CARLATERAL, INC.
(Name of small business issuer in its charter)
Nevada 6141 20-4158835
(State or Other Jurisdiction (Primary Standard Industrial (IRS Employer
of Organization) Classification Code) Identification #)
STATE AGENT & TRANSFER
CARLATERAL, INC. SYNDICATE, INC.
112 North Curry St. 112 North Curry St.
Carson City, Nevada 89703-4934 Carson City, Nevada 89703-4934
(775) 321-8243 (800) 253-1013
(Address and telephone of registrant's (Name, address and telephone number of
executive office) agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
INVESTING IN THE COMPANY'S COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING AT PAGE 7.
If this Form is filed to register additional common stock for an offering under Rule 462(b) of 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 under Rule 462(c) of 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 under Rule 462(d) of 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 under Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Securities to be Amount To Be Offering Price Aggregate Registration Registered Registered Per Share[1] Offering Price[2] Fee[3] Common Stock by 3,300,000 $ 0.15 $ 495,000 $ 58.21 Selling Security Shareholders |
[1] The offering price has been arbitrarily determined and bears no relationship
to assets, earnings, or any other valuation criteria. No assurance can be given
that the shares offered hereby will have a market value or that they may be sold
at this, or at any price.
[2] Carlateral, Inc. will not receive any of the proceeds from the sale of
common stock by the selling security shareholders.
[3] Estimated solely for the purpose of calculating the registration fee based
on Rule 457 (o) of the Securities Act of 1933. All of the securities are being
offered by existing security holders. If the security holders offer any
securities to the general public, the registration fee is to be calculated upon
the basis of the proposed offering price to the general public.
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 this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.
PROSPECTUS
CARLATERAL, INC.
SHARES OF COMMON STOCK
3,300,000 SHARES OF COMMON STOCK BEING SOLD BY SELLING SECURITY HOLDERS
Prior to this offering, there has been no public trading market for the common stock of Carlateral, Inc. ("Carlateral"). Carlateral's common stock is not presently traded on any market or securities exchange. Carlateral is registering 3,300,000 shares of its common stock on behalf of certain existing shareholders, as named under "Selling Security Holders" within this Registration Statement. The selling security holders are selling all of the shares. The offering price for the shares will be $0.15 per share until the shares are quoted on the Over-The-Counter (OTC) Bulletin Board or an exchange. The selling security holders may sell at prevailing market prices or privately negotiated prices only after the shares are quoted on either the OTC Bulletin Board or an exchange.
The selling securities holders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. Carlateral does not receive any proceeds from the sale of any of the shares held by the selling security holders.
The securities have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Securities and Exchange Commission or any state securities commission passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is July 10, 2006.
The information in this prospectus is not complete and may be changed. 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.
INVESTING IN THE COMPANY'S COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING AT PAGE 7 . PLEASE READ THIS PROSPECTUS CAREFULLY.
TABLE OF CONTENTS
Page No.
Summary of our Prospectus 1
Risk Factors 3
Use of Proceeds 8
Determination of the Offering Price 8
Selling Security Holders 8
Plan of Distribution; Terms of the Offering 10
Legal Proceedings 11
Business 11
Management's Discussion and Analysis of our Financial
Condition and the Results of our Operations 12
Management 13
Executive Compensation 14
Principal Stockholders 15
Description of Securities 16
Certain Transactions 17
Litigation 17
Experts 18
Financial Statements 18
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DEALER PROSPECTUS DELIVERY OBLIGATION
Until _______ , (90 days after the effective date of this prospectus) all dealers that effect transactions in these securities whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
SUMMARY OF OUR OFFERING
This summary provides an overview of selected information contained in this prospectus. It does not contain all the information that you should consider before making a decision to purchase the shares offered by the selling security holders. You should very carefully and thoroughly read the more detailed information in this prospectus and review our financial statements.
SUMMARY INFORMATION ABOUT CARLATERAL, INC.
Carlateral, Inc. ("Carlateral") is a development stage company, incorporated in the State of Nevada on December 9, 2005, to establish itself as a finance company specializing in sub prime title loans, secured primarily using automobiles (but also boats, recreational vehicles, machinery and other equipment) as collateral.
Carlateral intends to open regional and branch offices in metropolitan areas throughout Canada and the US. Our target market is the community of individuals needing short term loans.
We intend to create brand name awareness amongst people who need access to short term capital. Our lending procedure will be designed to be simple, friendly and quick.
Our business office is located at 112 North Curry St., Carson City, Nevada, 89703-4934 and our telephone number is (775) 321-8243. Our United States and registered statutory office is located at 112 North Curry St., Carson City, Nevada, 89703-4934 (775) 882-1013; our fax number is (775) 882-8628. Our fiscal year end is February 28.
As of February 28, 2006, Carlateral has raised $23,500 through the sale of its common stock. There is $18,904 cash on hand and in our corporate bank accounts. Carlateral currently has accounts payable and liabilities of $3,000 as of February 28, 2006. In addition, Carlateral anticipates that the costs associated with this offering will be approximately $3,460. As of the date of this prospectus, we have not yet generated or realized any revenues from our business operations. The following financial information summarizes the more complete historical financial information as indicated on the audited financial statements we have filed with this prospectus.
DESCRIPTION OF PROPERTY
The company does not own any property, the company currently rents shared office space on a month to month basis and has not entered into any lease or long term rental agreements for property. The Carlateral office is at 112 North Curry Street, Carson City Nevada, 89703-4934.
OFFERING BY THE SELLING SECURITY HOLDERS
A group of selling security holders is endeavoring to sell the shares of common stock. The percentage of total outstanding common stock being offered by the selling security holders is 32%. The price at which the selling security holders offer their shares is a fixed price of $0.15 per share for the duration of the offering. Carlateral will not receive any proceeds from the sale of the common stock by the selling security holders. Currently, the company has 34 shareholders of common stock and 33 of the existing shareholders are endeavoring to sell their shares of common stock.
SUMMARY INFORMATION REGARDING THE OFFERING
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Securities being Offered by Up to 3,300,000 common shares are being offered by
the selling security
Selling Security Holders,
Commonholders. Stock,
par value $0.001
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Offering Price Per Share by $0.15 per share, if and when the selling security
Selling Security Holders holders decide to sell their shares.
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1
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Number of Shares Outstanding 10,300,000 common shares are currently issued and
Before the Offering of outstanding. 3,300,000 of the issued and
Common Shares outstanding shares are to be sold under this
prospectus by the existing security holders.
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Number of Shares Outstanding 10,300,000 common shares.
After the Offering
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Minimum Number of Shares to None
be Sold in this Offering
================================================================================
Use of Proceeds Carlateral will not receive any proceeds from the
sale of the common stock by the selling security
holders. The expenses of this offering, including
the preparation of this prospectus and the filing
of this registration statement, estimated at
$3,460, are being paid for by Carlateral.
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Market for the Common Stock There is no public
market for the common shares. The price per share
will remain $0.15 per share until such a time the
shares are quoted on the Over-The-Counter (OTC)
Bulletin Board or an exchange. The selling
security holders may sell at prevailing market
prices or privately negotiated prices, only after
the shares are quoted on either the OTC Bulletin
Board or an exchange.
Carlateral may not be able to meet the requirement
for a public listing or quotation of its Common
Stock. Further, even if Carlateral common stock is
quoted or granted listing, a market for the common
shares may not develop. If a market develops, the
price of the shares in the market may not be
greater than or equal to the price per share that
investors in this offering pay; in fact, the price
of our shares in any market that may develop could
be significantly lower.
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Terms of the Offering The selling security holders will determine when
and how they will sell the common stock offered in
this prospectus.
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Termination of The offering will conclude when all 3,300,000
the Offering shares of common stock the registered in this
statement have been sold, or when Carlateral
decides to terminate the registration of these
shares.
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Unless otherwise indicated, all information in this prospectus, including per share data and information relating to the number of shares issued and outstanding, has been adjusted for a ten-for-one (10:1) forward stock split of our common stock effective on February 15, 2006. You should rely only on the information contained in this prospectus. Carlateral has not authorized anyone to provide you with information different from that which is contained in this prospectus. The selling security holders are offering to sell shares of common stock and seeking offers to buy shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus, or of any sale of the common stock.
SUMMARY OF OUR FINANCIAL INFORMATION
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BALANCE SHEET AS OF FEBRUARY 28, 2006
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Total Assets $20,378
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Total Liabilities $3,000
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Shareholder's Equity $17,378
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OPERATING DATA DEC 9, 2005 (INCEPTION) THROUGH
FEBRUARY 28, 2006
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Revenue $0
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Net Loss ($6,122)
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Carlateral has had no revenues and has achieved losses since inception. Carlateral has had no operations and has been issued a "going concern" opinion by its auditor.
RISK FACTORS
Please consider the following risk factors before deciding to invest in our common stock.
RISKS RELATED TO OUR FINANCIAL CONDITION
IF WE DO NOT OBTAIN ADEQUATE FINANCING, OUR BUSINESS WILL FAIL, WHICH WILL RESULT IN THE COMPLETE LOSS OF YOUR INVESTMENT.
Our current operating funds are adequate for corporate existence over the next twelve months. Carlateral's cash balance as of February 28, 2006 is $20,378. We will require additional financing in order to implement our business plans and strategy. The company is currently spending approximately $1,500 per month. We require significant capital to finance our growth. We will need funds in order to enter into leasing agreements for our storefront offices and to furnish and equip those offices. Opening a single store requires approximately $10,000 and we anticipate incurring operational losses for a period of 6 months in each location before the location generates enough cash flow to sustain our operations.
SINCE WE LACK AN OPERATING HISTORY, WE FACE A HIGH RISK OF BUSINESS FAILURE, WHICH MAY RESULT IN THE LOSS OF YOUR INVESTMENT.
Carlateral is a development stage company and has not yet begun to open offices and deliver services. Thus, we have no way to evaluate the likelihood that we will be able to operate the business successfully. We were incorporated on December 9, 2005 and to date have been involved primarily in organizational activities and market research. Based upon current plans, we expect to incur operating losses in future periods. We will incur these losses due to expenses associated with setting up our computerized loan systems, opening and staffing our offices and paying salaries and benefits to our future employees.
We cannot guarantee that we will be successful in generating revenue in the future, or in raising funds through the sale of our shares, adequate to pay for our business operations and planed expenditures. As of the date of this prospectus, we have earned no revenue. Failure to generate revenue will cause us to go out of business, which will result in the complete loss of your investment.
AS OUR SOLE OFFICER AND DIRECTOR HAS OTHER OUTSIDE BUSINESS ACTIVITIES, HE MAY BE UNABLE TO DEVOTE A MAJORITY OF HIS TIME TO THE COMPANY. AS A RESULT, THERE MAY BE PERIODIC INTERRUPTIONS IN OUR OPERATIONS AND OUR BUSINESS COULD FAIL.
Mr. Cameron, our sole officer and director, has other outside business activities and is devoting only approximately 5-10 hours per week to our operations. Our operations may be sporadic and occur at times which are not convenient to Mr. Cameron, which may result in periodic interruptions or suspensions of our business plan. If the demands of the company's business require the full time of our executive officer, he is prepared to adjust his timetable in order to devote more time to conducting our business operations. However, our executive officer may be unable to devote sufficient time to the management of the company's business, which may result in periodic interruptions in the implementation of the company's business plans and operations. Such delays could have a significant negative effect on the success of our business.
SHOULD OUR SOLE OFFICER AND DIRECTOR LEAVE THE COMPANY, WE MAY BE UNABLE TO CONTINUE OUR OPERATIONS.
The company is entirely dependent on the efforts and abilities of its sole officer and director. The loss of our sole officer and director could have a material adverse effect on the business and its prospects. The company believes that all commercially reasonable efforts have been made to minimize the risks attendant the departure from service of our current sole officer and director. However, replacement personnel may be unavailable to us. Moreover, even if available, replacement personnel may not enable the company to operate profitably.
All decisions regarding the management of the company's affairs will be made exclusively by its sole officer and director. Purchasers of the offered shares may not participate in the management of the company and, therefore, are dependent upon the management abilities of the company's sole officer and director. The only assurance that the shareholders of the company (including purchasers of the offered shares) have that the company's sole officer and director will not abuse his discretion in making decisions, with respect to its affairs and other business decisions, is his fiduciary obligations and business integrity. Accordingly, no person should purchase offered shares unless that person is willing to entrust all aspects of management to the company's sole officer and director, or his successors. Potential purchasers of the offered shares must carefully evaluate the personal experience and business performance of the company's management.
