UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM
10
GENERAL
FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or
(g) of the Securities Exchange Act of 1934
(Exact
name of registrant as specified in its charter)
Delaware
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37-1615850
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(State or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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1624 Harmon Place, Suite 210, Minneapolis,
MN
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55403
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (612) 486-5587
Securities
to be registered pursuant to Section 12(b) of the Act:
Title of each class
to be so registered
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Name of each exchange on which
each class is to be
registered
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None
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Not
Applicable
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Securities
to be registered pursuant to Section 12(g) of the
Act:
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Common Stock, $0.0001 par
value
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(Title
of class)
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Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
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Accelerated filer
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Non-accelerated
filer
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¨
(Do not check
if a smaller reporting company)
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Smaller reporting company
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x
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TABLE
OF CONTENTS
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Page
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Item
1.
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Business
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1
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Item 1A.
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Risk
Factors
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5
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Item
2.
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Financial
Information
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5
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Item
3.
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Properties
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6
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Item
4.
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Security
Ownership of Certain Beneficial Owners and Management
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6
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Item
5.
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Directors
and Executive Officers
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8
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Item
6.
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Executive
Compensation
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9
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Item
7.
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Certain
Relationships and Related Transactions and Director
Independence
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11
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Item
8.
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Legal
Proceedings
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11
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Item
9.
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Market
Price of and Dividends on the Registrant’s Common Equity and Related
Stockholder Matters
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11
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Item
10.
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Recent
Sales of Unregistered Securities
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12
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Item
11.
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Description
of Registrant’s Securities to be Registered
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12
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Item
12.
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Indemnification
of Directors and Officers
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13
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Item
13.
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Financial
Statements and Supplementary Data
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14
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Item
14.
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Change
in and Disagreements with Accountants on Accounting and Financial
Disclosure
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14
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Item 15.
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Financial
Statements and Exhibits
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14
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EXPLANATORY
NOTES
We are
voluntarily filing this General Form for Registration of Securities on Form 10
to register our common stock, par value $0.0001 per share (the “Common Stock”),
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”).
This
registration statement will become effective automatically by lapse of time 60
days from the date of filing pursuant to Section 12(g)(1) of the Securities
Exchange Act of 1934, at which point we will be subject to the requirements of
Regulation 13A under the Exchange Act, which will require us to file annual
reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on
Form 8-K, and we will be required to comply with all other obligations of the
Exchange Act applicable to issuers filing registration statements pursuant to
Section 12(g) of the Exchange Act.
In this
registration statement, unless the context indicates otherwise, the terms “Minn
Shares Delaware,” the “Company,” the “Registrant,” “we,” “us” and “our” refer to
Minn Shares Inc., a Delaware corporation. Our principal place of business is
located at 1624 Harmon Place, Suite 210, Minneapolis, Minnesota
55403.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
There are
statements in this registration statement that are not historical facts. These
“forward-looking statements” can be identified by use of terminology such as
“believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,”
“expect,” “estimate,” “project,” “positioned,” “strategy” and similar
expressions. You should be aware that these forward-looking statements are
subject to risks and uncertainties that are beyond our control. For a discussion
of these risks, you should read this entire registration statement carefully;
especially the risks discussed under the section entitled “Risk Factors.”
Although management believes that the assumptions underlying the forward looking
statements included in this registration statement are reasonable, they do not
guarantee our future performance, and actual results could differ from those
contemplated by these forward looking statements. The assumptions used for
purposes of the forward-looking statements specified in the following
information represent estimates of future events and are subject to uncertainty
as to possible changes in economic, legislative, industry, and other
circumstances. As a result, the identification and interpretation of data and
other information and their use in developing and selecting assumptions from and
among reasonable alternatives require the exercise of judgment. To the extent
that the assumed events do not occur, the outcome may vary substantially from
anticipated or projected results, and, accordingly, no opinion is expressed on
the achievability of those forward-looking statements. In light of these risks
and uncertainties, there can be no assurance that the results and events
contemplated by the forward-looking statements contained in this registration
statement will in fact transpire. You are cautioned to not place undue reliance
on these forward-looking statements, which speak only as of their dates. We do
not undertake any obligation to update or revise any forward-looking
statements.
HISTORY
Minn Shares Inc., a Delaware
corporation (“we,” “us,” “our” or the “Company”), was incorporated in the State
of Delaware on October 22, 2010 to effect the reincorporation (the
“Reincorporation”) of Minn Shares Inc., a Minnesota corporation (“Minn Shares
Minnesota”) in the State of Delaware. On December 1, 2010 we entered into an
Agreement and Plan of Merger (the “Merger Agreement”) with Minn Shares
Minnesota, pursuant to which Minn Shares Minnesota was merged with and into the
Company. Pursuant to the Merger Agreement, at the time of the merger,
Minn Shares Minnesota ceased to exist and the Company continued as the surviving
corporation. As a result, the Company succeeded to all of the
assets, property, rights, privileges, franchises, immunities and powers of Minn
Shares Minnesota and assumed all of the duties, liabilities, obligations and
restrictions of every kind and description of Minn Shares
Minnesota. Minn Shares Minnesota then ceased to exist. As
a result of the Reincorporation, the legal domicile of the Company is the State
of Delaware. It has no subsidiaries and the Company selected December 31 as its
fiscal year end.
Minn
Shares Minnesota was incorporated in the State of Minnesota on January 15, 1987
under the name H. H. & P. Yogurt, Inc., and on September 8, 1994, changed
its name to Minn Shares Inc. Minn Shares Minnesota operated two yogurt shops:
one in Minneapolis, Minnesota, and one in St. Paul, Minnesota. Both stores were
ultimately closed by October 1990, at which time Minn Shares Minnesota ceased to
engage in the yogurt business, and focused its business on locating a suitable
merger or acquisition candidate or investigating the possibility of becoming a
closed-end, non-diversified management company.
In August
1993, Minn Shares Minnesota filed a registration application with the Securities
and Exchange Commission (the “SEC”) to become a closed-end, non-diversified
management company under the Investment Company Act of 1940 (the “Investment
Company Act”), and began activity shortly thereafter. On August 3, 2001, Minn
Shares Minnesota filed an Application for Deregistration of Certain Registered
Investment Companies on Form N-8F (the “Form N-8F”), which was subsequently
amended on September 14, 2001, at which time Minn Shares Minnesota requested
deregistration. On September 27, 2001, Minn Shares Minnesota’s registration
under the Investment Company Act ceased to be in effect.
Subsequent
to the filing of the Form N-8F, as amended, and deregistration under the
Investment Company Act, Minn Shares Minnesota appointed a liquidating agent to
handle the winding-up of its business activities, affairs and obligations,
distributing any remaining assets to its shareholders with the intent to
ultimately dissolve Minn Shares Minnesota. All of the remaining net assets were
distributed to its shareholders by the liquidating agent during the period
between 2001 through 2009.
In 2009,
upon the approval of Minn Shares Minnesota’s shareholders, Minn Shares Minnesota
approved a plan to cancel its dissolution and accepted an offer from Paramount
Trading, Ltd., a Nevada limited liability company (“Paramount”), to purchase a
controlling interest in Minn Shares Minnesota. Subsequently, Minn Shares
Minnesota was merged with and into the Company and was reincorporated in the
State of Delaware.
On December 1, 2010, as described
above, the Company entered into an Agreement and Plan of Merger, dated December
1, 2010, pursuant to which the Company issued an aggregate of 1,191,346
shares of Common Stock in exchange for the cancellation of 11,913,455 shares of
Minn Shares Minnesota common stock issued and outstanding before the
Reincorporation.
Since
December 2001, Minn Shares Minnesota has not engaged in any business activities
other than for the purpose of collecting and distributing its assets, paying,
satisfying and discharging any existing debts and obligations and doing other
acts required to liquidate and wind up its business and affairs. The current
business purpose of the Company is to seek the acquisition of or merger with an
existing company. We will not restrict any potential candidate
targets to any specific business, industry or geographical location and thus may
acquire any type of business.
BUSINESS
OF ISSUER
The
Company, pursuant to SEC Rule 12b-2 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”) qualifies as a “shell company,” because it
has no or nominal assets (other than cash) and no or nominal
operations. Our principal business objective for the next 12 months
and beyond such time will be to achieve long-term growth potential through a
combination with a business rather than immediate-short term
earnings. As of September 30, 2010, we have total current assets
equal to $1,374 and its auditors have issued an opinion raising substantial
doubt about its ability to continue as a going concern. Management does not
intend to undertake any efforts to cause a market to develop in our securities,
either debt or equity, until we have successfully concluded a business
combination. The Company intends to comply with the periodic reporting
requirements of the Exchange Act for so long as it is subject to those
requirements.
The
Company currently serves as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation.
The Company will not
restrict its potential candidate target companies to any industry, specific
business or geographical location and, thus, may acquire any type of business.
The Company intends to establish a market for freely trading shares following
the conclusion of a successful business combination and commencing business as
an operating company.
The analysis of new business
opportunities will be undertaken by or under the supervision of the Company’s
officers and directors. As of this date, the Company has not entered into any
definitive agreement with any party, nor have there been any specific
discussions with any potential business combination candidate regarding business
opportunities for the Company. While the Company has limited funds, it has
unrestricted flexibility in seeking, analyzing and participating in potential
business opportunities in that it may seek a business combination target in any
business, industry or location. In its efforts to analyze potential acquisition
targets, the Company will consider the following kinds of factors:
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Potential
for growth, indicated by new technology, anticipated market expansion or
new products;
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Competitive
position as compared to other firms of similar size and experience within
the industry segment as well as within the industry as a
whole;
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Strength
and diversity of management, either in place or scheduled for
recruitment;
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Capital
requirements and anticipated availability of required funds, to be
provided by the Company or from operations, through the sale of additional
securities, through joint ventures or similar arrangements or from other
sources;
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The
cost of participation by the Company as compared to the perceived tangible
and intangible values and
potentials;
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The
extent to which the business opportunity can be
advanced;
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The
accessibility of required management expertise, personnel, raw materials,
services, professional assistance and other required items;
and
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Other
relevant factors.
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In
applying the foregoing criteria, no one of which will be controlling, management
will attempt to analyze all factors and circumstances and make a determination
based upon reasonable investigative measures and available data. Potentially
available business opportunities may occur in many different industries, and at
various stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Due to the Company’s limited capital available for investigation,
the Company may not discover or adequately evaluate adverse facts about the
opportunity to be acquired. In addition, we will be competing against other
entities that possess greater financial, technical and managerial capabilities
for identifying and completing business combinations. In evaluating a
prospective business combination, we will conduct a due diligence review of
potential targets based on information which may be available to us regarding
private companies, although such review may be limited given our limited
personnel and financial resources and the inexperience of our management with
respect to such activities. We expect that our due diligence will encompass,
among other things, meetings with the target business’s incumbent management and
inspection of its facilities, as necessary, as well as a review of financial and
other information which is made available to us. This due diligence review will
be conducted either by our management or by unaffiliated third parties,
including but not limited to attorneys, accountants, consultants or other such
professionals that we may engage. While the Company does not
have any agreements in effect with any third parties, one of the third parties,
which the Company expects will assist the Company in identifying and conducting
a due diligence review of potential business combination targets is Paramount.
