File
Number 333-147330
U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
AMENDMENT
NO. 1 TO
FORM
SB-2
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
(Name
of
Small Business Issuer in its Charter)
Nevada
|
2030
|
20-4036208
|
(State
or other jurisdiction of incorporation or organization)
|
(Primary
Standard Industrial
Classification
Code No.)
|
(I.R.S.
Employer Identification No.)
|
P.O.
Box
7, Ellicott City, MD 21041-0007
(443)
742-2134
(Address
and telephone number of principal executive offices)
Andrew
Uribe
EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
P.O.
Box
7, Ellicott City, MD 21041-0007
(Name,
address and telephone number of agent for service)
Copy
of all communications to:
Law
office of Mark Tolstoi
75
Eisenhower Parkway
Roseland,
New Jersey 07068
(973)
364-0111
(973)
364-1090 (fax)
APPROXIMATE
DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable following the
effective date of this registration statement.
If
any of
the securities being registered on this Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, please
check the following box:
x
If
this
Form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
o
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering.
o
If
this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering.
o
Title
of Each Class Of Securities To Be Registered
|
|
Amount
To
Be Registered
|
|
Previously
Registered
|
|
Proposed
Maximum Offering Price Per Share (1)
|
|
New
Proposed Maximum Aggregate Offering Price (1)
|
|
New
Proposed Maximum Aggregate Offering Price
|
|
Amount
of Additional
Registration
Fee
|
Common
Stock
|
|
2,987,500
|
|
1,887,500
|
|
$
0.05
|
|
$
149,375.00
|
|
$99,375.00
|
|
$2.30
|
|
(1)
|
The
price was arbitrarily determined by Emy’s Salsa Aji Distribution Company,
Inc.
|
|
(2)
|
Estimated
solely for the purpose of calculating the registration fee in accordance
with Rule 457 under the Securities Act.
|
PRELIMINARY
PROSPECTUS
SUBJECT
TO COMPLETION,
JANUARY
25, 2008
2,987,500
SHARES
EMYS
SALSA AJI DISTRIBUTION COMPANY, INC.
COMMON
STOCK
This
prospectus relates to the resale of up to 2,987,500 shares of our common stock,
par value $0.0001 per share.
The
selling shareholders named in this prospectus are offering all of the shares
of
Common Stock offered through this prospectus. Our Common Stock is presently
not
traded on any market or securities exchange.
The
selling shareholders will sell our shares at $0.05 per share until our shares
are quoted on the Over-the-Counter Bulletin Board (“OTCBB”), and thereafter at
prevailing market prices or privately negotiated prices. This offering price
was
arbitrarily determined by us. The expenses of the offering, estimated at $2,500,
will be paid by us.
No
underwriter or person has been engaged to facilitate the sale of shares of
common stock in this offering. None of the proceeds from the sale of common
stock by the selling stockholders will be placed in escrow, trust or any similar
account. There are no underwriting commissions involved in this offering. We
have agreed to pay all the costs of this offering other than customary brokerage
and sales commissions. Selling stockholders will pay no offering expenses other
than those expressly identified in this prospectus.
Investing
in our common stock involves a high degree of risk. See “Risk Factors” beginning
on page 4.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of the prospectus. Any representation to the contrary is a criminal
offense.
PROSPECTUS
SUMMARY
Emy’s
Salsa Aji Distribution Company, Inc. was incorporated on July 11, 2005 under
the
laws of the State of Nevada under the name Certiorari Corp. On August 23, 2005
our name was changed to our present name and we entered into negotiations to
act
as regional distributor of salsa products for Orbital Group, LLC (“Orbital”), a
Florida limited liability company. On July 11, 2005 our Board of Directors
authorized negotiations with Orbital Group, LLC, and we entered into our initial
Distribution Agreement (the “Distribution Agreement”) with Orbital. On July 1,
2006 we entered into a new agreement with Orbital under which we are a licensed
distributor of products to be manufactured by Orbital and sold under the trade
name of Emy’s Salsa Aji
tm
.
Our
Distribution Agreement provides us certain non-exclusive rights to distribute
Emy’s Mild and Spicy Salsa in the New England states of New York, New Jersey,
Connecticut, Vermont, Massachusetts, Maine and Rhode Island. On November 1,
2007
we extended our agreement with Orbital for an additional period ending December
31, 2008. We have made no sales of Emy’s Salsa products to date, although
Orbital has commenced distribution of Emy’s brand products in Maryland and other
mid-Atlantic states. We have distributed free samples and through Orbital have
entered into informal discussions with several restaurants and retail chains.
Our business is dependent upon the success of Emy’s Salsa, and the business of
Orbital, including the ability of Orbital to manufacture and ship in volume
quantities of Emy’s Salsa.
We
may
refer to ourselves in this prospectus as “ESD”, “we,” or “us.” All references to
our operations include all of our operations since our inception in 2005. Our
principal executive offices are located at 9446 Dunloggin Road, Ellicott City,
Maryland 21042, and our telephone number at that address is (443) 742-2134.
We
do not maintain our own website but the website for our salsa products is
located at
WWW.EMYSSALSAAJI.COM
.
The
Offering:
Shares
of common stock offered by us
|
|
None
|
|
|
|
Shares
of common stock which may be
sold
by the selling stockholders
|
|
2,987,500
|
|
|
|
Use
of proceeds
|
|
We
will not receive any proceeds from the resale of shares offered by
the
selling stockholders hereby, all of which proceeds will be paid to
the
selling stockholders.
|
|
|
|
Risk
factors
|
|
The
purchase of our common stock involves a high degree of
risk.
|
|
|
|
Trading
Market
|
|
None
|
The
shares being offered for resale by the selling stockholders identified herein
consist of approximately 24% of our issued and outstanding common
stock.
You
should rely only on the information contained or incorporated by reference
in
this prospectus. We have not authorized anyone to provide you with any different
information. We are not making an offer of these securities in any jurisdiction
where an offer is not permitted. The information 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 our securities.
RISK
FACTORS
You
should be aware that there are various risks to an investment in our common
stock. You should carefully consider these risk factors, together with all
of
the other information included in this prospectus, before you decide to invest
in shares of our common stock.
If
any of
the following risks develop into actual events, then our business, financial
condition, results of operations and/or prospects could be materially adversely
affected. If that happens, the market price of our common stock, if any, could
decline, and investors may lose all or part of their investment.
Risks
Related to the Business
ESD
may need financing which may not be available. Absent financing, our future
activities will be limited or discontinued
.
ESD
has
not established a source of equity or debt financing. Our need for cash is
entirely dependent on our distribution arrangements for Emy’s Salsa Aji
products, and our Distribution Agreement with Orbital. The willingness of retail
or wholesale purchasers and consumers to purchase our distributed products
and
the capital requirements for our development of any sales, marketing and
distribution capabilities, will determine our future need for financing. In
addition, ESD requires financing for advertising and customer promotions to
increase awareness of our distributed products and expand our operations. There
is no way of predicting amounts that would be needed or provide assurance that
financing will be available or found. In addition, Orbital is a small start-up
manufacturer of food products and is subject to similar and ongoing needs for
financing of its operations and has not established a source of equity or debt
financing. Neither ESD nor Orbital has generated any significant revenues (ESD
has not generated any revenues) and have never generated a profit. ESD is
heavily dependent on the abilities and capabilities of Orbital to produce
products and maintain its existence, and the capabilities of its officers and
directors.
We
are dependent upon the future business and success of Orbital and Mr. Andrew
Uribe. Orbital presently is a small-scale producer of Emy’s Salsa and presently
does not have the capability for mass production of its
products.
Orbital
is a closely-held company majority-owned by its founder Andrew Uribe who also
serves as our President and a director. Mr. Uribe does not have any substantial
business experience related to the manufacture and sale of food products.
Orbital does not presently have in place operational manufacturing, production,
storage or distribution facilities to produce Emy’s Salsa in quantities that
would permit ESD to commence marketing of Emy’s Salsa or offer Emy’s Salsa on a
wholesale or retail basis as a distributor of Orbital’s products. Orbital may
distribute its own products and may enter into agreements with other third
parties to perform services the same as, or similar to, those to be performed
by
ESD, including in the territory that ESD is permitted to distribute its
products. Orbital presently sells its own products on a limited basis through
the efforts of Mr. Uribe, primarily in the Washington, D.C., and Baltimore,
Maryland market, in a small number of restaurants at farm markets and in
specialty food stores. Orbital has leased a facility to serve as a location
for
manufacture on a larger scale, and entered into an agreement to purchase an
automated production and bottling line in order to increase its capacity and
to
commence expanded distribution of its products. There can be no assurance that
such steps will be successful to provide Orbital with expanded production
capability, that Orbital will be successful in its business endeavors or
continue its operations, that Orbital will have the skills, experience or
financial resources to succeed or that ESD will be able to successfully
introduce or distribute Emy’s Salsa as a distributor for Orbital. As such, the
business and operations of the Company are completely dependent upon the efforts
and success of Orbital and Mr. Uribe.
If
cash needs to maintain basic operations are not available, there is a likelihood
that we would discontinue operations.
If
we are
unable to generate or increase our revenue or obtain financing during periods
when we incur losses or if the financing that we do obtain is insufficient
to
cover any operating losses we may incur, we may have to substantially curtail
our operations or seek business opportunities through some form of as yet
unidentified strategic alliance that, in all probability, would dilute the
interest of existing stockholders. We may need to finance our inventory or
purchases in order to satisfy purchase orders from customers through factoring
and/or accounts receivable financing or other loans. No arrangements exist
for
such financing or loans, and there is no assurance any such arrangements may
be
available, particularly in light of our limited operations, credit history,
and
lack of history or track record.
We
do not
currently have sufficient resources to pay all of the costs of pursuing our
business. Our officers or directors, Orbital, or others may be required to
make
loans to us and others may be required to defer fees and expenses which may
only
be able to be repaid, if at all, upon the success of our business.
ESD’s
operations are heavily dependent on the acceptance of Latin food products by
wholesale and retail customers and the acceptance of Emy’s Salsa as a
minority-owned small business.
Our
success will be dependent upon the willingness and acceptance by large and
small
food stores and chains, restaurants, and consumers, to accept Emy’s Salsa as a
Latin food product produced by Mr. Uribe from his family recipe. The status
as a
minority small business owner product, and our ability to promote our business
while maintaining that status and image, will be important to our success.
Mr.
Uribe is a minority small-business owner which is an important factor in our
successful activities. Mr. Uribe, Orbital and his family members presently
own
approximately 45% of our common stock, and Mr. Uribe is our President and a
director. We do not have any experience in promoting food products or promotion
of minority small-business ventures, and we may not be perceived in the market
the same as is Orbital, which could hurt our efforts and success. ESD will
be
dependent upon the preferential treatment and informal policies that we believe
allocate limited store shelf space to small and minority business owners and
operators that are perceived as economically disadvantaged relative to major
national or international food producers or distributors. If we are incorrect,
or if the wholesale or retail outlets on which we may become dependent change
or
abandon these policies our business and results of operations will be
significantly negatively affected. Events that impact the number of persons
with
a desire to purchase or consume Latin oriented food products could also
negatively affect our business or results of operations.
ESD
is and will continue to be dependent on the services of our founder and
president, Andrew Uribe, the loss of whose services would likely cause our
business operations to cease.
ESD’s
business strategy is completely dependent upon the knowledge, reputation and
business contacts of Andrew Uribe, our president and director. If we were to
lose the services of Mr. Uribe, it is unlikely that we would be able to continue
conducting our business plan even if financing were obtained.
Our
President, Mr. Uribe, is entirely responsible for the execution of our business.
He is not presently employed and is under no contractual obligation to become
employed by us. If he should choose to leave us for any reason before we have
hired qualified additional personnel, our operations are likely to fail. Even
if
we are able to find additional personnel, it is uncertain whether we could
find
someone who could develop our business as presently contemplated. We do not
intend to acquire “key-man” life insurance on the life of Mr. Uribe.
Accordingly, it is important that we are able to attract, motivate and retain
highly qualified and talented personnel and independent contractors who provide
services for us in the event the Mr. Uribe is not available to us, although
it
is unlikely that they would be an adequate replacement for the skills,
resources, knowledge, reputation and business contacts of Mr.
Uribe.
We
will need additional, qualified personnel in order to expand our business.
Without additional personnel, we will not be able to expand our
business.
Expanding
our business entails increasing the number of persons engaged in activities
for
the promotion of Emy’s Salsa. We presently do not have any plans to increase
these persons. Due to the limited activities or Orbital, its status as a startup
operation, the present inability of Orbital to produce Emy’s Salsa in any
significant quantity that could be ordered by any wholesale or retail
organizations, local, national or regional, even if we did identify suitable
wholesale or retail purchasers, we are not planning on increasing our activity
level, efforts or personnel. Our primary activity is to prepare for the
potential larger scale demand that could arise for Emy’s Salsa, and seek working
capital that will be necessary to inventory and stock products necessary for
the
increased demand. We will need to have Orbital establish a track record that
provides us assurance that we will be able to satisfy the expectations of our
customers who may purchase Emy’s Salsa from or through us. We have not done any
research as to the availability or cost of qualified personnel, the interest
of
wholesale or retail customers that would allow us to consider appropriate
staffing levels or the compensation that would be required for additional
personnel, but believe that a significant amount of our personnel cost may
be
“commission” based, other than for officers and administrative personnel who
would receive salaries. There is no way of determining the likelihood of finding
and being able to afford and hire persons meeting these
credentials.