The company's management may retain independent contractors to provide services to the company. Those contractors have no fiduciary duty to the shareholders of the company and may not perform as expected. The company does not maintain key person life insurance on its sole officer and director.
IF WE CANNOT SECURE ADDITIONAL CAPITAL, OR IF AVAILABLE CAPITAL IS TOO EXPENSIVE, OUR BUSINESS WILL FAIL.
Opening more stores and implementing an electronic loan management system will require a significant capital investment. Debt or equity financing may not be available for us to do so, or if available may be too expensive. To open our average store requires an investment of approximately $10,000, and we anticipate 6 months of operational losses at approximately $1,500 per month before an average store generates adequate cash flow to cover operations.
IF WE EXPAND OUR OPERATIONS AND FAIL TO MANAGE THE RESULTING GROWTH EFFECTIVELY, OUR BUSINESS WILL BE HARMED.
Our plans include opening new stores at periodic intervals. Our growth strategy is subject to significant risks which you should carefully consider before purchasing the shares we are offering.
Although we plan on researching our locations carefully, some stores may be slow to achieve profitability, or may not become profitable at all, which will result in losses. There can be no assurance that we will succeed.
We intend to enter markets where the regulatory climate is favorable to our business. However, we may be unable to enter such markets successfully. The factors that will affect our growth strategy include our success in (a) identifying and implementing an electronic loan management system, (b) obtaining adequate financing on acceptable terms and (c) adapting our internal controls and operating procedures to accommodate our future growth.
Our systems, procedures and controls may not be adequate to support the expansion of our business operations. Significant growth will place managerial demands on all aspects of our operations. Our future operating results will depend substantially upon our ability to manage changing business conditions and to implement and improve our technical, administrative and financial controls and reporting systems. In addition, we may be unable to implement our business strategy profitably in all jurisdictions that we intend to operate due to local regulatory restrictions.
RISKS RELATED TO THIS OFFERING
INVESTORS WILL PAY MORE FOR CARLATERAL'S COMMON STOCK THAN THE PRO RATA PORTION OF OUR ASSETS ARE WORTH; AS A RESULT INVESTING IN THE COMMON STOCK MAY RESULT IN AN IMMEDIATE LOSS.
The arbitrary offering price of $0.15 per common share as determined herein, is substantially higher than the net tangible book value per share of Carlateral's common stock. Carlateral's assets do not substantiate a share price of $0.15 per share. This premium in share price applies to the terms of this offering and does not attempt to reflect any forward looking share price subsequent to the company obtaining a listing on any exchange, or becoming quoted on the OTC Bulletin Board.
AS WE CURRENTLY HAVE NO MARKET FOR OUR SHARES, SHAREHOLDERS MAY BE UNABLE TO SELL THEIR SHARES. EVEN IF A MARKET SHOULD DEVELOP, THE PRICE MAY BE VOLATILE AND SHAREHOLDERS MAY LOSE THEIR ENTIRE INVESTMENT.
Our stock is currently not traded and we cannot provide investors with any assurance that it will be traded, or if traded, whether a market will develop. If no market develops, the holders of our common stock may find it difficult or impossible to sell their shares. Further, even if a market develops, our common stock will be subject to price fluctuations and volatility.
The company cannot apply directly to be quoted on the OTC Bulletin Board. Additionally, the stock can be listed or traded only to the extent that there is interest by broker/dealers in acting as a market maker in the company's stock. Despite the company's best efforts, the company may not be able to convince any broker/dealers to act as market-makers and make quotations on the OTC Bulletin Board. It is the company's intent to contact potential market makers for the OTC Bulletin Board after it has completed its primary offering.
IN THE EVENT THAT THE COMPANY'S SHARES ARE TRADED, THEY MAY TRADE UNDER $5.00 PER SHARE AND THUS WILL BE A PENNY STOCK. TRADING IN PENNY STOCKS HAS MANY RESTRICTIONS AND THESE RESTRICTIONS COULD SEVERELY AFFECT THE PRICE AND LIQUIDITY OF THE COMPANY'S SHARES.
In the event our shares are traded, and our stock trades below $5.00 per share our stock would be known as a "penny stock" which is subject to various regulations involving disclosures to be given to you prior to purchase of any penny stock. The U.S. Securities and Exchange Commission (the "SEC") has adopted regulations which generally define a "penny stock" to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Depending on market fluctuations, our common stock could be considered to be a "penny stock". A penny stock is subject to rules that impose additional sales practice requirements on broker/dealers who sell these securities to persons other than established customers and accredited investors. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of these securities. In addition he must receive the purchaser's written consent to the transaction prior to the purchase. He must also provide certain written disclosures to the purchaser. Consequently, the "penny stock" rules may restrict the ability of broker/dealers to sell our securities, and may negatively affect the ability of holders of shares of our common stock to resell them. These disclosures require you to acknowledge you understand the risk associated with buying penny stocks and that you can absorb the entire loss of your investment. Penny stocks are low priced securities that do not have a very high trading volume. Consequently, the price of the stock is oftentimes volatile and you may not be able to buy or sell the stock when you want.
AS THE COMPANY HAS 75,000,000 AUTHORIZED SHARES, THE COMPANY'S MANAGEMENT COULD ISSUE ADDITIONAL SHARES DILUTING THE COMPANY'S CURRENT SHAREHOLDERS' EQUITY.
The company has 75,000,000 authorized shares of which only 10,300,000 are currently outstanding and will be issued and outstanding if all the shares in this offering are sold. The company's management could, without the consent of the company's existing shareholders issue substantially more shares causing a large dilution in our current shareholders' equity position. Additionally, large share issuances by the company would generally have a negative impact on our share price. It is possible that due to additional share issuance you could lose a substantial amount or all of your investment.
AS OUR COMPANY'S SOLE OFFICER AND DIRECTOR CURRENTLY OWNS 68% OF THE OUTSTANDING COMMON STOCK, INVESTORS MAY FIND DECISIONS MADE BY THE COMPANY'S SOLE OFFICER AND DIRECTOR CONTRARY TO THEIR INTERESTS.
The company's sole officer and director owns approximately 68% of our currently outstanding common stock. As a result, he will be able to decide who will be directors and control the direction of the company. Our sole officer and director's interests may differ from the interests of our other stockholders. Factors that could cause his interests to differ from the interests of other stockholders include the impact of corporate transactions on the timing of our business operations and his ability to continue to manage the business, in terms of the amount of time he is able to devote to the company.
IF WE FILE FOR BANKRUPTCY PROTECTION OR ARE FORCED INTO BANKRUPTCY PROTECTION, INVESTORS WILL LOSE THEIR ENTIRE INVESTMENT.
If we file for bankruptcy protection, or a petition for involuntary bankruptcy is filed by creditors against us, all funds will become part of the bankruptcy estate and administered according to the bankruptcy laws. In this case, you will lose your investment and your funds will be used to pay creditors and will not be used for implementing our electronic loan management systems or opening our storefront sales locations.
RISKS RELATING TO OUR BUSINESS
IF WE CANNOT EFFECTIVELY PROMOTE OUR LOAN SERVICES, WE WILL NOT ATTRACT CUSTOMERS.
Our success will depend on several factors, including consumers' perception of our role in the financial community and acceptance of our services. We believe that the publics' acceptance of our services depends on several factors, including the overall simplicity and expediency of our lending process, the pricing of our loan services, the convenience of our locations and the effectiveness of our marketing efforts. Our services may not achieve broad market acceptance. A decline in the demand for our consumer finance services, or our failure to achieve public acceptance for our loan services, would have a material and adverse effect on our business, operating results and financial condition.
CHANGING ECONOMIC CONDITIONS MAY HAVE AN ADVERSE EFFECT ON OUR BUSINESS.
Changing economic conditions may adversely affect our business. The risks associated with our business may become more significant in an economic slowdown or recession. In the event of an economic slowdown or recession we may suffer an increase in delinquency rates and loan write-offs. Our delinquency rates and the frequency and severity of our losses may be higher under adverse economic conditions than those experienced by the financial services industry generally because of our limited credit requirements, the fact that each transaction is the result of a customer's short-term financial need and the overall nature of our business. Any sustained period of economic slowdown or recession could have a material and adverse effect on our business, operating results and financial condition.
Our quarterly operating results may fluctuate significantly and any failure to meet financial expectations for any fiscal quarter may disappoint investors and could cause the price of our common stock to fall.
WE FACE SIGNIFICANT COMPETITION FROM OTHER COMPANIES THAT PROVIDE SHORT-TERM ADVANCES TO OUR TARGET CUSTOMERS.
In addition to other title loan companies, we compete with banks, credit card issuers, pawnshops, payday loan establishments and other financial services entities and retail businesses that provide short-term cash advances. We believe that the cash advance and short term loan industry will become more competitive as the industry consolidates, and we could face additional competition as increasing numbers of traditional check cashers, commercial banks and other retail credit outlets add title loan services to their financial product offerings. The entry of such competitors into our markets could have a material adverse effect on our business, operating results and financial condition. Many of our competitors have larger and more established customer bases and substantially greater financial, marketing and other resources than us.
ALTHOUGH WE REQUIRE THAT OUR CUSTOMERS PROVIDE COLLATERAL FOR CASH LOANS, WE ARE SUSCEPTIBLE TO SUBSTANTIAL RISKS OF NON-PAYMENT.
We require that our customers entitle us to the collateral that secures their loans. However, in the case of default, we may be unable to recover all of the costs incurred from failed loans. In addition, our customers have little or no liquidity. As a result, we are more susceptible to the risk that customers will not repay their loans than consumer lenders or finance companies that have more stringent underwriting criteria, and typically require significant collateral for their loan.
RISKS RELATING TO OUR INDUSTRY
OUR INDUSTRY IS CLOSELY REGULATED AND CHANGES IN LAWS AND PRACTICES MAY HAVE AN ADVERSE AFFECT ON OUR ABILITY TO OPERATE.
States closely regulate our industry. Several lawsuits have challenged sub prime loans as violations of state usury laws. If such lawsuits are successful in those states in which we operate, or if state laws are changed to disallow sub prime loans, we will be required to change the manner in which we conduct our business.
There is a substantial risk that we may be materially and adversely affected by future litigation, new state or federal regulations or consumer initiatives directed against us individually or against the sub prime loan industry in general. Several states have also raised questions related to the proper regulatory framework for sub prime loans. Each state where we operate regulates our business through consumer protection and lending practices laws (such as truth-in-lending and usury). These laws and regulations, among other things, establish licensing requirements, regulate our credit approval and application procedures, establish maximum fees and late payment charges, require specified disclosures to customers and govern collection practices. Our inability or failure to comply with any adverse changes in our regulatory environment, such as new laws and regulations or new interpretations of existing laws and regulations, could result in fines, class-action litigation or interruption or cessation of certain of our business activities. Any of these events could have a material and adverse effect upon our business, operating results and financial condition.
In addition, changes in our regulatory environment may be adopted by states in which we operate that may make our compliance to our regulatory environment more difficult or expensive, further limit or restrict our fees and other charges, curtail our future operations, restrict our ability to operate, or otherwise materially and adversely effect our business, operating results and financial condition.
FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements regarding management's plans and objectives for future operations, including plans and objectives relating to our planned entry into the sub-prime lending industry. The forward-looking statements and associated risks set forth in this prospectus include or relate to, among other things, (a) our projected profitability, (b) our growth strategies, (c) anticipated trends in our industry, (d) our ability to obtain and retain sufficient capital for future operations, and (e) our anticipated needs for working capital. These statements may be found under "Management's Discussion and Analysis or Plan of Operation" and "Description of Business," as well as in this prospectus generally. Actual events or results may differ materially from those discussed in these forward-looking statements as a result of various factors, including, without limitation, the risks outlined under "Risk Factors" and matters described in this prospectus generally. In light of these risks and uncertainties, the forward-looking statements contained in this prospectus may not in fact occur.