The costs associated with hiring third parties as required to complete a
business combination are difficult to determine for the various reasons
described below and may be significant. Our limited funds and the
lack of full-time management will likely make it impracticable to conduct a
complete and exhaustive investigation and analysis of a target business before
we consummate a business combination. Management decisions, therefore, will
likely be made without detailed feasibility studies, independent analysis,
market surveys and the like which, if we had more funds available to us, would
be desirable. We will be particularly dependent on making decisions upon
information provided by the promoters, owners, sponsors or others associated
with the target business seeking our participation.
We do not
currently intend to retain any entity to act as a “finder” to identify and
analyze the merits of potential target businesses. However, if we do,
at present, we contemplate that at least one of the third parties who may
introduce business combinations to us may be Paramount. Joseph Whitney, our
former officer and director and a current shareholder is the sole officer and
director of Paramount. Richard Gilbert, our current President,
Secretary and Chairman of the Board, serves as a consultant to
Paramount. Greyton Becker, our Chief Financial Officer, Treasurer and
a director also serves as a consultant to Paramount. There are
currently no agreements or preliminary agreements or understandings between the
Company and Paramount.
The time
and costs required to select and evaluate a target business and to structure and
complete a business combination cannot presently be ascertained with any degree
of certainty. The amount of time it takes to complete a business combination,
the location of the target company, and the size and complexity of the business
of the target company are all factors that determine the costs associated with
completing a business combination transaction. Prior to identifying a
target company, the time and costs required to complete a business combination
is difficult to determine. Any costs incurred with respect to the
evaluation of a prospective business combination that is not ultimately
completed will result in a loss to us.
Through
information obtained from industry professionals and publications, such as the
Reverse Merger Report, the Company is aware that there are hundreds of shell
companies seeking a business combination target. As a result, the
Company is in a highly competitive market for a small number of business
opportunities, which could reduce the likelihood of consummating a successful
business combination. We are, and will continue to be, an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including small public companies and venture capital
firms, are active in mergers and acquisitions of companies that may be desirable
target candidates for us. Nearly all of these entities have significantly
greater financial resources, technical expertise and managerial capabilities
than we do; consequently, we will be at a competitive disadvantage in
identifying possible business opportunities and successfully completing a
business combination. These competitive factors may reduce the likelihood of our
identifying and consummating a successful business combination.
FORM
OF ACQUISITION
The
manner in which the Company participates in an opportunity will depend upon the
nature of the opportunity, the respective needs and desires of the Company and
the promoters of the opportunity, and the relative negotiating strength of the
Company and such promoters.
It is
likely that the Company will acquire its participation in a business opportunity
through the issuance of its common stock, par value $0.0001 per share (the
“Common Stock”) or other securities of the Company. Although the terms of any
such transaction cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or not an acquisition is a
so-called “tax free” reorganization under Section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the “Code”) depends upon whether the owners of
the acquired business own 80% or more of the voting stock of the surviving
entity. If a transaction were structured to take advantage of these provisions
rather than other “tax free” provisions provided under the Code, all prior
stockholders would in such circumstances retain 20% or less of the total issued
and outstanding shares of the surviving entity. Under other circumstances,
depending upon the relative negotiating strength of the parties, prior
stockholders may retain substantially less than 20% of the total issued and
outstanding shares of the surviving entity. This could result in substantial
additional dilution to the equity of those who were stockholders of the Company
prior to such reorganization. The Company does not intend to supply disclosure
to shareholders concerning a target company prior to the consummation of a
business combination transaction, unless required by applicable law or
regulation. In the event a proposed business combination involves a change in
majority of directors of the Company, the Company will file and provide to
shareholders a Schedule 14F-1, which shall include, information concerning the
target company, as required. The Company will file a Current Report on Form 8-K,
as required, within four business days of a business combination that results in
the Company ceasing to be a shell company. This Form 8-K will include complete
disclosure of the target company, including audited financial
statements.
The
present stockholders of the Company will likely not have control of a majority
of the voting securities of the Company following a reorganization transaction.
As part of such a transaction, all or a majority of the Company’s directors may
resign and one or more new directors may be appointed without any vote by
stockholders.
In the
case of an acquisition, the transaction may be accomplished upon the sole
determination of management without any vote or approval by stockholders. In the
case of a statutory merger or consolidation directly involving the Company, it
will likely be necessary to call a stockholders’ meeting and obtain the approval
of the holders of a majority of the outstanding securities. The necessity to
obtain such stockholder approval may result in delay and additional expense in
the consummation of any proposed transaction and may also give rise to certain
appraisal rights to dissenting stockholders. Most likely, management will seek
to structure any such transaction so as not to require stockholder
approval.
The
Company intends to search for a target for a business combination by contacting
various sources including, but not limited to, our affiliates, lenders,
investment banking firms, private equity funds, consultants and attorneys. The
approximate number of persons or entities that will be contacted is unknown and
dependent on whether any opportunities are presented by the sources that we
contact. It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require substantial
management time and attention and substantial cost for accountants, attorneys
and others. If a decision is made not to participate in a specific business
opportunity, the costs theretofore incurred in the related investigation might
not be recoverable. Furthermore, even if an agreement is reached for the
participation in a specific business opportunity, the failure to consummate that
transaction may result in the loss to the Company of the related costs
incurred. The costs that will be incurred are not ascertainable at
this time as the costs are expected to be tied to the amount of time it takes to
identify and complete a business combination transaction as well as the specific
factors related to the business combination target that is chosen, including
such factors as the location, size and complexity of the business of the target
company. The Company has not established a timeline with respect to
the identification of a business combination target.
Due to our management’s
affiliation with Paramount, we expect that Paramount will assist the Company in
identifying a business combination target for us. There are currently no
agreements or understandings between the Company and Paramount.
It is
anticipated that the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and
substantial cost for accountants, attorneys and others. The costs that will be
incurred are not ascertainable at this time as the costs are expected to be tied
to the amount of time it takes to identify and complete a business combination
transaction as well as the specific factors related to the business combination
target that is chosen, including such factors as the location, size and
complexity of the business of the target company. The specific costs
may be estimated once the Company identifies a business combination
target. If a decision is made not to participate in a specific
business opportunity, the costs theretofore incurred in the related
investigation might not be recoverable. Furthermore, even if an agreement is
reached for the participation in a specific business opportunity, the failure to
consummate that transaction may result in the loss to the Registrant of the
related costs incurred. The Company has not established a timeline with respect
to the identification of a business combination target. We expect
that the Company’s management, through its affiliation with Paramount, will use
its contacts and business relationships to identify a business combination
target for the Company.
We
presently have no employees apart from our management. Our officers and
directors are engaged in outside business activities and are engaged as
consultants on a full-time basis by certain third parties including Paramount.
Our officers and directors will be dividing their time amongst these entities
and anticipate that they will devote very limited time to our business until the
acquisition of a successful business opportunity has been identified. The
specific amount of time that management will devote to the Company may vary from
week to week or even day to day, and, therefore, the specific amount of time
that management will devote to the Company on a weekly basis cannot be
ascertained with any level of certainty. In all cases, management intends to
spend as much time as is necessary to exercise its fiduciary duties as officers
or directors of the Company.
We expect
no significant changes in the number of our employees other than such changes,
if any, incident to a business combination.
As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.
Item 2.
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Financial
Information.
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
The
following discussion and analysis of our results of operations, financial
condition and liquidity and capital resources should be read in conjunction with
our audited financial statements and related notes for the fiscal years ended
December 31, 2009 and 2008. In addition to historical consolidated financial
information, the following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements.
The
Company was reorganized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. Our principal business objective for the
next twelve months and beyond such time will be to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings. The Company will not restrict its potential candidate
target companies to any specific business, industry or geographical location
and, thus, may acquire any type of business.
The
Company does not currently engage in any business activities that provide cash
flow. We expect that the costs of investigating and analyzing business
combinations for the next twelve months and beyond such time will be paid with
amounts that may be loaned to, advanced to, or invested in us by our
stockholders, management or other investors. We currently do not have
any agreements, arrangements or understanding with any stockholders, management
or others and there are no assurances that we will be able to receive the funds
required to locate and consummate a business combination
transaction.
During
the next twelve months we anticipate incurring costs related to:
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filing
Exchange Act reports, and
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investigating,
analyzing and consummating an
acquisition.
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We
anticipate incurring expenses of at least $25,000 for the next 12 months in
legal, accounting and other professional service fees related to the filing of
Exchange Act reports and investigating and analyzing a business
combination. The costs that will be incurred with respect to the
consummation of a business combination are not ascertainable at this time as the
costs are expected to be tied to the amount of time it takes to identify and
complete a business combination transaction as well as the specific factors
related to the business combination target that is chosen, including such
factors as the location, size and complexity of the business of the target
company. These conditions raise substantial doubt about our ability to continue
as a going concern. As of the date of the filing of this registration
statement the Company is a shell company and has not earned any revenues
from operations since 2001 and we have minimal funds in our treasury.
Currently, however, our
ability to continue as a going concern is dependent upon our ability to generate
future profitable operations and/or to obtain the necessary financing to meet
our obligations and repay our liabilities arising from normal business
operations when they come due. Our ability to continue as a going concern is
also dependent on our ability to locate a suitable target company and
ultimately, enter into a possible reverse merger with such company. Management’s
plan includes obtaining additional funds by equity financing through a reverse
merger transaction and/or related party advances; however, there is no assurance
of additional funding being available.
The
Company is currently devoting its efforts to locating merger candidates. The
Company may consider a business that has recently commenced operations, is in
need of additional funds for expansion into new products or markets, is seeking
to develop a new product or service or is an established business which may be
experiencing financial or operating difficulties and is in need of additional
capital. In the alternative, a business combination may involve the acquisition
of, or merger with, a company that does not need substantial additional capital,
but which desires to establish a public trading market for its shares, while
avoiding, among other things, the time delays, significant expense, and loss of
voting control which may occur in a public offering.
Management
does not have a timeline or a specific plan of action with respect to how or who
it will contact. Management expects to locate a business combination
target through management’s outside business and networking
activities. Our officers and directors have not had any preliminary
contact or discussions with any representative of any other entity regarding a
business combination with us. Any target business that is selected may be a
financially unstable company or an entity in its early stages of development or
growth, including entities without established records of sales or earnings. In
that event, we will be subject to numerous risks inherent in the business and
operations of financially unstable and early stage or potential emerging growth
companies. In addition, we may effect a business combination with an entity in
an industry characterized by a high level of risk, and, although our management
will endeavor to evaluate the risks inherent in a particular target business,
there can be no assurance that we will properly ascertain or assess all
significant risks.