Our
revenues and operating results could fluctuate significantly from quarter to
quarter, which may cause our stock price to decline.
Since
our
inception, we have not realized any revenue. Our results from year-to-year
and
from month-to-month may vary significantly based on ordering cycles of major
wholesale food distributors who we plan to pursue for sales, and the payment
cycle of such organizations. As a result of these and other factors, we believe
that period-to-period comparisons of our operating results will not be
meaningful and that you should not rely upon our performance in a particular
period as an indication of our performance in any future period.
The
ability of our president to control our business limits minority shareholders’
ability to influence corporate affairs.
Our
president and family members currently own, directly or indirectly,
approximately 45% of our outstanding common stock. Because of this ownership,
and his position as an officer and director, our president will be in a position
to continue to have significant impact on our business and affairs, including
the election of our board of directors. The interests of our president may
differ from the interests of other shareholders with respect to the issuance
of
shares, business transactions with or sales to other companies, including to
or
with Orbital and the conflicts of interest that could arise with regard to
pricing, quantity, and access, selection of officers and directors and all
other
business decisions. Our minority shareholders would individually have no way
of
overriding decisions made by our president and in the event of a disagreement
the loss of the continued services of our president would negatively affect
our
business and prospects. We believe that the current ownership percentage, of
approximately 45%, is the minimum amount necessary for the market to perceive
our company as a minority owned small business, although this assumption may
be
incorrect and this ownership may diminish over time as we seek additional
capital. In the event that we are incorrect, it may be necessary to issue or
sell to Mr. Uribe or his affiliates additional shares of our common stock,
which
may be at a price below the market price, in order to increase his ownership
that would result in dilution to existing shareholders. There is not presently
any agreement, or requirement, that we take such steps. The level of control
may
also cause the market value of our shares to be lower than it may be without
a
high level of control.
We
may be exposed to potential risks resulting from new requirements under Section
404 of the Sarbanes-Oxley Act of 2002. If we become subject to these
requirements we cannot provide reliable financial reports or prevent fraud,
our
business and operating results could be harmed, investors could lose confidence
in our reported financial information, and the trading price of our common
stock, if a market ever develops, could drop
significantly.
Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, we believe we will be
required, beginning with our fiscal year ending December 31, 2008 as a “newly
public company,” to include in our annual report our assessment of the
effectiveness of our internal control over financial reporting as of the end
of
fiscal 2008. Furthermore, our independent registered public accounting firm
will
be required to attest to whether our assessment of the effectiveness of our
internal control over financial reporting is fairly stated in all material
respects and separately report on whether it believes we have maintained, in
all
material respects, effective internal control over financial reporting as in
future periods. We have not yet completed our assessment of the effectiveness
of
our internal control over financial reporting. We expect to incur additional
expenses and diversion of management’s time as a result of performing the system
and process evaluation, testing and remediation required in order to comply
with
the management certification and auditor attestation requirements.
We
do not
have a sufficient number of employees to segregate responsibilities and may
be
unable to afford increasing our staff or engaging outside consultants or
professionals to overcome our lack of employees. During the course of our
testing, we may identify other deficiencies that we may not be able to remediate
in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance
with the requirements of Section 404. In addition, if we fail to achieve and
maintain the adequacy of our internal controls, as such standards are modified,
supplemented or amended from time to time, we may not be able to ensure that
we
can conclude on an ongoing basis that we have effective internal controls over
financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.
Moreover, effective internal controls, particularly those related to revenue
recognition, are necessary for us to produce reliable financial reports and
are
important to help prevent financial fraud. If we cannot provide reliable
financial reports or prevent fraud, our business and operating results could
be
harmed, investors could lose confidence in our reported financial information,
and the trading price of our common stock, if a market ever develops, could
drop
significantly.
We
have only two directors which limits our ability to establish effective
independent corporate governance procedures and increases the control of our
president.
We
have
only one director who is also our president, and chief accounting/chief
financial officer. Accordingly, we cannot establish board committees comprised
of independent members to oversee functions like compensation or audit
issues.
Until
we
have a larger board of directors which would include some independent members,
if ever, there will be limited oversight of our president’s decisions and
activities and little ability for minority shareholders to challenge or reverse
those activities and decisions, even if they are not in the best interests
of
minority shareholders.
The
costs to meet our reporting and other requirements as a public company subject
to the Securities Exchange Act of 1934 will be substantial and may result in
us
having insufficient funds to expand our business or even to meet routine
business obligations.
Upon
becoming a public entity we will become subject to the reporting requirements
of
the Securities Exchange Act of 1934, as amended. We will incur ongoing expenses
associated with professional fees for accounting, legal and for other expenses.
We estimate that these costs may be up to $50,000 per year, exclusive of the
requirements of Section 404 of the Sarbanes-Oxley Act of 2002. We currently
do
not possess adequate financial resources to cover these expected costs of
becoming public. These obligations will reduce and possibly eliminate our
ability and resources to fund other aspects of our business and may prevent
us
from meeting our normal business obligations and require we secure additional
sources of capital.
Risks
Related to Our Common Stock
Shareholders
may be diluted significantly through our efforts to obtain financing and from
issuance of additional shares of our common stock for
services.
We
have
no committed source of financing. We may issue shares or incur debt, which
may
be convertible into share, of our common stock to satisfy our financial
obligations. In addition, if a trading market develops for our common stock,
we
may attempt to raise capital by selling shares of our common stock, possibly
with warrants, which may be issued or exercised at a discount to the market
price for our common stock. These actions will result in dilution of the
ownership interests of existing shareholders, and may further dilute common
stock book value, and that dilution may be material. Such issuances may also
serve to enhance existing management’s ability to control ESD because the shares
may be issued to our officers, directors, new employees, or related parties
and
may be on a non-arms length basis.
Currently
there is no public market for our securities, and there can be no assurances
that any public market will ever develop or that our common stock will be quoted
for trading and even if quoted, it is likely to be subject to significant price
fluctuations.
There
is
no established trading market for our common stock. Our plans include seeking
a
market maker to file an application with the NASD seeking authorization to
quote
our shares on the automated quotation service maintained by the National
Association of Securities Dealers, Inc., commonly known as the OTC Bulletin
Board (“OTCBB”). There can be no assurance as to whether such market maker’s
application will be accepted or, if accepted, the prices at which our common
stock will be bid or sold if a trading market shall arise. There can be no
assurance that any trading marked will ever develop in our common
stock.
It
is
unlikely that our common stock will be of interest to or that any research
analysts will cover or report on our company. There may be only a single or
a
limited number of institutions acting as market makers for our common stock.
Either of these factors could adversely affect the liquidity and trading price
of our common stock. As a result, the price at which our common stock may trade
is likely to fluctuate significantly. Prices for our common stock will be
determined in the marketplace and may be influenced by many factors, including
the depth and liquidity of the market for shares of our common stock,
developments affecting our business, including the impact of the factors
referred to elsewhere under the heading “Risk Factors,” investor perception of
ESD and general economic and market conditions. No assurances can be given
that
an orderly or liquid market will ever develop for the shares of our common
stock.
Because
of the anticipated low price and low volume expected in the market for our
common stock, brokerage firms may not be willing to effect transactions in
these
securities.
Our
articles of incorporation and by-laws provide for indemnification of our present
and former officers and directors in the event any claim is asserted against
them and limits their liability which may require us to incur costs for their
legal defense and any ultimate liability.
Our
articles of incorporation, bylaws and applicable Nevada law permit us to provide
for indemnification of our directors, officers, employees, and agents under
certain circumstances arising from their association with or activities on
behalf of ESD, and to advance expenses for legal and other costs of such
actions. This indemnification policy could result in substantial expenditures
by
us for the benefit of our officers, directors and others. In the opinion of
the
SEC, indemnification for liabilities arising under federal securities laws
is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
Any
market that develops in shares of our common stock will be subject to the penny
stock restrictions which will create a lack of liquidity and make trading
difficult or impossible.
Rule
15g-9 adopted under the Securities Exchange Act of 1934, as amended, defines
a
“penny stock,” as an equity security that has a market price of less than $5.00
per share or with an exercise price of less than $5.00 per share, subject to
a
limited number of exceptions. We expect that our common stock will be a penny
stock subject to the penny stock rules. Under the penny stock rules, a broker
or
dealer must follow certain practices including obtaining a written agreement
to
the transaction setting forth the identity and quantity of the penny stock
to be
purchased. In order to approve a person’s account for transactions in penny
stocks, the broker or dealer must obtain financial information and investment
experience and objectives of the person and make a reasonable determination
that
transactions in penny stocks are suitable for that person and that person has
sufficient knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker or dealer
must
also deliver, prior to any transaction in a penny stock, a disclosure schedule
prepared by the SEC relating to the penny stock market, which, in highlight
form, sets forth the basis on which the broker or dealer made the suitability
determination, and that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. These requirements will
create a lack of liquidity and shareholders may find it difficult to dispose
of
their shares than would be the case if these rules did not apply to our common
stock.
Because
of these regulations and historic market abuses in penny stocks, many
broker-dealers may not wish to engage in the above-referenced activities and
may
encounter difficulties in their attempt to sell shares of our common stock,
which may affect the ability of selling shareholders or other holders to sell
their shares. Our shares in all probability will be subject to such penny stock
rules for the foreseeable future and our shareholders will, in all likelihood,
find it difficult to sell their securities in open market
transactions.
The
market for penny stocks has experienced numerous frauds and abuses which could
cause investors in our stock to lose some or all of their
investment.
The
market for penny stocks has suffered from fraud and abuse which could affect
the
liquidity and trading price of our securities, including the
following:
|
·
|
Control
of the market by one or a few broker-dealers that are often related
to the
promoter or issuer;
|
|
·
|
Manipulation
of prices through prearranged matching of purchases and sales and
false
and misleading press releases;
|
|
·
|
“Boiler
room” activities involving high pressure sales tactics and unrealistic
price projections by inexperienced sales
persons;
|
|
·
|
Excessive
and undisclosed bid-ask differentials and markups by selling
broker-dealers; and
|
|
·
|
Selling
of the same securities by promoters and broker-dealers after prices
have
been manipulated to a desired level, along with the inevitable
collapse of
those prices with consequent investor
losses.
|
If
violations of these rules occur, remedies to the investors include seeking
rescission of their purchase of shares made through their brokerage account.
We
may be subject to claims from investors and purchasers in the market that there
have been violations in which case we will be required to expend resources
and
divert management’s time and attention, to defending such actions and may not
prevail. In the event that we are subjected to such claims, or become involved
in litigation, investigations, or regulatory inquires for any reason, the price
of our common stock and value of our company could decline
significantly.
If
a market develops for our shares, Rule 144 sales may depress prices in that
market.
All
of
the outstanding shares of our common stock held by present stockholders are
“restricted securities” within the meaning of Rule 144 under the Securities Act
of 1933, as amended. After the registration statement of which this prospectus
is a part is declared effective 10,400,000 shares issued held by former and
present officers, directors, consultants, and others as unregistered securities
will be or become subject to resale under Rule 144. These shares held by such
persons could become eligible for free trading six months following the
anniversary of the date of sale or issuance, which is the earliest day upon
which Rule 144 sales are presently eligible to be made.
As
restricted shares, these shares may be resold only pursuant to an effective
registration statement or under the requirements of Rule 144 or other applicable
exemptions from registration under the Act and as required under applicable
state securities laws. Rule 144 provides in general that a person who has held
restricted securities for a prescribed period (six months effective February
2008 for non-affiliates and one year for affiliates) may resell such shares
without regard to volume. Under certain conditions, for “shell companies” such
as the Company, the six months period is not available. For affiliates and
shell
company holders, holders may resell such shares without registration during
every three month period, in brokerage transactions and subject to other
conditions, a number of shares that does not exceed one percent (1%) of a
company’s outstanding common stock. There is no limit on the amount of
restricted securities that may be sold by a non-affiliate (i.e., a stockholder
who has not been an officer, director or control person during the 90 days
preceding sale) and after restricted securities have been held by the owner
for
a period of one year. Sales under Rule 144 or pursuant to a further registration
statement for our common stock, on behalf of the company or selling
shareholders, may have a depressive effect upon the price of our common
stock.
Trading
in our common stock may be restricted by virtue of state securities “Blue Sky”
laws. These restrictions may make it difficult or impossible to sell shares
in
those states.
