SECURITIES
AND EXCHANGE
COMMISSION
Washington,
D.C. 20549
FORM
SB-2
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
__________________
WESTMOUNTAIN
ASSET MANAGEMENT,
INC.
(Name
of small business issuer in its
charter)
__________________
Colorado
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6199
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26-
1315305
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(State
or Jurisdiction of
Incorporation or Organization)
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(Primary
Standard Industrial
Classification Code Number)
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(I.R.S.
Employer Identification
Number)
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103
West Mountain
Fort
Collins, Colorado 80524
(970)
482-0783
(Address
and telephone number of
principal executive offices and principal place of business)
Brian
Klemsz
103
West Mountain
Fort
Collins, Colorado 80524
(970)
482-0783
(Name,
address and telephone
number of agent for service)
Copies
to:
With
a Copy
to:
|
David
J. Wagner,
Esq.
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David
Wagner & Associates,
P.C.
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Penthouse
Suite
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8400
East Prentice
Avenue
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Greenwood
Village, Colorado
80111
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Office(303)
793-0304
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Fax
(303)
409-7650
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Approximate
date of proposed sale to the
public: From time to time after this Registration Statement becomes
effective.
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, other than securities
offered only in connection with dividend or interest reinvestment plans, check
the following box. [X]
If
this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If
this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement number of
the
earlier effective registration statement for the same offering. [
]
If
this Form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the
following box and list the Securities Act registration statement number of
the
earlier effective registration statement for the same offering. [
]
If
delivery of the prospectus is
expected to be made pursuant to Rule 434, please check the following box. [
]
CALCULATION
OF REGISTRATION
FEE
Title
of each
class
of securities to be
registered
|
Amount
to be
registered
|
Proposed
maximum
offering
price per
share
(1)
|
Proposed
maximum
aggregate
offering
price
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Amount
of
registration
fee
|
|
|
|
|
|
Common
Stock, $0.001 par
value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________
(1)
Estimated
solely for the purpose of
calculating the registration fee in accordance with Rule 457(e) under the
Securities Act of 1933.
The
registrant
hereby amends this registration statement on such date or dates as may be
necessary to delay its effective date until the registrant shall file a further
amendment which specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the registration statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may
determine.
The
information in this Prospectus is
not complete and may be changed. The shareholders may not sell these
securities until the registration statement filed with the Securities Exchange
Commission is effective. This Prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities
in
any state where the offer or sale is not permitted.
Subject
to Completion,
dated January ____, 2008
WESTMOUNTAIN
ASSET MANAGEMENT,
INC.
736,750
Shares
of Common
Stock
Par
Value $0.001 Per
Share
This
prospectus relates to the offering
by the selling stockholders of WestMountain Asset Management, Inc. of up to
736,750 shares of our common stock, par value $0.001 per share. We
will not receive any proceeds from the sale of common stock.
The
selling stockholders have advised us
that they will sell the shares of common stock from time to time in the open
market, at the initial offering price of $0.10 per share,
which was the
price the majority of the selling stockholders paid for their shares,
until the shares are quoted
on the OTC
Bulletin Board or national securities exchange, at which point the selling
securities holders may sell the registered shares at market prices
prevailing at the time of sale, at prices related to the prevailing market
prices, at negotiated prices, or otherwise as described under the section of
this prospectus titled “Plan of Distribution.”
Our
common stock does not currently
trade in the public market.
You
should rely only on the information
contained in this prospectus or any prospectus supplement or amendment. We
have
not authorized anyone to provide you with different
information.
Investing
in these securities involves
significant risks. See “Risk Factors” beginning on page
5.
Neither
the Securities and Exchange
Commission nor any state securities commission has approved or disapproved
of
the securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The
date of this Prospectus is January
_____, 2008.
The
information contained in this
prospectus is not complete and may be changed. This prospectus is
included in the registration statement that was filed by WestMountain Asset
Management, Inc. with the Securities and Exchange Commission. The
selling stockholders may not sell these securities until the registration
statement becomes effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities
in
any state where the offer or sale is not permitted.
TABLE
OF CONTENTS
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PAGE
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5
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10
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12
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The
following summary highlights
selected information contained in this prospectus. This summary does
not contain all the information you should consider before investing in the
securities. Before making an investment decision, you should read the
entire prospectus carefully, including the “Risk Factors” section, the financial
statements, and the notes to the financial statements.
For
purposes of this prospectus, unless
otherwise indicated or the context otherwise requires, all references herein
to
“Asset Management,” “we,” “us,” and “our,” refer to WestMountain Asset
Management, Inc., a Colorado corporation.
Our
Company
WestMountain
Asset Management, Inc. is
a Colorado corporation which was incorporated on October 18, 2007. We are
a development stage company.
On
November 19, 2007, we issued
290,000 restricted
common
shares for cash.
On
November 20, 2007, we issued
235,000 restricted
common
shares for cash.
On
November 28, 2007, we issued
to WestMountain Blue, LLC, our largest shareholder, a total of 8,050,000
common shares
at a cash price of
$320,000, or $0.04 per share.
On
November 30, 2007, we completed a
private placement offering of our common shares under the provisions of Rule
504
and analogous Colorado securities laws. We raised a total of $48,675 in this
private placement offering and sold a total of 486,750
shares.
Our
plan
is to act as an asset manager by raising, investing and managing private equity
and direct investment funds. We plan to earn management fees based on the size
of the funds that we oversee and incentive income based on the performance
of
these funds. Our company has no prior history of operating as an asset
management advisory firm.
Our
principal executive offices are located at 103 West Mountain, Fort Collins,
Colorado 80524, and our telephone number is (970) 482-0783.
This
Prospectus
We
have undertaken several transactions
the result of which has been the issuance of shares that have restrictions
on
their transferability. In order to provide those investors with
liquidity for their shares, we are filing with the SEC this prospectus as part
of a registration statement to register those securities. We will not
receive any proceeds from any sales of these shares.
Common
stock currently
outstanding
|
9,061,750
shares
(1)
|
Common
stock offered by the
selling stockholders
|
736,750
shares
|
Use
of
proceeds
|
We
will not receive any proceeds
from the sale of common stock offered by this
prospectus.
|
________________
(1)
Shares
of common stock outstanding as
of November 30, 2007.
You
should carefully consider the risks and uncertainties described below and the
other information in this prospectus before deciding to invest in shares of
our
common stock.
The
occurrence of any of the following risks could materially and adversely affect
our business, financial condition and operating result. In this case, the
trading price of our common stock could decline and you might lose all or part
of your investment.
Risks
Related to Our Business and Industry
We
are recently formed, have no operating history, and have never been
profitable. As a result, we may never become profitable, and, as a
result, we could go out of business.
We
were
formed as a Colorado business entity in October, 2007. At the present time,
we
are recently formed and have never been profitable. There can be no
guarantee that we will ever be profitable. We cannot guarantee we will ever
develop revenue. Even if we develop revenue, there is no assurance that we
will
become a profitable company. We may never become profitable, and, as a result,
we could go out of business.
Because
we had incurred a loss and have no current operations, our accountants have
expressed doubts about our ability to continue as a going concern.
For our audit dated November 30, 2007, our accountants have expressed doubt
about our ability to continue as a going concern as a result of lack of history
of operations, limited assets, and operating losses since inception. Our ability
to achieve and maintain profitability and positive cash flow is dependent
upon:
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Ÿ
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our
ability to find suitable investments;
and
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our
ability to generate revenues.
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Based upon current plans, we expect to incur operating losses in future periods
because we will be incurring expenses and not generating sufficient
revenues. We expect our operating costs to range between $60,000 and
$100,000 for the fiscal year ending December 31, 2008. We cannot guarantee
that we will be successful in generating sufficient revenues or other funds
in
the future to cover these operating costs. Failure to generate sufficient
revenues will cause us to go out of business.
Our
lack of operating history makes it
difficult for us to evaluate our future business prospects and make decisions
based on those estimates of our future performance. An investor could lose
his
entire investment.
We
have no operating history. An
investor has no frame of reference to evaluate our future business prospects.
This
makes it difficult, if not
impossible, to evaluate us as an investment. An investor could lose his entire
investment if our future business prospects do not result in our ever becoming
profitable.
If
we do not generate adequate
revenues to finance our operations, our business may fail.
We have not generated revenues from our inception. As of November 30, 2007,
we
had a cash position of $366,565. We anticipate that operating costs will range
between $60,000 and $100,000, for the fiscal year ending December 31, 2008.
These operating costs include insurance, taxes, utilities, maintenance, contract
services and all other costs of operations. We will use contract employees
who
will be paid on an hourly basis as each investment transaction is evaluated.
However, the operating costs and expected revenue generation are difficult
to
predict. We expect to generate revenues in the next twelve months from making
investments and receiving fees for the placement of capital. Since there can
be
no assurances that revenues will be sufficient to cover operating costs for
the
foreseeable future, it may be necessary to raise additional funds. Due to our
lack of operating history, raising additional funds may be
difficult.
Competition
in the investment industry is intense.
Our
business plan involves acting as an investment manager. This business is highly
competitive. There are numerous similar companies providing such services in
the
United States of America. Our competitors will have greater financial resources
and more expertise in this business. Our ability to develop our business will
depend on our ability to successfully market our services in this highly
competitive environment. We cannot guarantee that we will be able to do so
successfully.
The
share control position of WestMountain Blue, LLC will limit the ability of
other
shareholders to influence corporate actions.
Our
largest shareholder,
WestMountain
Blue, LLC
, of which Mr. Klemsz is a 16.8% member, owns 8,050,000 shares
and thereby controls approximately 90% of our outstanding shares. Because
WestMountain
Blue, LLC
individually beneficially controls more than a majority of the
outstanding shares, other shareholders, individually or as a group, will be
limited in their ability to effectively influence the election or removal of
our
directors, the supervision and management of our business or a change in control
of or sale of our company, even if they believed such changes were in the best
interest of our shareholders generally.
Our
future success depends, in large part, on the continued service of our President
and our Secretary-Treasurer and the continued financing of WestMountain Blue,
LLC.
We depend almost entirely on the efforts and continued employment of Mr. Klemsz,
our President and Secretary-Treasurer. Mr. Klemsz is our primary executive
officer, and we will depend on him for nearly all aspects of our operations.
In
addition,
WestMountain
Blue, LLC
, is our only source of financing. We do not have an employment
contract with Mr. Klemsz, and we do not carry key person insurance on his
life. The loss of the services of Mr. Klemsz through incapacity or otherwise,
would have a material adverse effect on our business. It would be very
difficult to find and retain qualified personnel such as Mr. Klemsz and a
financing source to replace
WestMountain
Blue, LLC
.
Our
revenue and profitability fluctuate,
particularly inasmuch as we cannot predict the timing of realization events
in
our business, which may make it difficult for us to achieve steady earnings
growth on a quarterly basis and may cause volatility in the price of our
shares.
We
may experience significant variations
in revenues and profitability during the year and among years because we
are
paid incentive income from certain funds only when investments are realized,
rather than periodically on the basis of increases in the funds’ net asset
values. The timing and receipt of incentive income generated by our funds
is
event driven and thus highly variable, which contributes to the volatility
of
our revenue, and our ability to realize incentive income from our funds may
be
limited. We cannot predict when, or if, any realization of investments will
occur. If we were to have a realization event in a particular quarter, it
may
have a significant impact on our revenues and profits for that particular
quarter which may not be replicated in subsequent quarters. In addition,
our
investments are adjusted for accounting purposes to fair value at the end
of
each quarter, resulting in revenue attributable to our principal investments,
even though we receive no cash distributions from our funds, which could
increase the volatility of our quarterly earnings.
Difficult
market conditions can
adversely affect our funds in many ways, including by reducing the value
or
performance of the investments made by our funds and reducing the ability
of our
funds to raise or deploy capital, which could materially reduce our revenue
and
results of operations.
If
economic conditions are unfavorable
our funds may not perform well and we may not be able to raise money in existing
or new funds. Our funds are materially affected by conditions in the global
financial markets and economic conditions throughout the world. The global
market and economic climate may deteriorate because of many factors beyond
our
control, including rising interest rates or inflation, terrorism or political
uncertainty. In the event of a market downturn, our businesses could be affected
in different ways. Our funds may face reduced opportunities to sell and realize
value from their existing investments, and a lack of suitable investments
for
the funds to make. In addition, adverse market or economic conditions as
well as
a slowdown of activities in a particular sector in which portfolio companies
of
these funds operate could have an adverse effect on the earnings of those
portfolio companies, and therefore, our earnings.
A
general market downturn, or a specific
market dislocation, may cause our revenue and results of operations to decline
by causing:
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the
net asset value of the assets
under management to decrease, lowering management
fees;
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lower
investment returns, reducing
incentive income;
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material
reductions in the value
of our fund investments in portfolio companies which reduce our
‘‘surplus’’ and, therefore, our ability to realize incentive income from
these investments; and
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investor
redemptions, resulting in
lower fees.
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Furthermore,
while difficult market conditions may increase opportunities to make certain
distressed asset investments, such conditions also increase the risk of default
with respect to investments held by our funds with debt
investments.
The
success of our business depends, in large part, upon the proper selection of
investments, which may be difficult to find, acquire and develop.
We
believe that the identification,
acquisition and development of appropriate investments are key drivers of our
business. Our success depends, in part, on our ability to obtain these
investments under favorable terms and conditions and have them increase in
value. We cannot assure you that we will be successful in our attempts to find,
acquire, and/or develop appropriate investments, will not be challenged by
competitors which may put us at a disadvantage. Further, we cannot assure you
that others will not independently develop similar or superior programs or
investments, which may imperil our profitability.
Risks
Related to an Investment in Our Common Stock
The
lack of a broker or dealer to create or maintain a market in our stock could
adversely impact the price and liquidity of our securities.
We have no agreement with any broker or dealer to act as a market maker for
our
securities and there is no assurance that we will be successful in obtaining
any
market makers. Thus, no broker or dealer will have an incentive to make a market
for our stock. The lack of a market maker for our securities could adversely
influence the market for and price of our securities, as well as your ability
to
dispose of, or to obtain accurate information about, and/or quotations as to
the
price of, our securities.
We
have no experience as a public
company.
We
have never operated as a public
company. We have no experience in complying with the various rules and
regulations which are required of a public company. As a result, we may not
be
able to operate successfully as a public company, even if our operations are
successful. We plan to comply with all of the various rules and regulations
which are required of a public company. However, if we cannot operate
successfully as a public company, your investment may be materially adversely
affected. Our inability to operate as a public company could be the basis of
your losing your entire investment in us.
