compensation ($) (g) |
Nonqualified Deferred Compensation ($) (h) |
All Other Compensation ($)
(i) |
Total Earnings ($)
(j) |
|
William C. Lachmar, Manager |
0/30/12 3/31/123/31/11 |
$ 7,500 $30,000$20,353 |
0 0 0 |
0 0 0 |
0 0 0 |
0 0 0 |
0 0 0 |
0 0 0 |
0 0 0 |
Outstanding Equity Awards
We have no equity compensation or similar plans. We may be required to adopt an equity compensation plan or similar incentive plan to attract and maintain our present management and such additional employees as our business operations may require. We have no present plans or arrangements to do so.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 24, 2012, information concerning expected beneficial ownership of our common stock after giving effect to the spin-off by:
·
Each person or entity known to us who will beneficially own more than five percent of the outstanding shares of Geo Point Nevada’s common stock;
·
Each person who we currently know will be one of Geo Point Nevada’s directors or named executive officers at the time of the spin-off; and
·
As a group, all persons who Geo Point Nevada currently knows will be Geo Point Nevada directors and executive officers at the time of the spin-off.
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The following information:
·
Gives effect to the spin-off as if it had occurred on October 24, 2012, on which date 30,065,000 shares of Geo Point Nevada common stock were outstanding; and
·
Reflects a one for one (100%) ratio of one share of Geo Point Nevada common stock for every one share of Geo Point Utah on the record date (excluding ex-dividend date holders).
The actual number of shares of common stock outstanding as of the spin-off payment date may differ to the extent that new shares of Geo Point Utah common stock are issued or repurchased between October 24, 2012, and the record date and if (while unlikely) the assumed conversion ratio differs from the actual ratio. If the number of outstanding shares of Geo Point Utah common stock increases to more than 30,065,000 shares as of the record date, the number of shares to be issued to the Geo Point Utah stockholders in connection with the spin-off will increase accordingly, and Geo Point Nevada will amend the Registration Statement of which this Prospectus is a part to increase the number of shares registered thereunder.
Based on information furnished to us or on filings made under the Exchange Act by or on behalf of such person or entity, except as otherwise indicated in the footnotes below, Geo Point Nevada believes that each person or entity has sole voting and investment power with respect to the shares of common stock set forth opposite such person’s or entity’s name. Beneficial ownership is determined in accordance with the General Rules and Regulations of the Securities and Exchange Commission and generally attributes beneficial ownership of securities to persons who possess sole or shared voting or investment power with respect to such shares. Except as otherwise noted below, the address for each person listed in the following table is 2319 Foothill Drive, Suite 160, Salt Lake City, Utah 84109, with the exception of Mr. Lachmar, whose address is 1306 E. Edinger Ace, #C, Santa Ana, California 92705.
The following table summarizes certain information with respect to the beneficial ownership of Geo Point Nevada’s shares, immediately after the spin-off:
|
Name of Beneficial Owner (1),(2) and (3) |
|
Amount and Nature of Beneficial Ownership |
|
Owner % |
Late Reports |
|
|||
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10% Stockholders: |
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Gafur Kassymov (2) |
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10,000,000 |
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33.3% |
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Directors: |
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|
|
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|
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William C. Lachmar |
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0 |
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0 |
0 |
|
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Executive Officers: |
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|
|
|
|
|
|||
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William C. Lachmar, Chief Executive Officer
|
|
0 |
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0 |
0 |
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|||
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Jeffrey R. Brimhall, Secretary (2) |
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0 |
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0 |
0 |
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|||
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All directors and executive officers as a group (two persons) |
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0 |
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0 |
0 |
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All Other Shareholders |
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20,065,000 |
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66.7 % |
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Total Shares in Issue |
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30,065,000 |
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100.0% |
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(1) |
The address of each director and officer is c/o Geo Point Technologies, Inc., 2319 Foothill Drive, Suite 160, Salt Lake City, Utah 84109. |
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(2) |
Gafur Kassymov is the President and a director and Chairman of the Board of Geo Point Utah, and the General Director of Sinur. |
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(3) |
Jeffrey T. Jensen, who is the President and a director of Geo Point Utah, owns 16,000 shares of Geo Point Utah and assuming he retains these shares, will receive 16,000 shares of Geo Point Nevada in the spin-off dividend, |
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CAPITALIZATION
The following sets forth the capitalization of Geo Point Nevada as of the date of this Prospectus, and such capitalization conforms with that contained in the financial statements of Geo Point Nevada that accompany this Prospectus:
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100,000,000 shares of one mill ($0.001) par value common stock authorized, with 1,000 outstanding all held by Geo Point Utah, subject to board resolutions to forward split these outstanding shares to an amount
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equal to the outstanding number of shares of Geo Point Utah so that the spin-off will be on a one for one share basis, or to 30,065,000 shares as of the date hereof.
·
10,000,000 shares of one mill ($0.001) par value preferred stock, with such rights and preferences as the Board of Directors may determine. As of the date hereof, there are no outstanding shares of preferred stock.
·
Upon completion of the spin–off, Geo Point Nevada expects to have 30,065,000 shares of common stock outstanding.
DESCRIPTION OF CAPITAL STOCK
Geo Point Nevada was incorporated on June 13, 2012 in the State of Nevada. Copies of its Articles of Incorporation and Bylaws have been filed as Exhibits to the Registration Statement of which this Prospectus forms a part. The following information reflects Geo Point Nevada’s Articles of Incorporation and Bylaws as these documents will be in effect at the time of the consummation of the spin-off.
Authorized Capital Stock
Geo Point Nevada’s authorized capital stock consists of 110,000,000 shares, all of which have a par value of one mill ($0.001) per share. Of the total shares, 100,000,000 are designated as common stock, and 10,000,000 are designated as preferred stock. Immediately following the spin-off, Geo Point Nevada will have approximately 30,065,000 shares of common stock issued and outstanding, based upon the number of common shares of Geo Point Utah outstanding as of October 24, 2012. As of the date of the Prospectus, Geo Point Nevada has no outstanding shares of preferred stock, and we do not expect that any such shares will be outstanding at the time that the spin-off is completed.
Common Stock of Geo Point Nevada and Geo Point Utah
The holders of Geo Point Nevada and Geo Point Utah common stock (the “companies”) have equal rights, powers and privileges.
Voting Rights. The holders of the companies’ common stock will be entitled to one vote for each share held, on all matters voted on by the companies’ stockholders, including elections of directors. The companies’ Articles of Incorporation do not provide for cumulative voting in the election of directors. Generally, all matters to be voted on by the companies’ stockholders must be approved by a majority of the votes entitled to be cast by all shares of common stock present or represented by proxy.
Dividends. Holders of the companies’ common stock are entitled to receive dividends as, when and if dividends are declared by the respective Boards of Directors out of assets legally available for the payment of dividends. It is not the current expectation of either of the companies to pay dividends.