There
is
no public market for our common stock, and there can be no assurance that any
public market will develop in the foreseeable future. Transfer of our common
stock may also be restricted under the securities or securities regulations
laws
promulgated by various states and foreign jurisdictions, commonly referred
to as
“Blue Sky” laws. Absent compliance with such individual state laws, our common
stock may not be traded in such jurisdictions. Because the securities registered
hereunder have not been registered for resale under the blue sky laws of any
state, the holders of such shares and persons who desire to purchase them in
any
trading market that might develop in the future, should be aware that there
may
be significant state blue sky law restrictions upon the ability of investors
to
sell the securities and of purchasers to purchase the securities. These
restrictions prohibit the secondary trading of our common stock. We currently
do
not intend to and may not be able to qualify securities for resale in
approximately 17 states which do not offer manual exemptions and require shares
to be qualified before they can be resold by our shareholders. Accordingly,
investors should consider the potential secondary market for our securities,
should one develop, to be extremely limited.
Provisions
of our articles of incorporation and Nevada law could deter a change of our
management which could discourage or delay offers to acquire
us.
Provisions
of our articles of incorporation and Nevada law make it difficult for someone
to
affect a change of control of the company or to remove existing management,
and
might discourage a third party from offering to acquire a controlling interest
in us, even if a change in control or in management would be beneficial to
our
stockholders.
As
a
Nevada corporation, we are subject to certain provisions of the Nevada Business
Corporation Law rules and which inhibit the likelihood of a non-negotiated
merger or other business combination. These provisions are intended to encourage
any person interested in acquiring us to negotiate with, and to obtain the
approval of, our board of directors in connection with such a transaction and
to
discourage unsolicited bids. These provisions may discourage a future
acquisition of us, including an acquisition in which our shareholders might
otherwise receive a premium for their shares. Shareholders who might desire
to
participate in such a transaction may not have the opportunity to do
so.
Our
board of directors has the authority, without stockholder approval, to issue
shares of “blank check” preferred stock with terms that may not be viewed as
beneficial to common stockholders, and which may adversely affect common
stockholders.
Our
articles of incorporation allow us to issue shares of preferred stock without
any vote by our stockholders. Our board of directors has the authority to fix
and determine the relative rights and preferences of preferred stock. Our board
of directors also has the authority to issue preferred stock without further
stockholder approval. As a result, our board of directors could authorize the
issuance of preferred stock that would grant to holders the preferred right
to
vote on decisions submitted for a vote of the stockholders, to a priority on
distribution of our assets upon liquidation, the right to receive dividend
payments before dividends are distributed to the holders of common stock and
the
right to the redemption of the shares, together with a premium, prior to the
redemption of our common stock, and similar rights and priorities over our
common stock
2,987,500
shares of our common stock being registered in this offering may be sold by
selling stockholders upon the effectiveness of our registration statement.
Significant sales of these shares over a short or concentrated period of time
are likely to depress the market for and price of our shares in any market
that
may develop.
Shares
of
our common stock held by 20 shareholders registered in this offering for resale
may be resold subsequent to effectiveness of our registration statement. These
2,987,500 shares may be sold without restriction which may occur without
reliance upon Rule 144, and accordingly without restriction as to volume or
timing restrictions contained in Rule 144. The ability to sell these shares
of
common stock and/or the sale thereof reduces the likelihood of the establishment
and/or maintenance of an orderly trading market for our shares at any time
in
the near future.
For
all
of the foregoing reasons and others set forth herein, an investment in our
securities in any market which may develop in the future involves a high degree
of risk.
USE
OF
PROCEEDS
We
are
registering 2,987,500 of our 12,387,500 currently outstanding shares for
resale.
We
will
not receive any of the proceeds from the sale of shares of the common stock
offered by the selling stockholders.
SELLING
STOCKHOLDERS
At
January 22, 2008 we had 26 shareholders.
Of
our
outstanding shares, 500,000 shares were issued on July 11, 2005 to Andrew Uribe
and an additional 3,000,000 shares were issued on July 1, 2006 to Orbital which
is owned and controlled by Andrew Uribe, our officer and director, in exchange
for the Distribution Agreement and an extension of the term of the Distribution
Agreement. On November 1, 2007 an additional 2,000,000 shares were issued to
Orbital in connection with an extension of the Distributor Agreement to December
31, 2008. None of these 5,500,000 shares are being registered in this
offering.
An
additional 4,000,000 shares were issued as of July 11, 2005 to four additional
persons for services in connection with formation, organization and the business
of the company and 3,000,000 shares on November 1, 2007 to two additional
persons for services aggregating 1,000,000 shares, including 500,000 shares
issued to our counsel for legal fees. None of the 10,400,000 shares held
by
these persons are being registered for resale or will be available for resale
pursuant to this registration statement.
An
additional 1,887,500 shares were issued to 19 shareholders at $0.01 per share
paid in cash for which the company received $18,875,000 in cash proceeds from
such sales from June 2005 through August 2007 in transactions that were exempt
from the registration requirements under the Securities Act of 1933,as
amended.
All
shares may be resold by the selling stockholders named in the following table
from time to time. The table also contains information regarding each selling
stockholder’s beneficial ownership of shares of our common stock as of January
22, 2008 and as adjusted to give effect to the sale of the shares offered
hereunder and transfers of shares prior to this prospectus.
|
|
Shares
Owned Before Offering
|
|
Shares
Being Offered
|
|
Number
of Shares to be Owned After the Offering
|
|
Percentage
to be Owner After the Offering
|
|
Julio
Uribe
|
|
|
10,000
|
|
|
10,000
|
|
|
0
|
|
|
*
|
|
Sheila
D. Gladhill
|
|
|
10,000
|
|
|
10,000
|
|
|
0
|
|
|
*
|
|
William
S. Bergman
|
|
|
10,000
|
|
|
10,000
|
|
|
0
|
|
|
*
|
|
Gary
Ross
|
|
|
10,000
|
|
|
10,000
|
|
|
0
|
|
|
*
|
|
Harvey
Kesner
|
|
|
30,000
|
|
|
30,000
|
|
|
0
|
|
|
*
|
|
Edward
and Carol Martin JTWROS
|
|
|
50,000
|
|
|
50,000
|
|
|
0
|
|
|
*
|
|
Glenn
Kesner
|
|
|
50,000
|
|
|
50,000
|
|
|
0
|
|
|
*
|
|
Jean
Young
|
|
|
50,000
|
|
|
50,000
|
|
|
0
|
|
|
*
|
|
Mark
Goldberg
|
|
|
50,000
|
|
|
50,000
|
|
|
0
|
|
|
*
|
|
Seth
Farbman
|
|
|
50,000
|
|
|
50,000
|
|
|
0
|
|
|
*
|
|
David
Greenberg
|
|
|
50,000
|
|
|
50,000
|
|
|
0
|
|
|
*
|
|
Joshua
Greenberg
|
|
|
50,000
|
|
|
50,000
|
|
|
0
|
|
|
*
|
|
Michelle
Stern
|
|
|
50,000
|
|
|
50,000
|
|
|
0
|
|
|
*
|
|
Shai
Stern
|
|
|
50,000
|
|
|
50,000
|
|
|
0
|
|
|
*
|
|
Steven
Schlachter
|
|
|
50,000
|
|
|
50,000
|
|
|
0
|
|
|
*
|
|
Rudi
Schlachter
|
|
|
50,000
|
|
|
50,000
|
|
|
0
|
|
|
*
|
|
William
Bush
|
|
|
100,000
|
|
|
100,000
|
|
|
0
|
|
|
*
|
|
Marlin
Capital Partners, LLC
|
|
|
250,000
|
|
|
250,000
|
|
|
0
|
|
|
*
|
|
Rick
Werner
|
|
|
500,000
|
|
|
500,000
|
|
|
0
|
|
|
*
|
|
Mark
Tolstoi
|
|
|
500,000
|
|
|
500,000
|
|
|
0
|
|
|
*
|
|
GRQ
Consultants, Inc.
|
|
|
500,000
|
|
|
500,000
|
|
|
0
|
|
|
*
|
|
Paradox
Trading Company LLC
|
|
|
517,500
|
|
|
517,500
|
|
|
0
|
|
|
*
|
|
|
|
|
2,987,500
|
|
|
2,987,500
|
|
|
0
|
|
|
*
|
|
None
of
the Selling Stockholders is a broker/dealer or an affiliate of any
broker/dealers.
PLAN
OF
DISTRIBUTION
Selling
stockholders will offer their shares at the designated price
($0.05) until their shares are quoted on the Over the Counter (OTC)
Bulletin Board and thereafter at prevailing market prices or privately
negotiated prices. We intend to apply to the NASD to have the prices of our
shares quoted on its Over the Counter (OTC) Bulletin Board electronic
quotation service. To date no actions have been taken to apply to the
NASD to have our shares listed on its Over the Counter
(OTC) Bulletin Board quotation service. Our
common stock is not currently listed on any national exchange or electronic
quotation system. Once a market develops, sales may be made at prevailing
market prices or at privately negotiated prices. The selling
stockholders may use any one or more of
the following methods when selling shares:
Broker-dealers engaged by
the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts
from the selling stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
selling stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved.
The
selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be "underwriters" within the meaning of
the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
We
are
required to pay all fees and expenses incident to the registration of the
shares.
DETERMINATION
OF OFFERING PRICE
Since
our
shares are not listed or quoted on any exchange or quotation system, the
offering price of the shares of common stock was arbitrarily determined. The
offering price was determined by the price shares were sold to our shareholders
in our private placement through August 2007. All of our outstanding shares
held
by our selling shareholders were issued at $0.01 per share except for shares
issued for services and founders’ shares.
The
offering price of the shares of our common stock has been determined arbitrarily
by us and does not necessarily bear any relationship to our book value, assets,
past operating results, financial condition or any other established criteria
of
value. The facts considered in determining the offering price were our financial
condition and prospects, our limited operating history and the general condition
of the securities market. Although our common stock is not listed or quoted
on a
public exchange, we intend to seek a market maker to file a Rule 211 application
with the NASD to enable our securities to be quoted on the Over-the-Counter
Bulletin Board (OTCBB). In order to be quoted on the Bulletin Board, a market
maker must file an application on our behalf in order to make a market for
our
common stock. The registration statement, of which this prospectus is a part,
must be effective in order for our securities to be eligible for quotation
on
the OTCBB. There is no assurance that our common stock will trade at market
prices in excess of the initial public offering price as prices for the common
stock in any public market which may develop will be determined in the
marketplace and may be influenced by many factors, including the depth and
liquidity of the market for the common stock, investor perception of us and
general economic and market conditions.
DIVIDEND
POLICY
In
the
past, we have not declared or paid cash dividends on our common stock, and
we do
not intend to pay any cash dividends on our common stock. Rather, we intend
to
retain future earnings (if any) to fund the operation and expansion of our
business and for general corporate purposes. In addition, our agreements with
debt or preferred stock holders and other investors may restrict us from paying
any cash dividends in the future.
MARKET
FOR SECURITIES
There
is
no public market for our common stock, and a public market may never
develop.
There
is
no common equity subject to outstanding options or warrants to purchase or
securities convertible into common equity of ESD.
SUMMARY
FINANCIAL DATA
The
following summary financial data should be read in conjunction with the
financial statements and the notes thereto included elsewhere in this
prospectus.
Balance
Sheet Data:
|
|
December
31, 2006
|
|
September
30, 2007
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Current
assets
|
|
$
|
13,789
|
|
$
|
5,843
|
|
Total
assets
|
|
|
37,789
|
|
|
37,510
|
|
Current
liabilities
|
|
|
250
|
|
|
200
|
|
Stockholders’
equity
|
|
|
37,539
|
|
|
37,510
|
|
Income
Statement Data:
|
From
June 28, 2005
|
|
(Date
of Inception) to
|
|
September
30, 2007
|
|
|
Revenue
|
$nil
|
Net
Loss for the Period
|
$(32,015)
|
Basic
Loss Per Share
|
less
than $0.01 per share
|
Weighted
average number of shares outstanding
|
7,427,570
|
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
1.
|
This
prospectus contains ‘‘forward-looking
statements,’’ which include information relating to future events, future
financial performance, strategies, expectations, competitive environment
and regulations. Words such as ‘‘may,’’ ‘‘should,’’ ‘‘could,’’ ‘‘would,’’
‘‘predicts,’’ ‘‘potential,’’ ‘‘continue,’’ ‘‘expects,’’ ‘‘anticipates,’’
‘‘future,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘believes,’’ ‘‘estimates,’’ and
similar expressions, as well as statements in future tense, identify
forward-looking statements. Forward-looking statements should not
be read
as a guarantee of future performance or results and will probably
not be
accurate indications of when such performance or results will be
achieved.
Forward-looking statements are based on information we have when
those
statements are made or our management’s good faith belief as of that time
with respect to future events, and are subject to risks and uncertainties
that could cause actual performance or results to differ materially
from
those expressed in or suggested by the forward-looking
statements.
|
You
should review carefully the section entitled ‘‘Risk Factors’’ beginning on page
4 of this prospectus for a discussion of these and other risks that relate
to
our business and investing in shares of our common stock.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Overview
We
are
seeking to introduce Emy’s Salsa into new markets in the Northeast under a
Distribution Agreement with Orbital. We have not made any sales of products
and
have received, through Orbital, non-binding letters expressing interest from
several large and small food wholesalers and retailers. We intend to pursue
these leads and offer distribution of Orbital’s products as our sole line of
business for the foreseeable future. Orbital does not presently have adequate
manufacturing, bottling, storage or transportation to satisfy any material
demand we might generate for their products, and we do not possess nor do we
intend on acquiring such resources. We do not maintain any website, have no
employees, and do not lease or own any property that is used in our business
and
have no immediate plans to acquire any property or produce a
website.