Our
management anticipates that it will likely be able to effect only one business
combination, due primarily to our limited financing and the dilution of interest
for present and prospective stockholders, which is likely to occur as a result
of our management’s plan to offer a controlling interest to a target business in
order to achieve a tax-free reorganization. This lack of diversification should
be considered a substantial risk in investing in us, because it will not permit
us to offset potential losses from one venture against gains from
another.
The
Company anticipates that the selection of a business combination will be complex
and extremely risky. Because of general economic conditions and shortages of
available capital, our management believes that there are numerous firms seeking
the benefits of a business combination with an SEC reporting company and/or a
publicly traded corporation. Such perceived benefits of becoming a publicly
traded corporation include, among other things, facilitating or improving the
terms on which additional equity financing may be obtained, providing liquidity
for the principals of and investors in a business, creating a means for
providing incentive stock options or similar benefits to key employees, and
offering greater flexibility in structuring acquisitions, joint ventures and the
like through the issuance of stock. Potentially available business combinations
may occur in many different industries and at various stages of development, all
of which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
Off-Balance
Sheet Arrangements
We have
not entered into any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources and would be considered material to
investors.
The
Company neither rents nor owns any properties. The Company utilizes the office
space and equipment of its principal shareholders at no charge. The Company
currently has no policy with respect to investments or interests in real estate,
real estate mortgages or securities of, or interests in, persons primarily
engaged in real estate activities.
Item 4.
|
Security
Ownership of Certain Beneficial Owners and
Management.
|
The
following table sets forth, certain information, as of December 10, 2010,
regarding beneficial ownership of our Common Stock by (i) each stockholder known
by us to be the beneficial owner of more than five percent (5%) of the
outstanding shares of our Common Stock, (ii) each of our directors, (iii) each
of the named executive officers and (iv) all of our current executive officers
and directors as a group. At the close of business on December
10, 2010, (i) there were 1,191,346 shares of our Common Stock issued and
outstanding and (ii) no shares of our Preferred Stock issued and
outstanding. Unless otherwise indicated, the address with respect to
each of the individuals listed below is 1624 Harmon Place, Suite 210,
Minneapolis, Minneapolis 55403.
|
|
Amount
and Nature
of
Beneficially
Owned
(1)
|
|
|
Percent of
Class
(2)
|
|
|
|
|
|
|
|
|
Joseph
H. Whitney (3)
Former
Chief Executive Officer, President, Treasurer and Director
|
|
|
118,000
|
(4)
|
|
|
9.90
|
%
|
|
|
|
|
|
|
|
|
|
Richard
E. Gilbert
Chairman
of Board, President and Secretary
|
|
|
290,500
|
|
|
|
24.38
|
%
|
|
|
|
|
|
|
|
|
|
Aaron
W. Soderberg
Director
|
|
|
15,000
|
|
|
|
1.26
|
%
|
|
|
|
|
|
|
|
|
|
Greyton
Becker
Chief
Financial Officer, Treasurer, Director
|
|
|
25,000
|
|
|
|
2.10
|
%
|
|
|
|
|
|
|
|
|
|
All
current executive officers and directors as a group (3
persons)
|
|
|
330,500
|
|
|
|
27.74
|
%
|
(1)
|
This
table is based upon information supplied by our management. Unless
otherwise indicated in the footnotes to this table, we believe that each
of the stockholders named in this table has sole voting and investment
power with respect to the shares indicated as beneficially owned.
Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to
securities. Beneficial ownership also includes shares of stock subject to
options and warrants currently exercisable or exercisable within 60 days
of the date of this table. As of the date of this table, there are no
outstanding options or warrants.
|
(2)
|
Percentages
based on 1,191,346 shares of our Common Stock outstanding on December 10,
2010, issued in connection with the
Reincorporation.
|
(3)
|
Joseph
H. Whitney served as the Company’s President, Treasurer and a director
from June 9, 2009 through July 1,
2010.
|
(4)
|
Excludes
an aggregate of 172,500 shares of Common Stock owned of record by Mr.
Whitney’s children and of which Mr. Whitney disclaims beneficial
ownership.
|
Changes
in Control
The
Company’s business plan includes seeking a target company in order to complete a
business combination. In connection with such business combination we
anticipate that a change of control will occur if and when we engage in a
business combination. While management cannot predict the specific nature of the
form of the business combination, in the event a proposed business combination
involves a change in majority of directors of the Company, the Company will file
and provide to shareholders a Schedule 14F-1, which shall include information
concerning the target company, as required. Additionally, the Company
will file a Form 8-K with Form 10 information within four business days of the
consummation of a transaction in which the Company ceases to be a shell
company. Except as otherwise described herein, to the knowledge of
the management of the Company there are currently no arrangements, plans or
agreements with respect to a pledge by any person of securities of the
Company, the operation of which may at a subsequent date result in a change in
control of the Company.
Item 5.
|
Directors
and Executive Officers.
|
Identification
of Directors and Executive Officers
The Board
of Directors and executive officers of the Company is as follows:
|
|
Age
|
|
|
|
Of the
Company
Since
|
|
Of Minn Shares
Minnesota
Since
|
|
|
|
|
|
|
|
|
|
Richard
E. Gilbert
|
|
69
|
|
Chairman
of the Board,
President
Secretary
and Director
|
|
Inception
Inception
|
|
July
5, 2010
June
9, 2009
|
|
|
|
|
|
|
|
|
|
Aaron
W. Soderberg
|
|
49
|
|
Director
|
|
Inception
|
|
June
9, 2009
|
|
|
|
|
|
|
|
|
|
Greyton
Becker
|
|
58
|
|
Chief
Financial Officer,
Treasurer
and Director
|
|
Inception
Inception
|
|
August
30, 2010
|
Richard E.
Gilbert
, President, Secretary and director of the Company since
inception. Mr. Gilbert was elected as Secretary and a director of Minn Shares
Minnesota June 9, 2009 and as President and Chairman of the Board of Minn Shares
Minnesota on July 5, 2010. Mr. Gilbert also served as Chief Financial Officer of
Minn Shares Minnesota from June 9, 2009 to August 30, 2010. Mr. Gilbert has
primarily been engaged in consulting activities aimed at assisting companies,
primarily in the mining industry, in evaluating financing alternatives to
accomplish their growth objectives. From 1997 until 1998, Mr. Gilbert was Vice
President of Fleming & Company in New York, where he focused on investment
banking activities exclusively in the global mining industry. From 1991 until
1996, Mr. Gilbert was Vice President of Everen Securities, Inc, an investment
bank, where he focused exclusively on the North American mining industry. From
1972 until 1990, Mr. Gilbert was President and a director of Resource Management
Company, Resource Bank and Trust, Resource Companies, Inc., and Resource
Ventures, Inc., entities which he founded. From 1969 until 1971, Mr. Gilbert was
a retail and institutional sales person with Dain Kalman & Quail and Blyth
& Company. Mr. Gilbert received his Bachelor of Arts in business education
from the University of Minnesota in 1968, and has also served in the United
States Marine Corps. Mr. Gilbert’s consulting and executive experience
in evaluating financing alternatives will be an asset to the Company as it seeks
to identify a business combination target.
Aaron W. Soderberg
, a director
of the Company since inception and a director of Minn Shares Minnesota
since June 9, 2009. From 2007 until present, Mr. Soderberg has been the
President of Gold Aaro Capital, LLC and the Chief Investment Officer of Gold
Aaro Capital Partner’s Fund, responsible for day-to-day management and all
investment portfolio management decisions. From 2001 until 2006, Mr. Soderberg
was managing partner of Portable Storage of Minnesota, Inc., an entity that
he co-founded, which was ultimately sold in 2006. From 1989 until 2001, Mr.
Soderberg was employed by Equity Securities Trading Company, Inc. Over the
course of his 13 year tenure with that company, Mr. Soderberg’s main
responsibilities included managing client equity accounts and providing
investment banking services. Mr. Soderberg attended the University of Minnesota,
where he studied international relations and international commerce, with a
concentration in East Asia and China. Mr. Soderberg’s prior
investment banking experience will be an asset to the Company in identifying a
business combination target.
Greyton Becker
, Chief
Financial Officer, Treasurer and a director of the Company since inception and
Chief Financial Officer, Secretary and director of Minn Shares Minnesota since
August 30, 2010. From 2003 until present, Mr. Becker has been the
president of GI Becker & Associates LLC, where he has acted as an executive
consultant for startup banks, community banks, regional banks (public and
private) and non-banking organizations, where such experience includes strategic
planning, investor relations, M&A business development, operations, risk
management, information technology, risk management, regulatory compliance,
corporate governance and corporate administration. From 2003 to 2005,
Mr. Becker was also the president, chief financial officer and organizer of
Pinehurst Bank/Pinehurst Bancorp, Inc. In this capacity Mr. Becker,
managed the de novo bank application process, staffing, business development as
well as all implementation activities. As chief executive officer and
chief financial officer duties included managing the credit process, marketing,
business development, finance, operations, regulatory relations and corporate
governance. Mr. Becker received his Bachelors of Business
Administration from the University of Wisconsin-Eau Claire and a Masters in
Business Administration from the University of St. Thomas. Mr.
Becker’s prior regulatory compliance and business development experience will be
beneficial to the Company in seeking out a business combination
target.
Significant
Employees
None.
Family
Relationships
None.
Involvement
in Certain Legal Proceedings
On
September 28, 2001, pursuant to an Order Instituting Public Administrative and
Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange
Act of 1934 and Section 9(b) and 9(f) of the Investment Company Act of 1940,
Making Findings and Imposing Remedial Actions (the “Order”), the SEC instituted
public administrative and cease-and-desist proceedings against Larry Grady, a
former director and executive officer of Minn Shares Minnesota, for failing to
comply with certain provisions of the Investment Company Act and the Exchange
Act while operating as a management company under the Investment Company Act.
Mr. Grady resigned as an executive officer and director of Minn Shares Minnesota
on June 9, 2009.
Upon an
offer of settlement from Mr. Grady, and a subsequent acceptance by the SEC, Mr.
Grady was ordered to pay a civil penalty in the total amount of $10,309.09. In
addition, Mr. Grady was ordered to cease and desist from committing or causing
any violation and any future violation of the Investment Company Act, and was
prohibited from serving or acting as an employee, officer, director, member of
an advisory board, investment adviser or depositor of, or principal underwriter
for, a registered investment company or affiliated person of such investment
adviser, depositor, or principal underwriter, with the right to reapply to the
SEC to serve or act in any such capacity after three years from the date of the
Order.
To the
best of current managements’ knowledge, Mr. Grady has paid the civil penalty in
full in accordance with the Order.
Except as
otherwise described herein, there have been no events under any bankruptcy act,
no criminal proceedings and no judgments, injunctions, orders or decrees
material to the evaluation of the ability and integrity of any director,
executive officer, promoter or control person of the Registrant associated with
the Company within the past five years.
Prior
Blank Check or Shell Company Experience
None.