Liquidation. In the event of a liquidation, dissolution or winding up of the companies’ respective affairs, whether voluntary or involuntary, after payment of liabilities and obligations to creditors, the remaining assets will be distributed ratably among the holders of shares of common stock on a per share basis. If there exist any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution and/or liquidation preferences. In either case, the affected company would need to pay the applicable distribution to its holders of preferred stock before distributions are paid to the holders of the associated common stock.
Rights and preferences. Their respective shares of common stock have no preemptive, redemption, conversion or subscription rights. The rights, powers, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that may be designated and issued in the future.
Preferred Stock of Geo Point Nevada
Geo Point Nevada’s Articles of Incorporation provide that its Board of Directors has the authority, without action by the stockholders, to designate and issue up to 10,000,000 shares of preferred stock in one or more classes or series
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and to fix the powers, rights, preferences and privileges of each class or series of preferred stock, including but not limited to, the number of shares of each class or series; the stated or par value, if different; dividends, if any, and related priorities; voting rights, if any; conversion or exchange privileges, if any; redemption rights, if any; whether to establish a sinking fund for redemption or purchase and the amount of any such sinking fund; benefits that may set conditions or limit our ability to incur debt, issue additional shares, declare dividends or purchase our shares; the rights, if any, in the event of involuntary liquidation, dissolution or winding up of our company; and any other rights determined by the Board of Directors to be in the best interests of the corporation and its stockholders.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the 78.751 of the Nevada Revised Statutes, a corporation has the power to indemnify any person who is made a party to any civil, criminal, administrative or investigative proceeding, other than an action by or in the right of the corporation, by reason of the fact that such person was a director, officer, employee or agent of the corporation, against expenses, including reasonable attorneys’ fees, judgments, fines and amounts paid in settlement of any such actions; provided, however, in any criminal proceeding, the indemnified person shall have had no reason to believe the conduct committed was unlawful.
Articles of Incorporation
Article XI of our Articles of Incorporation provides:
“The Corporation shall, to the fullest extent permitted by the GCLN, indemnify any and all persons whom it shall have power to indemnify under said law from and against any and all of the expenses, liabilities or other matters referred to in or covered by said law, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.”
Bylaws
Our Bylaws also grant us similar powers of indemnification, including the right to obtain insurance to cover director and officers and other indemnified persons.
The “GCLN” refers to the General Corporation Law of the State of Nevada. The provisions in our Articles of Incorporation and our Bylaws are consistent with Section 78.751 of the General Corporation Law of the State of Nevada.
TRANSFER AGENT AND REGISTRAR
Interwest Transfer Company Inc., 1981 East Murray-Holladay Road, Salt Lake City, Utah 84117 (Telephone: 801-272-9294), will be the transfer agent and registrar for the common stock of both Geo Point Nevada and Geo Point Utah following the completion of the spin-off.
RELATIONSHIP BETWEEN GEO POINT NEVADA
AND GEO POINT UTAH FOLLOWING THE SPIN-OFF
The specific terms and conditions of the spin-off are governed by a Separation Agreement between Geo Point Nevada and Geo Point Utah. In addition, Geo Point Nevada and Geo Point Utah have entered into a Tax Matters Agreement in connection with the spin-off.
The material terms of the respective Agreements are described below. Copies of these Agreements have been filed as Exhibits to the Registration Statement of which this Prospectus forms a part, and the summaries of these documents that follow are qualified in their entirety by reference to the full text of these documents, which are incorporated by reference into this Prospectus.
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Arrangement Between Geo Point Nevada and Geo Point Utah Relating to the Spin-Off
Separation Agreement
This Separation Agreement sets forth the agreements between Geo Point Nevada and Geo Point Utah with respect to the principal corporate transactions required to effect the spin-off, and a number of other agreements governing the relationship between Geo Point Nevada and Geo Point Utah following the spin-off; it was entered into on October 23, 2012. The Separation Agreement also provides for the transfer to Geo Point Nevada of all of the assets and liabilities relating to its business, which was approved by the Geo Point Utah Board of Directors on June 13, 2012, on Geo Point Utah’s formation. However, these companies will only complete the spin-off if specified conditions are met. These conditions include:
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The transfer to Geo Point Nevada of all of the assets and liabilities attributable to its business;
·
The Securities and Exchange Commission and the State of Utah declaring effective the Registration Statement of which this Prospectus forms a part;
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Receipt of material consents and approvals (no material consents remain to be obtained); and
·
The absence of any injunction or similar order preventing the consummation of the spin-off.
Even if these conditions are satisfied, other events or circumstances, including litigation, could occur that could affect the timing or terms of the spin-off or Geo Point Utah’s ability or plans to complete the spin-off. As a result of any such events or circumstances, the spin-off may not occur and, if it does occur, it may not occur on the terms or in the manner described, or in the time frame contemplated. The decision to effectuate or to abandon the spin-off is left to the sole discretion of Geo Point Utah’s Board of Directors. In the event of a material change in the terms or the manner of the spin-off, we will file an amendment to our Registration Statement of which this Prospectus is a part. If there is such a change following the effective date of the Registration Statement, we will file a post-effective amendment thereto and will distribute a revised Prospectus. We do not anticipate any events that will result in abandoning the spin-off, unless the Board of Directors of Geo Point Utah determines that the time, management resources and costs make it more reasonable to dispose of Geo Point Nevada by sale or otherwise; or if the Utah Division does not grant Geo Point Nevada an effective date on its coordinated filing of this Registration Statement with the Utah Division, or if Geo Point Utah determines to issue the dividend in a spin-off of “restricted securities,” and the Utah Division does not grant Geo Point Utah an exemption from the registration requirements of the Utah Uniform Securities Act to effect the dividend, which is considered to be an “offer or sale” of a security under the Utah Uniform Securities Act because Geo Point Utah is not the “issuer” of the dividend of the Geo Point Nevada shares of common stock to be issued in the spin-off. See the heading “Registration Statement and Coordinated Filing with the Utah Division,” p. 15.
The material terms of the Separation Agreement are:
·
The parties will take all action necessary to effect the transfer of all of the assets, subject to all liabilities, that were utilized by Geo Point Utah in its Environmental and Engineering Divisions, including certain operating cash resources maintained for these operations, along with the License Agreement for the hydrocarbon-indicating technology that was previously assigned by Mr. Lachmar to Geo Point Utah.
·
Geo Point Utah will maintain ownership of all other assets not conveyed to Geo Point Nevada.
·
The parties will cooperate in transferring or obtaining all required consents, licenses and the like required for Geo Point Nevada to conduct the business operations formerly conducted by Geo Point Utah through these Divisions.
·
All necessary governmental action required to effect the spin-off shall be taken in a commercially reasonable manner by the parties.
·
Geo Point Utah shall pay all expenses of the spin-off and make all required stockholder mailings or governmental filings with the aid and assistance of Geo Point Nevada.