Characteristics
of our Revenues and Expenses
We
cannot
predict what our level of activity will be over the next 12 months because
we do
not know what level of production, bottling, storage and transportation Orbital
will develop, or if Orbital will be able to attract financing for such purposes,
or if we will be able to interest others in purchasing Emy’s products by or
through us.
Revenues,
Operating Loss, Cost of Revenues. Selling General and Administrative Expenses,
Net Loss
Due
to
the startup nature of our business, each of the items from our Statement of
Operations for the fiscal years ended December 31, 2006 and 2005 may not be
indicative of future levels of activity. As such, we expect our costs and loss
to increase in future periods as we seek active customers, and incur costs
for
infrastructure. During the prior periods, all expenses have been attributable
to
startup, organizational, legal and accounting expenses for services provided
in
connection with such matters and related to the preparation and filing of our
registration statement.
Liquidity
and Capital Resources
As
of
September 30, 2007 and 2006, we had cash and cash equivalents of $5,843 and
$14,550, respectively. We have historically met our liquidity requirements
from
a variety of sources, including short-term borrowings from related parties
and
the sale of equity securities. We do not presently maintain any credit
facilities, although we may incur indebtedness in connection with our expansion
plans.
As
of
September 30, 2007, we had positive working capital of $5,643 due primarily
to
the lack of indebtedness.
ESD
does
not have any credit facilities or other commitments for debt or equity
financing. No assurances can be given that advances when needed will be
available. We do not believe that we need funding to continue our operations
at
our current level because we do not have a capital-intensive business plan,
and
our fixed cost level is low. We would need some form of financing if Orbital
increases its capacity significantly, and we decide to ramp up our activities
in
accordance with our business plan. If a market for our shares ever develops,
of
which there can be no assurances, we may use restricted shares or options to
compensate employees, officers, directors, consultants and others wherever
possible. If we are successful such steps may enable us to meet some or all
of
the obligations of being a public company without requiring additional sources
of financing. We believe that we will have sufficient cash on hand for 12 months
of operations unless we commence activities related to our Distribution
Agreement rights with Orbital and in such case will not generate sufficient
cash
to continue operations for the next 12 months from the date of this prospectus
without additional investment in our equity or we incur
indebtedness.
Loans
From Related Parties
As
of
September 30, 2007, all previous short term advances for organizational expenses
other than $200 had been converted into equity.
Private
Placement
We
completed a private placement in August 2007, pursuant to which we issued
1,887,500 shares of common stock for aggregate gross proceeds of $18,875.00.
In
connection with this private placement, we incurred no placement agent or other
fees.
Critical
Accounting Policies
Our
financial statements are prepared in conformity with generally accepted
accounting principles in the United States of America, which require us to
make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of our financial statements and the reported amounts
of
revenues and expenses during the reporting periods. Critical accounting policies
are those that require the application of management’s most difficult,
subjective, or complex judgments, often because of the need to make estimates
about the effect of matters that are inherently uncertain and that may change
in
subsequent periods. In preparing the financial statements, we utilized available
information, including our past history, industry standards and the current
economic environment, among other factors, in forming our estimates and
judgments, giving due consideration to materiality. Actual results may differ
from these estimates. In addition, other companies may utilize different
estimates, which may impact the comparability of our results of operations
to
those of companies in similar businesses. We believe that of our significant
accounting policies, the following may involve a higher degree of judgment
and
estimation.
Stock-Based
Compensation.
Effective August 1, 2005, we adopted SFAS No. 123 (revised 2004), ‘‘Share-Based
Payment,’’ (SFAS 123R), which is a revision of SFAS No. 123, ‘‘Accounting for
Stock-Based Compensation.’’ SFAS No. 123R supersedes Accounting Principles
Board, or APB, Opinion No. 25, ‘‘Accounting for Stock Issued to Employees’’, and
amends SFAS No. 95, ‘‘Statement of Cash Flows.’’ SFAS No. 123R requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the financial statements based upon their fair values.
As a
result, the intrinsic value method of accounting for stock options with pro
forma footnote disclosure, as allowed for under SFAS No. 123, is no longer
permitted. We adopted SFAS No. 123R using the modified prospective method,
which
requires us to record compensation expense for all awards granted after the
date
of adoption, and for the unvested portion of previously granted awards that
remain outstanding at the date of adoption. Accordingly, prior period amounts
have not been restated to reflect the adoption of SFAS No. 123R. After assessing
alternative valuation models and amortization assumptions, we chose to continue
using the Black-Scholes valuation model and recognition of compensation expense
over the requisite service period of the grant, although we do not presently
have any outstanding obligations under any options under which SFAS No. 123R
is
applicable.
BUSINESS
Emy’s
Salsa Aji Distribution Company, Inc. was incorporated in the State of Nevada
on
July 11, 2005 as Certiorari Corporation and originally intended to pursue a
business of acquiring the rights to receive state and local real estate tax
refund claims from property owners but never commenced such business. On August
23, 2005 the name of the company was changed to Emy’s Salsa Aji Distribution
Company, Inc. and the company commenced its current activities and sought to
enter into distribution arrangements and entered into a Distribution Agreement
with Orbital Group, LLC effective as of July 1, 2006.
Orbital
Group, LLC, is a Florida limited liability company, registered to do business
in
the state of Maryland. During 2003 and 2004, the company’s owner, Andrew Uribe,
developed a unique specialty gourmet Colombian-style salsa called “Emy’s Salsa
Aji” (pronounced “Ahh-Hee”). The recipe is based upon the original recipe
developed over many years by Mr. Uribe’s father in Colombia. The product is a
more wholesome, tasty and different alternative to the many hot sauces and
salsa
products currently available in the market place. One of the main differences
of
Emy’s Salsa Aji from its competitors is in its consistency, its natural color
(without a watery red or green sauce), all natural ingredients (without any
preservatives or chemicals like all salsa products), and the refrigeration
requirement. Orbital believes that there is no known competitor in any product
that closely resembles Emy’s Salsa Aji. The product’s quality, fresh ingredients
and its simple yet stylish packaging give a taste and appearance that makes
it
an attractive alternative to the fancy labeled hot sauces and salsas found
in
stores. Orbital’s president, Andrew Uribe, background in diagnostic medicine
have proven highly helpful in the development and growth of Emy’s
Salsa.
Orbital
currently produces two product lines of its Emy’s Salsa Aji: a “mild” and a
spicy” salsa, each sold in 12 ounce clear jars and in industrial sizes for
restaurants and wholesalers. The Colombian AJI style of salsa has its origins
among the native Quimbaya people of Colombia South America. Emy’s Salsa is
trademarked with the United States Patent and Trade Office, serial number
78182646 issued April 27, 2004. In addition, Orbital has obtained appropriate
government regulatory approvals and permits as a Maryland based specialty food
processor.
Orbital
started manufacturing and sales of Emy’s Salsa in January 2005 through five
different Maryland-based gourmet food stores, and presently distributes through
10 local stores. In response to the strong demand for the company’s product,
several major retail food chains have expressed interest in carrying Emy’s
Salsa. Orbital currently leases a manufacturing and refrigerated storage
facility in Maryland and has purchased an automated assembly line. Orbital
has
received loans and other funds from its owner for its operations historically,
and is currently seeking funds to install and commence operations of its
automated assembly line which has been delivered but is presently inoperable.
Without additional financing, Orbital will not be able to meet its obligations
under the Distribution Agreement.
Based
on
this anticipated and continued increasing demand for the Emy’s Salsa, the
company entered into the Distribution Agreement on July 1, 2006 and sought
to
establish an independently funded operation to warehouse and distribute in
certain Northeastern states. Under the terms of the Distribution Agreement
with
Orbital, the company was appointed distributor of Emy’s Salsa, mild and hot, in
the “Territory,” as defined in the Distribution Agreement, consisting of New
York, New Jersey, Connecticut, Vermont, Massachusetts, Maine and Rhode Island.
The company has agreed not to sell or distribute the product outside the
Territory or to any third party who would do so, without Orbital’s consent.
Under the Distribution Agreement, prices for product are to be F.O.B. Baltimore,
Maryland, as will in the future be agreed by the parties. Under the terms of
the
Distribution Agreement, the company is not required to purchase any minimum
dollar amount of products during the first year, and thereafter, the
Distribution Agreement may be terminated if Distributor has not purchased a
minimum of $15,000 of products by the end of each subsequent one-year
anniversary of the agreement. ESD failed to purchase $15,000 of products through
June 30, 2007, however Orbital has agreed to waive the initial year minimum
purchase requirement under the Distribution Agreement and has extended the
Distribution Agreement through and July 1, 2008. Under the Distribution
Agreement, among other things, the company has agreed to use its best efforts
only to promote the sale of products in the Territory and to further the
popularity of names, brands, logos and trademarks used in connection with the
products, and shall maintain and operate suitable facilities for inventory,
advertising, distribution and sale to meet market requirements. At the present
time, Orbital does not possess operable mass production facilities suitable
for
the company’s commencement of large scale efforts, although Orbital has secured
a Small Business Administration loan, has entered into a lease for a
manufacturing and cold storage facility, and received delivery of an automated
manufacturing and bottling line located in Maryland.
The
Distribution Agreement term is for an initial period of one year and
automatically renews for successive one year periods unless either party
provides the other notice of non-renewal not less than 30 days prior to the
expiration of the then applicable term. In addition, the Distribution Agreement
may be terminated by Orbital on ten days notice in the event of bankruptcy,
insolvency, or assignment for the benefit of creditors of the company or if
Orbital viability as a going concern is impaired, in the judgment of Orbital,
if
the company fails to maintain a sufficient sales force, if the company degrades
and places in bad repute the name and reputation of Orbital, if the company
fails to meet its other obligations under the Distribution Agreement, upon
a
change of control (change of ownership in excess of 50%) or if the company
fails
to purchase more than $10,000 in any three month period, which has been waived
and ESD expects will continue to be waived until such time as Orbital has
secured adequate production facilities. Availability to ESD to Orbital’s mass
production capabilities have been delayed due to insufficient funds available
to
Orbital, which condition may continue for the foreseeable future. The
Distribution Agreement currently terminates on December 31, 2008, unless
extended.
Competition
The
company believes that the market for salsa and Latin based products generally
is
highly competitive. In addition, severe competition exists for store shelf
space, and includes companies that offer a variety of food products in addition
to salsa. We compete with these companies on the basis of the price, quality,
reputation and availability or products, virtually all of which possess
significantly greater financial and other resources than we do.
MANAGEMENT
The
following table sets forth information regarding the members of our board of
directors and our executive officers. All directors hold office for one-year
terms until the election and qualification of their successors. Officers are
elected annually by the board of directors and serve at the discretion of the
board.
Name
|
|
Age
|
|
Position
|
Andrew
Uribe
|
|
50
|
|
President
and Director
|
Sheila
Gladhill
|
|
40
|
|
Secretary
|
Kim
Long
|
|
50
|
|
Treasurer
|
Jean
Young
|
|
44
|
|
Director
|
Jean
Young
has served as a director
since our formation. Ms. Young is an experienced investor relations
professional.
Andrew
Uribe
Andrew
Uribe has served as the sole officer and director of Southridge Technology
Group, Inc. (OTCBB:SOUT) since April 13, 2007 through July 13, 2007 which
provides customized computing and communications services and solutions for
small to medium-sized businesses. Mr. Uribe is a Spanish language interpreter
for FIRN. Since 2003 and has been an adjunct instructor in clinical forensics
at
Anne Arundel Community College. From March 2000 until December 2004, Mr. Uribe
was a chemist for the U.S. Department of Defense. Mr. Uribe has in the past
been
involved in the development and marketing of point-of-care testing for HIV
antibodies for use in underdeveloped countries as a screening tool for early
diagnosis. Mr. Uribe will continue to provide assistance to the company in
addition to his primary activities with Orbital.
Sheila
Gladhill
Ms.
Gladhill initially served as President through 2005, and has served as our
Secretary since our formation. Ms. Gladhill attended the University of Maryland
and is an experienced sales representative.
Kim
Long
Ms. Long
has served as our Treasurer since our formation. Ms. Long is an experienced
customer service manager.
Board
of
Directors
All
directors hold office for a period of one year and until their successor is
duly
elected and qualified. Directors receive no compensation.
Committees
of the Board of Directors
We
do not
maintain any committees but we intend to establish an audit committee and a
compensation committee. The audit committee will review the results and scope
of
the audit and other services provided by the independent auditors and review
and
evaluate the system of internal controls. The compensation committee will manage
compensation including any stock option or other plan, and review and recommend
compensation arrangements for the officers.
All
directors will be reimbursed for any accountable expenses incurred in attending
directors’ meetings provided that the company has the resources to pay these
expenses.
Employees
As
of
January 22, 2008, we had no full-time employees. Mr. Uribe and our other
officers and directors perform services for us on a part-time as-needed basis
and have no continuing obligation to perform services.