The forward-looking statements herein are based on current expectations that involve a number of risks and uncertainties. Such forward-looking statements are based on the assumptions that we will be able to continue our business strategies on a timely basis, that we will attract customers, that there will be no material adverse competitive or regulatory changes in the conditions under which our business operates, that our sole officer and director will remain employed as such, and that our forecasts accurately anticipate market demand. The foregoing assumptions are based on judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond our control. Accordingly, although we believe that the assumptions underlying the forward-looking statements are reasonable, any such assumption could prove to be inaccurate and therefore there can be no assurance that the results contemplated in forward-looking statements will be realized. In addition, as disclosed elsewhere in this "Risk Factors" section of this prospectus, there are a number of other risks inherent in our business and operations, which could cause our operating results to vary markedly and adversely from prior results or the results contemplated by the forward-looking statements. Increases in the cost of developing and maintaining our electronic loan management systems, or in our general or administrative expenses, or the occurrence of extraordinary events, could cause actual results to vary materially from the results contemplated by these forward-looking statements.
Management decisions, including budgeting, are subjective in many respects and subject to periodic revisions in order to reflect actual business conditions and developments. The impact of such conditions and developments could lead us to alter our marketing, capital investment or other expenditures and may adversely affect the results of our operations. In light of the significant uncertainties inherent in the forward-looking information included in this prospectus, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.
USE OF PROCEEDS
Carlateral will not receive any proceeds from the sale of the securities being registered pursuant to this statement.
DETERMINATION OF OFFERING PRICE
As there is no established public market for our shares, the offering price and other terms and conditions relative to our shares have been arbitrarily determined by Carlateral and do not bear any relationship to assets, earnings, book value, or any other objective criteria of value. In addition, no investment banker, appraiser, or other independent third party has been consulted concerning the offering price for the shares or the fairness of the offering price used for the shares.
SELLING SECURITY HOLDERS
Carlateral is registering, for offer and sale shares of common stock held by certain selling security holders. The selling security holders may offer their shares for sale on a continuous or delayed basis pursuant to Rule 415under the 1933 Act.
Carlateral intends to apply for listing on the Over-The-Counter (OTC) Bulletin Board or an exchange as soon as meeting listing requirements, however, there is no assurance that Carlateral will be granted a listing. Moreover, selling shareholders will still be limited to selling the shares at $0.15 per share (set offering price per share pursuant to this prospectus) until the shares are quoted on the OTC or any securities exchanges. To date, there have been no steps taken to list Carlateral's common stock on any public exchange for listing.
All of the shares registered herein will become tradable on the effective date of this registration statement. The following table sets forth information as of July 10, 2006, with respect to the beneficial ownership of our common stock both before and after the offering. The table includes all those who beneficially own any of our outstanding common stock and are selling their shares in the offering. The company is not aware of any selling security holders being a broker-dealer or being affiliated with a broker-dealer.
NOTE: AS OF THE DATE OF THIS PROSPECTUS, OUR SOLE OFFICER AND DIRECTOR OWNS 7,000,000 OF OUR COMMON SHARES, WHICH ARE SUBJECT TO RULE 144 RESTRICTIONS.
The percentages determined in these calculations are based upon 10,300,000 of our common shares issued and outstanding as of the date of this prospectus. The following table shows the number of shares and percentage before and after the public offering:
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NAME AND ADDRESS OF OWNERSHIP TOTAL SHARETOTAL SHARE%
BENEFICIAL OWNERS OF BEFORE BEFORE OFFERED FOR SALE AFTER OFFERINOWNED AFTER
COMMON STOCK OFFERING OFFERING OFFERING
(1)
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Susan J Alcott 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Art Cameron 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Josh Cameron 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Cindy Julia Corcoran 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Kenneth Corcoran 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Dolores L Dawson 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Evelyn Gail Dawson 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Gordon Dawson 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
John A Dawson 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
John B Dawson 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Colin Embley 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Darrel Thomas Embley 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Erin Embley 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Marilyn Beverley Embley 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Todd Embley 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Malcolm Gray 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Margot Gray 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Peggy Lalor 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Pamela McDonald 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Richard Kyle Paisley 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Sheila Paterson 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Rob Phillips 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Teresa Phillips 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Shana Richmond 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Aaron Smith 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Brian Sprout 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Virginia Stanton 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Alec Tidey 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
April Tidey 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Linda Webb 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Peter Webb 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
John Welch 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
Wendy Welch 100,000 0.097% 100,000 0 0%
-------------------------------------------------------------------------------------------------------------------
TOTALS 3,300,000 32% 3,300,000 0 0%
-------------------------------------------------------------------------------------------------------------------
|
(1) Based on 10,300,000 common shares currently outstanding.
o EXCEPT AS PURSUANT TO APPLICABLE COMMUNITY PROPERTY LAWS, THE PERSONS NAMED
IN THIS TABLE HAVE SOLE VOTING AND INVESTMENT POWER WITH RESPECT TO ALL
SHARES OF COMMON STOCK.
As a group, the selling security holders are hereby registering 3,300,000 common shares. After the effective date of this registration statement, they may sell theses shares at any price or time.
The shares were acquired in December 2005; we issued 330,000 common shares for total consideration of $16,500, which was accounted for as a purchase of common stock.
On February 15, 2006, pursuant to a company resolution, we initiated a forward split in the ratio of 10:1. Share totals in the table above reflect this split.
The shares owned by the selling security holders are being registered pursuant to Rule 415 of the General Rules and Regulations of the Securities and Exchange Commission, which Rule pertains to delayed and continuous offerings and sales of securities. In regard to the shares offered under Rule 415, Carlateral undertakes in Part II of this registration statement to keep this registration statement current during any period in which offers or sales are made pursuant to Rule 415.
In the event the selling security holders receive payment for the sale of their shares, Carlateral will not receive any of the proceeds from such sales. Carlateral is bearing all expenses in connection with the registration of the shares of the selling security holders.
To our knowledge, none of the selling security holders has either (1) had a material relationship with Carlateral, other than as a shareholder as noted above, at any time since inception, December 9, 2005, or (2) ever been an officer or director of Carlateral.
PLAN OF DISTRIBUTION
GENERAL
Carlateral will not receive the proceeds from the sale of the shares by the selling security holders. The price per share is $0.15 and will remain at this price until such a time the shares are quoted on the Over-The-Counter (OTC) Bulletin Board or an exchange. The selling security holders may sell at prevailing market prices or privately negotiated prices, only after the shares are quoted on either the OTC Bulletin Board or an exchange. Carlateral cannot guarantee or provide assurances that its common stock will ever be quoted on the OTC Bulletin Board or listed on any exchange.
If and when the common stock is quoted on the OTC Bulletin Board or listed on an exchange the selling security holders' shares may be sold to purchasers from time to time directly by, and subject to, the discretion of the selling security holders. In addition, the selling security holders may from time to time offer their shares for sale through underwriters, dealers, or agents, who may receive compensation in the form of underwriting discounts, concessions or commissions from the selling security holders and/or the purchasers of the shares for whom they may act as agents. The shares sold by the selling security holders may be sold from time to time in one or more transactions: (i) at an offering price that is fixed or that may vary from transaction to transaction depending upon the time of sale or (ii) at prices otherwise negotiated at the time of sale. Such prices will be determined by the selling security holders or by agreement between the selling security holders and any underwriters.
If the selling security holders enter into an agreement, after the effectiveness of this Registration Statement, to sell their shares through a broker-dealer that acts as an underwriter, then Carlateral will file a post-effective amendment to the Registration Statement identifying the underwriter, and thereby providing the required information on the plan of distribution, revising the appropriate disclosures in the Registration Statement, and filing the agreement as an exhibit to the Registration Statement.
Any underwriters, dealers, or agents who participate in the distribution of the securities may be deemed to be "underwriters" under the Securities Act and any discounts, commissions, or concessions received by any such underwriters, dealers, or agents may be deemed to be underwriting discounts and commissions under the Securities Act.
At the time a particular offer is made by, or on the behalf of, the selling security holders, a registration statement, including any necessary supplement thereto, will be distributed, which will set forth the number of shares of common stock and other securities being offered and the terms of the offering, including the name or names of any underwriters, dealers, or agents, the purchase price paid by any underwriter for the shares purchased from the selling security holders, any discounts, commissions, and other items constituting compensation from the selling security holders, any discounts, commissions, or concessions allowed, realized or paid to dealers, and the proposed selling price to the public.
Pursuant to Regulation M of the General Rules and Regulations of the Securities and Exchange Commission, any person engaged in a distribution of securities, including on behalf of a selling security holder, may not simultaneously bid for, purchase or attempt to induce any person to bid for, or purchase securities of the same class for a period of five business days prior to the commencement of such distribution and continuing until the selling security holder (or other person engaged in the distribution) is no longer a participant in the distribution.
In order to comply with the applicable securities laws of certain states, the securities will be offered or sold in such states through registered or licensed brokers or dealers in those states. In addition, in certain states, the securities may not be offered or sold unless they have been registered or qualified for sale in such states or an exemption from such registration or qualification requirement is available, and with which Carlateral has complied.
In addition and without limiting the foregoing, the selling security holders will be subject to applicable provisions of the Exchange Act and the rules and regulations there under in connection with transactions in shares during the effectiveness of the registration statement.
Carlateral, Inc. will pay all expenses incidental to the registration of the shares (including registration pursuant to the securities laws of certain states) other than commissions, expenses, reimbursements and discounts of underwriters, dealers or agents, if any.
LEGAL PROCEEDINGS
We are not a party to any material legal proceedings and, to our knowledge, no such proceedings are threatened or contemplated by any party.
BUSINESS
GENERAL
Carlateral, Inc. is a development stage company and was incorporated on December 9, 2005 to enter into the financial services industry. Our key demographic market is comprised of individuals needing short term capital. By "short term" we mean 30 to 90 days, but we may include loans for longer periods on a case-by-case basis. Our target consumers are those that either do not meet the lending criteria of established banks and lending institutions, or do not wish to incur the delays associated with a lengthy loan application and approval process.
SERVICES
Carlateral intends to provide title loans and other forms of collateral loans to individuals on a short term basis. We intend to secure our loans through signed title transfers, liens, and other agreements whereby we take possession and ownership of the specified collateral if the loan defaults. If we take possession and ownership of any collateral we will dispose of it in the most efficient manner possible to both recoup our investment and to free up capital for subsequent loans.
MARKETING
Our primary marketing will be to purchase advertisements on local radio stations and in community newspapers. Our target audience is people experiencing short term cash needs.
COMPANY LAUNCH
Our goal is to open our first office within 11 months of having our registration approved.
COMPETITIVE ADVANTAGES
Banks and other financial institutions have significant barriers in place that may make it difficult for some individuals to secure a loan. Factors such as credit history and employment may preclude getting a loan from many of these financial institutions. Banks and other financial institutions also have an extensive and burdensome application and approval process that does not encourage people who may want to borrow only a small amount of money for a short period of time.
Our other competitors include Payday loan companies and other title loan companies. We intend to compete by being friendly and approachable, having a quick approval process, and flexible terms and payments.
COMPANY HISTORY
On December 9, 2005 Don Cameron, our sole officer and director, founded the company to enter into the financial services industry.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, we have no employees other than our sole officer and director, who has received no compensation. There are no employment agreements in existence. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans. However, we may adopt plans in the future. There are presently no personal benefits available to our sole officer and director.
During the initial implementation of our marketing strategy, the company intends to hire independent consultants to develop its website, rather than hire full time website development/maintenance employees. We plan on hiring initial sales staff to service our customers on a commission basis and do not anticipate paying fixed salaries to any future employees.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This section of the prospectus includes a number of forward-looking statements
that reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
"believe", "expect", "estimate", "anticipate", "intend", "project" and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements, which apply only
as of the date of this prospectus. These forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to differ
materially from historical results or our predictions.
We are a start-up corporation organized to enter into the financial services industry. We have not yet generated or realized any revenues from business operations.
Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin marketing our services to customers. Accordingly, we must raise cash from sources other than revenues generated from the proceeds of loans we undertake.
From inception to February 28, 2006 the company's business operations have primarily been focused on developing our business model and marketing strategy. The company has been conducting industry market research and an analysis of our competitors. Our initial research has focused on identifying the best locations for our initial office, both in terms of client demographics and the regulatory environment.
The company believes that we will be able to determine the best location within 120 days of the date on which this prospectus becomes effective and will expend approximately $8,000 during this period.