·
The parties will cooperate in all respects concerning business and accounting records and stock transfer records as may be applicable to the spin-off or the transferred Divisions and the License Agreement and any applicable accounting issues.
·
The determination of liabilities and related assumptions of liabilities shall be calculated as of the spin-off date or record date and each party shall be responsible for its own liabilities and actions from that point
35
forward, though the transfer of assets by Geo Point Utah to Geo Point Nevada provides for assumption of all liabilities of these Divisions as of June 13, 2012, and the indemnification of Geo Point Utah from and against all such liabilities of these Divisions at that date.
·
Each party shall indemnify and hold the other harmless from and against any failure to comply with its obligations, including, the payment or discharge of any liability of their respective businesses prior to or after the spin-off date or failure of management oversight of their respective businesses, among other rights.
We are unable to determine an exact dollar amount of the liabilities that Geo Point Nevada will assume under the Separation Agreement, but estimate it will be approximately $97,032 as of June 30, 2012.
In addition, the Separation Agreement also includes operating principles that will govern Geo Point Nevada’s and Geo Point Utah’s conduct concerning, and use of, specified instruments and other technologies currently utilized by one or both of Geo Point Nevada and Geo Point Utah.
Tax Matters Arrangement
The Tax Matters Agreement was entered into on October 23, 2012, between Geo Point Nevada and Geo Point Utah for the purpose of completing the spin-off of Geo Point Nevada, and will govern Geo Point Nevada’s and Geo Point Utah’s respective rights, responsibilities and obligations after the spin-off with respect to taxes. Below is a summary of the material terms of the agreement, including the provisions relating to indemnification of each party:
·
Geo Point Utah will have the responsibility of filing all consolidated tax returns required or necessary on the Divisions or other assets and operations conveyed to Geo Point Nevada to the spin-off date or record date, and thereafter, each party will be responsible for its respective tax return filings and the right to any refunds.
·
Geo Point Utah shall have the final determination of allocations and preparation and other decisions with respect to all pre-spin-off date or record date tax returns, including the manner of preparation, how any item is reported, whether extension will be sought or obtained, any available elections, whether claims for refunds will be made, whether refunds will be paid or credited against any liability and whether to retain outside firms to prepare the tax returns.
·
Geo Point Utah shall be liable for all taxes of Geo Point Nevada prior to the spin-off date or record date, while Geo Point Nevada will be similarly liable for all taxes following the spin-off date or record date.
·
Apportionment of certain property taxes and exemptions may be made as of the spin-off date or record date.
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There shall be an accounting provided by the parties for any claim made against the other for taxes related to obligations under the Agreement.
·
Each shall be responsible to the other for any act or omission respecting the spin-off or that is inconsistent with any tax opinion or supplemental tax opinion obtained, any acquisition of stock or assets of either or any issuances of stock by either.
·
Each shall be liable for their respective portion of any exchange taxes incurred in the spin-off.
·
There are mutual indemnification provisions related to the covenants and obligations of each to the other.
APPLICATION OF PROCEEDS
Since no money is being raised in this spin-off, no Application of Proceeds is here presented.
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
During Geo Point Nevada’s two most recent fiscal years and since then, no independent accountant who was previously engaged as the principal accountant to audit Geo Point Utah’s or Geo Point Nevada’s financial statements, or any independent accountant who was previously engaged to audit a significant subsidiary and on whom the principal accountant expressed reliance in its report, has resigned (or indicated it has declined to stand for re-election after the completion of the current audit) or was dismissed.
36
ABSENCE OF PUBLIC MARKET AND DIVIDEND POLICY
Public Market
Geo Point Utah, which currently has approximately 158 common stockholders, will remain a “reporting issuer” under Section 13 of the Exchange Act after this spin-off. There is a limited public trading market on the OTCBB for the shares of Geo Point Utah (OTCBB:GNNC). The completion of the spin-off will not have any effect on the number of Geo Point Utah shares held by each Geo Point Utah stockholder.
While not currently a “reporting issuer” under the Exchange Act, Geo Point Nevada will become a Section 15(d) “reporting issuer” because of the filing and effectiveness of the Registration Statement of which this Prospectus forms a part. Moreover, we believe that this registered spin-off and associated reporting status will permit Geo Point Nevada to qualify its shares for quotation on the OTCBB or other secondary markets for which Geo Point Nevada’s common stock may then qualify. See the headings “Risk Factors, p. 8, and “Market for Common Stock and Related Matters, p. 26. Geo Point Nevada intends to apply for quotations of its common stock on the OTCBB or the OTC Markets, Inc. “Pink Sheets,” but we cannot assure you when or if we will be successful in this regard or that any established public market will develop for Geo Point Nevada’s shares.
Dividend Policy
Short-term or long-term operations prospects may not result in a profit for Geo Point Utah or Geo Point Nevada. Therefore, neither is likely to pay immediate dividends and an investment in Geo Point Nevada is thus not suitable for investors seeking current income for financial or tax planning purposes. Future dividends will be paid at the sole discretion of the respective Boards of Directors of Geo Point Utah and Geo Point Nevada.
DETERMINATION OF OFFERING PRICE
The computation of the “Proposed Maximum Offering Price Per Share” was computed by dividing the book value of the Geo Point Nevada common stock by the 30,065,000 shares that are to be spun-off to the Geo Point Nevada stockholders and the “Proposed Maximum Aggregate Offering Price” was determined by the aggregate book value of the Geo Point Nevada common stock on June 30, 2012, the end of its most recent quarter and for which unaudited quarter financial statements are included in Appendix F of this Prospectus, along with the audited financial statements of Geo Point Nevada for the fiscal years ended March 31, 2012, and 2011.
DILUTION
The percentage of equity that the stockholders of Geo Point Utah will beneficially own immediately before and after the completion of the spin-off will remain unchanged. The spin-off is designed to have no impact on the ownership interest of Geo Point Utah’s stockholders immediately before and after the spin-off is completed. In addition, each such stockholder will hold the same percentage of equity in Geo Point Nevada at the completion of the spin-off that he/she/it then holds in Geo Point Utah.
LEGAL MATTERS
The validity of shares being offered by this Prospectus will be passed upon by Leonard W. Burningham, Esq., a licensed, practicing attorney and member of the Utah Bar Association, whose office address is 455 East 500 South, Suite 205, Salt Lake City, Utah 84111.
INTEREST OF NAMED EXPERTS AND COUNSEL
The financial statements included in this Prospectus and in the Registration Statement have been audited (or reviewed [unaudited, quarters ended June 30, 2012, and 2011, and audited, fiscal years ended March 31, 2012, and 2011]) by Hansen Barnett & Maxwell, P.C., an independent registered public accounting firm, to the extent and for the periods set forth in their report, appearing as Appendix F to this Prospectus, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.