We
may be required to register under the
Investment Company Act of 1940, or the Investment Advisors Act, which could
increase the regulatory burden on us and could negatively affect the price
and
trading of our securities.
Because our proposed business involves the
identification, acquisition
and
development of investments,
we
may be required to register as an investment company under the Investment
Company Act of 1940 or the Investment Advisors Act and analogous state law.
While we believe that we are currently either not an investment company or
an
investment advisor or are exempt from registration as an investment company
under the Investment Company Act of 1940 or the Investment Advisors Act and
analogous state law, either the SEC or state regulators, or both, may disagree
and could require registration either immediately or at some point in the
future. As a result, there could be an increased regulatory burden on us which
could negatively affect the price and trading of our
securities.
Our
stock has no public trading market and there is no guarantee a trading market
will ever develop for our securities.
There
has
been, and continues to be, no public market for our common stock. An active
trading market for our shares has not, and may never develop or be
sustained. If you purchase shares of common stock, you may not be able to resell
those shares at or above the initial price you paid. The market price of our
common stock may fluctuate significantly in response to numerous factors, some
of which are beyond our control, including the following:
* actual
or anticipated fluctuations in our operating results;
* changes
in financial estimates by securities analysts or our failure to perform in
line
with such estimates;
* changes
in market valuations of other companies, particularly those that market services
such as ours;
* announcements
by us or our competitors of significant innovations, acquisitions,
strategic partnerships, joint ventures or capital commitments;
* introduction
of product enhancements that reduce the need for the products our projects
may
develop;
* departures
of key personnel.
.
Of our total outstanding shares as of November 30, 2007, a total of 8,325,000,
or approximately 91.9%, will be restricted from immediate resale but may be
sold
into the market in the near future. This could cause the market price of our
common stock to drop significantly, even if our business is doing
well.
As
restrictions on resale end, the market price of our stock could drop
significantly if the holders of restricted shares sell them or are perceived
by
the market as intending to sell them.
Applicable
SEC rules governing the trading of “Penny Stocks” limit the liquidity of our
common stock, which may affect the trading price of our common
stock.
Our
common stock is currently not quoted in any market. If our common stock becomes
quoted, we anticipate that it will trade well below $5.00 per share. As a
result, our common stock is considered a “penny stock” and is subject to SEC
rules and regulations that impose limitations upon the manner in which our
shares can be publicly traded. These regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock and the associated risks. Under
these regulations, certain brokers who recommend such securities to persons
other than established customers or certain accredited investors must make
a
special written suitability determination for the purchaser and receive the
written purchaser’s agreement to a transaction prior to
purchase. These regulations have the effect of limiting the trading
activity of our common stock and reducing the liquidity of an investment in
our
common stock.
The
over-the-counter market for stock such as ours is subject to extreme price
and
volume fluctuations.
The
securities of companies such as ours have historically experienced extreme
price
and volume fluctuations during certain periods. These broad market fluctuations
and other factors, such as new product developments and trends in the our
industry and in the investment markets generally, as well as economic conditions
and quarterly variations in our operational results, may have a negative effect
on the market price of our common stock.
Buying
low-priced penny stocks is very risky and speculative.
The
shares being offered are defined as a penny stock under the Securities and
Exchange Act of 1934, and rules of the Commission. The Exchange Act and such
penny stock rules generally impose additional sales practice and disclosure
requirements on broker-dealers who sell our securities to persons other than
certain accredited investors who are, generally, institutions with assets in
excess of $5,000,000 or individuals with net worth in excess of $1,000,000
or
annual income exceeding $200,000, or $300,000 jointly with spouse, or in
transactions not recommended by the broker-dealer. For transactions covered
by
the penny stock rules, a broker-dealer must make a suitability determination
for
each purchaser and receive the purchaser's written agreement prior to the sale.
In addition, the broker-dealer must make certain mandated disclosures in penny
stock transactions, including the actual sale or purchase price and actual
bid
and offer quotations, the compensation to be received by the broker-dealer
and
certain associated persons, and deliver certain disclosures required by the
Commission. Consequently, the penny stock rules may affect the ability of
broker-dealers to make a market in or trade our common stock and may also affect
your ability to resell any shares you may purchase in the public
markets.
Resale
Limitations imposed by most states will limit the ability of our shareholders
to
sell their securities unless they are Colorado residents.
The
only
state in which we plan to register this offering is Colorado. As a result,
our
selling shareholders may be limited in the sale of their Shares. The laws of
most states require either an exemption from prospectus and registration
requirements of the securities laws to sell their shares or registration for
sale by this prospectus. These restrictions will limit the ability of
non-residents of Colorado to sell the securities. Residents of other states
must
rely on available exemptions to sell their securities, such as Rule 144, and
if
no exemptions can be relied upon, then the selling shareholders may have to
hold
the securities for an indefinite period of time. Shareholders of states other
than Colorado should consult independent legal counsel to determine the
availability and use of exemptions to re-sell their securities.
Issuances
of our stock could dilute
current shareholders and adversely affect the market price of our common stock,
if a public trading market develops.
We have the authority to issue up to 50,000,000 shares of common stock,
1,000,000 shares of preferred stock, and to issue options and warrants to
purchase shares of our common stock without stockholder approval. Although
no
financing is planned currently, we may need to raise additional capital to
fund
operating losses. If we raise funds by issuing equity securities, our existing
stockholders may experience substantial dilution. In addition, we could issue
large blocks of our common stock to fend off unwanted tender offers or hostile
takeovers without further stockholder approval.
The issuance of preferred stock by our board of directors could adversely affect
the rights of the holders of our common stock. An issuance of preferred stock
could result in a class of outstanding securities that would have preferences
with respect to voting rights and dividends and in liquidation over the common
stock and could, upon conversion or otherwise, have all of the rights of our
common stock. Our board of directors' authority to issue preferred stock could
discourage potential takeover attempts or could delay or prevent a change in
control through merger, tender offer, proxy contest or otherwise by making
these
attempts more difficult or costly to achieve.
Colorado
law and our Articles of Incorporation protect our directors from certain types
of lawsuits, which could make it difficult for us to recover damages from them
in the event of a lawsuit.
Colorado law provides that our directors will not be liable to our company
or to
our stockholders for monetary damages for all but certain types of conduct
as
directors. Our Articles of Incorporation require us to indemnify our directors
and officers against all damages incurred in connection with our business to
the
fullest extent provided or allowed by law. The exculpation provisions may have
the effect of preventing stockholders from recovering damages against our
directors caused by their negligence, poor judgment or other circumstances.
The
indemnification provisions may require our company to use our assets to defend
our directors and officers against claims, including claims arising out of
their
negligence, poor judgment, or other circumstances.
We
do not expect to pay dividends on common stock.
We
have
not paid any cash dividends with respect to our common stock, and it is unlikely
that we will pay any dividends on our common stock in the foreseeable future.
Earnings, if any, that we may realize will be retained in the business for
further development and expansion.
This
prospectus relates to the resale of
our common stock that may be offered and sold from time to time by the selling
stockholders. We will not receive any proceeds from the sale of
shares of common stock in this offering.
DET
ERMINATION
OF
OFFERING PRICE
These shares of common stock may be sold by the selling stockholders from time
to time in the over-the-counter market or on other national securities exchanges
or automated interdealer quotation systems on which our common stock may be
listed or quoted, through negotiated transactions or otherwise at market prices
prevailing at the time of sale or at negotiated prices. The distribution of
the
shares by the selling stockholders is not subject to any underwriting agreement.
The selling stockholders will sell their shares at the initial offering price
of
$0.10 per share until the shares are traded on the OTC Bulletin Board or a
national securities exchange, at which point the selling shareholders may sell
the registered shares at the prevailing market price for the shares at the
time of sale. We will file a post-effective amendment to this registration
statement to reflect a change to the market price when the shares begin trading
on a market.
MA
RKET
FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
Holders
As
of November 30, 2007, there were
sixty-two record holders of our common stock and there were 9,061,750 shares
of
our common stock outstanding. No public market currently exists for shares
of
our common stock. We intend to apply to have our common stock listed for
quotation on the Over-the-Counter Bulletin Board.
The
Securities Enforcement and Penny
Stock Reform Act of 1990
The
Securities and Exchange Commission
has also adopted rules that regulate broker-dealer practices in connection
with
transactions in penny stocks. Penny stocks are generally equity securities
with
a price of less than $5.00 (other than securities registered on certain national
securities exchanges or quoted on the Nasdaq system, provided that current
price
and volume information with respect to transactions in such securities is
provided by the exchange or system).
A
purchaser is purchasing penny stock
which limits the ability to sell the stock. The shares offered by this
prospectus constitute penny stock under the Securities and Exchange Act. The
shares will remain penny stocks for the foreseeable future. The classification
of penny stock makes it more difficult for a broker-dealer to sell the stock
into a secondary market, which makes it more difficult for a purchaser to
liquidate his/her investment. Any broker-dealer engaged by the purchaser for
the
purpose of selling his or her shares in us will be subject to Rules 15g-1
through 15g-10 of the Securities and Exchange Act. Rather than creating a need
to comply with those rules, some broker-dealers will refuse to attempt to sell
penny stock.
The
penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt
from
those rules, to deliver a standardized risk disclosure document prepared by
the
Commission, which:
|
•
|
contains
a description of the
nature and level of risk in the market for penny stocks in both public
offerings and secondary
trading;
|
|
•
|
contains
a description of the
broker's or dealer's duties to the customer and of the rights and
remedies
available to the customer with respect to a violation to such duties
or
other requirements of the Securities Act of 1934, as
amended;
|
|
•
|
contains
a brief, clear, narrative
description of a dealer market, including "bid" and "ask" prices
for penny
stocks and the significance of the spread between the bid and ask
price;
|
|
•
|
contains
a toll-free telephone
number for inquiries on disciplinary
actions;
|
|
•
|
defines
significant terms in the
disclosure document or in the conduct of trading penny stocks;
and
|
|
•
|
contains
such other information
and is in such form (including language, type, size and format) as
the
Securities and Exchange Commission shall require by rule or
regulation;
|
The
broker-dealer also must
provide, prior to effecting any transaction in a penny stock, to the
customer:
|
•
|
the
bid and offer quotations for
the penny stock;
|
|
•
|
the
compensation of the
broker-dealer and its salesperson in the
transaction;
|
|
•
|
the
number of shares to which such
bid and ask prices apply, or other comparable information relating
to the
depth and liquidity of the market for such stock;
and
|
|
•
|
monthly
account statements showing
the market value of each penny stock held in the customer's
account.
|
In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment
for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
their securities.
Equity
Compensation Plan
Information
We
have no outstanding stock options or other equity compensation
plans.
Reports
Once
our registration statement under
Form SB-2 has been declared effective, we will be subject to certain reporting
requirements and will furnish annual financial reports to our stockholders,
certified by our independent accountants, and will furnish unaudited quarterly
financial reports in our quarterly reports filed electronically with the SEC.
All reports and information filed by us can be found at the SEC website,
www.sec.gov
.
Stock
Transfer Agent
The
stock transfer agent for our securities is X-Clearing Corp, of Denver, Colorado.
Their address is 535 Sixteenth Street, Suite 810, Denver, Colorado 80202. Their
phone number is (303)573-1000.
Dividend
Policy
We
have not previously declared or
paid any dividends on our common stock and do not anticipate declaring any
dividends in the foreseeable future. The payment of dividends on our common
stock is within the discretion of our board of directors. We intend to retain
any earnings for use in our operations and the expansion of our business.
Payment of dividends in the future will depend on our future earnings, future
capital needs and our operating and financial condition, among other factors
that our board of directors may deem relevant. We are not under any contractual
restriction as to our present or future ability to pay
dividends.
MA
NAGEMENT’S
DISCUSSION
AND
ANALYSIS
This Management’s Discussion and Analysis or Plan of Operation contains
forward-looking statements that involve future events, our future performance
and our expected future operations and actions. In some cases, you can identify
forward-looking statements by the use of words such as “may”, “will”, “should”,
“anticipate”, “believe”, “expect”, “plan”, “future”, “intend”, “could”,
“estimate”, “predict”, “hope”, “potential”, “continue”, or the negative of these
terms or other similar expressions. These forward-looking statements are only
our predictions and involve numerous assumptions, risks and uncertainties.
Our
actual results or actions may differ materially from these forward-looking
statements for many reasons, including, but not limited to, the matters
discussed in this report under the caption “Risk Factors”. We urge you not to
place undue reliance on these forward-looking statements, which speak only
as of
the date of this prospectus. We undertake no obligation to publicly update
any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
The
following discussion of our financial condition and results of operations should
be read in conjunction with our financial statements and the related notes
included in this report.
The
following table provides selected financial data about us from inception October
18, 2007 through November 30, 2007. For detailed financial information, see
the
audited Financial Statements included in this prospectus.
Balance
Sheet Data: at November 30, 2007
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|
|
|
|
|
|
|
Cash
|
|
$
|
366,565
|
|
|
|
|
|
|
Total
liabilities
|
|
$
|
13,210
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Data: at November 30, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative
expenses
|
|
$
|
13,210
|
|
|
|
|
|
|
Results
of
Operations.
From
our inception on October 18, 2007
through November 30, 2007, we generated no revenue. As a result we have no
operating history upon which to evaluate our business. We had a net loss of
$13,210 for this period.
Our
accountants have expressed doubt
about our ability to continue as a going concern as a result of our history
of
net loss. Our ability to achieve and maintain profitability and positive cash
flow is dependent upon our ability to successfully develop investments and
our
ability to generate revenues.
Operating
expenses, which consisted
solely of general and administrative expenses for the period from our inception
on October 18, 2007 through November 30, 2007 was $13,210. The major
components of general and administrative expenses include professional fees
related to the filing of public documents and reports.
As
a result of the foregoing, we had a
net loss of $13,210 for the period from our inception on October 18, 2007
through November 30, 2007.
We
currently have no revenue but
continue to develop our plan.
Because
we do not pay salaries, and our
major professional fees have been paid for the year, operating expenses are
expected to remain fairly constant.
To
try to operate at a break-even level
based upon our current level of proposed business activity, we believe that
we
must generate approximately $50,000 in revenue per year. However, if our
forecasts are inaccurate, we will need to raise additional funds. In the event
that we need additional capital, WestMountain Blue, LLC has agreed to loan
such
funds as may be necessary through December 31, 2008 for working capital
purposes.