Property
Our
executive offices are currently located in the offices of Orbital, in Dunloggin,
Maryland. We utilize without cost 100 square feet of shared space. We do not
own
any real property.
We
believe our office space is adequate for our immediate needs. Additional space
may be required as we expand our activities. We do not foresee any significant
difficulties in obtaining any required additional facilities.
Legal
Proceedings
There
are
no legal proceedings pending or to our knowledge threatened against
us.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
We
currently operate out of office space located at the location of Orbital owned
by our President and Director, Mr. Uribe, for which we do not pay
rent.
Orbital
received all of its 3,000,000 shares of common stock for no cash investment
upon
execution of the Distribution Agreement, and Mr. Uribe received all of his
500,000 shares of common stock for no cash investment in consideration for
services provided. In addition, effective November 1, 2007, Orbital received
an
additional 2,000,000 shares of common stock for a one-year extension of the
Distribution Agreement. Mr. Uribe is the controlling owner of Orbital with
which
the company has entered into the Distribution Agreement. The terms of the
Distribution Agreement were not determined on an arms-length basis.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth information with respect to the beneficial ownership
of our common stock as of January 22, 2008 by:
|
•
|
each
person known by us to beneficially own more than 5.0% of our common
stock;
|
|
•
|
each
of the named executive officers;
and
|
|
•
|
all
of our directors and executive officers as a
group.
|
The
percentages of common stock beneficially owned are reported on the basis of
regulations of the Securities and Exchange Commission governing the
determination of beneficial ownership of securities. Under the rules of the
Securities and Exchange Commission, a person is deemed to be a beneficial owner
of a security if that person has or shares voting power, which includes the
power to vote or to direct the voting of the security, or investment power,
which includes the power to dispose of or to direct the disposition of the
security. Except as indicated in the footnotes to this table, each beneficial
owner named in the table below has sole voting and sole investment power with
respect to all shares beneficially owned and each person’s address is c/o Emy’s
Salsa Aji Distribution Company, Inc., P.O. Box 7, Ellicott City, Maryland 21041.
As of January 22, 2008, we had 12,387,500 shares outstanding.
Name
and Address of Beneficial Owner
|
|
Number
of Shares Beneficially Owned
(1)
|
|
Percentage
Beneficially
Owned
(1)
|
|
Andrew
Uribe, President and a Director
|
|
|
5,500,000
|
|
|
44
|
%
|
Sheila
Gladhill, Secretary
|
|
|
1,000,000
|
|
|
8
|
%
|
Kim
Long, Treasurer
|
|
|
1,000,000
|
|
|
8
|
%
|
Jean
Young, Director
|
|
|
1,900,000
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
All
directors and executive officers as a group (4 persons)
|
|
|
9,400,000
|
|
|
75
|
%
|
*
Less
than 1%.
(1)
|
Shares
of common stock beneficially owned and the respective percentages
of
beneficial ownership of common stock assumes the exercise of all
options,
warrants and other securities convertible into common stock beneficially
owned by such person or entity currently exercisable or exercisable
within
60 days of January 22, 2008. Shares issuable pursuant to the exercise
of
stock options and warrants exercisable within 60 days are deemed
outstanding and held by the holder of such options or warrants for
computing the percentage of outstanding common stock beneficially
owned by
such person, but are not deemed outstanding for computing the percentage
of outstanding common stock beneficially owned by any other
person.
|
(2)
|
Includes
shares owned Orbital Group, LLC, of which Mr. Uribe is deemed beneficial
owner.
|
DESCRIPTION
OF SECURITIES
We
are
authorized to issue 75,000,000 shares of common stock, par value $0.0001 per
share. On January 22, 2008 there were 12,387,500 shares of common stock issued
and outstanding and no shares of preferred stock issued and
outstanding.
Common
Stock
The
holders of common stock are entitled to one vote per share. Our articles of
incorporation does not provide for cumulative voting. The holders of our common
stock are entitled to receive ratably such dividends, if any, as may be declared
by the board of directors out of legally available funds. Upon liquidation,
dissolution or winding-up, the holders of our common stock are entitled to
share
ratably in all assets that are legally available for distribution. The holders
of our common stock have no preemptive, subscription, redemption or conversion
rights. The rights, preferences and privileges of holders of our common stock
are subject to, and may be adversely affected by, the rights of the holders
of
any series of preferred stock, which may be designated solely by action of
the
board of directors and issued in the future.
LEGAL
MATTERS
Mark
Tolstoi, Esq., Roseland, New Jersey will pass upon the validity of the shares
of
our common stock offered by us pursuant to this prospectus.
EXPERTS
The
financial statements for the years ended December 31, 2006 and 2005 included
in
this prospectus have been audited by Berman & Co., P.A., an independent
registered public accounting firm, as stated in their report appearing herein
and elsewhere in the registration statement, and are included in reliance upon
the report of such firm given upon their authority as experts in accounting
and
auditing.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We
have
filed with the Securities and Exchange Commission a registration statement
on
Form SB-2, together with any amendments and related exhibits, under the
Securities Act of 1933, as amended, with respect to our shares of common stock
offered by this prospectus. The registration statement contains additional
information about us and our shares of common stock that we are offering in
this
prospectus.
Following
effectiveness of the registration statement of which this prospectus is a part
we will file annual, quarterly and current reports and other information with
the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended. Our Securities and Exchange Commission filings are available
to the public over the Internet at the Securities and Exchange Commission’s
website at http://www.sec.gov. You may also read and copy any document we file
at the Securities and Exchange Commission’s public reference room located at 100
F Street, N.E., Washington, D.C. 20549. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the public reference
rooms and their copy charges. In addition, through our website, should we
publish a website in the future, you can access electronic copies of documents
we file with the Securities and Exchange Commission, including our Annual Report
on Form 10-KSB, our Quarterly Reports on Form 10-QSB, and Current Reports on
Form 8-K and any amendments to those reports. Information on our website is
not
incorporated by reference in this prospectus. Access to those electronic filings
is available as soon as practicable after filing with the Securities and
Exchange Commission. You may also request a copy of those filings, excluding
exhibits, from us at no cost. Any such request should be addressed to us at:
P.O. Box 7, Ellicott City, Maryland, 21041, Att: Andrew Uribe,
President.
EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
(A
DEVELOPMENT STAGE COMPANY)
FINANCIAL
STATEMENTS
SEPTEMBER
30, 2007
(UNAUDITED)
|
Page
|
|
1
|
|
|
Statements
of Operations for the Nine Months Ended September 30, 2007
and 2006,
and
|
|
for
the Period from June 28, 2005 (inception) to September 30,
2007
(Unaudited)
|
2
|
|
|
Statements
of Cash Flows for the Nine Months Ended September 30, 2007
and 2006,
and
|
|
for
the Period from June 28, 2005 (inception) to September 30,
2007
(Unaudited)
|
3
|
|
|
Notes
to Financial Statements (Unaudited)
|
4
-
8
|
Emy's
Salsa AJI Distribution Company, Inc.
|
(A
Development Stage Company)
|
Balance
Sheet
|
September
30, 2007
|
(Unaudited)
|
Assets
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash
|
|
$
|
5,843
|
|
Total
Current Assets
|
|
|
5,843
|
|
|
|
|
|
|
Other
asset - net of accumulated amortization of
$18,333
|
|
|
31,667
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
37,510
|
|
|
|
|
|
|
Liabilities
and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accrued
Expenses
|
|
$
|
200
|
|
Total
Current Liabilities
|
|
|
200
|
|
|
|
|
|
|
Stockholders’
Equity
|
|
|
|
|
Common
stock ($0.0001 par value, 75,000,000 shares authorized,
|
|
|
|
|
authorized,
11,387,500 shares issued and outstanding)
|
|
|
1,139
|
|
Additional
paid in capital
|
|
|
68,186
|
|
Deficit
accumulated during development stage
|
|
|
(32,015
|
)
|
Total
Stockholders’ Equity
|
|
|
37,310
|
|
|
|
|
|
|
Total
Liabilities and Stockholders’ Equity
|
|
$
|
37,510
|
|
See
accompanying notes to unaudited financial statements
Emy's
Salsa AJI Distribution Company, Inc.
|
(A
Development Stage Company)
|
Statements
of Operations
|
(Unaudited)
|
|
|
|
|
|
|
For
the Period from
|
|
|
|
|
|
|
|
June
28, 2005
|
|
|
|
For
the Nine
Months
Ended
|
|
(inception)
to
|
|
|
|
September
30, 2007
|
|
September
30, 2006
|
|
September
30, 2007
|
|
Revenues
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
-
|
|
|
-
|
|
|
1,450
|
|
Amortization
|
|
|
12,333
|
|
|
3,000
|
|
|
18,333
|
|
General
and administrative
|
|
|
11,571
|
|
|
125
|
|
|
12,523
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
|
23,904
|
|
|
3,125
|
|
|
32,306
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from Operations
|
|
|
(23,904
|
)
|
|
(3,125
|
)
|
|
(32,306
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
75
|
|
|
-
|
|
|
291
|
|
Total
Other Income
|
|
|
75
|
|
|
-
|
|
|
291
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(23,829
|
)
|
$
|
(3,125
|
)
|
$
|
(32,015
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share - basic and diluted
|
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of
shares
outstanding during
|
|
|
|
|
|
|
|
|
|
|
the
period - basic and diluted
|
|
|
9,753,507
|
|
|
5,811,557
|
|
|
7,427,570
|
|
See
accompanying notes to unaudited financial statements
Emy's
Salsa AJI Distribution Company, Inc.
|
(A
Development Stage Company)
|
Statements
of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
|
For
the Period from
|
|
|
|
|
|
|
|
June
28, 2005
|
|
|
|
For
the Nine Months Ended
|
|
(inception)
to
|
|
|
|
September
30, 2007
|
|
September
30, 2006
|
|
September
30, 2007
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(23,829
|
)
|
$
|
(3,125
|
)
|
$
|
(32,015
|
)
|
Adjustments
to reconcile net loss to net cash provided by (used in)
operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
12,333
|
|
|
3,000
|
|
|
18,333
|
|
Stock
issued for services
|
|
|
-
|
|
|
125
|
|
|
925
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accrued
Expenses
|
|
|
(50
|
)
|
|
250
|
|
|
200
|
|
Net
Cash Provided By (Used In) Operating Activities
|
|
|
(11,546
|
)
|
|
250
|
|
|
(12,557
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from sale of common stock
|
|
|
3,600
|
|
|
3,800
|
|
|
18,400
|
|
Proceeds
from previous stock subscription
|
|
|
-
|
|
|
10,500
|
|
|
-
|
|
Net
Cash Provided By Financing Activities
|
|
|
3,600
|
|
|
14,300
|
|
|
18,400
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase (Decrease) in Cash
|
|
|
(7,946
|
)
|
|
14,550
|
|
|
5,843
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
- Beginning of Period
|
|
|
13,789
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
- End of Period
|
|
$
|
5,843
|
|
$
|
14,550
|
|
$
|
5,843
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|
Cash
Paid During the Period for:
|
|
|
|
|
|
|
|
|
|
|
Income
Taxes
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Interest
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Non Cash Investing and Financing
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued in exchange for subscription receivable (See Note
5)
|
|
$
|
-
|
|
$
|
500
|
|
$
|
-
|
|
Stock
issued to acquire distribution agreement (See Note 3)
|
|
$
|
20,000
|
|
$
|
30,000
|
|
$
|
50,000
|
|
See
accompanying notes to unaudited financial statements
Emy’s
Salsa AJI Distribution Company, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September
30, 2007
(Unaudited)
Note
1 Basis of Presentation
The
accompanying unaudited interim financial statements have been prepared
in
accordance with accounting principles generally accepted in the United
States of
America and the rules and regulations of the United States Securities
and
Exchange Commission for interim financial information. Accordingly, they
do not
include all the information and footnotes necessary for a comprehensive
presentation of financial position, results of operations, stockholders’ equity
or cash flows. It is management's opinion, however, that all material
adjustments (consisting of normal recurring adjustments) have been made
which
are necessary for a fair financial statement presentation.
The
unaudited interim financial statements should be read in conjunction
with the
Company’s Report on Form SB-2, which contains the audited financial statements
and notes thereto, together with Management’s Discussion and Analysis, for the
year ended December 31, 2006, the period from June 28, 2005 (inception) to
December 31, 2005 and for the Period from June 28, 2005 (inception) to
December
31, 2006. The interim results for the period ended September 30, 2007
are not
necessarily indicative of results for the full fiscal year.
Note
2 Nature of Operations and Summary of Significant Accounting
Policies
Nature
of operations
Certiorari
Corporation is a Nevada corporation incorporated on June 28, 2005. On
July 11,
2005, the Company changed its name to Emy’s Salsa AJI Distribution Company, Inc.
(the “Company”).
The
Company is a development stage entity and expects to engage in the business
of
distributing products through distribution agreements with manufacturers.
The
initial focus of the Company’s efforts will be the distribution of Emy’s Salsa
(“Product”) for The Orbital Group (“Orbital”) (“Manufacturer”) (See Note 3). The
Company has not generated any revenues since inception
Development
Stage
The
Company's financial statements are presented as those of a development
stage
enterprise. Activities during the development stage primarily include
negotiating distribution agreements and marketing the territory for distribution
outlets for the Product. The Company, while seeking to implement its
business
plan, will look to obtain additional debt and/or equity related funding
opportunities.