When the company has determined the best location for our initial office, we will engage the services of an attorney to create a loan agreement that meets the local state laws and requirements. The company expects to have a valid loan agreement created within 180 days of the date on which this prospectus becomes effective and will expend approximately $4,000 during this process.
Concurrently with creating the loan agreement, the company will search for a suitable office space in the preferred locale based on the results of its demographic research. To offset expenses incurred during this period, the company may look at securing a shared space in an office with another non-competing business. Upon finding the appropriate location, the company will enter into a lease or sub-lease agreement. We believe that we will have secured our initial office location within 210 days of the date on which this prospectus becomes effective and will expend approximately $5,000 during this period.
The company will purchase a computer system and other office equipment and supplies for our initial store location. The company estimates that these equipment expenditures for the office will be $9,500. The company will also design and have printed all of the necessary forms and agreements used in its operations, at an estimated cost of $3,000.
The company will identify and hire a commission sales person to staff the initial office. The company believes that it will hire the commission sales person within 240 days of the date on which this prospectus becomes effective.
The company will research local advertising possibilities, including community newspapers, radio, yellow pages, and established local websites to determine the most advantageous media for the company's advertising campaigns. The company believes that it will have developed an advertising program within 300 days of the date on which this prospectus becomes effective and will expend approximately $8,500 on our initial advertising.
The company will research, purchase and implement a loan management system that can be customized to suit its needs and is scalable so that we will be able to manage multiple branches from a central location. The company expects to spend about $27,500 to research and implement the loan management system for the initial store location.
The company believes that it will be able to execute its first loan within 320 days of the date on which prospectus becomes effective.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an evaluation of our performance. Carlateral was incorporated in the State of Nevada in December of 2005; we are a development stage company attempting to enter into the financial services industry and have not generated any revenues from our operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including the financial risks associated with the limited capital resources currently available to us for the implementation of our business strategies. (See "Risk Factors").
To become profitable and competitive, we must first open and staff our initial office, attract lenders to provide capital, and attract new business.
Our sole officer and director undertakes to provide us with intial operating and loan capital to sustain our business plan over the next twelve month period.
RESULTS OF OPERATIONS
Since inception (December 9, 2005) to February 28, 2006, Carlateral has spent a total of $6,122 on start-up costs. The company has not generated any revenue from business operations. All proceeds currently held by the company are the result of the sale of common stock.
The company incurred expenditures of $5,663 for accounting services, the preparation of audited financial statements and legal services. The company also had expenditures of $459 for general administrative costs.
Since inception, the majority of the company's time has been spent refining its business plan and marketing model, conducting industry research, and preparing for a primary financial offering.
LIQUIDITY AND CAPITAL RESOURCES
As of the date of this registration statement, we have yet to generate any revenues from our business operations. On December 12, 2005, Carlateral issued 700,000 shares of common stock to our sole officer and director for cash proceeds of $0.01 per share. On December 15, 2005, Carlateral issued 330,000 common shares for cash proceeds of $0.05 per share. As of Feb 28, 2006, our total assets were $20,378 and our total liabilities were $3,000. From inception to February 28, 2006 the company has raised $23,500 through the sale of its shares.
MANAGEMENT
OFFICERS AND DIRECTORS
Our sole officer and director will serve until his successor is elected and
qualified. Our officers are elected by the board of directors to a term of one
(1) year and serve until their successor is duly elected and qualified, or until
they are removed from office. The board of directors has no nominating, auditing
or compensation committees.
The name, address, age and position of our president, secretary/treasurer, and director and vice president is set forth below:
Name and Address Age Position(s)
Don Cameron 53 President, Secretary/Treasurer,
1720 30th Street Principal Executive Officer,
West Vancouver, BC, Canada V7V 2X3 Principal Financial Officer and
sole member of the Board of
Directors
|
The person named above has held his offices/positions since the inception of our company and is expected to hold his offices/positions until the next annual meeting of our stockholders.
BACKGROUND OF OFFICERS AND DIRECTORS
DON CAMERON, PRESIDENT, CEO, DIRECTOR, SECRETARY/TREASURER
Mr. Cameron earned a Bachelor of Arts (Honors) in Economics (1975) and a Bachelor of Law (1979) from the University of British Columbia and was called to the Bar in British Columbia in 1980. Mr. Cameron attended an Executive Management course at Stanford University in 1997 and the Program on Negotiation at Harvard University in 1998.
Prior to practicing law, Mr. Cameron worked on the Pierce Royal Commission on Forest Resources. Mr. Cameron practiced law with the law firm of Worrall Scott & Page as an associate (1981 - 1985) and as a partner from (1986 - 1993), specializing in corporate transactions. During this time Mr. Cameron developed expertise in acquisitions and divestitures, various forms of debt and equity financings, executive employment contracts, and litigation related thereto.
Mr. Cameron left the practice of law to pursue entrepreneurial activities, moving to San Diego in 1993 and was the sole founder of Interactive Telesis Inc, a firm specializing in interactive voice response (IVR) services and the deployment of automated speech recognition (ASR) technologies. During Mr. Cameron's tenure with ITI he held the positions of Chairman, Chief Executive Officer and Director. Over a six year period, ITI grew to $5 million in revenue, and secured several Fortune 100 customers. Mr. Cameron created all product/service offerings, was directly responsible for raising all of the funding required to sustain ITI's growth, and recruited talented senior personnel at important stages in the development of the business.
In 2002 Mr. Cameron was the sole founder and CEO of ConferTel, a Carlsbad-based teleconferencing provider. ConferTel has approximately 1,300 customers throughout the U.S. and Canada and has been profitable since late 2004.
From December 2005 to present Mr. Cameron has been the founder and President of Carlateral.
CONFLICTS OF INTEREST
At the present time, we do not foresee a direct conflict of interest with our sole officer and director. The only conflict that we foresee is Mr. Cameron's devotion of time to projects that do not involve us. In the event that Mr. Cameron ceases devoting time to our operations, he has agreed to resign as an officer and director.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by us from inception on December 9, 2005 through February 28, 2006. The compensation addresses all compensation awarded to, earned by, or paid to our named executive officer up to February 28, 2006. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.
Summary Compensation Table
Long-Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Restricted
Other Under Shares or Other
Annual Options/ Restricted Annual
Names Executive Compensation SARs Share LTIP Compensation
Officer and Year Salary Bonus Granted Units Payouts
Principal Ended (US$) (US$) (US$) (#) (US$) (US$) (US$)
Position
Don Cameron 2005 0 0 0 0 0 0 0
President
Don Cameron 2006 0 0 0 0 0 0 0
President
|
We did not pay any salaries in 2006. We do not anticipate beginning to pay salaries until we have adequate funds to do so. There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and director other than as described herein.
LONG-TERM INCENTIVE PLAN AWARDS
We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.
COMPENSATION OF DIRECTORS
Our sole officer and director does not receive any compensation for serving as a member of the board of directors. As of the date hereof, we have not entered into employment contracts with our sole officer and do not intend to enter into any employment contracts until such time as it profitable to do so.
INDEMNIFICATION
Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he 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 indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this prospectus, the total number of shares owned beneficially by our sole officer and director, and the present owners of 5% or more of our total outstanding shares. The table also reflects what his ownership will be assuming completion of the sale of all shares in this offering. The stockholder listed below has direct ownership of his shares and possesses sole voting and dispositive power with respect to the shares.
Number of Number of Percentage of Percentage of
Shares Shares after Ownership as of Ownership After
Before the Offering The date of this the Offering
Offering Prospectus
Name and Address
Beneficial Ownership [1]
Don Cameron
1720 30th Street 7,000,000 7,000,000 67.9% 67.9%
West Vancouver, BC
Canada V7V 2X3
|
[1] The persons named above may be deemed to be a "parent" and "promoter" of our company, within the meaning of such terms under the Securities Act of 1933, as amended, by virtue of his/its direct and indirect stock holdings. Mr. Cameron is the only "promoter" of our company.
FUTURE SALES BY EXISTING STOCKHOLDERS
A total of 7,000,000 shares of common stock were issued to our sole officer and director, all of which are restricted securities, as defined in Rule 144 of the Rules and Regulations of the SEC promulgated under the Securities Act. Under Rule 144, the shares can be publicly sold, subject to volume restrictions and restrictions on the manner of sale, commencing one year after his acquisition commencing on December 9, 2006. Under Rule 144, a shareholder can sell up to 1% of total outstanding shares every three months in brokers' transactions. Shares purchased in this offering will be immediately resalable and sales of our remaining shares after applicable restrictions expire, could have a depressive effect on the market price, if any, of our common stock and the shares the selling security holders are offering.
Because our sole officer and director will control us after the offering, regardless of the number of shares sold, your ability to cause a change in the course of our operations is negligible. Thus, the value normally attributable to the right to vote is eliminated. This could result in a reduction in value of the shares you own because of their ineffective voting power. No common stock is subject to outstanding options, warrants or securities convertible into common stock.
DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized capital stock consists of 75,000,000 shares of common stock, par value $0.001 per share. The holders of our common stock:
* Have equal ratable rights to dividends from funds legally available if and
when declared by our board of directors,
* are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution or
winding up of our affairs,
* have neither preemptive, subscription or conversion rights, nor redemption
or sinking fund provisions or rights, and
* are entitled to one non-cumulative vote per share on all matters on which
stockholders may vote.
We refer you to the Bylaws of our Articles of Incorporation and the applicable statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of our securities.
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting rights. Thus, when voting for the election of directors, shareholders who hold more than 50% of the outstanding shares can, if they so choose, elect all of the directors to be elected. In that event, the holders of the remaining shares will not be able to elect any of our directors. After this offering is completed, present stockholders will own more than 51% of our outstanding shares.
CASH DIVIDENDS
As of the date of this prospectus, we have not paid any cash dividends to stockholders. The declaration of any future cash dividends will be at the discretion of our board of directors and will depend upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
ANTI-TAKEOVER PROVISIONS
There are no Nevada anti-takeover provisions that may have the affect of delaying or preventing a change in control. Provisions 78.378 through 78.3793 of the Nevada Revised Statutes relate to control share acquisitions that may delay, or make more difficult, acquisitions or changes in our control. However, these provisions apply only when we have 200 or more stockholders of record, at least 100 of whom have addresses in the state of Nevada appearing on our stock ledger and we do business in this state directly or through an affiliated corporation. Neither of the foregoing events seems likely to occur. Currently, we have no Nevada shareholders and, since this offering will not be made in the state of Nevada, no shares will be sold to Nevada residents. Further, we do not do business in Nevada, either directly or through an affiliate corporation, and we do not intend to do business in the state of Nevada in the future. Accordingly, there are no anti-takeover provisions that have the affect of delaying or preventing a change in our control.
REPORTS
After we complete this offering, we will not be required to furnish you with an annual report. Further, we will not voluntarily send you an annual report. We will be required to file reports with the SEC under section 15(d) of the Securities Act. The reports will be filed electronically. The reports we will be required to file are Forms 10-KSB, 10-QSB, and 8-K. You may read copies of any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that will contain copies of the reports we file electronically. The address for the Internet site is www.sec.gov.
STOCK TRANSFER AGENT
We have not engaged the services of a transfer agent at this time. However, within the next twelve months we anticipate doing so. Until such a time a transfer agent is retained, Carlateral will act as its own transfer agent.
CERTAIN TRANSACTIONS
Don Cameron, our sole officer and director, has not received, and will not receive, anything of value, directly or indirectly, from the company. Moreover, the company has not received, and will not receive, any assets or other consideration from Mr.Cameron, other than those managerial services he is required to perform as our sole officer and director.
On December 9, 2005, we issued a total of 700,000 shares of common stock to Mr. Cameron for total consideration of $7,000. This was accounted for as a purchase of common stock.
On December 15, 2005, we issued 330,000 shares of common stock for total consideration of $16,500. This was accounted for as a purchase of common stock.
On February 15, 2006, the company initiated a forward split in the ratio of 10:1 on each of the company's common shares in the form of a stock dividend. The capital of the company was not reduced as a result of this forward split.
LITIGATION
We are not a party to any pending litigation and none is contemplated or threatened.
EXPERTS
Our financial statements have been audited for the period ending February 28, 2006 by MacKay LLP, Chartered Accountants, 1100 - 1177 West Hastings Street, Vancouver, British Columbia, Canada V6E 4T5, as set forth in their report included in this prospectus. Their report is given upon their authority as experts in accounting and auditing.