On
the other hand, we may choose to
scale back our operations to operate at break-even with a smaller level of
business activity, while adjusting our overhead to meet the revenue from current
operations. In addition, we expect that we will need to raise additional funds
if we decide to pursue more rapid expansion, the development of new or enhanced
services or products, appropriate responses to competitive pressures, or the
acquisition of complementary businesses or technologies, or if we must respond
to unanticipated events that require us to make additional investments. We
cannot assure that additional financing will be available when needed on
favorable terms, or at all.
We
expect to incur operating losses in
future periods because we will be incurring expenses and not generating
sufficient revenues. We expect approximately $50,000 in operating costs over
the
next twelve months. We cannot guarantee that we will be successful in generating
sufficient revenues or other funds in the future to cover these operating costs.
Failure to generate sufficient revenues or additional financing when needed
could cause us to go out of business.
Liquidity
and Capital
Resources.
As
of November 30, 2007, we had cash or
cash equivalents of $366,565.
Net
cash provided by operating
activities was $-0- from our inception on October 18, 2007 through November
30,
2007.
Cash
flows used in investing activities
were $4,750 from our inception on October 18, 2007 through November 30,
2007.
Cash
flows provided by financing
activities were $371,315 from our inception on October 18, 2007 through November
30, 2007. These cash flows were all related to sales of
stock,
Over
the next twelve months we do not
expect any material our capital costs to develop operations. We plan to buy
office equipment to be used in our operations.
We
believe that we have sufficient
capital in the short term for our current level of operations. This is because
we believe that we can develop sufficient revenue within our present
organizational structure and resources to become profitable in our operations.
We do not anticipate needing to raise additional capital resources in the next
twelve months In the event that we need additional capital, WestMountain Blue,
LLC has agreed to loan such funds as may be necessary through December 31,
2008
for working capital purposes.
Our
principal source of liquidity will
be our operations. We expect variation in revenues to account for the difference
between a profit and a loss. Also business activity is closely tied to the
U.S.
economy. Our ability to achieve and maintain profitability and positive cash
flow is dependent upon our ability to successfully develop investments and
our
ability to generate revenues.
In
any case, we try to operate
with minimal overhead. Our primary activity will be to seek to
act as an
asset manager by raising, investing and managing private equity and direct
investment funds.
If we succeed in
generating sufficient revenues, we will become profitable. We cannot guarantee
that this will ever occur. Our plan is to build our company in any manner which
will be successful.
Off-Balance
Sheet
Arrangements
We
have no off-balance sheet
arrangements with any party.
Plan
of Operation.
Our
plan
for the twelve months beginning January 1, 2008 is to make a profit by
December 31, 2008
. Our company
has no prior history of operating as an asset manager.
We
are a
development stage company. We plan to act as an investment asset manager by
raising, investing and managing private equity and direct investment funds
for
third parties including high net worth individuals and institutions. As is
the
industry practice, we plan to earn management fees based on the size of the
funds that we manage and incentive income based on the performance of these
funds. We do not plan to focus on any particular industry but will look at
any
and all opportunities. We will screen investments with emphasis towards finding
opportunities with long term potential.
We
will
develop a proprietary investment screening process to make our
investments. This process will be based upon the experience of Mr.
Klemsz and outside consultants as we develop our company. This
process has not been developed at this time.
If
we are
not successful in our operations we will be faced with several
options:
1.
|
Cease
operations and go out of business;
|
2.
|
Continue
to seek alternative and acceptable sources of
capital;
|
3.
|
Bring
in additional capital that may result in a change of control;
or
|
4.
|
Identify
a candidate for acquisition that seeks access to the public marketplace
and its financing sources
|
Currently,
we believe that we have sufficient capital to implement our proposed business
operations or to sustain them through December 31, 2008. If we can become
profitable, we could operate at our present level indefinitely. To date, we
have
never had any discussions with any possible acquisition candidate nor have
we
any intention of doing so.
We
plan to operate out of one office in Colorado. We have no specific plans at
this
point for additional offices.
In
order to adequately develop our
business plan, we need people, permanence, capital and currency. As a public
company, we believe that we will be best positioned to meet each of these
goals:
|
•
|
People
—
to
increase our ability to
provide financial incentives to our future employees through the
issuance
of publicly-traded equity securities that represent the value and
performance of the company as a whole. In a highly competitive market
for
professional talent, publicly-traded equity securities provide us
with a
valuable additional compensation
tool;
|
|
•
|
Permanence
—
to
solidify our institutional
presence as a manager. Being a public asset manager will
benefit us as institutions and individuals increase their understanding
of
our operations;
|
|
•
|
Capital
—
to
more efficiently access
capital that we can use to grow our businesses and develop new
investments; and
|
|
•
|
Currency
—
to
provide us with a
publicly-traded equity security that we can use to finance future
strategic acquisitions.
|
Proposed
Milestones to Implement
Business Operations
At
the present time, we plan to operate
from one location in Fort Collins, Colorado. Our plan is to make our operation
profitable by December 31, 2008. We estimate that we must generate approximately
$50,000 in revenues per year to be profitable.
We
believe that we can be profitable or
at break even by the end of our next fiscal year, assuming sufficient revenues.
Based upon our current plans, we have adjusted our operating expenses so that
cash generated from operations and from working capital financing is expected
to
be sufficient for the foreseeable future to fund our operations at our currently
forecasted levels. To try to operate at a break-even level based upon our
current level of anticipated business activity, we believe that we must generate
approximately $50,000 in revenue per year. However, if our forecasts are
inaccurate, we may need to raise additional funds. Our resources consist of
our
available cash. In addition, WestMountain Blue, LLC agreed to loan
such additional funds as may be necessary through December 31, 2008 for working
capital purposes. On the other hand, we may choose to scale back our operations
to operate at break-even with a smaller level of business activity, while
adjusting our overhead to meet the revenue from current operations. In addition,
we expect that we will need to raise additional funds if we decide to pursue
more rapid expansion, the development of new or enhanced services and products,
appropriate responses to competitive pressures, or the acquisition of
complementary businesses or technologies, or if we must respond to unanticipated
events that require us to make additional investments. We cannot assure that
additional financing will be available when needed on favorable terms, or at
all.
We
expect to incur operating losses in
future periods because we will be incurring expenses and not generating
sufficient revenues. We expect approximately $50,000 in operating costs over
the
next twelve months. We cannot guarantee that we will be successful in generating
sufficient revenues or other funds in the future to cover these operating costs.
Failure to generate sufficient revenues or additional financing when needed
could cause us to go out of business
In
the next 12 months, we do not intend to spend any material funds on research
and
development and do not intend to purchase any large
equipment.
Recently
Issued Accounting
Pronouncements.
We
do not expect the adoption of any
recently issued accounting pronouncements to have a significant impact on our
net results of operations, financial position, or cash
flows.
Seasonality.
We
do not expect our revenues to be
impacted by seasonal demands for our services.
General
WestMountain Asset Management, Inc. is a Colorado corporation which was
incorporated on October 18, 2007. We are a development stage company. We
plan to act as an asset manager.
On
November 19, 2007, we issued
290,000 restricted
common
shares for cash.
On
November 20, 2007, we issued
235,000 restricted
common
shares for cash.
On
November 28, 2007, we issued
to WestMountain Blue, LLC, our largest shareholder, a total of 8,050,000
common shares
at a cash price of
$320,000, or $0.04 per share.
On
November 30, 2007, we completed a
private placement offering of our common shares under the provisions of Rule
504
and analogous Colorado securities laws. We raised a total of $48,675 in this
private placement offering and sold a total of 486,750
shares.
Our
principal executive offices are located at 103 West Mountain, Fort Collins,
Colorado 80524, and our telephone number is (970) 482-0783.
Organization
We
are comprised of one corporation. All
of our operations are conducted through this corporation.
Overview
of our Proposed Operations
Our
plan
is to act as an asset manager by raising, investing and managing private equity
and direct investment funds. We plan to earn management fees based on the size
of the funds that we oversee and incentive income based on the performance
of
these funds. Our company has no prior history of operating as an asset
management advisory firm.
Our
initial office is leased from a member of the limited liability company,
WestMountain Blue, LLC, which owns a majority of our shares. Currently, we
pay
no rent for this office space. We plan to occupy separate office facilities
and
obtain office furniture and equipment at some future date, depending upon the
development of our business plan. We also plan to develop a proprietary
investment screening process to make our investments. This process
will be based upon the experience of our management team and outside
consultants. This process has not been developed at this
time.
Private
equity and direct investment funds generally refer to portfolios of non-actively
traded common equity, preferred stock or mezzanine or distressed debt securities
of private companies, but such funds may include investments in such equity
or
debt securities of public companies. Private equity funds also may include
investments that constitute either control or minority positions in private
companies or investments in an array of real estate securities or assets,
including those made through special purpose funds that have risk-return
characteristics similar to those of other private equity investments and
venture
capital investments. Private equity fund managers often seek to exploit
dislocations in the market when other investors do not recognize the value
of a
certain company or security. These investments may include significant changes
to a company’s capital structure through the use of borrowed capital, a strategy
referred to as a ‘‘leveraged buyout’’. In certain cases, private equity funds
engage in the acquisition and delisting of public companies.
Private
equity and direct investment funds are typically structured as unregistered
limited partnership funds that obtain commitments from certain qualified
investors to invest a specified amount of equity capital on their behalf.
These
funds are typically ten year fixed-lived vehicles with provisions to extend
if
appropriate. Investors’ capital is typically called by the fund as investments
are made over the first three to six years of the fund’s term. Investors’
capital is returned through distributions and when those investments are
subsequently liquidated. Liquidation typically occurs within five to eight
years. Typical private equity fund investors are high net worth individuals
and
institutions. Private equity fund managers typically earn fees as follows:
(i)
management fees on committed or contributed capital, (ii) transaction and
monitoring fees as capital is invested and (iii) fees based on the net profits
of the fund, often subject to a preferred return for investors and contingent
repayment based on actual realized performance of the fund at the time of
liquidation. Private equity fund managers may from time to time commit a
portion
of their own capital to the funds they manage.
According
to Thomson Venture Economics, there are currently over 1,800 private equity
funds in existence globally. Private equity funds have experienced significant
inflows recently, with over $400 billion of capital raised in the U.S. since
the
beginning of 2002, according to Thomson Financial.
We
plan to act as an
investment asset manager by raising, investing and managing private equity
and
direct investment funds for third parties including high net worth individuals
and institutions. As is the industry practice, we plan to earn management fees
based on the size of the funds that we manage and incentive income based on
the
performance of these funds. We do not plan to focus on any particular industry
but will look at any and all opportunities.
When
making investments, we will primarily focus on working with small companies
that
require expansion or growth capital. We will screen investments
with emphasis towards finding opportunities with long term potential based
upon
technology, first mover, or market value add business plans.
We
are
presently planning to develop and implement a web site based operation to gather
additional potential investment opportunities beyond what we can generate
through our network of contacts. We also plan to utilize the most current
technology to analyze investments. We believe the technology will assist in
the
analysis of each opportunity.
We
plan to operate out of one office in Colorado. We have no specific plans at
this
point for additional offices.
If
we are not successful in our
operations we will be faced with several options:
1.
|
Cease
operations and go out of business;
|
2.
|
Continue
to seek alternative and acceptable sources of
capital;
|
3.
|
Bring
in additional capital that may result in a change of control;
or
|
4.
|
Identify
a candidate for acquisition that seeks access to the public marketplace
and its financing sources
|
Currently,
we believe that we have sufficient capital to implement our proposed business
operations or to sustain them through December 31, 2008. If we can become
profitable, we could operate at our present level indefinitely. To date,
we have
never had any discussions with any possible acquisition candidate nor have
we
any intention of doing so.
Development
We
plan
to utilize our relationships for referrals and the expertise of third party
independent contractors who we plan to hire to develop investment opportunities.
Each contractor will be expected to utilize her or his previous contacts in
business to develop potential investment opportunities. We will pay an
introduction fee to contractors for successful investments. However, Mr. Klemsz
initially plans to use his contacts to generate prospects. We may eventually
hire employees for this function. We currently use no one to solicit potential
investments.
Patents
and Trademarks
We
do not
currently have any patents or trademarks. If we determine it is feasible to
file
for such patent or trademark protection, we still have no assurance that doing
so will prevent competitors from using the same or similar technology, names,
marks, concepts or appearance.
Clients
and
Competition
Our
business plan involves acting as an
asset manager for private equity and direct investment funds. This business
is
highly competitive. There are numerous similar companies providing such services
in the United States of America. Our competitors will have greater financial
resources and more expertise in this business. Our ability to develop our
business will depend on our ability to successfully identify investments as
well
as raise capital through partnership structures in this highly competitive
environment. We cannot guarantee that we will be able to do so
successfully.
Over
the past several years, the size
and number of companies such as ours has continued to increase. If this trend
continues, it is possible that it will become increasingly difficult for
us to
raise funds to manage. More significantly, the allocation of increasing amounts
of capital to alternative investment strategies by institutional and individual
investors may lead to a reduction in profitable investment opportunities,
including by driving prices for investments higher and increasing the difficulty
of achieving targeted returns. In addition, if interest rates were to rise
or
there were to be a prolonged bull market in equities, the attractiveness
of our
funds relative to investments in other investment products could decrease.
Competition is based on a variety of factors, including:
|
•
|
investment
performance;
|
|
•
|
investor
perception of investment
managers’ drive, focus and alignment of
interest;
|
|
•
|
quality
of service provided to and
duration of relationship with
investors;
|
|
•
|
business
reputation;
and
|
|
•
|
level
of fees and expenses charged
for services.
|
We
compete in all aspects of our
business with a large number of investment management firms, private equity
fund
sponsors, hedge fund sponsors and other financial institutions. A number
of
factors serve to increase our competitive risks:
|
•
|
investors
may develop concerns
that we will allow a business to grow to the detriment of its
performance;
|
|
•
|
some
of our competitors have
greater capital, lower targeted returns or greater sector or investment
strategy specific expertise than we do, which creates competitive
disadvantages with respect to investment opportunities; some of our
competitors may perceive risk differently than we do which could
allow
them either to outbid us for investments in particular sectors or,
generally, to consider a wider variety of
investments;
|
|
•
|
there
are relatively few barriers
to entry impeding new private equity and hedge fund management firms,
and
the successful efforts of new entrants into our various lines of
business,
including former ‘‘star’’ portfolio managers at large diversified
financial institutions as well as such institutions themselves, will
continue to result in increased competition;
and
|
|
•
|
other
industry participants
continuously seek to recruit our best and brightest investment
professionals away from us.
|
These
and
other factors could reduce our earnings and revenues and materially adversely
affect our business.