Risks
and Uncertainties
The
Company operates in an industry that is subject to intense competition
and rapid
technological change. The Company's operati`ons are subject to significant
risk
and uncertainties including financial, operational, technological, and
regulatory risks including the potential risk of business failure.
Emy’s
Salsa AJI Distribution Company, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September
30, 2007
(Unaudited)
Use
of estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management
to
make estimates and assumptions that affect the reported amounts of assets
and
liabilities, disclosure of contingent assets and liabilities at the date
of the
financial statements and the reported amounts of revenue and expenses
during the
reporting period. Actual results could differ from those estimates.
Cash
The
Company considers all highly liquid instruments purchased with a maturity
of
three months or less and money market accounts to be cash equivalents.
The
Company had no cash equivalents at September 30, 2007.
Long
Lived Assets
Long-lived
assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison
of the
carrying amount of an asset to future undiscounted net cash flows expected
to be
generated by the asset. If such assets are considered impaired, the impairment
to be recognized is measured by the amount by which the carrying amount
of the
assets exceeds the fair value of the assets. There were no impairment
charges
taken during the nine months ended September 30, 2007 and 2006, and for
the
period from June 28, 2005 (inception) to September 30, 2007,
respectively.
Net
loss per share
Basic
loss per share is computed by dividing net loss by weighted average number
of
shares of common stock outstanding during each period. Diluted loss per
share is
computed by dividing net loss by the weighted average number of shares
of common
stock, common stock equivalents and potentially dilutive securities outstanding
during each period. For the nine months ended September 30, 2007 and
2006, and
for the period from June 28, 2005 (inception) to September 30, 2007,
respectively, the Company did not have any dilutive securities.
Stock-based
compensation
All
share-based payments to employees will be recorded and expensed in the
statement
of operations as applicable under SFAS No. 123R “Share-Based Payment”. For the
nine months ended September 30, 2007 and 2006, and for the period from
June 28,
2005 (inception) to September 30, 2007, respectively, the Company has
not issued
any stock based compensation.
Emy’s
Salsa AJI Distribution Company, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September
30, 2007
(Unaudited)
Segment
Information
The
Company follows Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information."
During
2007 and 2006, the Company only operated in one segment; therefore, segment
information has not been presented.
Recent
accounting pronouncements
In
February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial
Assets and Financial Liabilities, which permits entities to choose to
measure
many financial instruments and certain other items at fair value. The
unrealized
gains and losses on items for which the fair value option has been elected
should be reported in earnings. The decision to elect the fair value
option is determined on an instrument-by-instrument basis, should be
applied to
an entire instrument and is irrevocable. Assets and liabilities
measured at fair values pursuant to the fair value option should be reported
separately in the balance sheet from those instruments measured using
other
measurement attributes. SFAS No. 159 is effective as of the
beginning of the Company’s 2008 fiscal year. The Company does not expect the
adoption of SFAS 159 to have a material impact on their financial position,
results of operations or cash flows.
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an amendment of Accounting Research
Bulletin
No 51” (SFAS 160). SFAS 160 establishes accounting and reporting standards for
ownership interests in subsidiaries held by parties other than the parent,
changes in a parent’s ownership of a noncontrolling interest, calculation and
disclosure of the consolidated net income attributable to the parent
and the
noncontrolling interest, changes in a parent’s ownership interest while the
parent retains its controlling financial interest and fair value measurement
of
any retained noncontrolling equity investment. SFAS 160 is effective
for
financial statements issued for fiscal years beginning after December
15, 2008,
and interim periods within those fiscal years. Early adoption is prohibited.
The
Company must adopt these new requirements in its first quarter of
2009.
In
December 2007, the FASB issued SFAS 141R,
Business Combinations
(“SFAS
141R”), which replaces FASB SFAS 141,
Business Combinations.
This
Statement retains the fundamental requirements in SFAS 141 that the acquisition
method of accounting be used for all business combinations and for an
acquirer
to be identified for each business combination. SFAS 141R defines the
acquirer
as the entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the
acquirer
achieves control. SFAS 141R will require an entity to record
separately from the business combination the direct costs, where previously
these costs were included in the total allocated cost of the
acquisition. SFAS 141R will require an entity to recognize the assets
acquired, liabilities assumed, and any non-controlling interest in the
acquired
at the acquisition date, at their fair values as of that date. This
compares to the cost allocation method previously required by SFAS No.
141. SFAS 141R will require an entity to recognize as an asset or
liability at fair value for certain contingencies, either contractual
or
non-contractual, if certain criteria are met. Finally, SFAS 141R will
require an entity to recognize contingent consideration at the date of
acquisition, based on the fair value at that date. This Statement
will be effective for business combinations completed on or after the
first
annual reporting period beginning on or after December 15,
2008. Early adoption of this standard is not permitted and the
standards are to be applied prospectively only. Upon adoption of this
standard, there would be no impact to the Company’s results of operations and
financial condition for acquisitions previously completed. The
adoption of this standard will impact any acquisitions completed after
January
1, 2009.
Emy’s
Salsa AJI Distribution Company, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September
30, 2007
(Unaudited)
Other
accounting standards that have been issued or proposed by the FASB or
other
standards-setting bodies that do not require adoption until a future
date and
are not expected to have a material impact on the financial statements
upon
adoption.
Note
3 Other Asset
On
July
1, 2006, the Company issued 3,000,000 shares of common stock (see note
5) to
acquire a distribution agreement from a manufacturer having a fair value
of
$30,000 ($0.01/share) based upon recent cash offerings. The distribution
agreement provides the Company, as distributor, the opportunity to have
exclusive distribution rights in a specified geographic territory. The
manufacturer is Orbital Group, LLC, which is operated by our Company’s Chairman
and CEO.
On
July
1, 2007, the Company issued an additional 2,000,000 shares of common
stock (see
note 5) to extend the distribution agreement from July 1, 2007 to December
31,
2008 having a fair value of $20,000 ($0.01/share) based upon recent
cash
offerings.
The
Company, as distributor, is not required to purchase any minimum dollar
amount
of products through December 31, 2008. However, for the period from July
1, 2007
through December 31, 2008, the Company is required to purchase a minimum
of
$15,000 of products annually or the distribution agreement terminates.
The
agreement would also terminate upon a change in control or if the Company
does
not purchase at least $10,000 of products in any three consecutive month
period.
The
initial term of the agreement is thirty months and the Company is amortizing
the
agreement over this period. The agreement renews automatically on the
anniversary date for additional one-year periods. During the nine months
ended
September 30, 2007 and 2006 and for the period from June 28, 2005 (inception)
to
September 30, 2007, respectively, the Company has amortized $12,333,
$3,000 and
$18,333, respectively. The remaining $31,667 will be amortized through
December
31, 2008.
.
Note
4 Refundable Stock Subscription
In
2006,
the Company received $250 from a potential investor. The subscription
was not
accepted, and the Company returned the funds on September 27, 2007.
Note
5 Stockholders’ Equity
During
July 2005, the Company issued 4,500,000 shares of common stock to its
founders
having a fair value of $450 ($0.0001/share).
During
July and August 2005, the Company issued an aggregate 35,000 shares of
common
stock having a fair value of $350 ($0.01/share) based upon the fair value
of the
services provided.
During
December 2005, the Company issued 1,050,000 shares of common stock to
third
parties in exchange for a subscription receivable totaling $10,500
($0.01/share). Payment on subscription was received in January
2006.
In
January 2006, the Company issued 70,000 shares of common stock for $700
($0.01/share). Of the total, 60,000 shares were issued to related
parties.
In
March
2006, the Company issued 50,000 shares of common stock for $500 ($0.01/share).
In
April
2006, the Company issued 10,000 shares of common stock for $100 ($0.01/share).
These shares were issued to a family member of our Chairman and
CEO.
In
May
2006, the Company issued 250,000 shares of common stock for $2,500
($0.01/share).
On
July
1, 2006, the Company issued 3,000,000 shares of common stock to a related
party.
(See Note 3)
In
July
2006, the Company issued 50,000 shares of common stock for $500 ($0.01/share).
In
July
2006, the Company issued 12,500 shares of common stock for services having
a
fair value of $125 ($0.01/share) based upon recent cash offerings.
On
July
1, 2007, the Company issued 2,000,000 shares of common stock to a related
party.
(See Note 3)
During
August 2007, the Company issued 360,000 shares of common stock for $3,600
($0.01/share).
Note
6 Related Party
During
April 2007, a board member was paid $1,000 for services rendered.
Note
7 Subsequent Events
On
November 1, 2007, the Company issued 1,000,000 shares of common stock
for legal
s ervices rendered having a fair value of $10,000 ($.01/share) based
upon recent
cash offerings.
EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
(A
DEVELOPMENT STAGE COMPANY)
FINANCIAL
STATEMENTS
DECEMBER
31, 2006
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Page
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Report
of Independent Registered Public Accounting Firm
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F-12
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Balance
Sheet as of December 31, 2006
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Statements
of Operations for the Year Ended December 31, 2006, for the
Period
from
June 28, 2005 (inception) to December 31, 2005 and for the
Period from
June
28, 2005 (inception) to December 31, 2006
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Statement
of Changes in Stockholders’ Deficit for the Year Ended December 31, 2006,
for
the Period from June 28, 2005 (inception) to December 31,
2005 and for the
Period
from
June 28, 2005 (inception) to December 31, 2006
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Statements
of Cash Flows for the Year Ended December 31, 2006, for the
Period
from
June 28, 2005 (inception) to December 31, 2005 and for the
Period from
June
28, 2005 (inception) to December 31, 2006
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Notes
to Financial Statements
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REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Board of Directors and Stockholders of
Emy’s
Salsa AJI Distribution Company, Inc.
We
have
audited the accompanying balance sheet of Emy’s Salsa AJI Distribution Company,
Inc., as of December 31, 2006, and the related statements of operations,
stockholders’ equity, and cash flows for the year ended December 31, 2006, the
period from June 28, 2005 (inception) to December 31, 2005, and for
the period
from June 28, 2005 (inception) to December 31, 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
audits.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan
and perform the audit to obtain reasonable assurance about whether
the financial
statements are free of material misstatement. An audit includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the
financial
statements. An audit also includes assessing the accounting principles
used and
significant estimates made by management, as well as evaluating the
overall
financial statement presentation. We believe that our audits provide
a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly,
in all
material respects, the financial position of Emy’s Salsa AJI Distribution
Company, Inc., as of December 31, 2006, and the results of their operations,
changes in stockholders’ equity and cash flows for the year ended December 31,
2006, the period from June 28, 2005 (inception) to December 31, 2005,
and for
the period from June 28, 2005 (inception) to December 31, 2006, in
conformity
with accounting principles generally accepted in the United States
of
America.
Berman
& Company, P.A.
Boca
Raton, Florida
September
20, 2007
Emy's
Salsa AJI Distribution Company, Inc.
(A
Development Stage Company)
Balance
Sheet
December
31, 2006
Assets
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|
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|
|
Current
Assets
|
|
|
|
Cash
|
|
$
|
13,789
|
|
Total
Current Assets
|
|
|
13,789
|
|
|
|
|
|
|
Other
asset - net of accumulated amortization of $6,000
|
|
|
24,000
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
37,789
|
|
|
|
|
|
|
Liabilities
and Stockholders’ Equity
|
|
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|
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Current
Liabilities
|
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|
Refundable
stock subscription
|
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$
|
250
|
|
Total
Current Liabilities
|
|
|
250
|
|
|
|
|
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Stockholders’
Equity
|
|
|
|
|
Common
stock ($0.0001 par value, 75,000,000 shares authorized,
|
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|
authorized,
9,027,500 shares issued and outstanding)
|
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|
903
|
|
Additional
paid in capital
|
|
|
44,822
|
|
Deficit
accumulated during development stage
|
|
|
(8,186
|
)
|
Total
Stockholders’ Equity
|
|
|
37,539
|
|
|
|
|
|
|
Total
Liabilities and Stockholders’ Equity
|
|
$
|
37,789
|
|
See
accompanying notes to financial statements
Emy's
Salsa AJI Distribution Company, Inc.