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No expert named in the Registration Statement of which this Prospectus is a part as having prepared or certified any part thereof (or who is named as having prepared or certified a report or valuation for use in connection with the Registration Statement) or counsel for the Registrant named in this Prospectus as having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of such securities was employed for such purpose on a contingent basis, or at the time of such preparation, certification or opinion or at any time thereafter, had or is to receive in connection with the offering a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries or was connected with the Registrant or any of its parents or subsidiaries as a promoter, managing underwriter (or any principal underwriter, if there are no managing underwriters) voting trustee, director, officer, or employee.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Registrant pursuant to the provisions described under the heading “Indemnification of Directors and Officers,” p. 34, the Registrant has been informed 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.
WHERE YOU CAN FIND MORE INFORMATION
Geo Point Nevada has filed with the Securities and Exchange Commission a Registration Statement on Form S-1 under the Securities Act with respect to the shares of Geo Point Nevada common stock being registered hereunder. This Prospectus, which forms a part of the Registration Statement, does not contain all the information included in the Registration Statement and the exhibits thereto, to which reference is hereby made. You should refer to the Registration Statement, including its exhibits and schedules, for further information about Geo Point Utah, its common stock and the Geo Point Nevada stock being spun-off pursuant to this Prospectus.
From and after the effective date of the spin-off, Geo Point Nevada will become subject to the informational requirements of the Exchange Act. Accordingly, we will file annual, quarterly and other reports and other information with the Securities and Exchange Commission. Geo Point Utah is also required to file annual quarterly and other information with the Securities and Exchange Commission, and such reports and other information may contain important information about us. For so long as Geo Point Nevada has been operating as a wholly-owned subsidiary of Geo Point Utah and previously since Geo Point Utah became a “reporting issuer” under the Exchange Act in 2008, the results of Geo Point Utah’s operations have been included in Geo Point Utah’s consolidated financial statements. You may read and copy the Registration Statement and the reports and other information that Geo Point Nevada may in the future file or those of Geo Point Utah at the Securities and Exchange Commission’s Public Reference Room located at Station Place, 100 F Street, N.E., Washington D.C. 20549. You may also receive copies of these documents upon payment of a duplicating fee, by writing to the Securities and Exchange Commission’s Public Reference Room. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the Public Reference Room. Geo Point Nevada’s future Securities and Exchange Commission filings will also be available to the public from commercial document retrieval services and at the Internet world-wide website maintained by the Securities and Exchange Commission at www.sec.gov. Please note that information included in Geo Point Nevada’s website does not form a part of this Prospectus.
No person is authorized to give any information or to make any representations other than those contained in this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized. Neither the delivery of this Prospectus nor any distribution of securities made hereunder shall imply that there has been no change in the information set forth herein or in Geo Point Nevada’s affairs since the date hereof.
38
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
During the fiscal year ended March 31, 2012, we had sales of $126,459 compared to $135,370 for the fiscal year ended March 31, 2011. Cost of sales for the fiscal year ended March 31, 2012, was $38,099, compared to $35,206 for the previous fiscal year, for a gross profit of $88,360 for the fiscal year ended March 31, 2012, compared to $100,164 during the fiscal year ended March 31, 2011. Revenues and gross profit were relatively consistent between the years due to the continued pressure placed on the construction industry due to pricing competition and the limited amount of financing and personnel time available.
General and administrative expenses during the fiscal year ended March 31, 2012, were $163,198, compared to $227,061 during the fiscal year ended March 2011. The decrease in general and administrative expenses was directly related to the decrease in professional and consulting fees incurred by us prior to our acquisition by our former parent, Geo Point Utah. Subsequent to the acquisition, these costs were shared by us and Geo Point Utah’s Kazakhstan operations.
During the fiscal year ended March 31, 2011 we collected receivables in the amount of $27,500 that had been deemed uncollectible, with $0 collected in 2012.
Three Months Ended June 30, 2012 Compared to the Three Months Ended June 30, 2011
During the three months ended June 30, 2012, we had sales of $27,154, compared to $26,511, for the three months ended June 30, 2011. Cost of sales for the three months ended June 30, 2012, was $7,614, compared to $8,718 for the quarterly period ended June 30, 2011, for a gross profit of $19,540 for the three months ended June 30, 2012, compared to a gross profit of $17,793 during the three months ended June 30, 2011. Revenues and gross profits were relatively consistent between the years due to the continued pressure placed on the construction industry due to pricing competition and the limited amount of financing and personnel time available.
General and administrative expenses during the three months ended June 30, 2012, were $59,286, and increase from $55,059, during the three months ended June 30, 2011. General and administrative expenses remained relatively consistent during both periods due to no significant changes to our business operations.
Liquidity
Current assets at March 31, 2012, included $35,169 in cash, $500 in accounts receivable, net of allowance for bad debt, and $1,900 in prepaid expenses and other current assets for total current assets of $37,569, a decrease of $79,940 from total current assets of $117,509 at March 31, 2011. Current assets at June 30, 2012, included cash of $29,756, $500 in accounts receivable, net of allowance for bad debt, and $6,711 in prepaid expenses and other current assets for total current assets of $36,967.
At March 31, 2012, we had a negative working capital of $38,680, as compared to positive working capital of $21,135 at March 31, 2011.
Current assets at June 30, 2012, included $29,756 in cash, $500 in accounts receivable, net of allowance for bad debt, and $6,711 in prepaid expenses and other current assets for total current assets of $36,967. At June 30, 2012, we had a negative working capital of $60,065. The negative working capital is a result of an increase in accounts payable and the decrease in cash and accounts receivable which has been used in operations.
Capital Resources
During the fiscal year ended March 31, 2012, operating activities used net cash of $48,811, as compared to $51,660 in net cash used for the fiscal year ended March 31, 2011. During the three months ended June 30, 2012, operating activities used net cash of $23,973, compared to $25,161 net cash used in the three months ended June 30, 2011. The net cash used by operating activities was mainly driven by our net loss. We funded operations during the fiscal
39
year ended March 31, 2012, and the three months ended June 30, 2012, primarily through the use of cash on hand, the collection of accounts receivable which was outstanding as of March 31, 2011, and capital contributions from our former parent, Geo Point Utah.
Net cash used in investing activities increased to $9,038 for the fiscal year ended March 31, 2012, versus $0 for the fiscal year ended March 31, 2011. For the three months ended June 30, 2012, the net cash used by investing was $640 compared to $7,805 for the three months ended June 30, 2011. All of the investing activities were purchases of property and equipment. We continue to purchase capital equipment on an as needed basis only.
During the fiscal year ended March 31, 2012, financing activities provided $572, as compared to $22,258 in cash provided for the fiscal year ended March 31, 2011. The financing was provided by a line of credit in 2011, which was paid back in 2012. There was also a capital contribution from our former parent, Geo Point Utah, in fiscal year ended March 31, 2012. These proceeds were used for operations. During the three months ended June 30, 2012, we received cash from financing activities of $19,200, all coming from capital contributions from our former parent, Geo Point Utah, as compared to $22,258 used in financing activities for the three months ended June 30, 2011, to pay off the line of credit.