Backlog
At
November 30, 2007, we had no
backlogs.
Employees
We
have one full-time employee: Mr. Brian Klemsz, our President. Mr. Klemsz does
not draw a salary or receive any other kind of compensation. However, we
reimburse our employee for all necessary and customary business related
expenses. We have no plans or agreements which provide health care,
insurance or compensation on the event of termination of employment or change
in
our control. We do not pay our Directors separately for any Board
meeting they attend.
Proprietary
Information
We
own no proprietary information.
Government
Regulation
At
some point, we may be required to
file to become a registered investment advisor, but we do not expect government
regulations or environmental laws to have any material impact on
us.
Research
and
Development
We
have never spent any amount in
research and development activities.
Environmental
Compliance
We
believe that we are not subject to
any material costs for compliance with any environmental
laws.
Our
principal executive offices are located at 103 West Mountain, Fort Collins,
Colorado 80524, and our telephone number is (970) 482-0783.
Our initial office
is
leased from a member of the limited liability company, WestMountain Blue, LLC,
which owns a majority of our shares. Currently, we pay no rent for this office
space. We plan to occupy separate office facilities and obtain office furniture
and equipment at some future date, depending upon the development of our
business plan. We own no real estate nor have plans to acquire any real
estate.
DI
RECTORS,
EXECUTIVE
OFFICERS AND CONTROL PERSONS
Set
forth below is the name of the sole
director and officer of the Company, all positions and offices with the Company
held, the period during which he has served as such, and the business experience
during at least the last five years:
Name
|
|
Age
|
|
Positions
and Offices Held
|
|
|
|
|
|
Brian
Klemsz
|
|
48
|
|
President,
Treasurer,
Director
|
|
|
|
|
|
Mr.
Klemsz has been the Company’s
President, Secretary-Treasurer, and sole Director since our inception.
Since March, 2007, he has been the Chief Investment Officer of BOCO Investments,
LLC. He was President and Chief Investment Officer for GDBA
Investments, LLLP, a private investment partnership from May, 2000 until
February, 2007. S
ince 2005,
h
e has also been the President, Secretary-Treasurer, and Director of
Across America Financial Services, Inc., a public company which acts as a
mortgage broker in commercial
real
estate transactions. He is currently also
the
President, Secretary-Treasurer, and sole Director of WestMountain
Alternative Energy, Inc., WestMountain Distressed Debt, Inc., and WestMountain
Index Advisor, Inc., which are newly incorporated companies in the process
of
becoming public. Mr. Klemsz received a Masters of Science in Accounting and
Taxation in 1993 and a Masters of Science in Finance in 1990 from Colorado
State
University. He received his Bachelor of Science degree from the University
of
Colorado in 1981.
SEC
URITY
OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS
AND
MANAGEMENT
The
following sets forth the number of
shares of our $.0.001 par value common stock beneficially owned by (i) each
person who, as of November 30, 2007, was known by us to own beneficially more
than five percent (5%) of its common stock; (ii) our individual Directors and
(iii) our Officers and Directors as a group. A total of 9,061,750 common shares
were issued and outstanding as of November 30, 2007.
Name
and
Address
|
Amount
and Nature
of
|
Percent
of
|
of
Beneficial
Owner
|
Beneficial
Ownership
(1)(2)
|
Class
|
|
|
|
WestMountain
Blue, LLC(3)
|
8,050,000
|
88.8%
|
|
|
|
Fort
Collins, Colorado 80524
|
|
|
|
|
|
|
|
|
|
|
|
Fort
Collins, Colorado 80524
|
|
|
|
|
|
All
Officers and Directors as a
Group
|
|
|
|
|
|
______________
(1)
All ownership is
beneficial and of record, unless indicated otherwise.
(2)
The Beneficial owner
has
sole voting and investment power with respect to the shares
shown.
(3)
Mr. Klemsz owns 16.8%
of
WestMountain Blue, LLC.
Executive
Compensation
Our
officers and directors do not
receive any compensation for their services rendered to us, nor have they
received such compensation in the past. As of the date of this
registration statement, we have no funds available to pay the officers and
directors. Further, the officers and directors are not accruing any
compensation pursuant to any agreement with us. We have no plans to pay any
compensation to our officers or directors in the future.
None
of our officers and directors
will receive any finder’s fee, either directly or indirectly, as a result of
their respective efforts to implement our business plan outlined
herein.
No
retirement, pension, profit sharing,
stock option or insurance programs or other similar programs have been adopted
by us for the benefit of its employees.
CE
RTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Our
principal executive offices are located at 103 West Mountain, Fort Collins,
Colorado 80524, and our telephone number is (970) 482-0783.
This office is leased
from a member of the limited liability company, WestMountain Blue, LLC, which
owns a majority of our shares. Currently, we pay no rent for this office
space.
DE
SCRIPTION
OF
SECURITIES
We
are authorized to issue 50,000,000
shares of Common Stock, par value $.0.001 per share, and 1,000,000 shares of
Preferred Stock, par value $0.10 per share, to have such classes and preferences
as our Board of Directors may determine from time to time. As of November 30,
2007, we had 9,061,750 shares of Common Stock issued and outstanding. No
Preferred Stock has been issued or is outstanding as of the date
hereof.
Common
Stock
The
holders of Common Stock have one
vote per share on all matters (including election of Directors) without
provision for cumulative voting. Thus, holders of more than 50% of the shares
voting for the election of directors can elect all of the directors, if they
choose to do so. The Common Stock is not redeemable and has no conversion or
preemptive rights.
The
Common Stock currently outstanding
is validly issued, fully paid and non-assessable. In the event of our
liquidation, the holders of Common Stock will share equally in any balance
of
our assets available for distribution to them after satisfaction of creditors
and the holders of our senior securities, whatever they may be. We may pay
dividends, in cash or in securities or other property when and as declared
by
the Board of Directors from funds legally available therefore, but we have
paid
no cash dividends on our Common Stock.
Preferred
Stock
Under
the Articles of Incorporation, the
Board of Directors has the authority to issue non-voting Preferred Stock and
to
fix and determine its series, relative rights and preferences to the fullest
extent permitted by the laws of the State of Colorado and such Articles of
Incorporation. As of the date of this Registration Statement, no shares of
Preferred Stock are issued or outstanding. The Board of Directors has no plan
to
issue any Preferred Stock in the foreseeable future.
Dividends
We
do not expect to pay
dividends. Dividends, if any, will be contingent upon our revenues
and earnings, if any, capital requirements and financial
conditions. The payment of dividends, if any, will be within the
discretion of our Board of Directors. We presently intend to retain
all earnings, if any, for use in its business operations and accordingly, the
Board of Directors does not anticipate declaring any dividends in the
foreseeable future.
SE
LLING
SECURITY
HOLDERS
The
following table sets forth the shares beneficially owned, as of the date of
this
prospectus, by the selling stockholders prior to the offering contemplated
by
this prospectus, the number of shares each selling stockholder is offering
by
this prospectus and the number of shares which each selling stockholder would
own beneficially if all such offered shares are sold. None of the
selling stockholders is known to us to be a registered broker-dealer or an
affiliate of a registered broker-dealer. Each of the selling
stockholders has acquired his, her or its shares solely for investment and
not
with a view to or for resale or distribution of such
securities. Beneficial ownership is determined in accordance with SEC
rules and includes voting or investment power with respect to the
securities.
Name
(1)
|
Shares
of common stock owned prior
to the offering
|
Shares
of common stock to be
sold
(2)
|
Shares
of common stock owned after
the offering
|
Percentage
of common stock owned
after this offering %
|
|
|
|
|
|
|
|
|
|
|
Samuel
R. Ernst
|
18,000
|
18,000
|
-
0
-
|
-
0
-
|
Beth
Axe
|
2,500
|
2,500
|
-
0
-
|
-
0
–
|
Stan
& Nicole Javernick
|
5,000
|
5,000
|
-
0
-
|
-
0
–
|
Joni
Troska
|
30,000
|
30,000
|
-
0
-
|
-
0
-
|
Wendy
Hartzell
|
10,000
|
10,000
|
-
0
-
|
-
0
-
|
Bryon
F. Wynn III
|
5,000
|
5,000
|
-
0
-
|
-
0
-
|
Caitlin
Wacker
|
500
|
500
|
-
0
-
|
-
0
-
|
Rebecca
Cramer
|
2,500
|
2,500
|
-
0
-
|
-
0
-
|
Robert
D. Paul
|
1,000
|
1,000
|
-
0
-
|
-
0
-
|
Brooks
Bentley
|
2,500
|
2,500
|
-
0
-
|
-
0
-
|
Renee
& Greg Hanson
|
500
|
500
|
-
0
-
|
-
0
-
|
Jennifer
M. Crutchfield
|
500
|
500
|
-
0
-
|
-
0
-
|
Charles
Amburn
|
2,500
|
2,500
|
-
0
-
|
-
0
-
|
Gwen
Garrison
|
500
|
500
|
-
0
-
|
-
0
-
|
Merry
Hummell
|
30,000
|
30,000
|
-
0
-
|
-
0
-
|
Roger
A. & Susan D. Warren
|
30,000
|
30,000
|
-
0
-
|
-
0
-
|
Albert
C. Yates
|
10,000
|
10,000
|
-
0
-
|
-
0
-
|
David
L. Lavigne
|
500
|
500
|
-
0
-
|
-
0
-
|
C
Gerard Nalezny & Pennie M. Nalezny
|
15,000
|
15,000
|
-
0
-
|
-
0
-
|
Joseph
A. Lavigne
|
500
|
500
|
-
0
-
|
-
0
-
|
Steve
& Leslie Taylor
|
15,000
|
15,000
|
-
0
-
|
-
0
-
|
Barry
W. Schmitt
|
10,000
|
10,000
|
-
0
-
|
-
0
-
|
Ann
L. Schmitt
|
10,000
|
10,000
|
-
0
-
|
-
0
-
|
Kelly
Ann Schmitt (UTMA/CO account)
|
5,000
|
5,000
|
-
0
-
|
-
0
-
|
David
L. Diehl
|
30,000
|
30,000
|
-
0
-
|
-
0
-
|
Bryan
& Julie Willson
|
20,000
|
20,000
|
-
0
-
|
-
0
-
|
Dan
Eckles
|
30,000
|
30,000
|
-
0
-
|
-
0
-
|
Richy
& Teresita Bjelkevig
|
15,000
|
15,000
|
-
0
-
|
-
0
-
|
Gary
& Dee Emmerson
|
5,000
|
5,000
|
-
0
-
|
-
0
-
|
Joseph
X. Jenkins & Kristynn M. Jenkins
|
10,000
|
10,000
|
-
0
-
|
-
0
-
|
Nathan
Lorenz
|
4,000
|
4,000
|
-
0
-
|
-
0
-
|
Paul
& Anne Hudnut
|
20,000
|
20,000
|
-
0
-
|
-
0
-
|
Robert
J. Richmeier, Jr.
|
500
|
500
|
-
0
-
|
-
0
-
|
J.
David Holland Jr.
|
500
|
500
|
-
0
-
|
-
0
-
|
Valeri
Pappas
|
500
|
500
|
-
0
-
|
-
0
-
|
Scott
W. Wilkinson
|
500
|
500
|
-
0
-
|
-
0
-
|
Ellen
C. Husband
|
500
|
500
|
-
0
-
|
-
0
-
|
James
W. Creamer III
|
1,250
|
1,250
|
-
0
-
|
-
0
-
|
Matthew
T. Ramsey
|
1,000
|
1,000
|
-
0
-
|
-
0
-
|
Denis
J. & Cheryl M. Rice
|
25,000
|
25,000
|
-
0
-
|
-
0
-
|
Kenneth
P. Munsch
|
25,000
|
25,000
|
-
0
-
|
-
0
-
|
Mary
E. Klein
|
1,000
|
1,000
|
-
0
-
|
-
0
-
|
Matthew
K. Stone
|
1,000
|
1,000
|
-
0
-
|
-
0
-
|
James
R. Smith
|
10,000
|
10,000
|
-
0
-
|
-
0
-
|
Jaime
S. Whitlock
|
2,500
|
2,500
|
-
0
-
|
-
0
-
|
Bernard
M. Collett
|
11,250
|
11,250
|
-
0
-
|
-
0
-
|
Charlene
S. Collett
|
11,250
|
11,250
|
-
0
-
|
-
0
-
|
Chris
Thompson
|
10,000
|
10,000
|
-
0
-
|
-
0
-
|
Lisa
K. Collett
|
10,000
|
10,000
|
-
0
-
|
-
0
-
|
Mattison
C. Sperry
|
1,500
|
1,500
|
-
0
-
|
-
0
-
|
Christine
Kanouff
|
500
|
500
|
-
0
-
|
-
0
-
|
Gary
Ceriani
|
10,000
|
10,000
|
-
0
-
|
-
0
-
|
Christopher
Holloway
|
500
|
500
|
-
0
-
|
-
0
-
|
Jodi
K. Stevens
|
2,500
|
2,500
|
-
0
-
|
-
0
-
|
Anabelle
G. Stevens
|
2,500
|
2,500
|
-
0
-
|
-
0
-
|
Robert
L. Stevens(3)
|
2,500
|
2,500
|
-
0
-
|
-
0
-
|
Abigail
R. Stevens
|
2,500
|
2,500
|
-
0
-
|
-
0
-
|
Ajay
Menon
|
10,000
|
10,000
|
-
0
-
|
-
0
-
|
Edward
R. Gorab
|
500
|
500
|
-
0
-
|
-
0
-
|
Michael
J. McCloskey
|
1,000
|
1,000
|
-
0
-
|
-
0
–
|
Technology
Partners, LLC(3)
|
50,000
|
50,000
|
-
0
-
|
-
0
–
|
David
Wagner & Associates, P.C(4)
|
200,000
|
200,000
|
-
0
-
|
-
0
–
|
|
|
|
|
|
Total
|
736,750
|
736,750
|
|
|
________________________
|
(1)
|
All
shares are owned of record and
beneficially unless otherwise indicated. Beneficial ownership information
for the selling stockholders is provided as of November 30, 2007,
based
upon information provided by the selling stockholders or otherwise
known
to us.