(A
Development Stage Company)
Statements
of Operations
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|
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|
For
the Period from
|
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For
the Period from
|
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For
the Year Ended
|
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June
28, 2005 (inception) to
|
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June
28, 2005 (inception) to
|
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December
31, 2006
|
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December
31, 2005
|
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December
31, 2006
|
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Revenues
|
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$
|
-
|
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$
|
-
|
|
$
|
-
|
|
|
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|
|
|
|
|
|
|
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|
Operating
Expenses
|
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|
|
|
|
|
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Compensation
|
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|
1,000
|
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450
|
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1,450
|
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Amortization
|
|
|
6,000
|
|
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-
|
|
|
6,000
|
|
General
and administrative
|
|
|
602
|
|
|
350
|
|
|
952
|
|
|
|
|
|
|
|
|
|
|
|
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Total
Operating Expenses
|
|
|
7,602
|
|
|
800
|
|
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8,402
|
|
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|
|
|
|
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|
Loss
from Operations
|
|
|
(7,602
|
)
|
|
(800
|
)
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|
(8,402
|
)
|
|
|
|
|
|
|
|
|
|
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Other
Income
|
|
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|
|
|
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Interest
income
|
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216
|
|
|
-
|
|
|
216
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|
Total
Other Income
|
|
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216
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|
|
-
|
|
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216
|
|
|
|
|
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|
|
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Net
Loss
|
|
$
|
(7,386
|
)
|
$
|
(800
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)
|
$
|
(8,186
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)
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|
|
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Net
loss per share - basic and diluted
|
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
|
|
|
|
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Weighted
average number of shares outstanding
|
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|
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|
|
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during
the year/period - basic and diluted
|
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7,383,178
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4,154,934
|
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6,281,846
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|
See
accompanying notes to financial statements
Emy's
Salsa AJI Distribution Company, Inc.
(A
Development Stage Company)
Statement
of Changes in Stockholders' Equity
For
the Year Ended December 31, 2006, the Period from June 28, 2005 (Inception)
to
December 31, 2005 and for the Period from June 28, 2005 (inception)
to December
31, 2006
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Common
Stock, $.0001 Par Value
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Shares
|
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Amount
|
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Additional
Paid in Capital
|
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Deficit
Accumulated During Development Stage
|
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Subscriptions
Receivable
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Total
Stockholders' Equity
|
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|
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Issuance
of common stock for services - related parties - founder
shares
($0.0001/share)
|
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4,500,000
|
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$
|
450
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for consulting services ($0.01/share)
|
|
|
35,000
|
|
|
4
|
|
|
347
|
|
|
-
|
|
|
-
|
|
|
350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock in exchange for subscriptions receivable
($0.01/share)
|
|
|
1,050,000
|
|
|
105
|
|
|
10,395
|
|
|
-
|
|
|
(10,500
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss, 2005
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(800
|
)
|
|
-
|
|
|
(800
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
December 31, 2005
|
|
|
5,585,000
|
|
|
559
|
|
|
10,742
|
|
|
(800
|
)
|
|
(10,500
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receipt
of prior period stock subscriptions
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
10,500
|
|
|
10,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock to acquire distribution agreement - related
party
($0.01/share)
|
|
|
3,000,000
|
|
|
300
|
|
|
29,700
|
|
|
-
|
|
|
-
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for cash ($0.01/share)
|
|
|
360,000
|
|
|
36
|
|
|
3,564
|
|
|
-
|
|
|
-
|
|
|
3,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for cash - related parties ($0.01/share)
|
|
|
70,000
|
|
|
7
|
|
|
693
|
|
|
-
|
|
|
-
|
|
|
700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for consulting services ($0.01/share)
|
|
|
12,500
|
|
|
1
|
|
|
124
|
|
|
-
|
|
|
-
|
|
|
125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss, 2006
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(7,386
|
)
|
|
-
|
|
|
(7,386
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
December 31, 2006
|
|
|
9,027,500
|
|
$
|
903
|
|
$
|
44,822
|
|
$
|
(8,186
|
)
|
$
|
-
|
|
$
|
37,539
|
|
See
accompanying notes to financial statements
Emy's
Salsa AJI Distribution Company, Inc.
(A
Development Stage Company)
Statements
of Cash Flows
|
|
|
|
For
the Period from
|
|
For
the Period from
|
|
|
|
For
the Year Ended
|
|
June
28, 2005 (inception) to
|
|
June
28, 2005 (inception) to
|
|
|
|
December
31, 2006
|
|
December
31, 2005
|
|
December
31, 2006
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(7,386
|
)
|
$
|
(800
|
)
|
$
|
(8,186
|
)
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
6,000
|
|
|
-
|
|
|
6,000
|
|
Stock
issued for services
|
|
|
125
|
|
|
800
|
|
|
925
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Refundable
stock subscription
|
|
|
250
|
|
|
-
|
|
|
250
|
|
Net
Cash Used In Operating Activities
|
|
|
(1,011
|
)
|
|
-
|
|
|
(1,011
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from sale of common stock
|
|
|
14,800
|
|
|
-
|
|
|
14,800
|
|
Net
Cash Provided By Financing Activities
|
|
|
14,800
|
|
|
-
|
|
|
14,800
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase in Cash
|
|
|
13,789
|
|
|
-
|
|
|
13,789
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
- Beginning of Year/Period
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
- End of Year/Period
|
|
$
|
13,789
|
|
$
|
-
|
|
$
|
13,789
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|
Cash
Paid During the Period for:
|
|
|
|
|
|
|
|
|
|
|
Income
Taxes
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Interest
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Non Cash Investing and Financing
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued in exchange for subscription receivable (See Note
4)
|
|
$
|
-
|
|
$
|
10,500
|
|
$
|
-
|
|
See
accompanying notes to financial statements
EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006
Note
1 Nature of Operations and Summary of Significant Accounting
Policies
Nature
of operations
Certiorari
Corporation is a Nevada corporation incorporated on June 28, 2005.
On July 11,
2005, the Company changed its name to Emy’s Salsa AJI Distribution Company, Inc.
(the “Company”).
The
Company is a development stage entity and expects to engage in the
business of
distributing products through distribution agreements with manufacturers.
The
initial focus of the Company’s efforts will be the distribution of Emy’s Salsa
(“Product”) for The Orbital Group (“Orbital”) (“Manufacturer”) (See Note 2). The
Company has not generated any revenues since inception.
Development
Stage
The
Company's financial statements are presented as those of a development
stage
enterprise. Activities during the development stage primarily include
negotiating distribution agreements and marketing the territory for
distribution
outlets for the Product. The Company, while seeking to implement
its business
plan, will look to obtain additional debt and/or equity related funding
opportunities.
Risks
and Uncertainties
The
Company operates in an industry that is subject to intense competition
and rapid
technological change. The Company's operations are subject to significant
risk
and uncertainties including financial, operational, technological,
and
regulatory risks including the potential risk of business failure.
Use
of estimates
The
preparation of financial statements in conformity with generally
accepted
accounting principles in the United States of America requires management
to
make estimates and assumptions that affect the reported amounts of
assets and
liabilities, disclosure of contingent assets and liabilities at the
date of the
financial statements and the reported amounts of revenue and expenses
during the
reporting period. Actual results could differ from those estimates.
Cash
The
Company considers all highly liquid instruments purchased with a
maturity of
three months or less and money market accounts to be cash equivalents.
The
Company has no cash equivalents.
EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006
Long
Lived Assets
Long-lived
assets are reviewed for impairment whenever events or changes in
circumstances
indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison
of the
carrying amount of an asset to future undiscounted net cash flows
expected to be
generated by the asset. If such assets are considered impaired, the
impairment
to be recognized is measured by the amount by which the carrying
amount of the
assets exceeds the fair value of the assets. There were no impairment
charges
taken during the year ended December 31, 2006, the period from June
28, 2005
(inception) to December 31, 2005, and for the period from June 28,
2005
(inception) to December 31, 2006.
Net
loss per share
Basic
loss per share is computed by dividing net loss by weighted average
number of
shares of common stock outstanding during each period. Diluted loss
per share is
computed by dividing net loss by the weighted average number of shares
of common
stock, common stock equivalents and potentially dilutive securities
outstanding
during each period. At year ended December 31, 2006, the period from
June 28,
2005 (inception) to December 31, 2005, and for the period from June
28, 2005
(inception) to December 31, 2006 respectively, the Company did not
have any
dilutive securities.
Stock-based
compensation
All
share-based payments to employees will be recorded and expensed in
the statement
of operations as applicable under SFAS No. 123R “Share-Based P
ayment”.
At year ended December 31, 2006, the period from June 28, 2005 (inception)
to
December 31, 2005, and for the period from June 28, 2005 (inception)
to December
31, 2006, respectively, the Company has not issued any stock based
compensation.
Income
Taxes
The
Company accounts for income taxes under the liability method in accordance
with
Statement of Financial Accounting Standards No. 109, "Accounting
for Income
Taxes" under this method, deferred income tax assets and liabilities
are
determined based on differences between the financial reporting and
tax bases of
assets and liabilities and are measured using the enacted tax rates
and laws
that will be in effect when the differences are expected to
reverse.
Segment
Information
The
Company follows Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information."
During
2006 and 2005, the Company only operated in one segment; therefore,
segment
information has not been presented.
EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006
Recent
accounting pronouncements
In
February 2006, the FASB issued SFAS 155,
“Accounting
for Certain Hybrid Financial Instruments”
(SFAS
155), which amends SFAS No. 133,
“Accounting
for Derivatives Instruments and Hedging Activities”
(SFAS
133) and SFAS No. 140,
“Accounting
for Transfers and Servicing of Financial Assets and Extinguishment
of
Liabilities”
(SFAS
140). SFAS 155 amends SFAS 133 to narrow the scope exception for
interest-only
and principal-only strips on debt instruments to include only such
strips
representing rights to receive a specified portion of the contractual
interest
or principal cash flows. SFAS No. 155 also amends SFAS No. 140 to
allow
qualifying special-purpose entities to hold a passive derivative
financial
instrument pertaining to beneficial interests that it is a derivative
financial
instrument. The Company will adopt SFAS No. 155 on January 1, 2007
and does not
expect it to have a material effect on its financial position, results
of
operations or cash flows.
In
July
2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation
No. 48, (“FIN 48”)
“Accounting
for Uncertainty in Income Taxes - An Interpretation of SFAS No.
109.”
This
Interpretation provides guidance for recognizing and measuring certain
tax
positions, as defined in FASB No. 109,
“Accounting
for Income Taxes.”
FIN 48
prescribes a threshold condition that a tax position must meet for
any of the
benefit of an uncertain tax position to be recognized in the financial
statements. Guidance is also provided regarding de-recognition, classification
and disclosure of uncertain tax positions. FIN 48 is effective for
fiscal years
beginning after December 15, 2006. The Company does not expect that
this
Interpretation will have a material impact on their financial position,
results
of operations or cash flows.
In
September 2006, the FASB issued SFAS No. 157 (“SFAS 157”),
Fair
Value Measurements.
SFAS 157
clarifies the principle that fair value should be based on the assumptions
that
market participants would use when pricing an asset or liability.
Additionally,
it established a fair value hierarchy that prioritizes the information
used to
develop those assumptions. SFAS 157 is effective for financial statements
issued
for fiscal years beginning after November 15, 2007. The Company does
not expect
the adoption of SFAS 157 to have a material impact on their financial
position,
results of operations or cash flows.
In
September 2006, the FASB issued SFAS No. 158 (“SFAS 158”),
“Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans,
an
amendment of FASB Statements No. 87, 88, 106, and 132(R).”
SFAS 158
requires employers to recognize the under funded or over funded status
of a
defined benefit postretirement plan as an asset or liability in its
statement of
financial position and to recognize changes in the funded status
in the year in
which the changes occur through accumulated other comprehensive income.
Additionally, SFAS 158 requires employers to measure the funded status
of a plan
as of the date of its year-end statement of financial position. The
new
reporting requirements and related new footnote disclosure rules
of SFAS 158 are
effective for fiscal years ending after December 15, 2006. The new
measurement
date requirement applies for fiscal years ending after December 15,
2008. The
Company does not expect the adoption of SFAS 158 to have a material
impact on
their financial position, results of operations or cash flows.
EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006
In
September 2006, the U.S. Securities and Exchange Commission (the
“SEC”) issued
Staff Accounting Bulletin (“SAB No.108”), which expresses the views of the SEC
staff regarding the process of quantifying financial statement misstatements.
SAB No. 108 provides guidance on the consideration of the effects
of prior year
misstatements in quantifying current year misstatements for the purpose
of a
materiality assessment. The guidance of this SAB is effective for
annual
financial statements covering the first fiscal year ending after
November 15,
2006, which is December 31, 2006 for the Company. SAB No. 108 did
not have an
impact on the Company’s financial position, results of operations or cash
flows.
In
February 2007, the FASB issued SFAS 159, The Fair Value Option for
Financial
Assets and Financial Liabilities, which permits entities to choose
to measure
many financial instruments and certain other items at fair value.
The unrealized
gains and losses on items for which the fair value option has been
elected
should be reported in earnings. The decision to elect the fair value
option is determined on an instrument-by-instrument basis, should
be applied to
an entire instrument and is irrevocable. Assets and liabilities
measured at fair values pursuant to the fair value option should
be reported
separately in the balance sheet from those instruments measured using
other
measurement attributes. SFAS No. 159 is effective as of the
beginning of the Company’s 2008 fiscal year. The Company does not expect the
adoption of SFAS 159 to have a material impact on their financial
position,
results of operations or cash flows.
Other
accounting standards that have been issued or proposed by the FASB
or other
standards-setting bodies that do not require adoption until a future
date and
are not expected to have a material impact on the financial statements
upon
adoption.
Note
2 Other Asset
On
July
1, 2006, the Company issued 3,000,000 shares of common stock (see
note 4) to
acquire a distribution agreement from a manufacturer having a fair
value of
$30,000 ($0.01/share) based upon recent cash offerings. The distribution
agreement provides the Company, as distributor, the opportunity to
have
exclusive distribution rights in a specified geographic territory.