We intend to fund future operations for the next 12 months through cash flows generated from operations and cash on hand. If these cash flows are not sufficient, we may be required to raise capital through either a debt or equity financing. Currently, we cannot provide assurance that such financing will be available to us on favorable terms, or at all. If, after utilizing the existing sources of capital available to us, further capital needs are identified and if we are not successful in obtaining the financing, we may be forced to curtail our existing or planned future operations. We believe our plans will enable us to continue for a period in excess of one year from the date of our most recent balance sheet.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements during the quarter ended June 30, 2012, or the fiscal years ended March 31, 2012, and 2011.
FINANCIAL STATEMENTS
Please find our unaudited financial statements for quarters ended June 30, 2012 and 2011, and our audited financial statements for the fiscal years ended March 31, 2012, and 2011, which are attached hereto and incorporated herein as Appendix F.
40
GEO POINT RESOURCES, INC.
FINANCIAL STATEMENTS
F-1
Geo Point Resources, Inc.
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INDEX TO FINANCIAL STATEMENTS |
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Financial Statements of Geo Point Resources, Inc. |
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Report of Independent Registered Public Accounting Firm |
F-3 |
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Balance Sheets as of June 30, 2012, March 31, 2012 and 2011 |
F-4 |
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Statements of Operations for the Three Months Ended June 30, 2012 and 2011, and the Years Ended March 31, 2012 and 2011 |
F-5 |
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Statements of Cash Flows for the Three Months Ended June 30, 2012 and 2011, and |
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the Years Ended March 31, 2012 and 2011 |
F-6 |
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Statements of Shareholders’ Equity for the Years Ended March 31, 2011 and 2012 and the Three Months Ended June 30, 2012 |
F-7 |
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Notes to the Financial Statements |
F-8 |
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and the Shareholders
Geo Point Resources, Inc.
We have audited the accompanying consolidated balance sheets of Geo Point Resources, Inc. (the “Company”) as of March 31, 2012 and 2011, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we express no such opinion. An audit 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 audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Geo Point Technologies, Inc. as of March 31, 2012 and 2011, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the financial statements and as discussed in Note 2 to the financial statements, the Company has incurred significant losses and negative cash flows from operating activities, has negative working capital and an accumulated deficit, and is dependent on additional debt or equity financing in order to continue its operations. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 2. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ HANSEN, BARNETT & MAXWELL, P.C.
Salt Lake City, Utah
October 19, 2012
F-3
Geo Point Recources, Inc.
Balance Sheets
|
|
June 30, 2012 |
|
March 31, 2012 |
|
March 31, 2011 |
|
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
Cash |
$ 29,756 |
|
$ 35,169 |
|
$ 92,446 |
|
Accounts receivable, net of allowance for bad debt of $1,805, $1,805 and $1,805, respectively |
500 |
|
500 |
|
20,453 |
|
Prepaid expenses and other current assets |
6,711 |
|
1,900 |
|
4,610 |
|
Total Current Assets |
36,967 |
|
37,569 |
|
117,509 |
|
Furniture and equipment, net of accumulated depreciation of $50,815, $49,815 and $45,315, respectively |
7,040 |
|
7,400 |
|
2,362 |
|
Other assets |
1,000 |
|
1,000 |
|
1,000 |
|
Total Assets |
$ 45,007 |
|
$ 45,969 |
|
$ 120,871 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
$ 97,032 |
|
$ 76,249 |
|
$ 74,116 |
|
Line of credit |
- |
|
- |
|
22,258 |
|
Total Current Liabilities |
97,032 |
|
76,249 |
|
96,374 |
|
|
|
|
|
|
|
|
Shareholders’ Equity (Deficit) |
|
|
|
|
|
|
Common stock - $0.001 par value; 100,000,000 shares authorized; 30,065,000, 30,065,000 and 30,065,000 shares issued and outstanding, respectively |
30,065 |
|
30,065 |
|
30,065 |
|
Additional paid-in capital |
261,915 |
|
242,715 |
|
219,885 |
|
Accumulated deficit |
(344,006) |
|
(303,060) |
|
(225,453) |
|
Total Shareholders' Equity (Deficit) |
(52,026) |
|
(30,280) |
|
24,497 |
|
Total Liabilities and Shareholders’ Equity (Deficit) |
$ 45,007 |
|
$ 45,969 |
|
$ 120,871 |
|
|
For the Three Months Ended June 30, |
|
For the Year Ended March 31, |
||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
$ 27,154 |
|
$ 26,511 |
|
$ 126,459 |
|
$ 135,370 |
|
Cost of Sales |
7,614 |
|
8,718 |
|
38,099 |
|
35,206 |
|
Gross Profit |
19,540 |
|
17,793 |
|
88,360 |
|
100,164 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
General and administrative |
59,286 |
|
55,059 |
|
163,198 |
|
227,061 |
|
Total Operating Expenses |
59,286 |
|
55,059 |
|
163,198 |
|
227,061 |
|
Operating Loss |
(39,746) |
|
(37,266) |
|
(74,838) |
|
(126,897) |
|
Collection of receivable deemed uncollectible |
- |
|
- |
|
- |
|
27,500 |
|
Other income (expense) |
(1,200) |
|
- |
|
(2,769) |
|
(1,693) |
|
Loss before provision for income taxes |
(40,946) |
|
(37,266) |
|
(77,607) |
|
(101,090) |
|
Provision for income taxes |
- |
|
- |
|
- |
|
- |
|
Net Loss |
$ (40,946) |
|
$ (37,266) |
|
$ (77,607) |
|
$ (101,090) |
|
Basic and dilutive loss per share |
$ (0.00) |
|
$ (0.00) |
|
$ (0.00) |
|
$ (0.00) |
|
Basic and dilutive weighted average common shares outstanding |
30,065,000 |
|
30,065,000 |
|
30,065,000 |
|
30,065,000 |
The accompanying notes are an integral part of the financial statements.
F-5
Geo Point Resources, Inc.