|
|
(2)
|
Assumes
the sale of all shares of
common stock registered pursuant to this prospectus. The selling
stockholders are under no obligation known to us to sell any shares
of
common stock at this time.
|
|
(3)
|
The
company is controlled by
Robert Stevens and Paul
Enright.
|
|
(4)
|
The
company is owned by David
Wagner.
|
The
selling stockholders may, from time
to time, sell any or all of their shares of common stock on any stock exchange,
market or trading facility on which the shares are traded or in private
transactions. If the shares of common stock are sold through
underwriters or broker-dealers, the selling stockholders will be responsible
for
underwriting discounts or commission or agent’s commissions. The
selling stockholders have advised us that they will sell the shares of common
stock from time to time in the open market, at the initial offering price of
$0.10 per share,
which was the price the majority of the selling
stockholders paid for their shares,
until the shares are quoted
on the OTC
Bulletin Board or national securities exchange, at which point the selling
securities holders may sell the registered shares at fixed prices, at
prevailing market prices at the time of the sale, at varying prices determined
at the time of sale, or negotiated prices. The selling stockholders
may use any one or more of the following methods when selling
shares:
•
|
any
national securities exchange
or quotation service on which the securities may be listed or quoted
at
the time of sale;
|
•
|
ordinary
brokerage transactions
and transactions in which the broker-dealer solicits
purchasers;
|
•
|
blostocttrades
in which the
broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the
transaction;
|
•
|
purchases
by a broker-dealer as
principal and resale by the broker-dealer for its
account;
|
•
|
transactions
otherwise than on
these exchanges or systems or in the over-the-counter
market;
|
•
|
through
the writing of options,
whether such options are listed on an options exchange or
otherwise;
|
•
|
an
exchange distribution in
accordance with the rules of the applicable
exchange;
|
•
|
privately
negotiated
transactions;
|
•
|
broker-dealers
may agree with the
selling stockholders to sell a specified number of such shares at
a
stipulated price per share;
|
•
|
a
combination of any such methods
of sale; and
|
•
|
any
other method permitted
pursuant to applicable law.
|
The
selling stockholders
may also sell shares under Rule 144 under the Securities Act, if available,
rather than under this prospectus.
The
selling stockholders may also engage
in short sales against the box, puts and calls and other transactions in our
securities or derivatives of our securities and may sell or deliver shares
in
connection with these trades.
Broker-dealers
engaged by the selling
stockholders may arrange for other broker-dealers to participate in
sales. Broker-dealers may receive commissions or discounts from the
selling stockholders (or, if any broker-dealer acts as agent for the purchaser
of shares, from the purchaser) in amounts to be negotiated. The
selling stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved. Any profits
on the resale of shares of common stock by a broker-dealer acting as principal
might be deemed to be underwriting discounts or commissions under the Securities
Act. Discounts, concessions, commissions and similar selling
expenses, if any, attributable to the sale of shares will be borne by a selling
stockholder. The selling stockholders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving
sales
of the shares if liabilities are imposed on that person under the Securities
Act.
In
connection with the sale of the
shares of common stock or otherwise, the selling stockholders may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in positions they
assume.
The
selling stockholders may also sell
shares of common stock short and deliver shares of common stock covered by
this
prospectus to close out short positions and to return borrowed shares in
connection with such short sales. The selling stockholders may also
loan or pledge shares of common stock to broker-dealers that in turn may sell
such shares. The selling stockholders may, from time to time, pledge
or grant a security interest in some or all of the shares of common stock owned
by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the shares of common stock
from time to time under this prospectus after we have filed an amendment to
this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act amending the list of selling stockholders to include the pledgee, transferee
or other successors in interest as selling stockholders under this
prospectus.
The
selling stockholders also may
transfer the shares of common stock in other circumstances, in which case the
transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus and may sell the shares of
common stock from time to time under this prospectus after we have filed an
amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act amending the list of selling stockholders to include
the
pledgee, transferee or other successors in interest as selling stockholders
under this prospectus. The selling stockholders also may transfer and
donate the shares of common stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus. The
selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any
commissions paid, or any discounts or concessions allowed to, such
broker-dealers or agents and any profit realized on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. At the time a particular offering of the
shares of common stock is made, a prospectus supplement, if required, will
be
distributed which will set forth the aggregate amount of shares of common stock
being offered and the terms of the offering, including the name or names of
any
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling stockholders and any discounts,
commissions or concessions allowed or re-allowed or paid to
broker-dealers. Under the securities laws of some states, the shares
of common stock may be sold in such states only through registered or licensed
brokers or dealers.
In
addition, in some states the shares
of common stock may not be sold unless such shares have been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and is complied with. There can be no
assurance that any selling stockholder will sell any or all of the shares of
common stock registered pursuant to the shelf registration statement, of which
this prospectus forms a part.
Each
selling stockholder has informed us
that it does not have any agreement or understanding, directly or indirectly,
with any person to distribute the common stock. None of the selling
stockholders who are affiliates of broker-dealers, other than the initial
purchasers in private transactions, purchased the shares of common stock outside
of the ordinary course of business or, at the time of the purchase of the common
stock, had any agreements, plans or understandings, directly or indirectly,
with
any person to distribute the securities.
We
are paying all fees and expenses
incident to the registration of the shares of common stock. Except as
provided for indemnification of the selling stockholders, we are not obligated
to pay any of the expenses of any attorney or other advisor engaged by a selling
stockholder. We have not agreed to indemnify any selling stockholders
against losses, claims, damages and liabilities, including liabilities under
the
Securities Act.
If
we are notified by any selling
stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required, we will
file
a supplement to this prospectus. If the selling stockholders use this
prospectus for any sale of the shares of common stock, they will be subject
to
the prospectus delivery requirements of the Securities Act.
The
anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of our common stock
and
activities of the selling stockholders, which may limit the timing of purchases
and sales of any of the shares of common stock by the selling stockholders
and
any other participating person. Regulation M may also restrict the
ability of any person engaged in the distribution of the shares of common stock
to engage in passive market-making activities with respect to the shares of
common stock. Passive market making involves transactions in which a
market maker acts as both our underwriter and as a purchaser of our common
stock
in the secondary market. All of the foregoing may affect the
marketability of the shares of common stock and the ability of any person or
entity to engage in market-making activities with respect to the shares of
common stock.
Once
sold under the registration
statement, of which this prospectus forms a part, the shares of common stock
will be freely tradable in the hands of persons other than our
affiliates.
There
is no litigation pending or
threatened by or against us.
The
validity of the shares of common
stock to be sold in the offering will be passed upon for us by the law firm
of
David Wagner & Associates, P.C. This firm owns 200,000 shares of our common
stock.
Our
financial statements as of and for
the period ended November 30, 2007 included herein and elsewhere in the
prospectus have been audited by Cordovano and Honeck LLP independent certified
public accountants, to the extent set forth in their report appearing herein
and
elsewhere in the prospectus. Such financial statements have been so included
in
reliance upon the report of such firm given upon their authority as experts
in
auditing and accounting.
WH
ERE
YOU CAN FIND
MORE INFORMATION
Our
filings are available to the public
at the SEC’s web site at http://www.sec.gov. You may also read and
copy any document with the SEC at the SEC’s Public Reference Room at 100 F
Street, NE, Washington, D.C. 20549. Further information on the Public
Reference Room may be obtained by calling the SEC at
1-800-SEC-0330.
We have filed a registration statement on Form SB-2 with the SEC under the
Securities Act for the common stock offered by this prospectus. This
prospectus does not contain all of the information set forth in the registration
statement, certain parts of which have been omitted in accordance with the
rules
and regulations of the SEC. For further information, reference is
made to the registration statement and its exhibits. Whenever we make
references in this prospectus to any of our contracts, agreements or other
documents, the references are not necessarily complete and you should refer
to
the exhibits attached to the registration statement for the copies of the actual
contract, agreement or other document.
FINANCIAL
STATEMENTS
The
consolidated financial statements of
WestMountain Asset Management, Inc. commencing on page F-1 are included with
this prospectus. These financial statements have been prepared on the
basis of accounting principles generally accepted in the United States and
are
expressed in US dollars.
WestMountain
Asset Management, Inc.
(A
Development Stage
Company)
With
Independent Accountant’s Audit
Report
For
the period
October 18,
2007
(Inception) Through November
30, 2007
TABLE
OF
CONTENTS
|
Page
|
|
|
Independent
Accountant’s Audit
Report
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement
of Shareholders’
Equity
|
|
|
|
Notes
to Financial
Statements
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Board of Directors and Shareholders:
WestMountain
Asset Management, Inc.
We
have
audited the accompanying balance sheet of WestMountain Asset Management,
Inc. as
of November 30, 2007, and the related statements of operations, changes in
shareholders’ deficit and cash flows for the period from October 18, 2007
(inception) through November 30, 2007. These financial statements are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of WestMountain Asset Management,
Inc.
as of November 30, 2007, and the results of its operations and its cash flows
for the period from October 18, 2007 (inception) through November 30, 2007
in
conformity with accounting principles generally accepted in the United States
of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has no history of operations, limited assets,
and has incurred operating losses since inception, which raises substantial
doubt about its ability to continue as a going concern. Management’s
plan in regard to these matters is also discussed in Note 1. The
financial statements do not include any adjustments that might result from
the
outcome of this uncertainty.
/s/ Cordovano and Honeck LLP
Cordovano
and Honeck LLP
Englewood,
Colorado
December
14, 2007
WestMountain
Asset Management,
Inc.
(A
Development Stage
Company)
Balance
Sheet
November
30, 2007
|
|
|
|
Assets
|
|
|
|
Cash
and cash equivalents (note 6)
|
|
$
|
366,565
|
|
Property
and equipment (note 3)
|
|
|
4,750
|
|
Total
assets
|
|
$
|
371,315
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Shareholders' Equity
|
|
|
|
|
Liabilities
|
|
|
|
|
Accrued
liabilities (note 1)
|
|
$
|
13,210
|
|
Total
liabilities
|
|
|
13,210
|
|
|
|
|
|
|
Shareholders'
equity (note 4)
|
|
|
|
|
Preferred
stock, $.10 par value; 1,000,000 shares authorized,
|
|
|
-
|
|
-0-
shares issued and outstanding
|
|
|
|
|
Common
stock, $.001 par value; 50,000,000 shares authorized,
|
|
|
9,062
|
|
9,061,750
shares issued and outstanding
|
|
|
|
|
Additional
paid-in-capital
|
|
|
362,253
|
|
Deficit
accumulated during development stage
|
|
|
(13,210
|
)
|
Total
shareholders' equity
|
|
|
358,105
|
|
|
|
|
|
|
Total
liabilities and shareholders equity
|
|
$
|
371,315
|
|
See
accompanying notes to financial
statements
WestMountain
Asset Management,
Inc.
(A
Development Stage
Company)
Statement
of
Operations
For
the Period
October 18,
2007
(Inception) Through November
30, 2007
|
|
|
|
|
|
October
18,
2007
|
|
|
|
(Inception)
|
|
|
|
Through
|
|
|
|
November
30,
2007
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling,
general
and administrative (note 5)
|
|
$
|
13,210
|
|
Total
operating expenses
|
|
|
13,210
|
|
|
|
|
|
|
Loss
before income taxes
|
|
|
(13,210
|
)
|
|
|
|
|
|
Net
loss
|
|
$
|
(13,210
|
)
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted loss per
share
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
Basic
and diluted weighted average
common
|
|
|
|
|
shares
outstanding
|
|
|
9,061,750
|
|
See
accompanying notes to financial
statements
WestMountain
Asset Management,
Inc.
(A
Development Stage
Company)
Statement
of Cash
Flows
For
the Period
October 18, 2007
(Inception)
Through November 30, 2007
|
|
October
18,
2007
|
|
|
|
(Inception)
|
|
|
|
Through
|
|
|
|
November
30,
2007
|
|
Cash
flows from operating
activities:
|
|
|
|
Net
loss
|
|
$
|
(13,210
|
)
|
Adjustments
to reconcile net loss
to net cash used by operating activities:
|
|
|
|
|
Changes
in operating assets and operating liabilities:
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
|
13,210
|
|
Net
cash provided by operating activities
|
|
|
—
|
|
|
|
|
|
|
Cash
flows from investing
activities:
|
|
|
|
|
Payments
for property and equipment
|
|
|
(4,750
|
)
|
Net
cash (used in) investing activities
|
|
|
(4,750
|
)
|
|
|
|
|
|
Cash
flows from financing
activities:
|
|
|
|
|
Proceeds
from sale of common stock
|
|
|
371,315
|
|
Net
cash provided by financing activities
|
|
|
371,315
|
|
|
|
|
|
|
Net
change in cash
|
|
|
366,565
|
|
|
|
|
|
|
Cash
and cash equivalents,
beginning of period
|
|
|
—
|
|
|
|
|
|
|
Cash
and cash equivalents, end of
period
|
|
$
|
366,565
|
|
|
|
|
|
|
Supplemental
disclosure of cash
flow information:
|
|
|
|
|
Cash
paid during the period for:
|
|
|
|
|
Income
taxes
|
|
$
|
—
|
|
Interest
|
|
$
|
—
|
|
See
accompanying notes to financial
statements
WestMountain
Asset Management,
Inc.
(A
Development Stage
Company)
Statement
of
Changes in
Shareholders'
Equity
For
the Period
October 18, 2007
(Inception)
Through
November
30
,
2007
|
|
Preferred
Stock
|
|
|
Common
Stock
|
|
|
|
|
|
Deficit
Accumulated
During
|
|
|
|
|
|
|
Shares
|
|
|
|
|
Shares
|
|
|
|
|
|
|
|
|
Development
Stage
|
|
|
Total
|
|
Balance
at October 18,
2007
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November
19,
2007
common
stock shares
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.001 per
share
|
|
|
-
|
|
|
|
-
|
|
|
|
290,000
|
|
|
|
290
|
|
|
|
-
|
|
|
|
-
|
|
|
|
290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November
20,
2007
common stock shares
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.01 per
share
|
|
|
-
|
|
|
|
-
|
|
|
|
235,000
|
|
|
|
235
|
|
|
|
2,115
|
|
|
|
-
|
|
|
|
2,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November
28,
2007
common stock shares
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.04 per
share
|
|
|
-
|
|
|
|
-
|
|
|
|
8,050,000
|
|
|
|
8,050
|
|
|
|
311,950
|
|
|
|
-
|
|
|
|
320,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November
30,
2007
common
stock shares
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.10 per
share
|
|
|
-
|
|
|
|
-
|
|
|
|
486,750
|
|
|
|
487
|
|
|
|
48,188
|
|
|
|
-
|
|
|
|
48,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss, October 18,
2007
(inception)
through
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(13,210
|
)
|
|
|
(13,210
|
)
|
November
30,
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at November 30,
2007
|
|
|
-
|
|
|
$
|
-
|
|
|
|
9,061,750
|
|
|
$
|
9,062
|
|
|
$
|
362,253
|
|
|
$
|
(13,210
|
)
|
|
$
|
358,105
|
|
See
accompanying notes to financial
statements
WestMountain
Asset Management,
Inc.