James N. Barber, Attorney at Law, 50 West Broadway, Suite 100, 4th Floor, Chase Bank Tower, Salt Lake City, Utah 84101-2006, has acted as our legal counsel. Mr. Barber opined on the legality of the 6,500,000 shares of common stock offered through this prospectus.
FINANCIAL STATEMENTS
Our fiscal year end is February 28. We will provide audited financial statements to our stockholders on an annual basis; the statements will be prepared by an Independent Registered Public Accounting Firm.
Our financial statements immediately follow:
FINANCIAL STATEMENTS Audited February 28, 2006
Auditors' Report
Balance Sheet
Statement of Operations
Statement of Stockholders' Equity (Deficit)
Statement of Cash Flows
NOTES TO THE FINANCIAL STATEMENTS
CARLATERAL, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FEBRUARY 28, 2006
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BALANCE SHEET
STATEMENT OF OPERATIONS
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
STATEMENT OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE SHAREHOLDERS OF
CARLATERAL, INC.
(a Development Stage Company)
Vancouver, British Columbia, Canada
We have audited the balance sheet of Carlateral, Inc. (a Development Stage Company) as at February 28, 2006 and the related statement of operations and deficit, stockholders' equity (deficit), and cash flows for the period from December 9, 2005 (inception) to February 28, 2006. 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 an audit to obtain reasonable assurance 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 our audit provides a reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at February 28, 2006 and the results of its operations and its cash flows for the period from December 9, 2005 (inception) to February 28, 2006 in accordance with United States generally accepted accounting principles.
The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company is in the development stage, and has no permanently established source of revenue and is dependent on its ability to raise capital from shareholders or other sources to sustain operations. These factors, along with other matters as set forth in Note 1, raise substantial doubt that the Company will be able to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
VANCOUVER, CANADA "MACKAY LLP"
MAY 12, 2006 CHARTERED ACCOUNTANTS
CARLATERAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
February 28,
2006
--------------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS
Cash $ 20,378
--------------------------------------------------------------------------------------------------------------------------
$ 20,378
==========================================================================================================================
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 3,000
--------------------------------------------------------------------------------------------------------------------------
3,000
--------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY (DEFICIT )
Capital stock (Note 4)
Authorized
75,000,000 shares of common stock, $0.001 par value,
Issued and outstanding
10,300,000 shares of common stock 10,300
Additional paid-in capital 13,200
Deficit accumulated during the development stage (6,122)
--------------------------------------------------------------------------------------------------------------------------
17,378
--------------------------------------------------------------------------------------------------------------------------
$ 20,378
==========================================================================================================================
|
The accompanying notes are an integral part of these financial statements.
CARLATERAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
From
December 9, 2005
(inception) to
the Year ended
February 28,
2006
---------------------------------------------------------------------------------------------------------------------
GENERAL AND ADMINISTRATIVE EXPENSES
Office and general $ 459
Professional fees 5,663
---------------------------------------------------------------------------------------------------------------------
NET LOSS, being deficit accumulated during the development state $ (6,122)
=====================================================================================================================
BASIC NET LOSS PER SHARE $ (0.00)
------------------------
=====================================================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 9,211,011
=====================================================================================================================
|
All share amounts have been restated to reflect the 10:1 forward split in February 2006. (Refer to Note 5.)
The accompanying notes are an integral part of these financial statements.
CARLATERAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM INCEPTION (DECEMBER 9, 2005) TO FEBRUARY 28, 2006
Deficit
Common Stock Accumulated
------------------------------ Additional During the
Number of Amount Paid-in Development
shares Capital Stage Total
------------------------------------------------------ ---------------- ------------- --------------- --------------- ------------
Balance, December 9, 2005 - $ - $ - $ $ -
-
------------------------------------------------------ ---------------- ------------- --------------- --------------- ------------
Common stock issued for cash at $0.001 per share
December 15, 2005 7,000,000 7,000 - - 7,000
Common stock issued for cash at $0.005 per share
December 23, 2005 3,300,000 3,300 13,200 - 16,500
Net loss for the period - - - (6,122) (6,122)
------------------------------------------------------ ---------------- ------------- --------------- --------------- ------------
Balance, February 28, 2006 10,300,000 $ 10,300 $ 13,200 $ (6,122) $ 17,378
====================================================== ================ ============= =============== =============== ============
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All share amounts have been restated to reflect the 10:1 forward split in February 2006. (Refer to Note 5.)
The accompanying notes are an integral part of these financial statements.
CARLATERAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
From December 9,
2005 (inception)
to the Year ended
February 28,
2006
------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (6,122)
Adjustments to reconcile net loss to net cash used in operating activities:
- accounts payable and accrued liabilities 3,000
------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES (3,122)
------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITY
Proceeds from sale of common stock 23,500
------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITY 23,500
------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH 20,378
CASH, BEGINNING OF PERIOD -
------------------------------------------------------------------------------------------------------------------------
CASH, END OF PERIOD $ 20,378
========================================================================================================================
Supplemental cash flow information:
Cash paid for:
Interest $ -
========================================================================================================================
Income taxes $ -
========================================================================================================================
|
The accompanying notes are an integral part of these financial statements.
CARLATERAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Carlateral, Inc. (the "Company") is in the initial development stage and has incurred losses since inception totaling $6,122. The Company was incorporated on December 9, 2005 in the State of Nevada. The Company's fiscal year end is February 28. The Company was organized to establish itself as a finance company, specializing in sub-prime title loans, primarily using automobiles as the form of loan collateral, but will also include boats, recreational vehicles, machinery and other equipment. Carlateral intends to open regional and branch offices in metropolitan areas throughout the United States and Canada. The target market is individuals needing short term loans.
On February15, 2006, the Company completed a forward stock split of the Company's common stock by the issuance of 10 new shares for each 1 outstanding share of the Company' common stock.
The ability of the Company to continue as a going concern is dependent on raising capital to fund its business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company's ability to continue as a going concern. The Company is funding its initial operations by way of issuing Founders' shares and a Private Placement Offering for 4,000,000 shares at $.005 per share. As of February 28, 2006, the Company had sold 10,300,000 shares and had received $23,500 in proceeds from the sale of the Company's common stock of which 7,000,000 Founders' shares were issued at $.001 per share for net proceeds of $7,000 and 3,300,000 shares were issued at $.005 per share for net proceeds of $16,500 pursuant to the Private Placement Offering.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
These financial statements are presented in United States dollars and have been
prepared in accordance with accounting principles generally accepted in the
United States.
USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
INCOME TAXES
The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. As of February 28, 2006, the Company had net operating loss carryforwards; however, due to the uncertainty of realization the Company has provided a full valuation allowance for the deferred tax assets resulting from these loss carryforwards.
NET LOSS PER SHARE
Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive losses per share reflects the potential dilution of securities that could share in the losses of the Company. Because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In accordance with SFAS No. 52, "Foreign Currency Translation", foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the period. Related translation adjustments are reported as a separate component of stockholders' equity (deficit), whereas gains or losses resulting from foreign currency transactions are included in results of operations.
STOCK-BASED COMPENSATION
The Company has not adopted a stock option plan and has not granted any stock options. Accordingly no stock-based compensation has been recorded to date.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2004, the FASB issued SFAS No. 153, EXCHANGES OF NON-MONETARY ASSETS, AN AMENDMENT OF APB OPINION NO. 29, ACCOUNTING FOR NON-MONETARY TRANSACTIONS ("SFAS 153"). SFAS 153 requires that exchanges of non-monetary assets are to be measured based on fair value and eliminates the exception for exchanges of non-monetary, similar productive assets, and adds an exemption for non-monetary exchanges that do not have commercial substance. SFAS 153 will be effective for fiscal periods beginning after June 15, 2005. Management does not believe that the adoption of this standard will have a material impact on the Company's financial condition or results of operations.
In December 2004, the FASB issued SFAS No. 123R, "Share Based Payment". SFAS 123R is a revision of SFAS No. 123 "Accounting for Stock-Based Compensation", and supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees" and its related implementation guidance. SFAS 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. SFAS 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS 123R does not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS 123 as originally issued and EITF Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services". SFAS 123R does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans". SFAS 123R requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award - the requisite service period (usually the vesting period). SFAS 123R
requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of SFAS 123R includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. Public entities (other than those filing as small business issuers) will be required to apply SFAS 123R as of the first interim or annual reporting period that begins after June 15, 2005. Public entities that file as small business issuers will be required to apply SFAS 123R in the first interim or annual reporting period that begins after December 15, 2005. For nonpublic entities, SFAS 123R must be applied as of the beginning of the first annual reporting period beginning after December 15, 2005. Management is currently evaluating the impact, which the adoption of this standard will have on the Company's results of operations or financial position.
NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS
In accordance with the requirements of SFAS No. 107, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.
NOTE 4 - CAPITAL STOCK
The Company's capitalization is 75,000,000 common shares with a par value of $0.001 per share. No preferred shares have been authorized or issued.
As of December 31, 2005, the Company has not granted any stock options and has not recorded any stock-based compensation.
During the year ended February 28, 2006, the sole Director purchased 7,000,000 shares of common stock in the Company at $0.001 per share with proceeds to the Company totaling $7,000.
PRIVATE PLACEMENT
On December 23, 2005, the Company authorized a Private Placement Offering of up to 4,000,000 shares of common stock at a price of $0.005 per share. The total amount to be raised in this financing is $20,000. As of February 28, 2006, the Company had sold 3,300,000 shares and had received $16,500 in proceeds from the sale of the Company's common stock.
On February 15, 2006, the majority shareholder and the director of the Company approved a special resolution to undertake a forward split of the common stock of the Company on a 10 new shares for 1 old share basis.
All references in these financial statements to number of common shares , price per share and weighted average number of common shares outstanding prior to the forward stock split have been adjusted to record the effect of the forward stock split on a retroactive basis.
NOTE 5 - INCOME TAXES
THE COMPANY ACCOUNTS FOR ITS INCOME TAXES IN ACCORDANCE WITH FASB NO. 109, "ACCOUNTING FOR INCOME TAXES." AS OF FEBRUARY 28, 2006, THE COMPANY HAD NET OPERATING LOSS CARRY FORWARDS OF APPROXIMATELY $6,122 THAT MAY BE AVAILABLE TO REDUCE FUTURE YEARS' TAXABLE INCOME AND WILL EXPIRE COMMENCING IN 2015. AVAILABILITY OF LOSS USAGE IS SUBJECT TO CHANGE OF OWNERSHIP LIMITATIONS UNDER INTERNAL REVENUE CODE 382. FUTURE TAX BENEFITS WHICH MAY ARISE AS A RESULT OF
THESE LOSSES HAVE NOT BEEN RECOGNIZED IN THESE FINANCIAL STATEMENTS, AS THEIR REALIZATION IS DETERMINED NOT LIKELY TO OCCUR AND ACCORDINGLY, THE COMPANY HAS RECORDED A VALUATION ALLOWANCE FOR THE DEFERRED TAX ASSET RELATING TO THESE TAX LOSS CARRYFORWARDS.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Our auditors are the firm of MacKay LLP, Chartered Accountants, operating from their offices in Vancouver, British Columbia, Canada. We have never changed our accountants, nor have we had any disagreements with accountants regarding our accounts, accounting practices, financial disclosures, or any other matter.
PART II. INFORMATION NOT REQUIRED IN THE PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The registrant will pay for all expenses incurred by this offering. Whether or not all of the offered shares are sold, these expenses are estimated as follows:
SEC Filing Fee $ 1,760
Printing 200
---------------
Transfer Agent 1,500
---------------
TOTAL $3,460
---------------
|
RECENT SALES OF UNREGISTERED SECURITIES
(A) PRIOR SALES OF COMMON SHARES
Carlateral is authorized to issue up to 75,000,000 shares of common stock with a par value of $0.001. As of December 15, 2005, we had issued 700,000 common shares to our sole officer and director for a total consideration of $7,000. In addition we have issued 330,000 common shares for a total consideration of $16,500 to a total of thirty-three (33) registered shareholders, all of whom are resident outside the United States. There are no United States shareholders of record who own shares in Carlateral.