Statements of Cash Flows
|
For the Three Months Ended June 30, |
|
For the Year Ended March 31, |
|||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
|
(unaudited |
|
(unaudited) |
|
|
|
|
|
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net loss |
$ (40,946) |
|
$ (37,266) |
|
$ (77,607) |
|
$ (101,090) |
|
Adjustments to reconcile net loss to net cash from operating activities |
|
|
|
|
|
|
|
|
Depreciation |
1,000 |
|
500 |
|
4,000 |
|
6,000 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
- |
|
17,953 |
|
19,953 |
|
40,397 |
|
Prepaid expenses and other current assets |
(4,811) |
|
(8,118) |
|
2,710 |
|
(4,610) |
|
Accounts payable and accrued liabilities |
20,784 |
|
1,770 |
|
2,133 |
|
7,643 |
|
Net Cash Used in Operating Activities |
(23,973) |
|
(25,161) |
|
(48,811) |
|
(51,660) |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
(640) |
|
(7,805) |
|
(9,038) |
|
- |
|
Net Cash Used in Investing Activities |
(640) |
|
(7,805) |
|
(9,038) |
|
- |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Capital contribution from former parent company |
19,200 |
|
- |
|
22,830 |
|
- |
|
Net proceeds from (payments on) line of credit |
- |
|
(22,258) |
|
(22,258) |
|
22,258 |
|
Cash Flows Provided by (Used in) Financing Activities |
19,200 |
|
(22,258) |
|
572 |
|
22,258 |
|
|
|
|
|
|
|
|
|
|
Net Change in Cash |
(5,413) |
|
(55,224) |
|
(57,277) |
|
(29,402) |
|
Cash at Beginning of Period |
35,169 |
|
92,446 |
|
92,446 |
|
121,848 |
|
Cash at End of Period |
$ 29,756 |
|
$ 37,222 |
|
$ 35,169 |
|
$ 92,446 |
|
|
|
|
|
|
|
|
|
|
Supplement Disclosure of Cash Flow Information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
$ - |
|
$ 212 |
|
$ 1,893 |
|
$ 370 |
|
Cash paid for income taxes |
$ - |
|
$ - |
|
$ - |
|
$ - |
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
F-6
Geo Point Resources, Inc.
Statements of Shareholders’ Equity (Deficit)
For the Year Ended March 31, 2011 and 2012 and the Three Months Ended June 30, 2012
|
|
Common Stock |
|
Additional Paid-in Capital |
|
Accumulated Deficit |
|
Total |
||
|
|
Number of Shares |
|
Amount |
|
|
|
|||
|
Balance, March 31, 2010 |
30,065,000 |
|
$ 30,065 |
|
$ 219,885 |
|
$ (124,363) |
|
$ 125,587 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
- |
|
- |
|
- |
|
(101,090) |
|
(101,090) |
|
Balance, March 31, 2011 |
30,065,000 |
|
30,065 |
|
219,885 |
|
(225,453) |
|
24,497 |
|
|
|
|
|
|
|
|
|
|
|
|
Capital contributed by former parent company |
- |
|
- |
|
22,830 |
|
- |
|
22,830 |
|
Net loss |
- |
|
- |
|
- |
|
(77,607) |
|
(77,607) |
|
Balance, March 31, 2012 |
30,065,000 |
|
30,065 |
|
242,715 |
|
(303,060) |
|
(30,280) |
|
|
|
|
|
|
|
|
|
|
|
|
Capital contributed by former parent company |
- |
|
- |
|
19,200 |
|
- |
|
19,200 |
|
Net loss (unaudited) |
- |
|
- |
|
- |
|
(40,946) |
|
(40,946) |
|
Balance at June 30, 2012 |
30,065,000 |
|
$ 30,065 |
|
$ 261,915 |
|
$ (344,006) |
|
$ (52,026) |
The accompanying notes are an integral part of the financial statements.
F-7
GEO POINT RESOURCES, INC.
Notes to Financial Statements
March 31, 2012 and 2011
(References to June 30, 2012 and 2011 are unaudited)
NOTE 1 – ORGANIZATION AND BUSINESS
On June 13, 2012, the Board of Directors of Geo Point Technologies, Inc. (“GPT”), approved a stock dividend that will result in a spin-off (“Spin-Off”) of Geo Point Resources, Inc. (the “Company”) common stock to the GPT stockholders, pro rata, on the record date. Prior to the Spin-Off, the Company was a wholly-owned subsidiary of the GPT, was incorporated on June 13, 2012, comprising all of our Environmental and Engineering Divisions’ assets, business, operations, rights or otherwise, along with our “Hydrocarbon Identification Technology” License Agreement with William C. Lachmar dated January 31, 2008. The Spin-Off is expected to have a record date that will be 10 days from the effective date of its registration statement to be filed with the Securities and Exchange Commission (the “SEC”) to effect the Spin-Off (the “Record Date”). GPT will retain and focus its efforts on their oil refining operations in Karatau, Kazakhstan.
The Spin-Off will be pro rata, effected through a stock dividend, based on a one (1) for one (1) ratio of the only class of outstanding securities of GPT, common stock, amounting to 30,065,000 shares; no change in this number of GPT’s outstanding shares is expected to occur prior to the Record Date. Each GPT stockholder at the close of business on the Record Date will be entitled to receive one (1) share of the Company’s common stock for every one (1) share of the GPT held.
The financial statements included herein are those of the Company based on their historical basis since the Spin-Off was due to entities under common control. All operations presented herein represent the environmental and engineering division of GPT. See GPT’s 8-K filed with the SEC within four business of the filing of its Registration Statement, which contains additional information regarding the Spin-Off and pro-forma information.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements
The accompanying unaudited interim financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC. The accompanying balance sheet as of June 30, 2012, and the statements of operations and comprehensive income, and cash flows for the three months ended June 30, 2012 and 2011, are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations, and cash flows for such periods. The financial data and other information disclosed in these notes to the financial statements related to the three-month periods are unaudited. The results of the three months ended June 30, 2012, are not necessarily indicative of the results to be expected for the year ending March 31, 2013, any other interim period, or any other future year.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes to financial statements. Actual results could differ from those estimates. Significant estimates made by management include allowance for doubtful accounts and the useful life of property and equipment.
Fair Value of Financial Instruments
On April 1, 2008, the Company adopted the accounting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, Fair Value Measurements, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from selling an asset or
The accompanying notes are an integral part of the financial statements.
F-8
paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
The guidance also establishes a fair value hierarchy for measurements of fair value as follows:
•
Level 1 –
quoted market prices in active markets for identical assets or liabilities.
•
Level 2 –
inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•
Level 3 –
unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
As of June 30, 2012, March 31, 2012 and 2011, the Company did not have Level 1, 2, or 3 financial assets, nor did it have any financial liabilities. Financial instruments consist of cash, accounts receivable, and payables. The fair value of financial instruments approximated their carrying values as of June 30, 2012, March 31, 2012 and 2011, due to the short-term nature of these items.
Concentration of Credit Risks and Customer Concentrations
During the three months ended June 30, 2012, services provided to two customers accounted for 85.0% and 15.0% of total revenues. During the three months ended June 30, 2011, services provided to two customers accounted for 56.9% and 33.5% of total revenues. As of June 30, 2012, one customer accounted for 100% of the accounts receivable balance.
During the year ended March 31, 2012, services provided to one customer accounted for 49.8% of total revenues. During the year ended March 31, 2011, services provided to three customers accounted for 41.6%, 16.7% and 11.3% of total revenues. As of March 31, 2011, three customers accounted for 53.0%, 19.8% and 19.6% of the accounts receivable balance. Management believes the loss of these customers would not have a material impact on the Company.