(A
Development Stage
Company)
Notes
to Financial
Statements
For
the Period
October 18,
2007
(Inception) Through November
30, 2007
(1)
Nature
of Organization and Summary of Significant Accounting Policies
Nature
of Organization and Basis of Presentation
WestMountain
Asset Management, Inc. was incorporated in the state of Colorado on October
18,
2007 and on this date approved its business plan and commenced
operations.
The
Company is a development stage enterprise in accordance with Statement of
Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by
Development Stage Enterprises”. The company’s plan is to act as an
asset management investment advisory firm by raising, investing and managing
private equity and direct investment funds. The Company plans to earn
management fees based on the size of the funds that it oversees and incentive
income based on the performance of these funds.
The
accompanying 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. As shown in the accompanying
financial statements, the Company is a development stage company with no history
of operations, limited assets, and has incurred operating losses since
inception. These factors, among others, raise substantial doubt about
its ability to continue as a going concern.
The
financial statements do not include any adjustments relating to the
recoverability of assets and classification of liabilities that might be
necessary should the Company be unable to continue as a going
concern. The Company’s continuation as a going concern is dependent
upon its ability to obtain additional operating capital, commence operations,
provide competitive services, and ultimately to attain
profitability.
Use
of Estimates
The
preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Cash
and Cash Equivalents
The
Company considers all highly liquid securities with original maturities of
three
months or less when acquired to be cash equivalents. There were no
cash equivalents at November 30, 2007.
Financial
Instruments
The
Company’s financial instruments consist of cash and accrued
liabilities. At November 30, 2007, the fair value of the Company’s
financial instruments approximate fair value due to the short-term maturity
of
the instruments.
Property,
Equipment and Depreciation
Property
and equipment are stated at cost. Depreciation is calculated using the
straight-line method over the estimated useful lives of the related assets,
ranging from three to seven years. Expenditures for repairs and maintenance
are
charged to expense when incurred. Expenditures for major renewals and
betterments, which extend the useful lives of existing property and equipment,
are capitalized and depreciated. Upon retirement or disposition of property
and
equipment, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is recognized in the statements of
operations.
WestMountain
Asset Management,
Inc.
(A
Development Stage
Company)
Notes
to Financial
Statements
For
the Period
October 18,
2007
(Inception) Through November
30, 2007
Loss
per Common Share
The
Company reports loss per share using a dual presentation of basic and diluted
loss per share. Basic loss per share excludes the impact of common stock
equivalents and is determined by dividing income available to common
shareholders by the weighted average number of common shares outstanding during
the period. Diluted loss per share reflects the potential dilution that could
occur if securities and other contracts to issue common stock were exercised
or
converted into common stock. At November 30, 2007, there were no variances
between the basic and diluted loss per share as there were no potentially
dilutive securities outstanding.
Income
Taxes
The
Company accounts for income taxes under the provisions of SFAS No. 109,
“Accounting for Income Taxes” (“SFAS 109”). SFAS 109 requires recognition of
deferred tax liabilities and assets for the expected future tax consequences
of
events that have been included in the financial statements or tax returns.
Under
this method, deferred tax liabilities and assets are determined based on the
difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.
Fiscal
Year-end
The
Company operates on a December 31 year-end.
(2)
Income Taxes
A
reconciliation of the U.S. statutory federal income tax rate to the effective
tax rate is as follows:
|
|
November
30,
|
|
|
|
2007
|
|
U.S.
statutory federal rate
|
|
|
15.00
|
%
|
State
income tax rate, net of federal benefit
|
|
|
3.94
|
%
|
Net
operating loss for which no tax
|
|
|
|
|
benefit is currently available
|
|
|
-18.94
|
%
|
|
|
|
0.00
|
%
|
At
November 30, 2007, deferred tax assets consisted of a net tax asset of $2,502,
based on an operating loss inception to date of $13,210, which was
fully allowed for, in the valuation allowance of $2,502. The valuation allowance
offsets the net deferred tax asset for which there is no assurance of
recovery.
The
valuation allowance will be evaluated at the end of each year, considering
positive and negative evidence about whether the deferred tax asset will be
realized. At that time, the allowance will either be increased or reduced;
reduction could result in the complete elimination of the allowance if positive
evidence indicates that the value of the deferred tax assets is no longer
impaired and the allowance is no longer required.
Should
the Company undergo an ownership change as defined in Section 382 of the
Internal Revenue Code, the Company’s tax net operating loss carryforwards
generated prior to the ownership change will be subject to an annual limitation,
which could reduce or defer the utilization of these losses.
WestMountain
Asset Management,
Inc.
(A
Development Stage
Company)
Notes
to Financial
Statements
For
the Period
October 18,
2007
(Inception) Through November
30, 2007
(3)
Property
and Equipment
The
Company’s property and equipment consists of computer software that will be
placed into service during December 2007. As of November 30, 2007 no
depreciation has been recorded. Depreciation will begin accumulating when
the asset is placed in service.
(4)
Stockholders
Equity
On
November 19, 2007 the Company sold 290,000 shares of its common stock for $290
or $0.001 per share.
On
November 20, 2007 the Company sold 235,000 shares of its common stock for $2,350
or $0.01 per share.
On
November 28, 2007 the Company sold 8,050,000 shares of its common stock to
WestMountain Blue, LLC, an affiliate, for a cash price of $320,000 or $0.04
per
share. The stock transaction made WestMountain Blue, LLC the
Company’s majority shareholder.
On
November 30, 2007 the Company sold 486,750 shares of its common stock for
$48,675 or $0.10 per share. The stock sale was made in reliance on an
exemption from registration of a trade in the United States under Rule 504
and/or Section 4(6) of the Act. The Company relied upon exemptions from
registration believed by it to be available under federal and state securities
laws in connection with the offering.
A
total
of 9,061,750 shares were issued for a total cash price of
$371,315. All of the shares issued are considered to be “restricted
stock” as defined in Rule 144 promulgated under the Securities Act of
1933. As of November 30, 2007 the common stock issued and outstanding
at par is $9,062 or $0.001 per share. The amount over and above the
$0.001 par value per share is recorded in the additional paid-in capital account
in the amount of $362,253.
(5)
Operating
Expenses
The
total
administrative expense recorded on the financials for the period ending November
30, 2007 was $13,210. This amount consisted of professional fees
related to the filing of public reports.
(6)
Concentration
of Credit Risk for Cash
The
Company has concentrated its credit risk for cash by maintaining deposits in
financial institutions, which may at times exceed the amounts covered by
insurance provided by the United States Federal Deposit Insurance Corporation
("FDIC"). The loss that would have resulted from that risk totaled $266,565
at
November 30, 2007, for the excess of the deposit liabilities reported by the
financial institution over the amount that would have been covered by FDIC.
The
Company
has not experienced any losses in such accounts and believes it is not exposed
to any significant credit risk to cash.
WESTMOUNTAIN
ASSET MANAGEMENT, INC.
736,750 Shares
of Common
Stock
Par
Value $0.001 Per
Share
January
____, 2008
Until ,
2008 (90 days after the date of this prospectus), all dealers affecting
transactions in the shares offered by this prospectus — whether or not
participating in the offering — may be required to deliver a copy of this
prospectus. Dealers may also be required to deliver a copy of this prospectus
when acting as underwriters and for their unsold allotments or
subscriptions.
Prospectus
PART
II
INFORMATION
NOT REQUIRED IN
PROSPECTUS
Item
24.
Indemnification of Directors and Officers
Pursuant
to our Articles of
Incorporation and By-Laws, we may indemnify an officer or director who is made
a
party to any proceeding, including a law suit, because of his position, if
he
acted in good faith and in a manner he reasonably believed to be in our best
interest. In certain cases, we may advance expenses incurred in defending any
such proceeding. To the extent that the officer or director is successful on
the
merits in any such proceeding as to which such person is to be indemnified,
we
must indemnify him against all expenses incurred, including attorney's fees.
With respect to a derivative action, indemnity may be made only for expenses
actually and reasonably incurred in defending the proceeding, and if the officer
or director is judged liable, only by a court order. The prior discussion of
indemnification in this paragraph is intended to be to the fullest extent
permitted by the laws of the State of Colorado.
Indemnification
for liabilities arising
under the Securities Act of 1933, as amended, may be permitted to directors
or
officers pursuant to the foregoing provisions. However, we are informed that,
in
the opinion of the Commission, such indemnification is against public policy,
as
expressed in the Act and is, therefore, unenforceable.
Item
25. Other
Expenses of Issuance and Distribution
The
following table sets forth an
itemization of all estimated expenses, all of which we will pay, in connection
with the issuance and distribution of the securities being
registered:
Nature
of
expense
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
Accounting
fees and
expenses
|
|
$
|
2,000
|
|
|
|
|
|
|
Printing
expenses
|
|
$
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________________
*
Estimated.
Item
26. Recent Sales
of Unregistered Securities
On
November 19, 2007, we issued the
following restricted common shares to the following entities at a price of
$0.001 for cash:
Name
|
|
Shares
Issued
|
|
David
Wagner & Associates, PC
|
|
|
200,000
|
|
WM
Founders Group
|
|
|
40,000
|
|
Technology
Partners, LLC
|
|
|
50,000
|
|
Total
|
|
|
290,000
|
|
II
–
1
On
November 20, 2007, we issued the
following restricted common shares to the following entity at a price of $0.01
for cash:
Name
|
Shares
Issued
|
WestMountain
Investors
|
235,000
|
On
November 28, 2007, we issued
to WestMountain Blue, LLC, a total of 8,050,000 common shares
at a cash price of $320,000,
or $0.04
per share.
In
the transactions shown above, the
issuance, delivery and sale of our common stock were made pursuant to the
private offering exemption within the meaning of Section 4(2) of the Securities
Act of 1933 (“Act”) because the offers were made to a limited number of people,
all of whom received all material information concerning the investment and
all
of whom have had sophistication and ability to bear economic risk based upon
their representations to us and their prior experience in such investments.
The
exemptions are claimed upon, among other things, certain representations made
by
the purchasers in connection with the transactions. The purchase price paid
by
the purchaser’s consideration for the common stock was determined through
arm's-length negotiations between the parties.
On
November 30, 2007 we raised $48,675 and sold a total of 486,750 shares in an
offering under Section 3(b) including Rule 504 and the analogous Colorado state
exemption. We relied upon these exemptions for all investors because of their
close relationship to us, the availability of information, and the filing of
a
Form D. The shares were sold through our officers and directors.
Under
this offering, we issued the following common shares to the following persons
and entities for cash at a price of $0.10 per share:
|
|
Name
(1)
|
Shares
Owned
|
Samuel
R. Ernst
|
18,000
|
Beth
Axe
|
2,500
|
Stan
& Nicole Javernick
|
5,000
|
Joni
Troska
|
30,000
|
Wendy
Hartzell
|
10,000
|
Bryon
F. Wynn III
|
5,000
|
Caitlin
Wacker
|
500
|
Rebecca
Cramer
|
2,500
|
Robert
D. Paul
|
1,000
|
Brooks
Bentley
|
2,500
|
Renee
& Greg Hanson
|
500
|
Jennifer
M. Crutchfield
|
500
|
Charles
Amburn
|
2,500
|
Gwen
Garrison
|
500
|
Merry
Hummell
|
30,000
|
Robert
A. & Susan D. Warren
|
30,000
|
Albert
C. Yates
|
10,000
|
David
L. Lavigne
|
500
|
C
Gerard Nalezny & Pennie M. Nalezny
|
15,000
|
Joseph
A. Lavigne
|
500
|
Steve
& Leslie Taylor
|
15,000
|
Barry
W. Schmitt
|
10,000
|
Ann
L. Schmitt
|
10,000
|
Kelly
Ann Schmitt (UTMA/CO account)
|
5,000
|
David
L. Diehl
|
30,000
|
Bryan
& Julie Willson
|
20,000
|
Dan
Eckles
|
30,000
|
Richy
& Teresita Bjelkevig
|
15,000
|
Gary
& Dee Emmerson
|
5,000
|
Joseph
X. Jenkins & Kristynn M. Jenkins
|
10,000
|
Nathan
Lorenz
|
4,000
|
II-2
Paul
& Anne Hudnut
|
20,000
|
Robert
J. Richmeier, Jr.
|
500
|
J.
David Holland Jr.
|
500
|
Valeri
Pappas
|
500
|
Scott
W. Wilkinson
|
500
|
Ellen
C. Husband
|
500
|
James
W. Creamer III
|
1,250
|
Matthew
T. Ramsey
|
1,000
|
Denis
J. & Cheryl M. Rice
|
25,000
|
Kenneth
P. Munsch
|
25,000
|
Mary
E. Klein
|
1,000
|
Matthew
K. Stone
|
1,000
|
James
R. Smith
|
10,000
|
Jaime
S. Whitlock
|
2,500
|
Bernard
M. Collett
|
11,250
|
Charlene
S. Collett
|
11,250
|
Chris
Thompson
|
10,000
|
Lisa
K. Collett
|
10,000
|
Mattison
C. Sperry
|
1,500
|
Christine
Kanouff
|
500
|
Gary
Ceriani
|
10,000
|
Christopher
Holloway
|
500
|
Jodi
K. Stevens
|
2,500
|
Anabelle
G. Stevens
|
2,500
|
Robert
L. Stevens
|
2,500
|
Abigail
R. Stevens
|
2,500
|
Ajay
Menon
|
10,000
|
Edward
R. Gorab
|
500
|
Michael
J. McCloskey
|
1,000
|
|
|
Total
|
486,750
|
II-3
Item
27.
Exhibits
The
following Exhibits are filed with or
incorporated by reference to this Registration Statement, pursuant to
Item 601 of Regulation S-B.