On February 15, 2006, the company initiated a forward split in the ratio of 10:1 on each share of the company's common shares in the form of a stock dividend. The capital of the company was not reduced as a result of this forward split.
Carlateral is not listed for trading on any securities exchange in the United States, and there has been no active market in the United States or elsewhere for our common shares.
During the past year, Carlateral has sold the following securities, which were not registered under the Securities Act of 1933 as amended:
The company sold shares in an offshore transaction pursuant to Rule 903 of Regulation S of the Securities Act of 1933. The company's shareholders are not U.S. persons as that term is defined in Regulation S. No directed selling efforts were made in the United States by the company, any distributor, any of their respective affiliates or any person acting on behalf of any of the foregoing.
We are subject to Category 3 of Rule 903 of Regulation S and accordingly we implemented the offering restrictions required by Category 3 of Rule 903 of Regulation S by including a legend on all offering materials and documents which stated that the shares have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States or to US persons unless the shares are registered under the Securities Act of 1933, or an exemption from the registration requirements of the Securities Act of 1933 is available.
DECEMBER 15, 2005
Carlateral issued 700,000 shares of common stock to the sole officer and director for cash proceeds of $0.01 per share.
DECEMBER 23, 2005
Carlateral issued 330,000 common shares to thirty three (33) individual investors for cash proceeds of $0.05 per share.
We issued the foregoing restricted shares of common stock to the above named thirty three (33) individuals pursuant to Regulation S of the Securities Act of 1933. None of the above are deemed to be accredited investors and each was in possession of all material information relating to Carlateral. Further, no commissions were paid to anyone in connection with the sale of the shares and no general solicitation was made to anyone.
On February 15, 2006, the company initiated a forward split in the ratio of 10:1 on each share of the company's common shares in the form of a stock dividend. The capital of the company was not reduced as a result of this forward split.
(B) USE OF PROCEEDS
We have spent a portion of the proceeds of the above private placements to pay for the costs associated with this registration statement. We expect to apply the balance of the proceeds to offset further costs associated with preparing this prospectus, as well as administrative costs.
We shall report the use of these proceeds on our first periodic report filed pursuant to sections 13(a) and 15(d) of the Exchange Act after the effective date of this registration statement and thereafter on each of our subsequent periodic reports through the later of the disclosure of the application of the offering proceeds or disclosure of the termination of this offering.
EXHIBITS
The following exhibits are filed as part of this registration statement, pursuant to Item 601 of Regulation K. All exhibits have been previously filed unless otherwise noted.
================================================================================
EXHIBIT NO. DOCUMENT DESCRIPTION
================================================================================
3.1 Articles of Incorporation of Carlateral, Inc.
================================================================================
3.2 Bylaws of Carlateral, Inc.
================================================================================
4.1 Specimen Stock Certificate of Carlateral, Inc.
================================================================================
5.1 Opinion of James N. Barber regarding the legality of the
securities being registered
================================================================================
23.1 Consent of MacKay LLP Chartered Accountants.
================================================================================
99.1 Subscription Agreement of Carlateral, Inc..
================================================================================
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(B) DESCRIPTION OF EXHIBITS
EXHIBIT 3.1
Articles of Incorporation of Carlateral, Inc. dated December 9, 2005 and
approved January 6, 2006.
EXHIBIT 3.2
Bylaws of Carlateral, Inc., approved and adopted on December 12, 2005.
EXHIBIT 4.1
Specimen Stock Certificate of Carlateral, Inc.
EXHIBIT 5.1
Opinion of James N. Barber dated July 10, 2006 regarding the legality of the
securities being registered in this registration statement.
EXHIBIT 23.1
Consent of MacKay LLP, Chartered Accountants, 1177 West Hastings Street, Suite
1100, Vancouver, British Columbia, Canada V6E 4T5, dated July 11, 2006,
regarding the use in this Registration Statement of their auditors' report on
the financial statements of Carlateral, Inc. for the period ending February 28,
2006.
EXHIBIT 99.1
Subscription Agreement of Carlateral, Inc.
UNDERTAKINGS
Presently the sole officer and director of Carlateral is not covered by liability insurance. However, Carlateral's Articles of Incorporation state that the company may indemnify its officers, directors, employees and agents to the full extent permitted by the laws of the State of Nevada. No other statute, charter provision, by-law, contract or other arrangement to insure or indemnify a controlling person, director or officer of Carlateral exists which would affect his liability in that capacity.
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 itself is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
1. To file, during any period in which it offers or sells securities, a post-effective amendment to this registration statement:
a. To include any prospectus required by Section 10(a)(3) of the Securities Act;
b. To reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered, if the total dollar value of securities offered would not exceed that which is registered, and any deviation from the low or high end of the estimated maximum offering range, may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424 (b) if, in the aggregate, the changes in 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
c. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any change to such information in the registration statement.
2. That, for the purpose of determining any 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.
SIGNATURES
Pursuant to 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 of filing on this Form SB-2. Furthermore, the registrant has authorized this registration statement and has duly caused this Form SB-2 registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Vancouver, British Columbia, on this 10 day of July, 2006.
Carlateral, Inc.
/s/ DON CAMERON
----------------------------
Don Cameron
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer
|
Know all men by these present, that each person whose signature appears below constitutes and appoints Don Cameron, as agent, with full power of substitution, for his and in his name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this registration statement, and to file the same, therewith, with the Securities and Exchange Commission, and to make any and all state securities law filings, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying the confirming all that said attorney-in-fact and agent, or any substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Form SB-2 registration statement has been signed by the following persons in the capacities and on the dates indicated:
/s/ DON CAMERON July 10, 2006
----------------------------
Don Cameron
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer
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EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
CARLATERAL, INC
The undersigned, being the original incorporator herein named, for the purpose of forming a corporation under the General Corporation Laws of the State of Nevada, to do business both within and without the State of Nevada, do make and file these Articles of Incorporation, hereby declaring and certifying that the facts herein stated are true.
ARTICLE I
The name of the corporation, which is hereinafter
referred to as "the corporation" is:
CARLATERAL, INC
ARTICLE II
The name and address of the Resident Agent for the service of process is:
STATE AGENT AND TRANSFER SYNDICATE, INC.
202 NORTH CURRY STREET, SUITE 100
CARSON CITY, NEVADA 89703-4121
ARTICLE III
The corporation is organized for the purpose of engaging in ANY LAWFUL ACTIVITY, within or without the State of Nevada.
ARTICLE IV
The total number of shares of authorized capital stock of the Corporation shall consist of seventy-five million (75,000,000) SHARES of common stock at .001 par value.
The Board of Directors may issue such shares of Common Stock in one or more series, with such voting powers, designations, preferences and rights or qualifications, limitations or restrictions thereof as shall be stated in Resolutions or Bylaws adopted by them.
Stockholders of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the Board of Directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation's unissued shares upon the decision of the board of directors to issue them limited by the provisions of NRS 78.267.
The Common Stock of the corporation, after the amount of the subscription price has been paid, in money, property or services, as the directors shall determine, shall not be subject to assessment to pay the debts of the corporation, nor for any other purpose, and no stock issued as fully paid shall ever be assessable or assessed, and the Articles of Incorporation shall not be amended in this particular.
ARTICLE V
The name and address of the one member of the Board of Directors is as follows:
1. Donald E. Cameron, 202 North Curry Street, Suite 100; Carson City, NV 89703-4121
ARTICLE VI
The liability of the directors, officers or stockholders for damages for breach of fiduciary duty as a director or officer is hereby eliminated pursuant to NRS 78.037 except for acts or omissions which involve intentional misconduct, fraud or knowing violation of law; or the payments of distributions in violation of NRS 78.300.
ARTICLE VII
Every person who was or is a party to or is threatened to be made a party to, or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he, or a person of whom he is the legal representative, is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada from time to time against all expenses, liability and loss (including attorneys' fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. The expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. Such right of indemnification shall not be exclusive of any other right which such directors, officers or
representatives may have or hereafter acquire, and without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any by-law, agreement, vote of stockholders, provision of law, or otherwise, as well as their rights under this Article.
ARTICLE VIII
The name and address of the incorporator of CARLATERAL, INC, is:
Tristin Alishio For State Agent and Transfer Syndicate, Inc. 202 North Curry Street, Suite 100 Carson City, Nevada 89703-4121
Dated: December 9, 2005 /s/ DONALD CAMERON
___________________
Donald Cameron
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CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
I, STATE AGENT AND TRANSFER SYNDICATE, INC do hereby accept appointment as Resident Agent for CARLATERAL, INC
Dated: December 9, 2005 /s/ TRISTIN ALISHIO
___________________
On Behalf of STATE AGENT AND TRANSFER
SYNDICATE, INC
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Addendum to the
ARTICLES OF INCORPORATION
OF
CARLATERAL, INC.
PARAGRAPH THREE
SHARES
The amount of the total authorized capital of this corporation is $75,000 as 75,000,000 shares each with a par value of one mill ($.001). Such shares are non-assessable.
In any election participated in by the shareholders, each shareholder shall have one vote for each share of stock he owns, either in person or by proxy as proved by law. Cumulative voting shall not prevail in any election by the shareholders of this corporation.
PARAGRAPH EIGHT
ELIMINATING PERSONAL LIABILITY
Officers and directors shall have no personal liability to the corporation of its stock holders for damages for breach of fiduciary duty as an officer or director. This provision does not eliminate or limit the liability of an officer or director for acts or omissions which involve intentional misconduct, fraud or a knowing violation of law or the payment of distributions in violation of the NRS 78.300.
PARAGRAPH NINE
AMENDMENT OF ARTICLES OF INCORPORATION
The articles of incorporation of the corporation may be amended from time to time by a majority vote of all shareholders voting by written ballot in person or by proxy held at any general or special meeting of shareholders upon lawful notice.
EXHIBIT 3.2
BYLAWS
OF
CARLATERAL, INC.
A NEVADA CORPORATION
ARTICLE I
SHAREHOLDERS
1. ANNUAL MEETING
A meeting of the shareholders shall be held annually for the elections of directors and the transaction of other business on such date in each year as may be determined by the Board of Directors, but in no event later than 100 days after the anniversary of the date of incorporation of the Corporation.
2. SPECIAL MEETINGS
Special meetings of the shareholders may be called by the Board of Directors, Chairman of the Board or President and shall be called by the Board upon written request of the holders of record of a majority of the outstanding shares of the Corporation entitled to vote at the meeting requested to be called. Such request shall state the purpose or purposes of the proposed meeting. At such special meetings the only business which may be transacted is that relating to the purpose or purposes set forth in the notice thereof.
3. PLACE OF MEETINGS
Meetings of the shareholders shall be held at such place within or outside of the State of Nevada as may be fixed by the Board of Directors. If no place is fixed, such meetings shall be held at the principal office of the Corporation.
4. NOTICE OF MEETINGS
Notice of each meeting of the shareholders shall be given in writing and shall state the place, date and hour of the meeting and the purpose or purposes for which the meeting is called. Notice of a special meeting shall indicate that it is being issued by or at the direction of the person or persons calling or requesting the meeting.
If, at any meeting, action is proposed to be taken which, if taken, would entitle objecting shareholders to receive payment for their shares, the notice shall include a statement of that purpose and to that effect.
A copy of the notice of each meeting shall be given, personally or by first class mail, not less than ten nor more than sixty days before the date of the meeting, to each shareholder entitled to vote at such meeting. If mailed,
such notice shall be deemed to have been given when deposited in the United States mail, with postage thereon paid, directed to the shareholder at his address as it appears on the record of the shareholders, or, if he shall have filed with the Secretary of the Corporation a written request that notices to him or her be mailed to some other address, then directed to him at such other address.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken. At the adjourned meeting any business may be transacted
that might have been transacted on the original date of the meeting. However, if
after the adjournment the Board of Directors fixes a new record date for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
shareholder of record on the new record date entitled to notice under this
Section 4.
5. WAIVER OF NOTICE
Notice of a meeting need not be given to any shareholder who submits a signed waiver of notice, in person or by proxy, whether before or after the meeting. The attendance of any shareholder at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by him or her.