Cash and Cash Equivalents
Cash and short-term investments with an original maturity of three months or less are considered to be cash and cash equivalents. At June 30, 2012, March 31, 2012 and 2011, the Company did not have any cash deposits in excess of FDIC limits.
Allowances for Doubtful Accounts
The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company considers the following factors when determining if collection of a fee is reasonably assured: customer creditworthiness and past transaction history with the customer, if the Company has no previous experience with the customer, the Company typically requests retainers or obtains financial information sufficient to extend the credit. If these factors do not indicate collection is reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon receipt of cash. If the financial condition of the Company’s customers deteriorates, additional allowances are made.
The accompanying notes are an integral part of the financial statements.
F-9
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation and amortization. Major additions and improvements are capitalized, while minor equipment as well as repairs and maintenance costs are expensed when incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets. Computers, other office equipment, and furniture are depreciated over a period of three to seven years. Vehicles are depreciated over five years.
On retirement or disposition of property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is recognized in the statement of operations.
Impairment of Long Lived Assets
The Company evaluates the recoverability of the carrying amount of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of any asset may not be fully recoverable. If circumstances require that a long-lived asset be tested for possible impairment, the Company compares the carrying amount of an asset to future undiscounted cash flows expected to be generated by the asset. If the carrying amount of the long-lived asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value based on a discounted cash flow analysis. As of June 30, 2012, March 31, 2012 and 2011, impairments are not present.
Revenue Recognition
The Company recognizes revenue when it is realized and earned. The Company considers revenue realized or realizable and earned when: (1) it has persuasive evidence of an arrangement; (2) services have been rendered and are invoiced; (3) the price is fixed or determinable; and (4) collectibility is reasonably assured.
The Company’s primary source of revenue has been in its environmental division, providing historical site data searches, preliminary investigation and drilling, site characterization modeling, regulatory agency liaison, and full environmental clean-ups using such methods as vapor extraction, air sparging, bio-remediation, ORC (Oxygen Release Compound) and HRC (Hydrogen Release Compound) injection treatment, air stripping, and ionic exchange. Revenues from providing historical site data searches, preliminary investigation and drilling, site characterization modeling, regulatory agency liaison, and full environmental clean-ups using such methods as vapor extraction, air sparging, bio-remediation, ORC (Oxygen Release Compound) and HRC (Hydrogen Release Compound) injection treatment, air stripping, and ionic exchange are recognized over the period of services being performed. The Company also has operations associated with the oil and gas segment that have limited activity and have not yet generated revenues. All revenues are reported inclusive of shipping and handling costs billed and exclusive of any taxes billed to customers, if any. Shipping and handling costs incurred, if any, are reported in cost of products sold.
Research and Development
Research and development is primarily related to developing and improving methods to detect oil and gas reserves. Research and development expenses are expensed when incurred.
Income Taxes
The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Tax law and rate changes are reflected in income in the period such changes are enacted. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. The Company includes interest and penalties related to income taxes, including unrecognized tax benefits, within the provision for income taxes. The Company believes it has appropriate support for the income tax positions taken and to be taken on future income tax returns.
The accompanying notes are an integral part of the financial statements.
F-10
Income taxes are not presented within these financial statements as prior the Spin-Off, the Company’s operations were included in a consolidated tax return. The net losses included within those returns, are not available to the Company. In addition, due to the net loss position of GPT there is no income tax which should have been allocated to the Company.
Basic and Diluted Loss per Common Share
Basic loss per share is calculated by dividing net loss by the weighted average common shares outstanding during the period. Diluted loss per share reflects the potential dilution to basic earnings per share that could occur upon conversion or exercise of securities, options, or other such items to common shares using the treasury stock method, based upon the weighted average fair value of the Company’s common shares during the period. As of June 30, 2012, March 31, 2012 and 2011, the Company did not have any dilutive securities.
NOTE 3 - GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company had a net loss and used cash in operating activities of $77,607 and $48,811, respectively, for the year ended March 31, 2012. The Company had a working capital deficiency and accumulated deficit of $38,680 and $303,060, respectively, at December 31, 2012. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company’s continuation as a going concern is dependent upon its ability to generate additional revenues and its ability to obtain additional debt or equity financing to sustain its current level of operations. The Company plans to pursue additional working capital from investors for equity ownership, debt instrument, and/or strategic partnerships. No assurance can be given that the Company will be successful in these efforts.
The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 – PROPERTY AND EQUIPMENT
Property and equipment are stated at cost, net of accumulated depreciation, and are comprised of the following at June 30, 2012, March 31, 2012 and 2011:
|
|
June 30, 2012 |
|
March 31, 2012 |
|
March 31, 2011 |
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Computers and equipment |
$ 34,965 |
|
$ 34,325 |
|
$ 32,787 |
|
Vehicles |
22,890 |
|
22,890 |
|
15,390 |
|
Total |
57,855 |
|
57,215 |
|
48,177 |
|
Less: accumulated depreciation |
(50,815) |
|
(49,815) |
|
(45,815) |
|
Net Value |
$ 7,040 |
|
$ 7,400 |
|
$ 2,362 |
Depreciation expense for the three months ended June 30, 2012 and 2011, and the years ended March 31, 2012 and 2011, was $1,000, $500, $4,000 and $6,000, respectively.
The accompanying notes are an integral part of the financial statements.
F-11
NOTE 5 – LINE OF CREDIT
In August 2010, the Company drew $50,000 from a line of credit already in place with a bank. At March 31, 2011, the line of credit accrued interest at 5.50% per annum and had no amounts available. The line of credit was unsecured, but is guaranteed by GPT’s former Chief Executive Officer. As of March 31, 2011, the line of credit balance of $22,258 was in default and reflected as a current liability. The Company satisfied the balance of the line of credit during the year ended March 31, 2012.
NOTE 6 – STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock
Under the Company’s articles of incorporation, the board of directors is authorized, without stockholder action, to issue up to 5,000,000 shares of preferred stock in one or more series and to fix the number of shares and rights, preferences, and limitations of each series. Among the specific matters that may be determined by the board of directors are the dividend rate, the redemption price, if any, conversion rights, if any, the amount payable in the event of any voluntary liquidation or dissolution, and voting rights, if any. If the Company offers preferred stock, the specific designations and rights will be described in amended articles of incorporation.
Capital Contributed by the Former Parent
During the three months ended June 30, 2012 and the year ended March 31, 2012, GPT contributed $19,200 and $22,830, respectively, to the Company for use in operations.
The accompanying notes are an integral part of the financial statements.