Exhibit
No.
|
Description
|
3.1
|
Articles
of Incorporation of
WestMountain Asset Management, Inc.
|
3.2
|
Bylaws
of WestMountain Asset
Management, Inc.
|
5.1
|
Opinion
of David Wagner &
Associates, P.C.
|
23.1
|
Consent
of Independent
Auditors
|
23.2
|
Consent
of Counsel (See Exhibit
5.1)
|
Item
28.
Undertakings
The
undersigned registrant hereby
undertakes to:
(1) File,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of the securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of a prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective
registration statement, and
(iii) To
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.
(2) That,
for determining liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That,
for the purpose of determining liability under the Securities Act of 1933 to
any
purchaser in the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities of the
undersigned registrant 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 offer or sell such securities to such
purchaser:
II
- 4
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating
to
the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of
the
undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
(5) Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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 Act and
will
be governed by the final adjudication of such issue.
(6)
Each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying
on
Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall
be
deemed to be part of and included in the registration statement as of the date
it is first used after effectiveness. Provided, however, that no statement
made
in a registration statement or prospectus that is a part of the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to
such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made
in
any such document immediately prior to such date of first use.
II
- 5
SIGNATURES
In
accordance with the requirements of
the Securities Act of 1933, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form
SB-2
and has authorized this registration statement to be signed on its behalf by
the
undersigned, thereunto duly authorized, in City of Fort Collins, State of
Colorado, on January 2, 2008.
|
WESTMOUNTAIN
ASSET MANAGEMENT,
INC.
|
|
|
|
|
|
By:
|
/s/ Brian
L
Klemsz
|
|
|
|
Brian
L Klemsz, President,
Treasurer, and Director
Chief
Executive, Financial, and
Accounting Officer
|
|
|
|
|
|
|
|
|
|
II
- 6
BYLAWS
OF
WestMountain
Asset Management, Inc.
as
of
October 18, 2007
ARTICLE
I
Offices
The
principal office of the Corporation
shall initially be located at 103 West Mountain, Fort Collins, Colorado 80534.
The Corporation may have other offices at such places within or without the
State of Colorado as the Board of Directors may from time to time
establish.
ARTICLE
II
Registered
Office and
Agent
The
registered office of the Corporation in Colorado shall be located at Penthouse
Suite, 8400 East Prentice Ave., Greenwood Village, Colorado 80111 and the
registered agent shall be Corporate Filing Corp. The Board of Directors may,
by
appropriate resolution from time to time, change the registered office and/or
agent.
ARTICLE
III
Meetings
of Stockholders
Section 1
.
Annual
Meetings
.
The annual
meeting of the Stockholders for the election of Directors and for the
transaction of such other business as may properly come before such meeting
shall be held at such time and date as the Board of Directors shall designate
from time to time by resolution duly adopted.
Section 2
.
Special
Meetings
.
A special
meeting of the Stockholders may be called at any time by the President or the
Board of Directors, and shall be called by the President upon the written
request of Stockholders of record holding in the aggregate twenty per cent
(20%)
or more of the outstanding shares of stock of the Corporation entitled to vote,
such written request to state the purpose or purposes of the meeting and to
be
delivered to the President.
Section 3
.
Place
of
Meetings
.
All meetings
of
the Stockholders shall be held at the principal office of the Corporation or
at
such other place, within or without the State of Colorado, as shall be
determined from time to time by the Board of Directors or the Stockholders
of
the Corporation.
Section 4
.
Change
in Time or Place of Meetings
.
The time and
place specified in this Article III for annual meetings shall not be changed
within thirty (30) days next before the day on which such meeting is to be
held. A notice of any such change shall be given to each Stockholder
at least twenty (20) days before the meeting, in person or by letter mailed
to
his last known post office address.
Section 5
.
Notice
of Meetings
.
Written
notice, stating the place, day and hour of the meeting, and in the case of
a
special meeting, the purposes for which the meeting is called, shall be given
by
or under the direction of the President or Secretary at least ten (10) days
but
not more than fifty (50) days before the date fixed for such meeting; except
that if the number of the authorized shares of the Corporation are to be
increased, at least thirty (30) days' notice shall be given. Notice shall be
given to each Stockholder entitled to vote at such meeting, of record at the
close of business on the day fixed by the Board of Directors as a record date
for the determination of the Stockholders entitled to vote at such meeting,
or
if no such date has been fixed, of record at the close of business on the day
next preceding the day on which notice is given. Notice shall be in
writing and shall be delivered to each Stockholder in person or sent by United
States Mail, postage prepaid, addressed as set forth on the books of the
Corporation. A waiver of such notice, in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed
equivalent
to such notice. Except as otherwise required by statute, notice of
any adjourned meeting of the Stockholders shall not be required.
Section 6
.
Quorum
.
Except
as may
otherwise be required by statute, the presence at any meeting, in person or
by
proxy, of the holders of record of a majority of the shares then issued and
outstanding and entitled to vote shall be necessary and sufficient to constitute
a quorum for the transaction of business. In the absence of a quorum,
a majority in interest of the Stockholders entitled to vote, present in person
or by proxy, or, if no Stockholder entitled to vote is present in person or
by
proxy, any Officer entitled to preside or act as secretary of such meeting,
may
adjourn the meeting from time to time for a period not exceeding sixty (60)
days
in any one case. At any such adjourned meeting at which a quorum may
be present, any business may be transacted which might have been transacted
at
the meeting as originally called. The Stockholders present at a duly
organized meeting may continue to do business until adjournment, notwithstanding
the withdrawal of enough Stockholders to leave less than a quorum.
Section 7
.
Voting
.
Except
as may
otherwise be provided by statute or these Bylaws, including the provisions
of
Section 4 of Article VIII hereof, each Stockholder shall at every meeting of
the
Stockholders be entitled to one (1) vote, in person or by proxy, for each share
of the voting capital stock held by such Stockholder. However, no
proxy shall be voted on after eleven (11) months from its date, unless the
proxy
provides for a longer period. At all meetings of the Stockholders, except as
may
otherwise be required by statute, the Articles of Incorporation of this
Corporation, or these Bylaws, if a quorum is present, the affirmative vote
of
the majority of the shares represented at the meeting and entitled to vote
on
the subject matter shall be the act of the Stockholders.
Persons
holding stock in a fiduciary capacity shall be entitled to vote the shares
so
held, and persons whose stock is pledged shall be entitled to vote, unless
in
the transfer by the pledgor on the books of the Corporation he shall have
expressly empowered the pledgee to vote thereon, in which case only the pledgee
or his proxy may represent said stock and vote thereon.
Shares
of
the capital stock of the Corporation belonging to the Corporation shall not
be
voted directly or indirectly.
Section 8
.
Consent
of Stockholders in Lieu of Meeting
.
Whenever
the vote of
Stockholders at a meeting thereof is required or permitted to be taken in
connection with any corporate action, by any provision of statute, these Bylaws,
or the Articles of Incorporation, the meeting and vote of Stockholders may
be
dispensed with if that number of shares which would have been required to vote
affirmatively upon the action if such meeting were held shall consent in writing
to such corporate action being taken.
Section 9
.
Telephonic
Meeting
.
Any meeting
held
under this Article III may be held by telephone, in accordance with the
provisions of the Colorado Business Corporation Act.
Section
10
.
List
of
Stockholders Entitled to Vote
.
The Officer
who
has charge of the stock ledger of the Corporation shall prepare and make, at
least ten (10) days before every annual meeting, a complete list of the
Stockholders entitled to vote at such meeting, arranged in alphabetical order
and showing the address of each Stockholder and the number of shares registered
in the name of each Stockholder. Such list shall be open to the
examination of any Stockholder during ordinary business hours, for a period
of
at least ten (10) days prior to election, either at a place within the city,
town or village where the election is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where said
meeting is to be held. The list shall be produced and kept at the
time and place of election during the whole time thereof and be subject to
the
inspection of any Stockholder who may be present.
ARTICLE
IV
Board
of
Directors
Section 1
.
General
Powers
.
The
business and affairs of the Corporation shall be managed by the Board of
Directors, except as otherwise provided by statute, the Articles of
Incorporation of the Corporation, or these Bylaws.
Section
2
.
Number
and Qualifications
.
The Board
of Directors shall consist of at least one (1) member, and not
more than five (5) members, as shall be designated by the Board of Directors
from time to time, and in the absence of such designation, the Board of
Directors shall consist of least one (1) member. This number may be
changed from time to time by resolution of the Board of
Directors. However, no such change shall have the effect of reducing
the number of members below least one (1) member. Members need not be residents
of the State of Colorado or Stockholders of the
Corporation. Directors shall be natural persons of the age of
eighteen (18) years or older.
Section 3
.
Election
and Term of Office
.
Members of
the
initial Board of Directors of the Corporation shall hold office until the first
annual meeting of Stockholders. At the first annual meeting of
Stockholders, and at each annual meeting thereafter, the Stockholders shall
elect Directors to hold office until the next succeeding annual
meeting. Each Director shall hold office until his successor is duly
elected and qualified, unless sooner displaced. Election of Directors
need not be by ballot.
Section 4
.
Compensation
.
The
Board of
Directors may provide by resolution that the Corporation shall allow a fixed
sum
and reimbursement of expenses for attendance at meetings of the Board of
Directors and for other services rendered on behalf of the
Corporation. Any Director of the Corporation may also serve the
Corporation in any other capacity, and receive compensation therefor in any
form, as the same may be determined by the Board in accordance with these
Bylaws.
Section 5
.
Removals
and Resignations
.
Except as
may
otherwise be provided by statute, the Stockholders may, at any special meeting
called for the purpose, by a vote of the holders of the majority of the shares
then entitled to vote at an election of Directors, remove any or all Directors
from office, with or without cause.
A
Director may resign at any time by giving written notice to the Board of
Directors, the President or the Secretary of the Corporation. The
resignation shall take effect immediately upon the receipt of the notice, or
at
any later period of time specified therein. The acceptance of such
resignation shall not be necessary to make it effective, unless the resignation
requires acceptance for it to be effective.
Section 6
.
Vacancies
.
Any
vacancy
occurring in the office of a Director, whether by reason of an increase in
the
number of directorships or otherwise, may be filled by a majority of the
Directors then in office, though less than a quorum. A Director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office, unless sooner displaced.
When
one
or more Directors resign from the Board, effective at a future date, a majority
of the Directors then in office, including those who have so resigned, shall
have power to fill such vacancy or vacancies, the vote thereon to take effect
when such resignation or resignations shall become effective. Each
Director so chosen shall hold office as herein provided in the filling of other
vacancies.
Section 7
.
Executive
Committee
.
By
resolution adopted by a majority of the Board of Directors, the Board may
designate one or more committees, including an Executive Committee, each
consisting of one (1) or more Directors. The Board of Directors may
designate one (1) or more Directors as alternate members of any such committee,
who may replace any absent or disqualified member at any meeting of such
committee. Any such committee, to the extent provided in the
resolution and except as may otherwise be provided by statute, shall have and
may exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation and may authorize the seal of the
Corporation to be affixed to all papers which may require the
same. The designation of such committee and the delegation thereto of
authority shall not operate to relieve the Board of Directors, or any member
thereof, of any responsibility imposed upon it or him by law. If
there be more than two (2) members on such committee, a majority of any such
committee may determine its action and may fix the time and place of its
meetings, unless provided otherwise by the Board. If there be only
two (2) members, unanimity of action shall be required. Committee
action may be by way of a written consent signed by all committee
members. The Board shall have the power at any time to fill vacancies
on committees, to discharge or abolish any such committee, and to change the
size of any such committee.
Except
as
otherwise prescribed by the Board of Directors, each committee may adopt such
rules and regulations governing its proceedings, quorum, and manner of acting
as
it shall deem proper and desirable.
Each
such
committee shall keep a written record of its acts and proceedings and shall
submit such record to the Board of Directors. Failure to submit such
record, or failure of the Board to approve any action indicated therein will
not, however, invalidate such action to the extent it has been carried out
by
the Corporation prior to the time the record of such action was, or should
have
been, submitted to the Board of Directors as herein provided.
ARTICLE
V
Meetings
of Board of
Directors
Section 1
.
Annual
Meetings
.
The Board
of
Directors shall meet each year immediately after the annual meeting of the
Stockholders for the purpose of organization, election of Officers, and
consideration of any other business that may properly be brought before the
meeting. No notice of any kind to either old or new members of the
Board of Directors for such annual meeting shall be necessary.
Section
2
.
Regular
Meetings
.
The Board
of
Directors from time to time may provide by resolution for the holding of regular
meetings and fix the time and place of such meetings. Regular
meetings may be held within or without the State of Colorado. The
Board need not give notice of regular meetings provided that the Board promptly
sends notice of any change in the time or place of such meetings to each
Director not present at the meeting at which such change was made.
Section 3
.
Special
Meetings
.
The
Board may hold special meetings of the Board of Directors at any place, either
within or without the State of Colorado, at any time when called by the
President, or two or more Directors. Notice of the time and place
thereof shall be given to and received by each Director at least three (3)
days
before the meeting. A waiver of such notice in writing, signed by the
person or persons entitled to said notice, either before or after the time
stated therein, shall be deemed equivalent to such notice. Notice of
any adjourned special meeting of the Board of Directors need not
given.
Section 4
.
Quorum
.
The
presence, at
any meeting, of a majority of the total number of Directors shall be necessary
and sufficient to constitute a quorum for the transaction of
business. Except as otherwise required by statute, the act of a
majority of the Directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors; however, if only one (1) Director
is
present, unanimity of action shall be required. In the absence of a
quorum, a majority of the Directors present at the time and place of any meeting
may adjourn such meeting from time to time until a quorum is
present.
Section 5
.
Consent
of Directors in Lieu of Meeting
.
Unless otherwise
restricted
by statute, the Board may take any action required or permitted to be taken
at
any meeting of the Board of Directors without a meeting, if a written consent
thereto is signed by all members of the Board, and such written consent is
filed
with the minutes of proceedings of the Board.
Section 6
.
Telephonic
Meeting
.
Any meeting
held
under this Article V may be held by telephone, in accordance with the provisions
of the Colorado Business Corporation Act.
Section 7
.
Attendance
Constitutes Waiver
.
Attendance
of a Director at a meeting constitutes a waiver of any notice
to which the Director may otherwise have been entitled, except where a Director
attends a meeting for the express purpose of objecting the transaction of any
business because the meeting is not lawfully called or convened.