Item 6.
|
Executive
Compensation.
|
The
following table sets forth all compensation awarded to, earned by or paid by the
Company to each of our named executive officers and directors for the fiscal
years ended December 31, 2009 and 2008:
Summary
Compensation Table
Name
and Principal Position
|
|
Year
|
|
Salary
|
|
|
Bonus
|
|
|
Option
Awards
|
|
|
All Other
Compensation
|
|
|
Total
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
(d)
|
|
|
(f)
|
|
|
(i)
|
|
|
(j)
|
|
Joseph H. Whitney
(1)
|
|
2009
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Former
Chief Executive Officer,
President,
Treasurer
and Director
|
|
2008
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard E. Gilbert
(2)
|
|
2009
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
President,
Secretary
and
Director
|
|
2008
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence P. Grady
(3)
|
|
2009
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Former
President, Secretary and Director
|
|
2008
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aaron W. Soderberg
(4)
|
|
2009
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(a)
|
|
Director
|
|
2008
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greyton Becker
(5)
|
|
2009
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(b)
|
|
Chief
Financial Officer,
Treasurer
and Director
|
|
2008
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
(1)
|
Joseph
H. Whitney is the former Chief Executive Officer, President, Treasurer and
Director of Minn Shares Minnesota. He served in such capacities from June
9, 2009 through July 1, 2010.
|
(2)
|
Richard
E. Gilbert has served as President, Secretary and Chairman of the Board of
Directors of the Company since inception and was elected to serve as a
director of Minn Shares Minnesota on June 9, 2009 and was appointed to
serve as Chief Financial Officer and Secretary of Minn Shares
Minnesota on such date. On July 5, 2010, Mr. Gilbert was
appointed to serve as President and Chairman of the Board of Minn Shares
Minnesota. Mr. Gilbert resigned as Chief Financial Officer of Minn Shares
Minnesota on August 30, 2010.
|
(3)
|
Lawrence
P. Grady resigned as President, Secretary and a director of Minn Shares
Minnesota on June 9, 2009.
|
(4)
|
Aaron
W. Soderberg has been a director of the Company since inception and was
elected to serve as a director of Minn Shares Minnesota in June of
2009.
|
(5)
|
Greyton
Becker has served as Chief Financial Officer, Treasurer and a director of
the Company since inception. He was appointed to serve as Chief
Financial Officer, Treasurer and a director of Minn Shares Minnesota on
August 30, 2010.
|
(a)
In June of 2009, Aaron Soderberg received an aggregate of 100,000 shares of
Common Stock with a total aggregate value of $340.00 from Paramount in exchange
for services to be provided to Minn Shares Minnesota and a total of 50,000
shares of Common Stock with a total aggregate value of $170.00 from Mr. Grady,
the Company’s President and Chairman of the Board prior to the change of
control.
(b)
On August 30, 2010
,
Greyton Becker, our Chief Financial Officer and director received an
aggregate of 250,000 shares of the common stock of Minn Shares Minnesota in
exchange for his services as Chief Financial Officer and director of Minn Shares
Minnesota with a total aggregate value equal to $840.00. There are no
agreements in effect with respect to the issuance of these
securities.
Except as
described herein, the Company’s officers and directors have not received any
cash or other compensation for the fiscal years ended December 31, 2009 and 2008
and we do not expect that they will receive any compensation until the
consummation of an acquisition.
It is
possible that, after the Company successfully consummates a business combination
with an unaffiliated entity, that entity may desire to employ or retain members
of our management for the purposes of providing services to the surviving
entity.
No
retirement, pension, profit sharing, stock option or insurance programs or other
similar programs have been adopted by the Company for the benefit of its
employees.
There are
no understandings or agreements regarding compensation that our management will
receive after a business combination.
The
Company does not have a standing compensation committee or a committee
performing similar functions, since the Board of Directors has determined not to
compensate the officers and directors until such time that the Company completes
a reverse merger or business combination.
Item 7.
|
Certain
Relationships and Related Transactions and Director
Independence.
|
Promoters and Certain Control
Persons
On June
9, 2009, in connection with a change of control of the company, Minn Shares
Minnesota offered and sold an aggregate of 5,950,000 shares (the “Shares”) of
its common stock to Paramount, for an aggregate purchase price of $20,000 in
connection with a Stock Purchase Agreement, dated April 28, 2009. The shares
then owned by Paramount represented approximately 51% of the issued and
outstanding shares of the capital stock of Minn Shares Minnesota. Mr. Whitney,
the former Chief Executive Officer, President and director of Minn Shares
Minnesota is the sole owner of Paramount. Mr. Gilbert, our President, Secretary
and a director is a consultant to Paramount. The Shares were
then transferred by Paramount in their entirety to certain
individuals. Mr. Whitney received an aggregate of 2,905,000 Shares
from Paramount and Richard E. Gilbert received an aggregate of 2,905,000 Shares
from Paramount in connection with services rendered to Paramount. Aaron
Soderberg received an aggregate of 100,000 Shares from Paramount and 50,000
shares of Common Stock from Lawrence Grady, the President and director of Minn
Shares Minnesota prior to the June 9, 2009 change in control.
The
professional fees and expenses associated with the preparation and filing of the
Company’s Registration Statement on Form 10, have been advanced by Paramount, as
a result Paramount may be deemed to be a promoter of the Company. As
of September 30, 2010, Paramount has advanced an aggregate amount of $7,000 on
behalf of the Company. There is currently no written agreement in
effect with respect to repayment of such fees and expenses, although Minn Shares
Minnesota has agreed to repay such amounts upon the Company entering into a
business combination transaction.
Director
Independence
Our
Common Stock is not quoted or listed on any national exchange or interdealer
quotation system with a requirement that a majority of our board of directors be
independent and, therefore, the Company is not subject to any director
independence requirements. Under NASDAQ Rule 5605(a)(2)(A), a director is not
considered to be independent if he or she also is an executive officer or
employee of the corporation. Under such definition, each of Mr. Gilbert and Mr.
Becker would not be considered an independent director.
Except as
otherwise indicated herein, there have been no other related party transactions,
or any other transactions or relationships required to be disclosed pursuant to
Item 404 and Item 407(a) of Regulation S-K.
Item 8.
|
Legal
Proceedings.
|
There are
presently no material pending legal proceedings to which the Company is a party
or as to which any of its property is subject, and no such proceedings are known
to the Company to be threatened or contemplated against it.
Item 9.
|
Market
Price of and Dividends on the Registrant’s Common Equity and Related
Stockholder Matters.
|
Market
Information
There is
currently no public market for our Common Stock. Our Common Stock is not listed
on any securities exchange or inter-dealer quotation system at the present time.
We are not certain whether a trading market will develop for our Common Stock,
or if it develops whether the trading market will be sustained. Investors in our
Common Stock must be prepared to bear the entire economic risk of an investment
in our Common Stock for an indefinite period of time. The Company intends to
apply for listing on a securities exchange.
Holders
As of
December 10, 2010 there were 1,191,346 shares of Common Stock outstanding
and approximately 151 stockholders of record.
Dividends
The
Company has not paid any cash dividends since inception and does not anticipate
or contemplate paying dividends in the foreseeable future. It is the present
intention of management to utilize all available funds for the development of
the Company’s business. As a result of the 2001 Plan of Liquidations
adopted by the shareholders of Minn Shares Minnesota, Minn Shares Minnesota made
the following distributions to its shareholders: $153,603 in 2005, $25,004 in
2007 and $39,944 in 2009.
Securities
Authorized for Issuance under Equity Compensation Plans
None.
Item 10.
|
Recent
Sales of Unregistered Securities.
|
The
information below lists all of our securities sold by us during the past three
years, which were not registered under the Securities Act of 1933. We paid no
underwriting discounts or commissions in connection with any of the following
transactions.
|
•
|
On
December 1, 2010, and in connection with the Reincorporation,
pursuant to the Agreement and Plan of Merger, dated December 1, 2010, the
Company issued an aggregate of 1,191,346 shares of Common Stock in
exchange for the cancellation of 11,913,455 shares of Minn Shares
Minnesota common stock issued and outstanding before the
Reincorporation. These shares were issued in connection with
the Company’s Reincorporation and merger and solely for effecting a change
of the Company’s domicile from the State of Minnesota to the State of
Delaware, and, are therefore, exempt from registration under the
Securities Act of 1933 and/or Rule 145 promulgated
thereunder.
|
|
•
|
On
August 30, 2010
,
Greyton Becker, our Chief Financial Officer received an aggregate
of 250,000 shares of the common stock of Minn Shares Minnesota for his
services as Chief Financial Officer and director of the Company with a
total aggregate value equal to
$840.00.
|
|
•
|
On
June 9, 2009, and in connection with the change of control of Minn Shares
Minnesota, Minn Shares Minnesota offered and sold an aggregate of
5,950,000 shares of its common stock to Paramount, for an aggregate
purchase price equal to $20,000, pursuant to the terms and conditions set
forth in that certain Stock Purchase Agreement dated April 28, 2009. Minn
Shares Minnesota sold these shares to an accredited investor (as defined
under Rule 501(a) promulgated under the Securities Act of 1933) pursuant
to a private placement and was exempt from registration under
Section 4(2) of the Securities Act of 1933 and/or Regulation D
promulgated thereunder. The Stock Purchase Agreement is attached hereto as
Exhibit 10.1 to this registration
statement.
|
Neither
the Company nor any person acting on its behalf offered or sold the securities
by means of any form of general solicitation or general
advertising.
Item 11.
|
Description
of Registrant’s Securities to be
Registered.
|
Description
of Capital Stock
The
Company is authorized by its Certificate of Incorporation to issue an aggregate
of 110,000,000 shares of capital stock, of which 100,000,000 are shares of
Common Stock and 10,000,000 are shares of Preferred Stock. As of
December 10
,
2010,
1,191,346 shares of Common Stock and no (0) shares of Preferred Stock were
issued and outstanding.
Common
Stock
All
outstanding shares of Common Stock are of the same class and have equal rights
and attributes. The holders of Common Stock are entitled to one vote per share
on all matters submitted to a vote of stockholders of the Company. All
stockholders are entitled to share equally in dividends, if any, as may be
declared from time to time by the Board of Directors out of funds legally
available. In the event of liquidation, the holders of Common Stock are entitled
to share ratably in all assets remaining after payment of all liabilities. The
stockholders do not have cumulative or preemptive rights.
Preferred
Stock
Our
Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares
of Preferred Stock with designations, rights and preferences determined from
time to time by our Board of Directors. Accordingly, our Board of Directors is
empowered, without stockholder approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting, or other rights which could adversely affect
the voting power or other rights of the holders of the Common Stock. In the
event of issuance, the Preferred Stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. Although we have no present intention to issue any
shares of our authorized Preferred Stock, there can be no assurance that the
Company will not do so in the future.
The
description of certain matters relating to the securities of the Company is a
summary only and is qualified in its entirety by the provisions of the Company’s
Certificate of Incorporation and Bylaws, copies of which have been filed as
exhibits to this registration statement.
Debt
Securities
None.
Warrants
and Rights
None.
Other
Securities to be Registered
None.