The
manufacturer is Orbital Group, LLC, which is operated by our Company’s Chairman
and CEO.
The
Company, as distributor, is not required to purchase any minimum
dollar amount
of products through June 30, 2007. However, for the period from July
1, 2007
through December 31, 2008, the Company is required to purchase a
minimum of
$15,000 of products annually or the distribution agreement terminates.
The
agreement would also terminate upon a change in control or if the
Company does
not purchase at least $10,000 of products in any three consecutive
month
period.
The
initial term of the agreement is thirty months and the Company is
amortizing the
agreement over this period. The agreement renews automatically on
the
anniversary date for additional one-year periods. For the year ended
December
31, 2006, the Company has amortized $6,000. The remaining $24,000
is amortized
through December 31, 2008.
EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006
Note
3 Refundable Stock Subscription
In
2006,
the Company received $250 from a potential investor. The subscription
was not
accepted, and the Company will return these funds.
Note
4 Stockholders’ Equity
During
July 2005, the Company issued 4,500,000 shares of common stock to
its founders
having a fair value of $450 ($0.0001/share).
During
July and August 2005, the Company issued an aggregate 35,000 shares
of common
stock having a fair value of $350 ($0.01/share) based upon the fair
value of the
services provided.
During
December 2005, the Company issued 1,050,000 shares of common stock
to third
parties in exchange for a subscription receivable totaling $10,500
($0.01/share). Payment on subscription was received in January
2006.
In
January 2006, the Company issued 70,000 shares of common stock for
$700
($0.01/share). Of the total, 60,000 shares were issued to related
parties.
In
March
2006, the Company issued 50,000 shares of common stock for $500 ($0.01/share).
In
April
2006, the Company issued 10,000 shares of common stock for $100 ($0.01/share).
These shares were issued to a family member of our Chairman and
CEO.
In
May
2006, the Company issued 250,000 shares of common stock for $2,500
($0.01/share).
On
July
1, 2006, the Company issued 3,000,000 shares of common stock to a
related party.
(See Note 2)
In
July
2006, the Company issued 50,000 shares of common stock for $500 ($0.01/share).
In
July
2006, the Company issued 12,500 shares of common stock for services
having a
fair value of $125 ($0.01/share) based upon recent cash offerings.
Note
5 Income Taxes
The
Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" "SFAS 109". SFAS
109 requires
the recognition of deferred tax assets and liabilities for both the
expected
impact of differences between the financial statements and the tax
basis of
assets and liabilities, and for the expected future tax benefit to
be derived
from tax losses and tax credit carryforwards. SFAS 109 additionally
requires the
establishment of a valuation allowance to reflect the likelihood
of realization
of deferred tax assets.
The
Company has a net operating loss carryforward, for tax purposes,
totaling $8,186
at December 31, 2006 expiring through the year 2026. Internal Revenue
Code
Section 382 places a limitation on the amount of taxable income that
can be
offset by carryforwards after a change in control (generally greater
than a 50%
change in ownership). Temporary differences, which give rise to a
net deferred
tax asset, are as follows:
EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006
Significant
deferred tax assets at December 31, 2006 are as follows:
Gross
deferred tax assets:
|
|
|
|
Net
operating loss carryforwards
|
|
$
|
2,999
|
|
Total
deferred tax assets
|
|
|
2,999
|
|
Less:
valuation allowance
|
|
|
(2,999
|
)
|
Net
deferred tax asset recorded
|
|
$
|
-
|
|
The
valuation allowance at December 31, 2005 was $293. The net change
in valuation
allowance during the year ended December 31, 2006 was an increase
of $2,706. In
assessing the realizability of deferred tax assets, management considers
whether
it is more likely than not that, some portion or not all of the deferred
income
tax assets will be realized. The ultimate realization of deferred
income tax
assets is dependent upon the generation of future taxable income
during the
periods in which those temporary differences become deductible. Management
considers the scheduled reversal of deferred income tax liabilities,
projected
future taxable income, and tax planning strategies in making this
assessment.
Based on consideration of these items, management has determined
that enough
uncertainty exists relative to the realization of the deferred income
tax asset
balances to warrant the application of a full valuation allowance
as of December
31, 2006.
The
actual tax benefit differs from the expected tax benefit for the
year ended
December 31, 2006 and for the period from June 28, 2005 (inception)
to December
31, 2005 (computed by applying the U.S. Federal Corporate tax rate
of 34% to
income before taxes and 4% for state income taxes, a blended rate
of 36.64%) as
follows:
|
|
December
31,
2006
|
|
December
31,
2005
|
|
|
|
|
|
|
|
Expected
tax expense (benefit) -
Federal
|
|
|
($2,411
|
)
|
|
($261
|
)
|
Expected
tax expense (benefit) - State
|
|
|
(295
|
)
|
|
(32
|
)
|
Change
in valuation allowance
|
|
|
2,706
|
|
|
293
|
|
Actual
tax expense (benefit)
|
|
$
|
-
|
|
$
|
-
|
|
Note
6 Subsequent Events
(A)
Related Party
During
April 2007
,
a board
member was paid $1,000 for services rendered.
EMY’S
SALSA AJI DISTRIBUTION COMPANY, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006
(B)
Loan Payable
In
August
2007, a third party paid $200 for general and administrative expenses
on behalf
of the company in exchange for a loan. The loan is unsecured, non-interest
bearing and due on demand.
(C)
Stock Issued for Cash
During
August 2007, the Company issued 360,000 shares of common stock for
$3,600
($0.01/share).
This
prospectus is part of a registration statement that we filed with the SEC.
You
should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different information.
We are not making an offer of these securities in any state where the offer
is
not permitted. You should not assume that the information in this prospectus
is
accurate as of any date other than the date on the front of the prospectus.
No
one (including any salesman or broker) is authorized to provide oral or written
information about this offering that is not included in this
prospectus.
The
information contained in this prospectus is correct only as of the date set
forth on the cover page, regardless of the time of the delivery of this
prospectus.
Until
90
days after the commencement of the offering, 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 dealers’
obligation to deliver a prospectus when acting as underwriters and with respect
to their unsold allotments or subscriptions.
2,987,500
Shares
Emy’s
Salsa Aji Distribution Company, Inc.
Common
Stock
PROSPECTUS
January
, 2008
Part
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM
24.
INDEMNIFICATION
OF DIRECTORS AND OFFICERS.
The
Company has a provision in its Article of Incorporation providing for
indemnification of its officers and directors as follows.
“The
corporation shall indemnify all directors, officers, employees, and agents
to
the fullest extent permitted by Nevada law as provided within NRS 78.751 or
any
other law then in effect or as it may hereafter be amended.
The
corporation shall indemnify each present and future director, officer, employee,
or agent of the corporation who becomes a party or is threatened to be made
a
party to any suit or proceeding, whether pending, completed, or merely
threatened, and whether said suit or proceeding is civil, criminal,
administrative, investigative, or otherwise, except an action by or in the
right
of the corporation, by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request
of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses, including but not limited to attorneys = fees, judgments, fines,
and
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit, or proceeding if he acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interest of
the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
The
expenses of directors and officers 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
if
and only if the director or officer undertakes to repay said expenses to the
corporation if it is ultimately determined by a court of competent jurisdiction
that he is not entitled to be indemnified by the corporation.
The
indemnification and advancement of expenses may not be made to or on behalf
of
any director or officer if a final adjudication establishes that the director
=
s of officer = s acts or omission involved intentional misconduct, fraud, or
a
knowing violation of the law and was material to the cause of
action.”
Insofar
as indemnification for liabilities arising under the Securities Act of 1933,
as
amended, may be permitted to directors officers and controlling persons of
the
Company 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 Company of expenses incurred
or
paid by a director, officer or controlling person of the registrant in the
successful defense of any such action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of
such issue.
ITEM
25.
OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION.
The
Registrant is bearing all expenses in connection with this prospectus other
than
sales commissions, underwriting discounts and underwriter’s expense allowances
designated as such. Estimated expenses payable by the Registrant in connection
with the registration and distribution of the Common Stock registered hereby
are
as follows:
|
|
$
|
14
|
|
*Accounting
fees and expenses
|
|
$
|
7,500
|
|
*Legal
fees and expenses
|
|
$
|
2,500
|
|
*Transfer
Agent fees
|
|
$
|
2,500
|
|
*Blue
Sky fees and expenses
|
|
$
|
5,000
|
|
*Miscellaneous
expenses
|
|
$
|
500
|
|
|
|
|
|
|
Total
|
|
$
|
18,014
|
|
*Indicates
expenses that have been estimated for filing purposes.
ITEM
26.
RECENT
SALES OF UNREGISTERED SECURITIES
The
Company was incorporated on July 11, 2005 and 17,500 shares were initially
issued to Paradox Trading Company, LLC in consideration of the payment of
certain organizational expenses on behalf of the Company. These shares were
issued in reliance on the exemption under Section 4(2) of the Securities Act
of
1933, as amended (the “Act”).
From
organization through July 2006, 1,887,500 shares of common stock were issued
to
19 individuals or entities, including the above, each of with provided the
company with a written subscription agreement in which each certified that
the
investor was an accredited investor. The foregoing issuances of securities
were
affected in reliance upon the exemption from registration provided by Section
4(2) and/or 3(b) under the Securities Act of 1933, as amended.
We
completed a Regulation D, Rule 506 Offering in which we issued a total of
1,887,500 shares of our common stock to a total of 19 investors, at a purchase
price of $0.01 per share for an aggregate offering price of $18,875. Each
investor had a pre-existing relationship with a founder, officer, director
or
other person associated with the Company and completed a questionnaire to
confirm that they were either “accredited” or “sophisticated”
investors.
These
shares of our common stock qualified for exemption under Section 4(2) of the
Securities Act of 1933 since the issuance shares by us did not involve a public
offering. The offering was not a “public offering” as defined in Section4(2) due
to the insubstantial number of persons involved in the deal, size of the
offering, manner of the offering and number of shares offered. In addition,
each
of the investors had the necessary investment intent as required by Section
4(2)
since he agreed to and received share certificates bearing a legend stating
that
such shares are restricted pursuant to Rule 144 of the 1933 Securities Act.
This
restriction ensures that these shares would not be immediately redistributed
into the market and therefore not be part of a “public offering.” Based on an
analysis of the above factors, we have met the requirements to qualify for
exemption under Section 4(2) of the Securities Act of 1933 for these
transactions.
ITEM
27.
EXHIBITS.
3.1
|
Articles
of Incorporation
|
3.2
|
Amended
Articles of Incorporation
|
3.3
*
|
By-Laws
|
5.1
|
Opinion
of Mark Tolstoi, Esq.
|
10.1 *
|
Distribution
Agreement between the company and Orbital Group, LLC.
|
23.1
|
Consent
of Berman & Co., P.A.
|
|
Consent
of Mark Tolstoi, Esq. (included in Exhibit
5.1)
|
*
Previously filed
ITEM
28. UNDERTAKINGS.
The
undersigned registrant hereby undertakes:
|
|
1.
To file, during any period in which offers or sales are being made,
a
post-effective amendment to this registration
statement:
|
|
|
(a)
To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
|
|
|
(b)
To reflect in the prospectus any facts or events arising after the
effective date of this registration statement, or most recent
post-effective amendment, which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement; and Notwithstanding the foregoing, any increase
or
decrease in volume of securities offered (if the total dollar value
of
securities offered would not exceed that which was registered) and
any
deviation From the low or high end of the estimated maximum offering
range
may be reflected in the form of prospects filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in the
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 this registration statement
or
any material change to such information in the registration
statement.
|
|
2.
That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein,
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 hereby which remain unsold at the
termination of the offering.
|
|
Insofar
as indemnification for liabilities arising under the Securities Act
maybe
permitted to our directors, officers and controlling persons pursuant
to
the provisions above, or otherwise, we have been advised that in
the
opinion of the Securities and Exchange Commission such indemnification
is
against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities, other than the payment by us of expenses
incurred or paid by one of our directors, officers, or controlling
persons
in the successful defense of any action, suit or proceeding, is asserted
by one of our directors, officers, or controlling persons in connection
with the securities being registered, we will, unless in the opinion
of
our counsel the matter has been settled by controlling precedent,
submit
to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities
Act, and we will be governed by the final adjudication of such
issue.
|
SIGNATURES
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of
the
requirements for filing on Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned, in the City of Ellicott City,
State of Maryland on January 25, 2008.
|
|
|
|
By:
|
/s/ ANDREW
URIBE
|
|
By:
Andrew Uribe
President,
Chief
Financial Officer,
Principal
Accounting Officer, and
Director
|
|
|
By:
|
/s/ANDREW
URIBE
|
|
President,
|
|
By:
Andrew Uribe
|
|
Chief
Financial Officer,
Principal
Accounting Officer, and
Director
|
By:
|
*
|
|
Director
|
|
By:
Jean Young
|
|
|
Dated:
January 25, 2008
*
Signed by Andrew Uribe as
attorney-in-fact.