6. INSPECTORS OF ELECTION
The Board of Directors, in advance of any shareholders' meeting, may appoint one or more inspectors to act at the meeting or any adjournment thereof. If inspectors are not so appointed, the person presiding at a shareholders' meeting may, and on the request of any shareholder entitled to vote thereat shall, appoint two inspectors. In case any person appointed fails to appear or act, the vacancy may be filled by appointment in advance of the meeting by the Board or at the meeting by the person presiding thereat. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of such inspector at such meeting with strict impartiality and according to the best of his ability.
The inspectors shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote at the meeting, count and tabulate all votes, ballots or consents, determine the result thereof, and do such acts as are proper to conduct the election or vote with fairness to all shareholders. On request of the person presiding at the meeting, or of any shareholder entitled to vote thereat, the inspectors shall make a report in writing of any challenge, question or matter determined by them and shall execute a certificate of any fact found by them. Any report or certificate made by them shall be prima facie evidence of the facts stated and of any vote certified by them.
7. LIST OF SHAREHOLDERS AT MEETINGS
A list of the shareholders as of the record date, certified by the Secretary or any Assistant Secretary or by a transfer agent, shall be produced at any meeting of the shareholders upon the request thereat or prior thereto of any shareholder. If the right to vote at any meeting is challenged, the
inspectors of election, or the person presiding thereat, shall require such list of the shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.
8. QUALIFICATION OF VOTERS
Unless otherwise provided in the Certificate of Incorporation, every shareholder of record shall be entitled at every meeting of the shareholders to one vote for every share standing in its name on the record of the shareholders.
Treasury shares as of the record date and shares held as of the record date by another domestic or foreign corporation of any kind, if a majority of the shares entitled to vote in the election of directors of such other corporation is held as of the record date by the Corporation, shall not be shares entitled to vote or to be counted in determining the total number of outstanding shares.
Shares held by an administrator, executor, guardian, conservator, committee or other fiduciary, other than a trustee, may be voted by such fiduciary, either in person or by proxy, without the transfer of such shares into the name of such fiduciary. Shares held by a trustee may be voted by him or her, either in person or by proxy, only after the shares have been transferred into his name as trustee or into the name of his nominee.
Shares standing in the name of another domestic or foreign corporation of any type or kind may be voted by such officer, agent or proxy as the bylaws of such corporation may provide, or, in the absence of such provision, as the board of directors of such corporation may determine.
No shareholder shall sell his vote, or issue a proxy to vote, to any person for any sum of money or anything of value except as permitted by law.
9. QUORUM OF SHAREHOLDERS
The holders of a majority of the shares of the Corporation issued and outstanding and entitled to vote at any meeting of the shareholders shall constitute a quorum at such meeting for the transaction of any business, provided that when a specified item of business is required to be voted on by a class or series, voting as a class, the holders of a majority of the shares of such class or series shall constitute a quorum for the transaction of such specified item of business.
When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders.
The shareholders who are present in person or by proxy and who are entitled to vote may, by a majority of votes cast, adjourn the meeting despite the absence of a quorum.
10. PROXIES
Every shareholder entitled to vote at a meeting of the shareholders, or to express consent or dissent without a meeting, may authorize another person or persons to act for him by proxy.
Every proxy must be signed by the shareholder or its attorney. No proxy shall be valid after the expiration of eleven months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the shareholder executing it, except as otherwise provided by law.
The authority of the holder of a proxy to act shall not be revoked by the incompetence or death of the shareholder who executed the proxy, unless before the authority is exercised written notice of an adjudication of such incompetence or of such death is received by the Secretary or any Assistant Secretary.
11. VOTE OR CONSENT OF SHAREHOLDERS
Directors, except as otherwise required by law, shall be elected by a plurality of the votes cast at a meeting of shareholders by the holders of shares entitled to vote in the election.
Whenever any corporate action, other than the election of directors, is to be taken by vote of the shareholders, it shall, except as otherwise required by law, be authorized by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon.
Whenever shareholders are required or permitted to take any action by vote, such action may be taken without a meeting on written consent, setting forth the action so taken, signed by the holders of all outstanding shares entitled to vote thereon. Written consent thus given by the holders of all outstanding shares entitled to vote shall have the same effect as a unanimous vote of shareholders.
12. FIXING THE RECORD DATE
For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other action, the Board of Directors may fix, in advance, a date as the record date for any such determination of shareholders. Such date shall not be less than ten nor more than sixty days before the date of such meeting, nor more than sixty days prior to any other action.
When a determination of shareholders of record entitled to notice of or to vote at any meeting of shareholders has been made as provided in this Section, such determination shall apply to any adjournment thereof, unless the Board of Directors fixes a new record date for the adjourned meeting.
ARTICLE II
BOARD OF DIRECTORS
1. POWER OF BOARD AND QUALIFICATIONS OF DIRECTORS
The business of the Corporation shall be managed by the Board of Directors. Each director shall be at least eighteen years of age.
2. NUMBER OF DIRECTORS
The number of directors constituting the entire Board of Directors shall be the number, not less than one nor more than ten, fixed from time to time by a majority of the total number of directors which the Corporation would have, prior to any increase or decrease, if there were no vacancies, provided, however, that no decrease shall shorten the term of an incumbent director. Unless otherwise fixed by the directors, the number of directors constituting the entire Board shall be four.
3. ELECTION AND TERM OF DIRECTORS
At each annual meeting of shareholders, directors shall be elected to hold office until the next annual meeting and until their successors have been elected and qualified or until their death, resignation or removal in the manner hereinafter provided.
4. QUORUM OF DIRECTORS AND ACTION BY THE BOARD
A majority of the entire Board of Directors shall constitute a quorum for the transaction of business, and, except where otherwise provided herein, the vote of a majority of the directors present at a meeting at the time of such vote, if a quorum is then present, shall be the act of the Board.
Any action required or permitted to be taken by the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board or the committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consent thereto by the members of the Board or committee shall be filed with the minutes of the proceedings of the Board or committee.
5. MEETINGS OF THE BOARD
An annual meeting of the Board of Directors shall be held in each year directly after the annual meeting of shareholders. Regular meetings of the Board shall be held at such times as may be fixed by the Board. Special meetings of the Board may be held at any time upon the call of the President or any two directors.
Meetings of the Board of Directors shall be held at such places as may be fixed by the Board for annual and regular meetings and in the notice of meeting for special meetings. If no place is fixed, meetings of the Board shall be held at the principal office of the Corporation. Any one or more members of the Board of Directors may participate in meetings by means of conference telephone or similar communications equipment.
No notice need be given of annual or regular meetings of the Board of Directors. Notice of each special meeting of the Board shall be given to each director either by mail not later than noon, Nevada time, on the third day prior to the meeting or by telegram, written message or orally not later than noon, Nevada time, on the day prior to the meeting. Notices are deemed to have been properly given if given: by mail, when deposited in the United States mail; by telegram at the time of filing; or by messenger at the time of delivery. Notices by mail, telegram or messenger shall be sent to each director at the address
designated by him for that purpose, or, if none has been so designated, at his last known residence or business address.
Notice of a meeting of the Board of Directors need not be given to any director who submits a signed waiver of notice whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to any director.
A notice, or waive of notice, need not specify the purpose of any meeting of the Board of Directors.
A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place. Notice of any adjournment of a meeting to another time or place shall be given, in the manner described above, to the directors who were not present at the time of the adjournment and, unless such time and place are announced at the meeting, to the other directors.
6. RESIGNATIONS
Any director of the Corporation may resign at any time by giving written notice to the Board of Directors or to the President or to the Secretary of the Corporation. Such resignation shall take effect at the time specified therein; and unless otherwise specified therein the acceptance of such resignation shall not be necessary to make it effective.
7. REMOVAL OF DIRECTORS
Any one or more of the directors may be removed for cause by action of the Board of Directors. Any or all of the directors may be removed with or without cause by vote of the shareholders.
8. NEWLY CREATED DIRECTORSHIPS AND VACANCIES
Newly created directorships resulting from an increase in the number of directors and vacancies occurring in the Board of Directors for any reason except the removal of directors by shareholders may be filled by vote of a majority of the directors then in office, although less than a quorum exists. Vacancies occurring as a result of the removal of directors by shareholders shall be filled by the shareholder. A director elected to fill a vacancy shall be elected to hold office for the unexpired term of his predecessor.
9. EXECUTIVE AND OTHER COMMITTEES OF DIRECTORS
The Board of Directors, by resolution adopted by a majority of the entire Board, may designate from among its members an executive committee and other committees each consisting of three or more directors and each of which, to the extent provided in the resolution, shall have all the authority of the Board, except that no such committee shall have authority as to the following matters: (a) the submission to shareholders of any action that needs shareholders' approval; (b) the filling of vacancies in the Board or in any committee; (c) the fixing of compensation of the directors for serving on the Board or on any committee; (d) the amendment or repeal of the bylaws, or the
adoption of new bylaws; (e) the amendment or repeal of any resolution of the Board which, by its term, shall not be so amendable or repealable; or (f) the removal or indemnification of directors.
The Board of Directors may designate one or more directors as alternate members of any such committee, who may replace any absent member or members at any meeting of such committee.
Unless a greater proportion is required by the resolution designating a committee, a majority of the entire authorized number of members of such committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members present at a meeting at the time of such vote, if a quorum is then present, shall be the act of such committee.
Each such committee shall serve at the pleasure of the Board of Directors.
10. COMPENSATION OF DIRECTORS
The Board of Directors shall have authority to fix the compensation of directors for services in any capacity.
11. INTEREST OF DIRECTORS IN A TRANSACTION
Unless shown to be unfair and unreasonable as to the Corporation, no contract or other transaction between the Corporation and one or more of its directors, or between the Corporation and any other corporation, firm, association or other entity in which one or more of the directors are directors or officers, or are financially interested, shall be either void or voidable, irrespective of whether such interested director or directors are present at a meeting of the Board of Directors, or of a committee thereof, which authorizes such contract or transaction and irrespective of whether his or their votes are counted for such purpose. In the absence of fraud any such contract and transaction conclusively may be authorized or approved as fair and reasonable by: (a) the Board of Directors or a duly empowered committee thereof, by a vote sufficient for such purpose without counting the vote or votes of such interested director or directors (although such interested director or directors may be counted in determining the presence of a quorum at the meeting which authorizes such contract or transaction), if the fact of such common directorship, officership or financial interest is disclosed or known to the Board or committee, as the case may be; or (b) the shareholders entitled to vote for the election of directors, if such common directorship, officership or financial interest is disclosed or known to such shareholders.
Notwithstanding the foregoing, no loan, except advances in connection with indemnification, shall be made by the Corporation to any director unless it is authorized by vote of the shareholders without counting any shares of the director who would be the borrower or unless the director who would be the borrower is the sole shareholder of the Corporation.
ARTICLE III
OFFICERS
1. ELECTION OF OFFICERS
The Board of Directors, as soon as may be practicable after the annual election of directors, shall elect a President, a Secretary, and a Treasurer, and from time to time may elect or appoint such other officers as it may determine. Any two or more offices may be held by the same person. The Board of Directors may also elect one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers.
2. OTHER OFFICERS
The Board of Directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board.
3. COMPENSATION
The salaries of all officers and agents of the Corporations shall be fixed by the Board of Directors.
4. TERM OF OFFICE AND REMOVAL
Each officer shall hold office for the term for which he is elected or appointed, and until his successor has been elected or appointed and qualified. Unless otherwise provided in the resolution of the Board of Directors electing or appointing an officer, his term of office shall extend to and expire at the meeting of the Board following the next annual meeting of shareholders. Any officer may be removed by the Board with or without cause, at any time. Removal of an officer without cause shall be without prejudice to his contract rights, if any, and the election or appointment of an officer shall not of itself create contract rights.
5. PRESIDENT
The President shall be the chief executive officer of the Corporation, shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall also preside at all meeting of the shareholders and the Board of Directors.
The President shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation.
6. VICE PRESIDENTS
The Vice Presidents, in the order designated by the Board of Directors, or in absence of any designation, then in the order of their election, during the absence or disability of or refusal to act by the President, shall perform the duties and exercise the powers of the President and shall perform such other duties as the Board of Directors shall prescribe.