Item 12.
|
Indemnification
of Directors and Officers.
|
Section 145
of the Delaware General Corporation Law provides that a corporation may
indemnify directors and officers as well as other employees and individuals
against expenses including attorneys’ fees, judgments, fines and amounts paid in
settlement in connection with various actions, suits or proceedings, whether
civil, criminal, administrative or investigative other than an action by or in
the right of the corporation, a derivative action, if they acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, if they had no reasonable cause to believe their conduct was
unlawful. A similar standard is applicable in the case of derivative actions,
except that indemnification only extends to expenses including attorneys’ fees
incurred in connection with the defense or settlement of such actions, and the
statute requires court approval before there can be any indemnification where
the person seeking indemnification has been found liable to the corporation. The
statute provides that it is not exclusive of other indemnification that may be
granted by a corporation’s certificate of incorporation, bylaws, agreement, a
vote of stockholders or disinterested directors or otherwise.
The
Company’s Certificate of Incorporation provides that it will indemnify and hold
harmless, to the fullest extent permitted by Section 145 of the Delaware General
Corporation Law, as amended from time to time, each person that such section
grants us the power to indemnify.
The
Delaware General Corporation Law permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability
for:
|
•
|
any
breach of the director’s duty of loyalty to the corporation or its
stockholders;
|
|
•
|
|
acts
or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law;
|
|
•
|
|
Payments
of unlawful dividends or unlawful stock repurchases or redemptions;
or
|
|
•
|
|
any
transaction from which the director derived an improper personal
benefit.
|
The
Company’s Certificate of Incorporation provides that, to the fullest extent
permitted by applicable law, none of our directors will be personally liable to
us or our stockholders for monetary damages for breach of fiduciary duty as a
director. Any repeal or modification of this provision will be prospective only
and will not adversely affect any limitation, right or protection of a director
of our company existing at the time of such repeal or
modification.
Item 13.
|
Financial
Statements and Supplementary Data.
|
See the
financial statements and related notes included in Item 15 of this
registration statement.
Item 14.
|
Change
in and Disagreements with Accountants on Accounting and Financial
Disclosure.
|
There are
not and have not been any disagreements between the Company and our accountants
on any matter of accounting principles, practices or financial statement
disclosure.
Item 15.
|
Financial
Statements and Exhibits.
|
(a) Index
to Financial Statements.
See the
index to consolidated financial statements set forth on page F-1.
(b) Index
to Exhibits.
See the
exhibit index immediately following the signature page to this Form
10.
SIGNATURE
Pursuant
to the requirements of Section 12 of the Securities Exchange Act of 1934,
the registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
|
|
|
|
MINN
SHARES INC.
|
|
|
|
|
Date:
December 10, 2010
|
|
|
|
By:
|
/s/
Richard Gilbert
|
|
|
|
|
|
|
|
Richard
Gilbert
|
|
|
|
|
|
|
|
President
|
EXHIBIT
INDEX
|
|
|
|
|
|
2.1
|
|
Agreement
and Plan of Merger dated December 1, 2010
|
|
|
|
3.1
|
|
Certificate
of Incorporation
|
|
|
|
3.2
|
|
Certificate
of Merger filed in Delaware
|
|
|
|
3.3
|
|
Articles
of Merger filed in Minnesota
|
|
|
|
3.4
|
|
Bylaws
|
|
|
|
10.1
|
|
Stock
Purchase Agreement dated April 28,
2009
|
Minn
Shares Inc.
INDEX
TO FINANCIAL STATEMENTS
Contents
|
Page
|
|
|
Financial
Statements
|
|
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|
|
Balance
sheets as of December 31, 2008 and 2009 and September 30, 2010
(unaudited)
|
F-3
|
|
|
Statements
of Operations for the years ended December 31, 2008 and 2009 and for the
nine months ended September 30, 2009 and 2010 (unaudited)
|
F-4
|
|
|
Statements
of Stockholders’ Equity (Deficit) for the years ended December
31, 2008 and 2009 and the nine months ended September 30, 2010
(unaudited)
|
F-5
|
|
|
Statements
of Cash Flows for the years ended December 31, 2008 and 2009 and for the
nine months ended September 30, 2009 and 2010 (unaudited)
|
F-6
|
|
|
Notes
to financial statements
|
F-7
|
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders
and Board of Directors
Minn
Shares Inc.
Minneapolis,
Minnesota
We have audited the accompanying
balance sheets of Minn Shares Inc. as of December 31, 2008 and 2009, and the
related statements of operations, shareholders’ equity (deficit), and cash flows
for the years then ended. 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 the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, 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 Minn Shares Inc. as of December 31, 2008 and 2009, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has no revenues, suffered recurring losses from
operations and has a shareholders’ deficit. These conditions raise substantial
doubt about its ability to continue as a going concern. Management’s plans
regarding those matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
/s/ LURIE
BESIKOF LAPIDUS & COMPANY, LLP
Minn
Shares Inc.
BALANCE
SHEETS
|
|
December
31,
|
|
|
September 30,
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
1,817
|
|
|
$
|
14,952
|
|
|
$
|
157
|
|
Investment
|
|
|
49,073
|
|
|
|
-
|
|
|
|
-
|
|
Other
receivable
|
|
|
-
|
|
|
|
-
|
|
|
|
1,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
50,890
|
|
|
$
|
14,952
|
|
|
$
|
1,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payables
|
|
$
|
13,634
|
|
|
$
|
16,492
|
|
|
$
|
16,492
|
|
Accrued
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
5,870
|
|
Due
to Paramount
|
|
|
-
|
|
|
|
-
|
|
|
|
7,000
|
|
Total
liabilities
|
|
|
13,634
|
|
|
|
16,492
|
|
|
|
29,362
|
|
SHAREHOLDERS’
EQUITY (DEFICIT):
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock, $.0001 par value; 10,000,000 shares authorized, no shares issued
and outstanding
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Common
stock, $.0001 par value; 100,000,000 shares authorized, 571,346;
1,166,346 and 1,191,346 shares issued and outstanding
|
|
|
57
|
|
|
|
117
|
|
|
|
119
|
|
Additional
paid-in-capital
|
|
|
599,908
|
|
|
|
579,904
|
|
|
|
580,742
|
|
Accumulated
deficit
|
|
|
(562,709
|
)
|
|
|
(581,561
|
)
|
|
|
(608,849
|
)
|
Total
shareholder’s equity (deficit)
|
|
|
37,256
|
|
|
|
(1,540
|
)
|
|
|
(27,988
|
)
|
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
|
|
$
|
50,890
|
|
|
$
|
14,952
|
|
|
$
|
1,374
|
|
The
accompanying notes are an integral part of these financial
statements.
Minn
Shares Inc.
STATEMENTS
OF OPERATIONS
|
|
Years Ended
|
|
|
Nine Months Ended
|
|
|
|
December
31,
|
|
|
September
30,
|
|
|
|
2008
|
|
|
2009
|
|
|
2009
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
OPERATING
EXPENSES
|
|
$
|
-
|
|
|
$
|
18,852
|
|
|
$
|
17,363
|
|
|
$
|
27,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
$
|
-
|
|
|
$
|
(18,852
|
)
|
|
$
|
(17,363
|
)
|
|
$
|
(27,288
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
|
571,346
|
|
|
|
907,154
|
|
|
|
819,807
|
|
|
|
1,176,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
$
|
0.00
|
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
The
accompanying notes are an integral part of these financial
statements.
Minn
Shares Inc.
STATEMENTS
OF SHAREHOLDERS’ EQUITY (DEFICIT)
|
|
Common stock
|
|
|
Additional
Paid-in
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Total
|
|
Balance
at December 31, 2007
|
|
|
571,346
|
|
|
$
|
57
|
|
|
$
|
599,908
|
|
|
$
|
(562,709
|
)
|
|
$
|
37,256
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Balance
at December 31, 2008
|
|
|
571,346
|
|
|
|
57
|
|
|
|
599,908
|
|
|
|
(562,709
|
)
|
|
|
37,256
|
|
Issuance
of common stock
|
|
|
595,000
|
|
|
|
60
|
|
|
|
19,940
|
|
|
|
-
|
|
|
|
20,000
|
|
Liquidating
distribution
|
|
|
-
|
|
|
|
-
|
|
|
|
(39,944
|
)
|
|
|
-
|
|
|
|
(39,944
|
)
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(18,852
|
)
|
|
|
(18,852
|
)
|
Balance
at December 31, 2009
|
|
|
1,166,346
|
|
|
|
117
|
|
|
|
579,904
|
|
|
|
(581,561
|
)
|
|
|
(1,540
|
)
|
Issuance
of common stock
|
|
|
25,000
|
|
|
|
2
|
|
|
|
838
|
|
|
|
-
|
|
|
|
840
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(27,288
|
)
|
|
|
(27,288
|
)
|
Balance
at September 30, 2010 (unaudited)
|
|
|
1,191,346
|
|
|
$
|
119
|
|
|
$
|
580,742
|
|
|
$
|
(608,849
|
)
|
|
$
|
(27,988
|
)
|
The
accompanying notes are an integral part of these financial
statements.
Minn
Shares Inc.
STATEMENTS
OF CASH FLOWS
|
|
Years Ended
|
|
|
Nine Months Ended
|
|
|
|
December
31,
|
|
|
September
30,
|
|
|
|
2008
|
|
|
2009
|
|
|
2009
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
-
|
|
|
$
|
(18,852
|
)
|
|
$
|
(17,363
|
)
|
|
$
|
(27,288
|
)
|
Adjustment
to reconcile net loss to net cash provided (used) by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
compensation expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
840
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,217
|
)
|
Payables
|
|
|
13,634
|
|
|
|
2,858
|
|
|
|
-
|
|
|
|
-
|
|
Accrued
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,870
|
|
Due
to Paramount
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided (used) by operating activities
|
|
|
13,634
|
|
|
|
(15,994
|
)
|
|
|
(17,363
|
)
|
|
|
(14,795
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from sale of investment
|
|
|
-
|
|
|
|
49,073
|
|
|
|
49,073
|
|
|
|
-
|
|
Net
cash provided by investing activities
|
|
|
-
|
|
|
|
49,073
|
|
|
|
49,073
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from issuance of common stock
|
|
|
-
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
-
|
|
Liquidating
distribution
|
|
|
-
|
|
|
|
(39,944
|
)
|
|
|
(39,944
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash used by financing activities
|
|
|
-
|
|
|
|
(19,944
|
)
|
|
|
(19,944
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash
|
|
|
13,634
|
|
|
|
13,135
|
|
|
|
11,766
|
|
|
|
(14,795
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
– beginning of period
|
|
|
(11,817
|
)
|
|
|
1,817
|
|
|
|
1,817
|
|
|
|
14,952
|
|
Cash
– end of period
|
|
$
|
1,817
|
|
|
$
|
14,952
|
|
|
$
|
13,583
|
|
|
$
|
157
|
|
The
accompanying notes are an integral part of these financial
statements.
Minn
Shares Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008 and 2009
1. Organization
and Significant Accounting Policies
Organization
Minn
Shares Inc., a Delaware corporation (the Company) was incorporated in the State
of Delaware on October 22, 2010 to effect the reincorporation of Minn Shares
Inc., a Minnesota corporation (Minn Shares Minnesota) in the State of Delaware.