F-12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
|
Item 13. |
Other Expenses of Issuance and Distribution * |
The expenses relating to the registration of the securities will be borne by the Registrant. Such expenses are estimated to be as follows: The following table sets forth an itemized statement of all cash expenses in connection with the issuance and distribution of the securities being registered:
|
SEC registration fee* |
|
$ |
500 |
|
|
Blue sky fees and expenses* |
|
|
300 |
|
|
Printing and related expenses* |
|
|
1,500 |
|
|
Legal fees* |
|
|
37,500 |
|
|
Accounting fees and expenses |
|
|
25,000 |
|
|
Transfer Agent fees |
|
|
2,200 |
|
|
Miscellaneous |
|
|
1,500 |
|
|
TOTAL |
|
$ |
68,500 |
|
|
* |
Estimated |
Item 14. Indemnification of Directors and Officers
The Registrant is prohibited from indemnifying its “affiliates” for liabilities resulting from violations or alleged violations of the Securities Act or any state securities laws in connection with the issuance or sale of the shares of common stock, except in the case of successful defense of an action in which such violations are alleged, and then only if a court approves such indemnification after being appraised of relevant regulatory positions on indemnification. See the caption “Disclosure ff Commission Position on Indemnification for Securities Act Liabilities,” p. 38, of the Prospectus.
Under Section 78.751 of the Nevada Revised Statutes, a corporation has the power to indemnify any person who is made a party to any civil, criminal, administrative or investigative proceeding, other than an action by or in the right of the corporation, by reason of the fact that such person was a director, officer, employee or agent of the corporation, against expenses, including reasonable attorneys’ fees, judgments, fines and amounts paid in settlement of any such actions; provided, however, in any criminal proceeding, the indemnified person shall have had no reason to believe the conduct committed was unlawful.
Section 78.751 of the Nevada Revised Statutes provides that each corporation shall have the following powers regarding indemnification:
(1) A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, does not, of itself create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
(2) A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the
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fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals there from, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction, determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity of such expenses as the court deems proper.
(3) To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections 1 and 2, or in defense of any claim, issue or matter therein, he must be indemnified by the corporation against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with the defense.
(4) Any indemnification under subsections 1 and 2, unless ordered by a court or advanced pursuant to subsection 5, must be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of directors who were not parties to the act, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not parties to the act, suit or proceeding so orders, by independent legal counsel, in a written opinion; or if a quorum consisting of directors who were not parties to the act, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.
(d) The certificate or articles of incorporation, the bylaws or an agreement made by the corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.
(5) The indemnification and advancement of expenses authorized in or ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the certificate or articles of incorporation or any bylaw, agreement, vote of stockholders of disinterested directors or otherwise, for either an action in his official capacity or an action in another capacity while holding his office, except that indemnification, unless ordered by a court pursuant to subsection 2 or for the advancement of expenses made pursuant to subsection 5, may not be made to or on behalf of any director or officer if a final adjudication establishes that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person.
Articles of Incorporation
Article XI of our Articles of Incorporation provides:
“The Corporation shall, to the fullest extent permitted by the GCLN, indemnify any and all persons whom it shall have power to indemnify under said law from and against any and all of the expenses, liabilities or other matters referred to in or covered by said law, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.”
Bylaws
Our Bylaws also grant us similar powers of indemnification, including the right to obtain insurance to cover director and officer and other indemnified persons.
The “GCLN” refers to the General Corporation Law of the State of Nevada. The provisions in our Articles of Incorporation and our Bylaws are consistent with Section 78.751 of the General Corporation Law of the State of Nevada.
The foregoing summary is qualified in its entirety by reference to the complete text of any statutes referred to below and the Articles of Incorporation and the Bylaws of the Registrant and the common shares of Geo Point Nevada that will be spun-off pursuant to the Registration Statement.
Item 15. Recent Sales of Unregistered Shares
At its inception on June 13, 2012, the Registrant issued 1,000 “unregistered” and “restricted” shares of its common stock to its parent, Geo Point Technologies, Inc., a Utah corporation. The Registrant has not issued any other shares of common stock or any preferred stock and at no time has it issued options and/or warrants to anyone. These shares were issued pursuant to an exemption from registration under the Securities Act provided under Section 4(2) thereof, for offerings of securities not involving a public offering.
Item 16. Index to Appendix
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(a)(1) |
Index to Financial Statements -- Included in Prospectus |
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(a)(2) |
Included Separately from Prospectus: Consent of Independent Registered Public Accountants. (See Exhibit 23.2 below.) |
Other than the Financial Data Schedule, no schedules are included for the reason that all required information is contained in the financial statements included in the Prospectus.
(b) Financial Statement Schedules. Schedules not listed above have been omitted because the information to be set forth therein is not material, not applicable or is shown in the financial statements or notes thereto.
(c) Exhibits:
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Exhibit 3.1 - Articles of Incorporation |
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Exhibit 3.2 - Bylaws |
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Exhibit 5 - Opinion of Leonard W. Burningham, Esq., regarding the legality of the securities being offered |
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Exhibit 10.1 - License Agreement |
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Exhibit 10.2 - Separation Agreement |
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Exhibit 10.3 - Tax Matters Agreement |
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Exhibit 23.1 - Consent of Counsel (See Opinion of Leonard W. Burningham, Esq.) |
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Exhibit 23.2 - Consent of Independent Registered Public Accountant Firm (Hansen, Barnett & Maxwell, P.C.) |
Item 17.
Undertakings
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A. |
Certificates: |
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B. |
Rule 415 Offering Registrant hereby undertakes: |
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(1) |
To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement to: (i) include any Prospectus required by Section 10(a) (3) of the Securities Act ; (ii) reflect in the Prospectus any facts or events which, individually or in the aggregate, represent a fundamental change in the information in the Registration Statement; and (iii) include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement. |
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(2) |
For determining liability under the Securities Act, treat each post-effective amendment as a new Registration Statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering. |
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(3) |
File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. |
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C. |
Request for Acceleration of Effective Date |
The Registrant may elect to request acceleration of the effective date of the Registration Statement under Rule 461 of the Securities Act.
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D. |
Indemnification |
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”) may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, 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 or 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.
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E. |
Liability to Any Purchase in Initial Distribution of Securities |
Registrant undertakes that in a primary offering of its securities 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 Registrant will be a seller to the purchaser and will be considered to have offered or sold such securities to such purchaser:
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(i) |
Any Preliminary Prospectus or Prospectus of the Registrant relating to the Offering required to be filed pursuant to Rule 424 under the Securities Act;
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(ii) |
Any free writing Prospectus relating to the Offering prepared by or on behalf of the Registrant or used or referred to by the Registrant; |
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(iii) |
The portion of any other free writing Prospectus relating to the Offering containing material information about the Registrant or its securities provided by or on behalf of the Registrant; and
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(iv) |
Any other communication that constitutes an offer in the Offering made by the Registrant to the purchaser. |
The Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s Annual Report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (and, where applicable, each filing of an employee benefit plan’s Annual Report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in a new Registration Statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the Undersigned, thereunto duly authorized, in the City of Santa Ana, California, on the 24th day of October, 2012.
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GEO POINT RESOURCES, INC. |
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Date: October 24, 2012 |
By: |
s/s William C. Lachmar |
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William C. Lachmar |
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President, CEO and sole Director |
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