7. SECRETARY AND ASSISTANT SECRETARIES
The Secretary shall attend all meetings of the Board of Directors and all meetings of the shareholders and record all the proceedings of the meetings of the Corporation and of the Board of Directors in a book to be kept for that purpose, and shall perform like duties for the standing committees when required. The Secretary shall give or cause to be given, notice of all meetings of the shareholders and special meetings of the Board of Directors, and shall perform such other duties as may be described by the Board of Directors or President, under whose supervision the Secretary shall be. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or an Assistant Secretary shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the Secretary's signature or by signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature.
The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order designated by the Board of Directors, or in the absence of such designation then in the order of their election, in the absence of the Secretary or in the event of the Secretary's inability or refusal to act, shall perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
8. TREASURER AND ASSISTANT TREASURERS
The Treasurer shall have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation; and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation.
If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of Treasurer, and for the restoration to the Corporation, in the case of the Treasurer's death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the possession or under the control of the Treasurer belonging to the Corporation.
The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order designated by the Board of Directors, or in the absence of such designation, then in the order of their election, in the
absence of the Treasurer or in the event the Treasurer's inability or refusal to act, shall perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
9. BOOKS AND RECORDS
The Corporation shall keep: (a) correct and complete books and records of account; (b) minutes of the proceedings of the shareholders, Board of Directors and any committees of directors; and (c) a current list of the directors and officers and their residence addresses. The Corporation shall also keep at its office in the State of Nevada or at the office of its transfer agent or registrar in the State of Nevada, if any, a record containing the names and addresses of all shareholders, the number and class of shares held by each and the dates when they respectively became the owners of record thereof.
The Board of Directors may determine whether and to what extent and at what times and places and under what conditions and regulations any accounts, books, records or other documents of the Corporation shall be open to inspection, and no creditor, security holder or other person shall have any right to inspect any accounts, books, records or other documents of the Corporation except as conferred by statute or as so authorized by the Board.
10. CHECKS, NOTES, ETC.
All checks and drafts on, and withdrawals from the Corporation's accounts with banks or other financial institutions, and all bills of exchange, notes and other instruments for the payment of money, drawn, made, endorsed, or accepted by the Corporation, shall be signed on its behalf by the person or persons thereunto authorized by, or pursuant to resolution of, the Board of Directors.
ARTICLE IV
CERTIFICATES AND TRANSFER OF SHARES
1. FORMS OF SHARE CERTIFICATES
The share of the Corporation shall be represented by certificates, in such forms as the Board of Directors may prescribe, signed by the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. The shares may be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue.
Each certificate representing shares issued by the Corporation shall set forth upon the face or back of the certificate, or shall state that the Corporation will furnish to any shareholder upon request and without charge, a full statement of the designation, relative rights, preferences and limitations
of the shares of each class of shares, if more than one, authorized to be issued and the designation, relative rights, preferences and limitations of each series of any class of preferred shares authorized to be issued so far as the same have been fixed, and the authority of the Board of Directors to designate and fix the relative rights, preferences and limitations of other series.
Each certificate representing shares shall state upon the face thereof:
(a) that the Corporation is formed under the laws of the State of Nevada; (b)
the name of the person or persons to whom issued; and (c) the number and class
of shares, and the designation of the series, if any, which certificate
represents.
2. TRANSFERS OF SHARES
No share or other security may be sold, transferred or otherwise disposed of without the consent of the directors or until the Company is a reporting issuer, as defined under the Securities Exchange Act of 1934. The directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.
Shares of the Corporation shall be transferable on the record of shareholders upon presentment to the Corporation of a transfer agent of a certificate or certificates representing the shares requested to be transferred, with proper endorsement on the certificate or on a separate accompanying document, together with such evidence of the payment of transfer taxes and compliance with other provisions of law as the Corporation or its transfer agent may require.
3. LOST, STOLEN OR DESTROYED SHARE CERTIFICATES
No certificate for shares of the Corporation shall be issued in place of any certificate alleged to have been lost, destroyed or wrongfully taken, except, if and to the extent required by the Board of Directors upon: (a) production of evidence of loss, destruction or wrongful taking; (b) delivery of a bond indemnifying the Corporation and its agents against any claim that may be made against it or them on account of the alleged loss, destruction or wrongful taking of the replaced certificate or the issuance of the new certificate; (c) payment of the expenses of the Corporation and its agents incurred in connection with the issuance of the new certificate; and (d) compliance with other such reasonable requirements as may be imposed.
ARTICLE V
OTHER MATTERS
1. CORPORATE SEAL
The Board of Directors may adopt a corporate seal, alter such seal at pleasure, and authorize it to be used by causing it or a facsimile to be affixed or impressed or reproduced in any other manner.
2. FISCAL YEAR
The fiscal year of the Corporation shall be the twelve months ending February 28th, or such other period as may be fixed by the Board of Directors.
3. AMENDMENTS
Bylaws of the Corporation may be adopted, amended or repealed by vote of the holders of the shares at the time entitled to vote in the election of any directors. Bylaws may also be adopted, amended or repealed by the Board of Directors, but any bylaws adopted by the Board may be amended or repealed by the shareholders entitled to vote thereon as herein above provided.
If any bylaw regulating an impending election of directors is adopted, amended or repealed by the Board of Directors, there shall be set forth in the notice of the next meeting of shareholders for the election of directors the bylaw so adopted, amended or repealed, together with a concise statement of the changes made.
APPROVED AND ADOPTED this 12th day of December, 2005.
EXHIBIT 4.1
FORM OF STOCK CERTIFICATE
TEXT ON FACE
CARLATERAL, INC.
Incorporated Under the Laws of the State of Nevada
PAR VALUE $0.001 CUSIP NO. ___________
COMMON STOCK
This Certifies that ____________________________________________________________
is the owner of ________________________________________________________________
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK PAR VALUE OF $0.001 EACH OF
CARLATERAL, INC.
transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.
DATED:
Countersigned and Registered:
_________________________ The transfer agent, Inc.
President (City, State) Transfer Agent
By _________________________________
Authorized Signature
|
[Corporate Seal]
TEXT ON REVERSE
The Corporation will furnish to any shareholder upon request and without charge, a full statement of the designations, preferences, limitation, and relative rights of the shares of each class or series authorized to be issued, so far as they will have been determined, and the authority of the Board of Directors to determine the relative rights and preferences of subsequent classes or series.
For value received ________ hereby sell, assign and transfer unto ________
Attorney to transfer the said shares on the Books of the within named Corporation with full power of substitution in the premises.
Dated _________________, 20___ ____________________________
IN PRESENCE OF__________________________________________________________________
EXHIBIT 5.1
JAMES N. BARBER
ATTORNEY AT LAW
Suite 100, Bank One Tower
50 West Broadway
Salt Lake City, UT 84101
Telephone: (801) 364-6500 E-Mail: Barberjn@aol.com Fax: (801) 532-0141
July 10, 2006
Securities and Exchange Commission
100 F Street
Washington, D.C. 20549
Re: Opinion and consent of Counsel with respect to registration statement on Form SB-2 for Carlateral, Inc.
Dear Sir or Madam:
I have been requested to issue my opinion as to the legal status of 3,300,000 common shares of Carlateral, Inc. which are being registered for resale by their registered owners under a registration statement on Form SB-2 under the Securities Act of 1933, as amended (the "Act"). I have, in connection with that request, examined the Articles of Incorporation and By-laws of Carlateral, Inc., a Nevada corporation, relevant resolutions of the Board of Directors of Carlateral and reviewed a draft of the SB-2 registration statement Carlateral proposes to file under the Securities Act of 1933. I have also reviewed other instruments as I have deemed necessary or appropriate to establish a basis for the opinions set forth herein and reviewed my findings with representatives of management. Carlateral proposes to register the 3,300,000 shares previously sold to individual investors for resale. The issuer will receive none of the proceeds from the sale of any of the shares covered by the registration statement.
Based upon my examination of relevant documents and other inquiries made by my staff it is my opinion that Carlateral, Inc. is duly organized, validly existing and in good standing as a corporation under the laws of the State of Nevada. The 3,300,000 common shares being registered for resale by their present record owners, as adjusted for a ten for one share forward split, were purchased by them on or about December 23, 2005 in a private offering of shares at a price of $0.005 per share. As of February 28, 2006, the Company had sold 3,300,000 shares and had received $16,500 in proceeds from the sale of the Company's common stock. In my opinion, these 3,300,000 common shares of Carlateral, Inc. are validly authorized and issued, fully paid and non-assessable common shares of Carlateral in the hands of their present
registered owners. The status of these shares will not change if and when they are sold by their present registered owners pursuant to the SB-2 registration statement or otherwise, and they will maintain their status as validly authorized and issued, fully paid and non-assessable common shares of Carlateral, Inc. in the hands of any purchasers from their existing owners.
I will be available to respond to any questions the Staff of the commission or Carlateral, itself, may have about the opinions expressed herein or the facts upon which they are based. I hereby consent to the use of this opinion as an exhibit to the Registration Statement.
Sincerely,
James N. Barber
EXHIBIT 23.1
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S CONSENT
The Board of Directors
Carlateral, Inc.
(A Development Stage Company)
We consent to the use in the Registration Statement of Carlateral, Inc. on Form SB-2 (the "Registration Statement") of our Auditors' Report dated May 12, 2006, on the balance sheet of Carlateral, Inc. as at February 28, 2006, and the related statements of operations and deficit, stockholders' equity and cash flows for the period from incorporation on December 9, 2005 (inception) to February 28, 2006.
In addition, we consent to the reference to us under the heading "Experts" in the Registration Statement.
MACKAY LLP
CHARTERED ACCOUNTANTS
"MACKAY LLP"
Vancouver, British Columbia
Canada
July 12, 2006
EXHIBIT 99.1
HOW TO SUBSCRIBE
A. INSTRUCTIONS.
Each person considering subscribing for the Shares should review the following instructions:
SUBSCRIPTION AGREEMENT: Please complete, execute and deliver to the Company the enclosed copy of the Subscription Agreement. The Company will review the materials and, if the subscription is accepted, the Company will execute the Subscription Agreement and return one copy of the materials to you for your records.
The Company shall have the right to accept or reject any subscription, in whole or in part.
An acknowledgment of the acceptance of your subscription will be returned to you promptly after acceptance.
PAYMENT: Payment for the amount of the Shares subscribed for shall be made by delivery by the earlier of _______________, 2006 or such date as the Company shall specify by written notice to subscribers (unless such period is extended in the sole discretion of the President of the Company), of a check or wire transfer of immediately available funds to the Company at the address set forth below or an account specified by the Company. The closing of the transactions contemplated hereby (the "Closing") will be held on _______________, 2006 or such earlier date specified in such notice (unless the closing date is extended in the sole discretion of the President of the Company). There is no minimum aggregate amount of Shares which must be sold as a condition precedent to the Closing, and the Company may provide for one or more Closings while continuing to offer the Shares that constitute the unsold portion of the Offering.
B. COMMUNICATIONS.
All documents and cheques should be forwarded to:
CARLATERAL, INC.
202 North Curry Street
Carson City NV 89703 - 4121
Attention: Donald Cameron
THE PURCHASE OF SHARES OF CARLATERAL, INC. INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN BEAR THE RISK OF THE LOSS OF THEIR ENTIRE INVESTMENT.
CARLATERAL, INC.
202 North Curry Street
Carson City, NV 89703 - 4121
SUBSCRIPTION AGREEMENT
The undersigned (the "Subscriber") hereby irrevocably subscribes for that number of Shares set forth below, upon and subject to the terms and conditions set forth in the Corporation's SB-2 Registration Statement dated _______________,
2006. Total Number of Shares to be Acquired: _____________________________. Amount to be Paid (price of $0.025 per Share): _____________________________. |
IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this ___ day of _________, 2006.
Signature: ___________________________________
Print Name: _________________________________
Address: Number and Street: _________________________________________________ City, State, Zip: __________________________________________________
Name as it should appear on the Certificate: ___________________________________
If Joint Ownership, check one (all parties must sign above):
[ ] Joint Tenants with Right of Survivorship
[ ] Tenants in Common
[ ] Community Property
If Fiduciary or Business Organization, check one:
[ ] Trust
[ ] Estate
[ ] Power of Attorney
Name and Type of Business Organization: ________________________________________
ACCEPTANCE OF SUBSCRIPTION
The foregoing Subscription is hereby accepted for and on behalf of CARLATERAL, INC. this ___ day of __________, 2006.
CARLATERAL, INC.
By ________________________________________________ Donald Cameron, President