On December 1, 2010, the Company entered into an Agreement and Plan of Merger
(Merger Agreement) with Minn Shares Minnesota, pursuant to which Minn Shares
Minnesota was merged with and into the Company. Pursuant to the
Merger Agreement, at the time of the merger, Minn Shares Minnesota ceased to
exist and the Company continued as the surviving corporation. On
December 1, 2010, the Company issued an aggregate of 1,191,346 shares of Common
Stock in exchange for the cancellation of 11,913,455 shares of Minn Shares
Minnesota common stock issued and outstanding before the reincorporation. All
share and per share information included in these financial statements give
retroactive effect of the merger.
Minn
Shares Minnesota was a corporation duly organized and existing under the laws of
the State of Minnesota and had authorized capital of 20,000,000 shares,
15,000,000 of which were designated Common Stock at $.01 par value and 5,000,000
of which were undesignated. Before the merger, there were 11,913,455 shares of
Common Stock issued and outstanding and no shares of Undesignated Stock were
issued and outstanding.
Minn
Shares Minnesota was registered under the Investment Company Act of 1940 (as
amended) as a non-diversified, closed-end, management investment company in May
1993.
At a
Special Meeting of Shareholders of Minn Shares Minnesota held in September 2001,
the shareholders approved a Plan of Liquidation and Dissolution of Minn Shares
Minnesota authorizing (a) the sale of all of the assets of Minn Shares Minnesota
and the distribution to shareholders of assets remaining after payment of its
debts and obligations, (b) the appointment of a liquidating agent to conduct
such liquidation and distribution, (c) the deregistration of Minn Shares
Minnesota under the Investment Company Act of 1940 and (d) the dissolution of
Minn Shares Minnesota pursuant to the Minnesota Business Corporation
Act.
Minn
Shares Minnesota filed an application with the Securities and Exchange
Commission in August 2001, requesting an order under section 8 (f) of
the Investment Company Act of 1940 declaring that it had ceased to be an
investment company. On September 27, 2001, the Securities and Exchange
Commission informed Minn Shares Minnesota that it was no longer registered as an
investment company under section 8 (f) of the Act.
From
December 2001 through early June 2009, Minn Shares Minnesota has not engaged in
any business activities other than for the purpose of collecting and
distributing its assets, paying, satisfying and discharging any existing debts
and obligations and doing other acts required to liquidate and wind up its
business and affairs.
In 2001
Minn Shares Minnesota’s principal assets were securities that had a limited or
no public trading market. As of December 31, 2009, the Liquidating
Agent had sold all of Minn Shares Minnesota’s portfolio investments and made
three liquidating distributions to shareholders: 2005 - $153,603, 2007 - $25,004
and 2009 $39,944.
On June
9, 2009, Minn Shares Minnesota held an Annual Meeting of Shareholders and
approved the following (a) Elected one new director, (b) Abandoned the Plan of
Liquidation and Dissolution of Minn Shares Minnesota and termination of the
related Liquidating Agent Agreement, (c) Revoked Minn Shares Minnesota’s
dissolution proceedings pursuant to the Minnesota Business Corporation Act
Section 302A.731 and (d) Approved the issuance and sale to a new investor common
stock representing a majority of the outstanding shares in Minn Shares Minnesota
pursuant to the Stock Purchase Agreement dated April 28, 2009.
The
current business purpose of the Company is to seek the acquisition of or merger
with an existing company.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that may affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates.
Minn
Shares Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008 and 2009
1. Organization
and Significant Accounting Policies (continued)
Income
Taxes
Deferred
income taxes are provided for temporary differences between the financial
reporting and tax basis of assets and liabilities. Deferred taxes are reduced by
a valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of the enactment.
In
evaluating the ultimate realization of deferred income tax assets, management
considers whether it is more likely than not that the deferred income tax assets
will be realized. Management establishes a valuation allowance if it is more
likely than not that all or a portion of the deferred income tax assets will not
be utilized. The ultimate realization of deferred income tax assets
is dependent on the generation of future taxable income, which must occur prior
to the expiration of the net operating loss carryforwards.
Basic
loss per common share is computed by dividing net loss by the weighted average
number of common shares outstanding. Diluted loss per common share is
computed by dividing net loss by weighted average number of common shares
outstanding and common share equivalents. There are no common share
equivalents outstanding.
Fair Value of Financial
Instruments
The
carrying value of current financial assets and liabilities approximates their
fair values due to their short-term nature.
Recent Accounting
Pronouncements
In June
2009, the Financial Accounting Standard Board (FASB) issued FASB ASC "The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles". The FASB Accounting Standards Codification has become
the single source of authoritative accounting principles recognized by the FASB
to be applied by nongovernmental entities in the preparation of financial
statements in accordance with generally accepted accounting principles (GAAP).
All existing accounting standard documents are superseded by the FASB ASC and
any accounting literature not included in the FASB ASC will not be
authoritative. However, rules and interpretive releases of the SEC issued under
the authority of federal securities laws will continue to be sources of
authoritative GAAP for SEC registrants. This accounting standard is effective
for interim and annual reporting periods ending after September 15, 2009. This
accounting standard does not change or alter existing GAAP and, therefore, did
not impact our financial position, results of operations, or cash
flows.
The
Company is a shell company, has not earned any revenues from operations since
2001, suffered recurring losses from operations and has a shareholders’ deficit.
The Company’s ability to continue as a going concern is dependent upon its
ability to generate future profitable operations and/or to obtain the necessary
financing to meet its obligations and repay its liabilities arising from normal
business operations when they come due. The Company’s ability to continue as a
going concern is also dependent on its ability to locate a suitable target
company and ultimately enter into a possible reverse merger with such company.
Management’s plan includes obtaining additional funds by equity financing
through a reverse merger transaction and/or related party advances, however,
there is no assurance of additional funding being available.
3. Investments
The
Company’s only investment consisted of 98,145 common shares of Humanetics and
was sold during 2009 for $49,073. The investment was originally
recorded using the cost method but was subsequently reduced for other than
temporary impairment.
Minn
Shares Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008 and 2009
Liquidating
distributions were distributed to qualified shareholders in 2005 ($153,603),
2007 ($25,004) and 2009 ($39,944). Some shareholders did not
cash/deposit their checks; as a result, new checks will be distributed to these
shareholders to replace the checks that are considered non-negotiable after 180
days by the Uniform Commercial Code.
5. Shareholders’
Equity
In 2009,
the shareholders of Minn Shares Minnesota approved a plan to cancel its
dissolution and accepted an offer from Paramount Trading, Ltd. (“Paramount”), a
company owned by our current majority shareholder, to purchase a controlling
interest in Minn Shares Minnesota. Paramount purchased 5,950,000
shares of Minn Shares Minnesota’s common stock for $20,000. On the same date,
Paramount distributed 2,905,000 of those shares to the Company’s President and
director and 100,000 shares to another director of the Company. The Company’s
President and director is a consultant to Paramount. The Company did not record
compensation expense or a capital contribution on the distribution of such
shares by Paramount since the amount is not considered material.
During
2009, a liquidating distribution of $39,944 was distributed to qualifying
shareholders.
On August
30, 2010, Minn Shares Minnesota issued 250,000 common shares, having a total
value of $840, to the Company’s Chief Financial Officer and director for
services.
6. Income
Taxes
A
reconciliation between the expected federal income tax rate and the actual tax
rate is as follows:
|
|
Years
Ended
December
31,
|
|
|
|
2008
|
|
|
2009
|
|
|
|
|
|
|
|
|
Statutory
income tax rate
|
|
|
34.0
|
%
|
|
|
34.0
|
%
|
State
income tax, net of federal benefit
|
|
|
6.5
|
|
|
|
6.5
|
|
Valuation
of deferred tax assets
|
|
|
(40.5
|
)
|
|
|
(40.5
|
)
|
|
|
|
-
|
%
|
|
|
-
|
%
|
A summary
of deferred tax assets and liabilities are as follows:
|
|
December 31,
|
|
|
|
2008
|
|
|
2009
|
|
|
|
|
|
|
|
|
Deferred
tax assets:
|
|
|
|
|
|
|
Operating
loss carryforwards
|
|
$
|
118,126
|
|
|
$
|
125,998
|
|
Capital
loss carryforwards
|
|
|
29,713
|
|
|
|
51,172
|
|
Total
deferred tax assets
|
|
|
147,839
|
|
|
|
177,170
|
|
Valuation
allowance
|
|
|
(147,839
|
)
|
|
|
(177,170
|
)
|
Net
deferred taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
Deferred
income tax assets have been reduced by a valuation allowance as it is more
likely than not that they will not be realized. The valuation allowance
increased by $29,331 for the year ended December 31, 2009.
Minn
Shares Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008 and 2009
6.
|
Income
Taxes (continued)
|
At
December 31, 2009, the Company had net operating loss carry forwards of
approximately $311,000 for income tax purposes that expire starting in
2018. The Company established a valuation allowance for the full
amount of net deferred tax asset at December 31, 2009 because it cannot
demonstrate that it is more likely than not that it will realize the benefit of
that asset. In addition, future utilization of the available net operating loss
carryforward may be limited under Internal Revenue Code Section 382 as a result
of changes in ownership.
It is the
Company’s practice to recognize penalties and/or interest related to income tax
matters in the interest and penalties expense. There are no interest and
penalties recognized in the statements of operations or accrued on the balance
sheets.
The
Company is subject to U.S. federal, state, or local income tax examination by
tax authorities for all years for which a loss carryforward is utilized in
subsequent periods.
STOCK
PURCHASE AGREEMENT
This
STOCK PURCHASE AGREEMENT (“
Agreement
”) is
entered into on April 28, 2009, by and among Paramount Trading Ltd., a Nevada
corporation (the “
Buyer
”), and Minn
Shares Inc., a Minnesota corporation (the “
Company
”), and solely
for the purpose of agreeing with Sections 2.4, 2.8, 2.9, 2.10, 2.14, 2.15, 2.18
and 6.5 hereof, Cecilia M. Denning (f/k/a Cecilia M. Luikens) (the “
Liquidating
Agent
”).
Recitals
1. On
September 11, 2001, shareholders of the Company approved a Plan of Liquidation
and Dissolution of the Company (the “
Plan of
Liquidation
”). Under a Liquidating Agent Agreement dated September 11,
2001 between the Company and the Liquidating Agent (the “
Liquidating Agent
Agreement
”), the Liquidating Agent is conducting the liquidation of the
Company’s assets and the distribution of net assets to the shareholders of the
Company. The Company filed a Notice of Intent to Dissolve with the Minnesota
Secretary of State on September 13, 2001, but as of the date hereof has not
filed Articles of Dissolution with the Minnesota Secretary of
State.