ARTICLE
VI
Officers
Section 1
.
Number
.
The
Corporation
shall have a President, one or more Vice Presidents as the Board may from time
to time elect, a Secretary and a Treasurer, and such other Officers and Agents
as may be deemed necessary. One person may hold more than one
office.
Section 2
.
Election,
Term of Office and Qualifications
.
The Board
shall
choose the Officers specifically designated in Section 1 of this Article VI
at
the annual meeting of the Board of Directors and such Officers shall hold office
until their successors are chosen and qualified, unless sooner
displaced. Officers need not be Directors of the
Corporation.
Section 3
.
Subordinate
Officers
.
The
Board of Directors, from time to time, may appoint other Officers and Agents,
including one or more Assistant Secretaries and one or more Assistant
Treasurers, each of whom shall hold office for such period, and each of whom
shall have such authority and perform such duties as are provided in these
Bylaws or as the Board of Directors from time to time may
determine. The Board of Directors may delegate to any Officer the
power to appoint any such subordinate Officers and Agents and to prescribe
their
respective authorities and duties.
Section 4
.
Removals
and Resignations
.
The Board
of
Directors may, by vote of a majority of their entire number, remove from office
any Officer or Agent of the Corporation, appointed by the Board of
Directors.
Any
Officer may resign at any time by giving written notice to the Board of
Directors. The resignation shall take effect immediately upon the
receipt of the notice, or any later period of time specified
therein. The acceptance of such resignation shall not be necessary to
make it effective, unless the resignation requires acceptance for it to be
effective.
Section 5
.
Vacancies
.
Whenever
any
vacancy shall occur in any office by death, resignation, removal, or otherwise,
it shall be filled for the unexpired portion of the term in the manner
prescribed by these Bylaws for the regular election or appointment to such
office, at any meeting of Directors.
Section 6
.
The
President
.
The President
shall be the chief executive officer of the Corporation and, subject to the
direction and under the supervision of the Board of Directors, shall have
general charge of the business, affairs and property of the Corporation, and
shall have control over its Officers, Agents and Employees. The
President shall preside at all meetings of the Stockholders and of the Board
of
Directors at which he is present. The President shall do and perform
such other duties and may exercise such other powers as these Bylaws or the
Board of Directors from time to time may assign to him.
Section 7
.
The
Vice
President
.
At the request
of the President or in the event of his absence or disability, the Vice
President, or in case there shall be more than one Vice President, the Vice
President designated by the President, or in the absence of such designation,
the Vice President designated by the Board of Directors, shall perform all
the
duties of the President, and when so acting, shall have all the powers of,
and
be subject to all the restrictions upon, the President. Any Vice
President shall perform such other duties and may exercise such her powers
as
from time to time these Bylaws or by the Board of Directors or the President
be
assign to him.
Section 8
.
The
Secretary
.
The
Secretary shall:
|
a.
|
record
all the proceedings of the meetings of the Corporation and Directors
in a
book to be kept for that purpose;
|
|
b.
|
have
charge of the stock ledger (which may, however, be kept by any transfer
agent or agents of the Corporation under the direction of the Secretary),
an original or duplicate of which shall be kept at the principal
office or
place of business of the Corporation in the State of Colorado;
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|
c.
|
see
that all notices are duly and properly given;
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|
d.
|
be
custodian of the records of the Corporation and the Board of Directors,
and the and of the seal of the Corporation, and see that the seal
is
affixed to all stock certificates prior to their issuance and to
all
documents for which the Corporation has authorized execution on its
behalf
under its seal;
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e.
|
see
that all books, reports, statements, certificates, and other documents
and
records required by law to be kept or filed are properly kept or
filed;
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f.
|
in
general, perform all duties and have all powers incident to the office
of
Secretary, and perform such other duties and have such other powers
as
these Bylaws, the Board of Directors or the President from time to
time
may assign to him; and
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g.
|
prepare
and make, at least ten (10) days before every election of Directors,
a
complete list of the Stockholders entitled to vote at said election,
arranged in alphabetical order.
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Section 9
.
The
Treasurer
.
The Treasurer
shall:
|
a.
|
have
supervision over the funds, securities, receipts and disbursements
of the
Corporation;
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|
b.
|
cause
all moneys and other valuable effects of the Corporation to be deposited
in its name and to its credit, in such depositories as the Board
of
Directors or, pursuant to authority conferred by the Board of Directors,
its designee shall select;
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c.
|
cause
the funds of the Corporation to be disbursed by checks or drafts
upon the
authorized depositaries of the Corporation, when such disbursements
shall
have been duly authorized;
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|
d.
|
cause
proper vouchers for all moneys disbursed to be taken and preserved;
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e.
|
cause
correct books of accounts of all its business and transactions to
be kept
at the principal office of the Corporation;
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f.
|
render
an account of the financial condition of the Corporation and of his
transactions as Treasurer to the President or the Board of Directors,
whenever requested;
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g.
|
be
empowered to require from the Officers or Agents of the Corporation
reports or statements giving such information as he may desire with
respect to any and all financial transactions of the Corporation;
and
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h.
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in
general, perform all duties and have all powers incident to the office
of
Treasurer and perform such other duties and have such other powers
as from
time to time may be assigned to him by these Bylaws or by the Board
of
Directors or the President.
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Section
10
.
Salaries
.
The
Board of Directors
shall from time to time fix the salaries of the Officers of the
Corporation. The Board of Directors may delegate to any person the
power to fix the salaries or other compensation of any Officers or Agents
appointed, in accordance with the provisions of Section 3 of this Article
VI. No Officer shall be prevented from receiving such salary by
reason of the fact that he is also a Director of the
Corporation. Nothing contained in this Bylaw shall be construed so as
to obligate the Corporation to pay any Officer a salary, which is within the
sole discretion of the Board of Directors.
Section
11
.
Surety
Bond
.
The Board
of Directors may in its discretion secure the fidelity of any or all of the
Officers of the Corporation by bond or otherwise.
ARTICLE
VII
Execution
of Instruments
Section 1
.
Checks,
Drafts, Etc
.
The President
and the Secretary or Treasurer shall sign all checks, drafts, notes, bonds,
bills of exchange and orders for the payment of money of the Corporation, and
all assignments or endorsements of stock certificates, registered bonds or
other
securities, owned by the Corporation, unless otherwise directed by the Board
of
Directors, or unless otherwise required by law. The Board of
Directors may, however, authorize any Officer to sign any
of
such
instruments for and on behalf of the Corporation without necessity of
countersignature, and may designate Officers or Employees of the Corporation
other than those named above who may, in the name of the Corporation, sign
such
instruments.
Section 2
.
Execution
of Instruments Generally
.
Subject always
to the specific direction of the Board of Directors, the President shall execute
all deeds and instruments of indebtedness made by the Corporation and all other
written contracts and agreements to which the Corporation shall be a party,
in
its name, attested by the Secretary. The Secretary, when necessary
required, shall affix the corporate seal thereto.
Section 3
.
Proxies
.
The
President
and the Secretary or an Assistant Secretary of the Corporation or by any other
person or persons duly authorized by the Board of Directors may execute and
deliver proxies to vote with respect to shares of stock of other corporations
owned by or standing in the name of the Corporation from time to time on behalf
of the Corporation.
ARTICLE
VIII
Capital
Stock
Section 1
.
Certificates
of Stock
.
Every
holder of stock in the Corporation shall be entitled to have a certificate,
signed in the name of the Corporation by the President and by the Secretary
of
the Corporation, certifying the number of shares owned by that person in the
Corporation.
Certificates
of stock shall be in such form as shall, in conformity to law, be prescribed
from time to time by the Board of Directors.
Section 2
.
Transfer
of Stock
. Shares of stock of the Corporation shall only be
transferred on the books of the Corporation by the holder of record thereof
or
by his attorney duly authorized in writing, upon surrender to the Corporation
of
the certificates for such shares endorsed by the appropriate person or persons,
with such evidence of the authenticity of such endorsement,
transfer,
authorization
and other matters as the Corporation may reasonably
require. Surrendered certificates shall be cancelled and shall be
attached to their proper stubs in the stock certificate book.
Section 3
.
Rights
of Corporation with Respect to Registered Owners
.
Prior to the
surrender to the Corporation of the certificates for shares of stock with a
request to record the transfer of such shares, the Corporation may treat the
registered owner as the person entitled to receive dividends, to vote, to
receive notifications, and otherwise to exercise all the rights and powers
of an
owner.
Section 4
.
Closing
Stock Transfer Book
.
The Board
of Directors may close the Stock Transfer Book of the
Corporation for a period not exceeding fifty (50) days preceding the date of
any
meeting of Stockholders, the date for payment of any dividend, the date for
the
allotment of rights, the date when any change, conversion or exchange of capital
stock shall go into effect or for a period of not exceeding fifty (50) days
in
connection with obtaining the consent of Stockholders for any
purpose. However, in lieu of closing the Stock Transfer Book, the
Board of Directors may in advance fix a date, not exceeding fifty (50) days
preceding the date of any meeting of Stockholders, the date for the payment
of
any dividend, the date for the allotment of rights, the date when any change
or
conversion or exchange of capital stock shall go into effect, or a date in
connection with obtaining such consent, as a record date for the determination
of the Stockholders entitled to notice of, and to vote at, any such meeting
and
any adjournment thereof, or entitled to receive payment of any such dividend,
or
to any such allotment of rights, or to exercise the rights in respect of any
such change, conversion or exchange of capital stock, or to give such consent.
In such case such Stockholders of record on the date so fixed, and only such
Stockholders shall be entitled to such notice of, and to vote at, such meeting
and any adjournment thereof, or to receive payment of such dividend, or to
receive such allotment of rights, or to exercise such rights, or to give such
consent, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after any such record date fixed as
aforesaid.
Section 5
.
Lost,
Destroyed and Stolen Certificates
.
The Corporation
may issue a
new certificate of shares of stock in the place of any certificate theretofore
issued and alleged to have been
lost,
destroyed or stolen. However, the Board of Directors may require the
owner of such lost, destroyed or stolen certificate or his legal representative,
to: (a) request a new certificate before the Corporation has notice
that the shares have been acquired by a bona fide purchaser; (b) furnish an
affidavit as to such loss, theft or destruction; (c) file with the Corporation
a
sufficient indemnity bond; or (d) satisfy such other reasonable requirements,
including evidence of such loss, destruction, or theft as may be imposed by
the
Corporation.
ARTICLE
IX
Dividends
Section 1
.
Sources
of Dividends
.
The Directors
of
the Corporation, subject to the Colorado Business Corporation Act, may declare
and pay dividends upon the shares of the capital stock of the
Corporation.
Section 2
.
Reserves
.
Before
the
payment of any dividend, the Directors of the Corporation may set apart out
of
any of the funds of the Corporation available for dividends a reserve or
reserves for any proper purpose, and the Directors may abolish any such reserve
in the manner in which it was created.
Section 3
.
Reliance
on Corporate Records
.
A Director
in relying in good faith upon the books of account of the
Corporation or statements prepared by any of its officials as to the value
and
amount of the assets, liabilities, and net profits of the Corporation, or any
other facts pertinent to the existence and amount of surplus or other funds
from
which dividends might properly be declared and paid shall be fully
protected.
Section 4
.
Manner
of Payment
.
Dividends
may be
paid in cash, in property, or in shares of the capital stock of the
Corporation.
ARTICLE
X
Seal
and
Fiscal Year
Section 1
.
Seal
.
The
corporate
seal, subject to alteration by the Board of Directors, shall be in the form
of a
circle, shall bear the name of the Corporation, and shall indicate its formation
under the laws of the State of Colorado and the year of
incorporation. Such seal may be used by causing it or a facsimile
thereof to be impressed, affixed, or otherwise reproduced.
Section 2
.
Fiscal
Year
.
The Board
of
Directors shall, in its sole discretion, designate a fiscal year for the
Corporation.
ARTICLE
XI
Amendments
Except
as
may otherwise be provided herein, a majority vote of the whole Board of
Directors at any meeting of the Board shall be sufficient to amend or repeal
these Bylaws.
ARTICLE
XII
Indemnification
of Officers and Directors
Section 1
.
Exculpation
.
No
Director or
Officer of the Corporation shall be liable for the acts, defaults, or omissions
of any other Director or Officer, or for any loss sustained by the Corporation,
unless the same has resulted from his own willful misconduct, willful neglect,
or gross negligence.
Section 2
.
Indemnification
.
Each
Director and Officer
of the Corporation and each person who shall serve at the Corporation's request
as a director or officer of another corporation in which the Corporation owns
shares of capital stock or of which it is a creditor shall be indemnified by
the
Corporation against all reasonable costs, expenses and liabilities (including
reasonable attorneys' fees) actually and necessarily incurred by or imposed
upon
him in connection with, or resulting from any claim, action, suit, proceeding,
investigation, or inquiry of whatever nature in which he may be involved as
a
party or otherwise by reason of his being or having been a Director or Officer
of the Corporation or such director or officer of such other corporation,
whether or not he continues to be a Director or Officer of the Corporation
or a
director or officer of such other corporation, at the time of the
incurring or imposition of such costs, expenses or liabilities, except in
relation to matters as to which he shall be finally adjudged in such action,
suit, proceeding, investigation, or inquiry to be liable for willful misconduct,
willful neglect, or gross negligence toward or on behalf of the Corporation
in
the performance of his duties as such Director or Officer of the Corporation
or
as such director or officer of such other corporation. As to whether
or not a Director or Officer was liable by reason of willful misconduct, willful
neglect, or gross negligence toward or on behalf of the Corporation in the
performance of his duties as such Director or Officer of the Corporation or
as
such director or officer of such other corporation, in the absence of such
final
adjudication of the existence of such liability, the Board of Directors and
each
Director and Officer may conclusively rely upon an opinion of independent legal
counsel selected by or in the manner designated by the Board of
Directors. The foregoing right to indemnification shall be in
addition to and not in limitation of all other rights which such person may
be
entitled as a matter of law, and shall inure to the benefit of the legal
representatives of such person.
Section 3
.
Liability
Insurance
.
The Corporation
may purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation or who is or was serving
at the request of the Corporation as a director, officer, employee or agent
of
another corporation, partnership, joint venture, trust, association, or other
enterprise against any liability asserted against him and incurred by him in
any
such capacity or arising out of his status as such, whether or not he is
indemnified against such liability by this Article XII.
EX
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