2. The
Company desires to sell, and the Buyer desires to purchase, upon the terms and
conditions stated in this Agreement an aggregate of 5,950,000 shares of common
stock, par value $0.01 per share (the “
Common Stock
”), of
the Company, constituting approximately 51% of the issued and outstanding Common
Stock of the Company on a fully diluted basis as of and immediately after the
Closing (as defined in Section 1).
3. Prior
to the Closing, the Company will hold a meeting of the shareholders of the
Company (the “
Shareholder Meeting
”)
at which it will ask the shareholders to abandon the Plan of Liquidation,
terminate the Liquidating Agent Agreement, revoke the dissolution proceedings of
the Company, and approve the sale of stock to the Buyer.
4. If
any assets remain for distribution to shareholders (“
distributable
assets
”), then prior to the Closing the Company will make a final
distribution of distributable assets to its shareholders, completing the role
and duties of the Liquidating Agent under the Liquidating Agent
Agreement.
Agreement
In
consideration of the representations, warranties and agreements contained herein
and for other good and valuable consideration, the adequacy and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1.
Purchase and Sale of Shares; Closing.
1.1
Purchase
and Sale
. Subject to the terms and conditions of this Agreement, the
Buyer agrees to purchase at the Closing, and the Company agrees to sell and
issue to the Buyer at the Closing, 5,950,000 shares of Common Stock (the “
Shares
”) at an
aggregate purchase price of $20,000.
1.2
Closing
. The
purchase and sale of the Shares shall take place at the offices of Messerli
& Kramer, 1400 Fifth Street Towers, 100 South Fifth Street, Minneapolis, MN
55402, at 10:00 a.m. on or before the second business day after the Shareholder
Meeting, or at such other time or place as the parties may mutually agree upon
(the “
Closing
”). At the
Closing, the Buyer will deliver to the Company the purchase price by certified
check or wire transfer, and the Company will deliver to the Buyer a certificate
representing
the Shares the Buyer is purchasing. In addition, at the Closing, the Company
will deliver to the Buyer (i) evidence of the election of Richard E. Gilbert,
Aaron W. Soderberg and Joseph H. Whitney as directors of the Company effective
on the Closing Date, (ii) a letter of resignation of Lawrence P. Grady as the
sole director and officer of the Company effective on the Closing Date, (iii)
evidence as of a recent date of the good standing and corporate existence of the
Company issued by the Minnesota Secretary of State and (iv) a certificate signed
by the Liquidating Agent to the effect that the Company has made a final
distribution of distributable assets to its shareholders.
2.
Representations and Warranties of the Company.
The Company hereby represents and warrants to the Buyer as
follows:
2.1
Organization, Good Standing
and Qualification
. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota. The
Company has delivered to the Buyer true and complete copies of the Articles of
Incorporation of Company as now in effect (the “
Company Charter
”) and
the Bylaws of the Company as now in effect (the “
Company Bylaws
”).
Subject to the abandonment of the Plan of Liquidation, termination of the
Liquidating Agent Agreement and revocation of the Company’s dissolution
proceedings, the Company has all requisite corporate power and authority to own
and operate its properties and assets, to execute and deliver this Agreement,
and to carry on its business as presently conducted. The Company is duly
qualified to do business and is in good standing in each jurisdiction in which
the nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions in which failure to
be so qualified would not have a material adverse effect on the Company, or its
business or properties, taken as a whole. Except as disclosed in Schedule 2.1,
the Company does not own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other equity interest
in any person.
2.2
Capitalization
. The
authorized capital stock of the Company consists of 5,000,000 shares of
undesignated stock, par value $0.01 per share, none of which are issued and
outstanding; and 15,000,000 shares of Common Stock, of which 5,713,455 shares
are issued and outstanding. The Company has no outstanding options, warrants or
other rights to acquire any capital stock, or securities convertible or
exchangeable or exercisable for capital stock of the Company (together, “
Convertible
Securities
”). The Company has no agreement or commitment to sell or issue
any shares of capital stock or Convertible Securities, except as contemplated by
this Agreement, and the Company has no outstanding contractual obligations to
repurchase, redeem or otherwise acquire any shares of capital stock or
convertible securities of the Company. All issued and outstanding shares of the
Company’s capital stock (i) have been duly authorized and validly issued, (ii)
are fully paid and nonassessable, (iii) are not subject to or issued in
violation of any option, preemptive right, right of first refusal or other
similar right and (iv) were issued pursuant to valid exemptions under federal
and state securities laws. There are no voting trusts, proxy or shareholder
agreements or other agreements or understandings of any kind relating to the
Company’s securities to which the Company or any of its executive officers and
directors is a party or as to which the Company otherwise has knowledge. There
are not any bonds, debentures, notes or other indebtedness of the Company having
the right to vote on any matters on which holders of the Company’s Common Stock
may vote. The Shares that are being purchased by the Buyer hereunder will be
validly issued, fully paid and nonassessable, and will be free of any liens or
encumbrances, other than restrictions on transfer under applicable state and
federal securities laws.
2.3
Authorization; Binding
Obligations
. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization of this
Agreement and the performance of all obligations of the Company hereunder at the
Closing has been taken or will be taken prior to the Closing, subject to
approval by the shareholders at the Shareholder Meeting of the abandonment of
the Plan of Liquidation, the termination of the Liquidating Agent Agreement and
the revocation of the
Company’s
dissolution proceedings. This Agreement, when executed and delivered, will be a
valid and binding obligation of the Company enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
2.4
Financial Statements;
Liabilities
. The unaudited balance sheet as of December 31, 2008 and
unaudited statement of receipts and disbursements for the period ended December
31, 2008, as delivered to the Buyer, are based on information contained in the
books and records of the Company. The Company has no material liability or
obligation, absolute or contingent, other than its (i) obligations under the
Liquidating Agent Agreement and (ii) liability for costs incurred or to be
incurred in connection with this Agreement and the transactions contemplated
hereby (excluding the final distribution of distributable assets, if any) and
the Shareholders Meeting (“
Transaction Costs
”).
The Company has no indebtedness for borrowed money that the Company has directly
or indirectly created, incurred, assumed or guaranteed or with respect to which
the Company has become directly or indirectly liable.
2.5
Obligations of or to Related
Parties
. There are no obligations of the Company to officers, directors
or employees of the Company or, to the Company’s knowledge, to any members of
their immediate families or other affiliates. To the Company’s knowledge, none
of the officers, directors or employees of the Company or, to the Company’s
knowledge, any members of their immediate families or other affiliates, are
indebted to the Company or have any direct or indirect ownership interest in any
firm, corporation or other entity with which the Company is affiliated or with
which the Company has a business relationship, or any firm, corporation or other
entity that competes with the Company. Except as disclosed in Schedule 2.5, no
officer, director or employee of the Company or, to the Company’s knowledge, any
member of their immediate families or other affiliates, is, directly or
indirectly, interested in or a party to any contract with the Company. The
Company is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.
2.6
Title to Properties and
Assets; Liens
. The Company does not own any real property. The Company
has good and marketable title to all of its properties and assets used in the
conduct of its business, in each case subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than (i) those resulting from taxes that
have not yet become delinquent, (ii) liens and encumbrances that do not
materially detract from the value of the property subject thereto or materially
impair the operations of the Company and (iii) those that have otherwise arisen
in the ordinary course of business. With respect to the property and assets it
leases, the Company is in compliance with such leases in all material respects
and, to the Company’s knowledge, holds a valid leasehold interest free of any
liens, claims or encumbrances.
2.7
Patents and
Trademarks
. The Company does not own, use or license any patents, patent
applications, trademarks, service marks, trade names, copy rights, trade
secrets, licenses and rights with respect to the foregoing in its business as
presently conducted.
2.8
Compliance with Other
Instruments
. The Company is not in violation or default of any term of
the Company Charter, Company Bylaws or Liquidating Agent Agreement, or in any
material respect of any mortgage, indenture, contract, agreement, instrument or
contract to which it is party or by which it is bound or of any judgment,
decree, order, writ or, to its knowledge, any statute, rule or regulation
applicable to the Company that would materially and adversely affect the
business, assets, liabilities, financial condition, operations or prospects of
the Company. The execution and delivery of, and the performance of and
compliance with the transactions contemplated by, this Agreement will not, with
or without the passage of time or giving of notice, result in any such material
violation, or be in conflict with or constitute a default under any such term,
or result in the creation of any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of the Company or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to the Company, the business or operations
of the Company or any of the assets or properties of the Company, except for
such results that would not materially and adversely affect the business,
assets, liabilities, financial condition, operations or prospects of the
Company.
2.9
Litigation
. There is
no action, suit, proceeding or investigation pending or, to the Company’s
knowledge, currently threatened against the Company or the Liquidating Agent
that questions the validity or enforceability of this Agreement or the right of
the Company to consummate the transactions contemplated hereby. There is no
action, suit, proceeding or investigation pending or, to the Company’s
knowledge, currently threatened against the Company or the Liquidating Agent
that might result, either individually or in the aggregate, in any material
adverse change in the assets, condition, affairs or prospects of the Company,
financial or otherwise, or any change in the current equity ownership of the
Company. Except as set forth in the Company’s filings with the SEC, neither the
Company nor any director or officer (in such capacity) of the Company is a party
or subject to the provisions of any order, writ, injunction, judgment or decree
of any court or government agency or instrumentality.
2.10
Tax Returns and
Payments
. The Company has timely filed all tax returns (federal, state
and local) required to be filed by it. All taxes shown to be due and payable on
such returns, any assessments imposed, and, to the Company’s knowledge, all
other taxes due and payable by the Company on or before the Closing have been
paid or will be paid prior to the time they become delinquent. The Company has
not been advised (i) that any of the tax returns of the Company have been or are
being audited as of the date hereof or (ii) of any deficiency in assessment or
proposed judgment to its federal, state or other taxes. The Company has no
knowledge of any liability of any tax to be imposed upon the properties or
assets of the Company as of the date of this Agreement that is not adequately
provided for.
2.11
Employees
. The
Company has no employees, independent contractors or other persons providing
services to it, other than the Liquidating Agent pursuant to the Liquidating
Agent Agreement. There is no collective bargaining agreement or other labor
union agreement to which the Company is a party or by which it is bound. No
employee has any agreement or contract, written or verbal, regarding his
employment. The Company is not a party to or bound by any currently effective
employment contract, deferred compensation arrangement, bonus plan, incentive
plan, profit sharing or defined benefit plan, retirement agreement or other
employee compensation plan or agreement.
2.12
Registration
Rights
. The Company is presently not under any obligation, and has not
granted any rights, to register any of the Company’s presently outstanding
securities or any of its securities that may hereafter be issued under the
Securities Act of 1933, as amended (the “
Securities
Act
”).
2.13
Compliance with Laws;
Consents
. The Company is in compliance with all applicable laws,
statutes, ordinances, rules, regulations, orders or restriction, including those
relating to occupational health and safety and the environment, except for
instances of noncompliance that have not and would not materially and adversely
affect the business, assets, liabilities, financial condition, operations or
prospects of the Company. The Company has not received any written communication
during the past three years from a governmental entity or agency that alleges
that the Company is not in compliance in any material respect with any
applicable law, statute, regulation or order. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery of, and the performance of the transactions
contemplated by, this Agreement, except such as has been duly and validly
obtained or filed.
2.14
Full Disclosure
. All
disclosures provided to the Buyer regarding the Company, its business and the
transactions contemplated hereby, furnished by or on behalf of the Company
(including
the
Company’s representations and warranties set forth herein) are true and correct
and do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
2.15
Absence of
Changes
. Since December 31, 2008, the Company has not engaged in any
business activities other than for the purpose of collecting and distributing it
assets, paying, satisfying and discharging any existing debts and obligations
and doing all other acts required to liquidate and wind up its business and
affairs. Since December 31, 2008, there have not been any changes in the assets
and liabilities of the Company, except for the incurrence of Transaction Costs
or as disclosed in Schedule 2.15.
2.16
SEC Reporting; Investment
Company
. The Company is not subject to the reporting requirements under
the Securities Act or the Securities Exchange Act of 1934. The Company is not an
“investment company,” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as
amended.
2.17
Minute Books
. The
copy of the minute books of the Company provided to the Buyer contains minutes
of all meetings of directors and shareholders and all actions by written consent
without a meeting by the directors and shareholders since the date of
incorporation and accurately reflects all actions by the directors and
shareholders with respect to all transactions referred to in such minutes in all
material respects.
2.18
Shareholders
.
Schedule 2.18 hereto contains a true and complete list of the names of the
record holders of all of the outstanding shares of Common Stock, together with
the number of shares held, and the addresses last provided to the Company by
such record holders.
2.19
Foreign Corrupt
Practices
. Neither the Company, nor to the knowledge of the Company, any
agent or other person acting on behalf of the Company, has (i) directly or
indirectly, used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.
2.20
Finder’s Fee
. The
Company has not incurred nor will incur, directly or indirectly, any liability
for any broker’s, finder’s or agent’s fees or commissions (whether payable in
cash, in equity securities or by a combination thereof) in connection with this
Agreement.
2.21
Application of Takeover
Protections
. The Company has taken all necessary action, if any, in order
to render inapplicable any control share acquisition, poison pill or other
similar anti-takeover provisions under the Company Charter, Company Bylaws or
the laws of its State of incorporation that is or could become applicable to the
Buyers as a result of the issuance and ownership of the Shares, except that the
Company has not taken action to render inapplicable the business combination
provisions of the Minnesota Business Corporations Act, Chapter 302A, Minnesota
Statutes.
2.22
Shareholder Approval
.
The transactions contemplated by this Agreement are subject to approval of the
Company’s shareholders. A Shareholder Meeting will be convened to obtain such
approval as provided in Section 4.1.
3.
Investment Representations of Buyer.
The Buyer acknowledges and represents as
follows:
3.1
Receipt of
Information
. The Buyer has been given access to full and complete
information regarding the Company and has utilized such access to his
satisfaction for the purpose of obtaining information regarding the Company. The
Buyer has met with or been given reasonable opportunity to meet with
representatives of the Company for the purpose of obtaining all information
concerning the Company that he deems necessary to make an informed investment
decision. The foregoing, however, does not limit the representations and
warranties of the Company in Section 2 of this Agreement or the right of the
Buyer to rely thereon.
3.2
Investment
Experience
. The Buyer has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of the
prospective investment in the Shares. The Buyer is in a financial position to
hold the Shares for an indefinite period of time and is able to bear the
economic risk and withstand a complete loss of his investment in the
Shares.
3.3
High Degree of Risk
.
The Buyer recognizes that an investment in the Shares is highly speculative and
involves a high degree of risk, including, but not limited to, the risk of
economic losses from operations of the Company and the loss of his entire
investment in the Company.
3.4
Restricted
Securities
. The Buyer understands that there are substantial restrictions
on the transfer of the Shares. The Buyer represents and agrees that he will not
sell or otherwise transfer the Shares without registration under the Securities
Act or an exemption therefrom.
3.5
Purchase Entirely for Own
Account
. The Buyer is acquiring the Shares for his own account and for
investment, and has made no agreement with others regarding the resale or
distribution of the Shares.
3.6
Accredited Investor
.
The Buyer is an accredited investor as defined in Rule 501 of Regulation D under
Securities Act.
3.7
Reliance Upon Buyers’
Representations
. The Buyer understands that the Shares are not being
registered under the Securities Act or state securities laws pursuant to
exemptions from the Securities Act and such laws, and that the Company’s
reliance upon such exemptions is predicated on the representations of Buyer
contained herein.
3.8
Finder’s Fee
. The
Buyer has not incurred nor will incur, directly or indirectly, any liability for
any broker’s, finder’s or agent’s fees or commissions (whether payable in cash,
in equity securities or by a combination thereof) in connection with this
Agreement.
4.
Additional
Agreements.
4.1
Shareholder Meeting
.
The Company will take all action necessary to call, convene and hold a meeting
of its shareholders to consider and vote upon (i) the abandonment of the Plan of
Liquidation and the termination of the Liquidating Agent Agreement, (ii) the
revocation of the Company’s dissolution proceedings, and (iii) the sale of
Shares to the Buyer under this Agreement so as to permit the consummation of the
transactions contemplated hereby. The Shareholder Meeting shall be held as
promptly as practicable after mailing of the Company’s proxy statement relating
to the Shareholder Meeting to its shareholders. The Board of Directors of
Company shall recommend that its shareholders approve and adopt each of such
proposals and shall use commercially reasonable efforts to obtain the requisite
affirmative vote of the shareholders.
4.2
Board of Directors
.
At the Closing, the Company shall increase the size of the Board of Directors to
3 directors and cause Richard E. Gilbert, Aaron W. Soderberg and Joseph H.
Whitney to be elected to the Board of Directors of the Company and accept the
resignation of the sole director and officer of the Company as provided in
Section 1.2.
4.3
Notice of Revocation
.
Immediately after shareholder approval of the revocation of the Company’s
dissolution proceedings, the Company shall file a notice of revocation with the
Minnesota Secretary of State, in accordance with the relevant provisions of the
Minnesota Business Corporation Act.
5. Conditions
to Closing.
5.1
Conditions to
the Buyer’s Obligations
. The obligation of the Buyer to purchase the
Shares is subject to satisfaction of the following conditions at or before the
Closing:
5.1.1 The
Company shall have performed and complied with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing.
5.1.2 The
representations and warranties of the Company contained in Section 2 shall be
true and correct on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.
5.1.3 Prior
to the Closing, the Company shall have completed the sale of all of its
remaining portfolio securities and the final distribution of its distributable
assets to the shareholders.
5.1.4 The
shareholders of the Company shall have approved (i) the abandonment of the Plan
of Liquidation and the termination of the Liquidating Agent Agreement, (ii) the
revocation of the Company’s dissolution proceedings, and (iii) the sale of
Shares to the Buyer under this Agreement.
5.1.5 Robins,
Kaplan, Miller & Ciresi LLP, legal counsel to the Company, shall have
delivered an opinion to the Buyer with respect to the following matters (which
opinion may contain customary exclusions and limitations that are reasonably
acceptable to counsel for the Purchasers):
5.1.5.1 The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Minnesota. The Company has all corporate
power and authority necessary to own its properties and to conduct its business
as, to the knowledge of such counsel, it is presently conducted.
5.1.5.2 The
Company has the requisite corporate power and authority to execute, deliver and
perform its obligations under the Agreement. The Agreement has been duly
authorized by all necessary corporate action on the part of the
Company.
5.1.5.3 The
Agreement, when executed and delivered by the Company, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with its terms.
5.1.5.4 The
authorized capital stock of the Company consists of 5,000,000 shares of
undesignated stock, none of which, as of the Closing, are issued and
outstanding; and 15,000,000 shares of Common Stock, of which, as of the Closing,
5,713,455 shares are issued and outstanding. To the knowledge of such counsel,
except as described in the Agreement (including the schedules and exhibits
thereto), there are no outstanding options, warrants, rights (including
conversion or preemptive rights) or agreements for the purchase or issuance from
the Company of any shares of the capital stock of the Company.
5.1.5.5 The
Shares, when issued and paid for in accordance with this Agreement, will be
validly issued, fully paid and nonassessable, and will be free of any liens or
encumbrances; provided, however, that the Shares may be subject to restrictions
on transfer under applicable state and federal securities laws.
5.1.5.6 The
execution and delivery of the Agreement by the Company will not result in (i) a
violation of the Company Charter or Company Bylaws (in each case, as amended or
restated) or (ii) to the knowledge of such counsel, a violation or default under
any agreement known to such counsel to which the Company is a party or by which
any of its properties or assets are bound.
5.1.5.7 To
the knowledge of such counsel, there is no other action, suit, proceeding or
investigation pending against the Company before any court or administrative
agency, and the Company has not received any written threat
thereof.
5.2
Conditions to the Company’s
Obligations
. The obligation of the Company to sell the Shares to the
Buyer is subject to satisfaction of the following conditions at or before the
Closing:
5.2.1 The
representations and warranties of the Buyer contained in Section 3 shall be true
and correct on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.
5.2.2 The
shareholders of the Company shall have approved (i) the abandonment of the Plan
of Liquidation and the termination of the Liquidating Agent Agreement, (ii) the
revocation of the Company’s dissolution proceedings, and (iii) the sale of
Shares to the Buyer under this Agreement.
6.
Miscellaneous.
6.1
Amendment and Waiver
.
No amendment to this Agreement or waiver of the rights or obligations of the
parties shall be effective unless in writing signed by the parties.
6.2
Governing Law
. This
Agreement is governed by the laws of Minnesota without regard to conflicts of
laws principles. Any legal proceeding related to this Agreement shall be brought
in an appropriate Minnesota court, and each of the parties hereto hereby
consents to the exclusive jurisdiction of the courts of the State of Minnesota
for this purpose.
6.3
Severability
. If any
provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
6.4
Entire Agreement
.
This Agreement contains the entire agreement and understanding of the parties
concerning the subject matter of this Agreement and supersedes any prior
agreements or representations, whether oral or written.
6.5
Survival of
Warranties
. The warranties, representations and agreements of the parties
contained in or made pursuant to this Agreement shall survive the execution and
deliver of this Agreement and the Closing.
6.6
Counterparts
. This
Agreement may be executed by facsimile signature and in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[signature
page follows]
IN WITNESS WHEREOF
, the parties hereto have
executed this Agreement as of the date first written above.
The
Company:
MINN
SHARES INC.
By:
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/s/ Lawrence P. Grady
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Lawrence
P. Grady
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President
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The
Buyer:
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PARAMOUNT
TRADING LTD.
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By:
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/s/
Joseph Whitney
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Joseph
Whitney
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Chairman
and Chief Executive Officer
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The
undersigned executes and delivers this Agreement for the sole purpose of
agreeing with the terms of Sections 2.4, 2.8, 2.9, 2.10, 2.14, 2.15, 2.18 and
6.5.
The
Liquidating Agent:
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By:
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/s/
Cecilia M. Denning
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Cecilia
M. Denning
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