U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number ______
Nexam Acquisition Corp.
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(Name of Small Business Issuer in its Charter)
Delaware
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(State or other jurisdiction of (I.R.S. employer
incorporation or formation) identification number)
c/o TBM Investments, Inc.
305 Madison Avenue, Suite 1166
New York, NY 10165
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 917-591-2648
facsimile number: 917-591-2648
Copies to:
William Tay, President
P.O. Box 42198
Philadelphia, PA 19101
Tel/Fax: (917) 591-2648
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Exchange Act:
Title of each class Name of Exchange on which
to be so registered
each class is to be registered
Common Stock, $0.0001 N/A
Indicate by check mark whether the registrant is a large accelerated filer, an
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. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
EXPLANATORY NOTE
We are filing this General Form for Registration of Securities on Form
10-12G to register our common stock, pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Once this registration statement is deemed effective, 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-KSB or Form 10-K, quarterly
reports on Form 10-QSB or 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.
Unless otherwise noted, references in this registration statement to
"Nexam Acquisition Corp.," the "Company," "we," "our" or "us" means Nexam
Acquisition Corp.
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 "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 the
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 not to
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.
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TABLE OF CONTENTS
Item Number
and Caption Page
1. Description of Business 4
2. Management's Discussion and Analysis and Plan of Operation 7
3. Description of Property 13
4. Security Ownership of Certain Beneficial Owners and Management 13
5. Directors, Executive Officers, Promoters and Control Persons 14
6. Executive Compensation 15
7. Certain Relationships and Related Transactions 16
8. Description of Securities 16
PART II
1. Market for Common Equity and Related Stockholder Matters 19
2. Legal Proceedings 19
3. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 19
4. Recent Sales of Unregistered Securities 20
5. Indemnification of Directors and Officers 20
PART F/S
Financial Statements F-1 through
F-6
PART III
1 Index to Exhibits 31
Signatures 31
3
PART I.
ITEM 1. DESCRIPTION OF BUSINESS
(A) BUSINESS DEVELOPMENT
Nexam Acquisition Corp. ("we", "us", "our", the "Company" or the
"Registrant") was incorporated in the State of Delaware on January 11, 2008.
The Company has been in the developmental stage since inception and has
conducted virtually no business operations, other than organizational
activities and preparation of this registration statement on Form 10-12G. The
Company has no full-time employees and owns no real estate or personal
property. The Company was formed as a vehicle to pursue a business combination
and has made no efforts to identify a possible business combination. As a
result, the Company has not conducted negotiations or entered into a letter of
intent concerning any target business. The business purpose of the Company is
to seek the acquisition of or merger with, an existing company.
(B) BUSINESS OF ISSUER
The Company, based on proposed business activities, is a "blank check"
company. The U.S. Securities and Exchange Commission (the "SEC") defines those
companies as "any development stage company that is issuing a penny stock,
within the meaning of Section 3 (a)(51) of the Exchange Act of 1934, as
amended, (the "Exchange Act") and that has no specific business plan or
purpose, or has indicated that its business plan is to merge with an
unidentified company or companies." Under SEC Rule 12b-2 under the Securities
Act of 1933, as amended (the "Securities Act"), the Company also qualifies as a
"shell company," because it has no or nominal assets (other than cash) and no
or nominal operations. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. 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 we
are subject to those requirements.
The Company was organized to provide a method for a foreign or domestic
private company to become a reporting ("public") company whose securities are
qualified for trading in the United States secondary market such as the New
York Stock Exchange (or NYSE), NASDAQ, American Stock Exchange (or AMEX), and
the OTC Bulletin Board, and, 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 and, to a lesser
extent that desires to employ our funds in its business. The Company's
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. 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.
PERCEIVED BENEFITS
There are certain perceived benefits to being a reporting company with a
class of publicly-traded securities. These are commonly thought to include the
following:
o the ability to use registered securities to make acquisitions of
assets or businesses;
o increased visibility in the financial community;
o the facilitation of borrowing from financial institutions;
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o improved trading efficiency;
o shareholder liquidity;
o greater ease in subsequently raising capital;
o compensation of key employees through stock options for which there
may be a market valuation;
o enhanced corporate image; and
o a presence in the United States capital market.
POTENTIAL TARGET COMPANIES
A business entity, if any, which may be interested in a business
combination with the Company may include the following:
o a company for which a primary purpose of becoming public is the use
of its securities for the acquisition of assets or businesses;
o a company which is unable to find an underwriter of its securities or
is unable to find an underwriter of securities on terms acceptable to
it;
o a company which wishes to become public with less dilution of its
common stock than would occur upon an underwriting;
o a company which believes that it will be able to obtain investment
capital on more favorable terms after it has become public;
o a foreign company which may wish an initial entry into the United
States securities market;
o a special situation company, such as a company seeking a public
market to satisfy redemption requirements under a qualified Employee
Stock Option Plan; and
o a company seeking one or more of the other perceived benefits of
becoming a public company.
The analysis of new business opportunities will be undertaken by or
under the supervision of the officers and directors of the Registrant. The
Registrant has unrestricted flexibility in seeking, analyzing and participating
in potential business opportunities. In its efforts to analyze potential
acquisition targets, the Registrant will consider the following kinds of
factors:
o Potential for growth, indicated by new technology, anticipated market
expansion or new products;
o 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;
o Strength and diversity of management, either in place or scheduled
for recruitment;
o Capital requirements and anticipated availability of required funds,
to be provided by the Registrant or from operations, through the sale
of additional securities, through joint ventures or similar
arrangements or from other sources;
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o The cost of participation by the Registrant as compared to the
perceived tangible and intangible values and potentials;
o The extent to which the business opportunity can be advanced;
o The accessibility of required management expertise, personnel, raw
materials, services, professional assistance and other required
items; and
o Other relevant factors.
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 Registrant's limited capital
available for investigation, the Registrant may not discover or adequately
evaluate adverse facts about the opportunity to be acquired.
No assurances can be given that the Company will be able to enter into a
business combination, as to the terms of a business combination, or as to the
nature of the target company.
(C) FORM OF ACQUISITION
The manner in which the Registrant participates in an opportunity will
depend upon the nature of the opportunity, the respective needs and desires of
the Registrant and the promoters of the opportunity, and the relative
negotiating strength of the Registrant and such promoters.
It is likely that the Registrant will acquire its participation in a
business opportunity through the issuance of common stock or other securities
of the Registrant. 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.
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 Registrant prior to such reorganization.
The present stockholders of the Registrant will likely not have control
of a majority of the voting shares of the Registrant following a reorganization
transaction. As part of such a transaction, all or a majority of the
Registrant's directors may resign and 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
shares. The necessity to obtain such stockholder approval may result in delay
and additional expense in the consummation of any proposed transaction and will
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.
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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 would
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.
We presently have no employees apart from our management. Our officer
and sole director is engaged in outside business activities and anticipates he
will devote to our business very limited time until the acquisition of a
successful business opportunity has been identified. We expect no significant
changes in the number of our employees other than such changes, if any,
incident to a business combination.
We are voluntarily filing this Registration Statement with the U.S.
Securities and Exchange Commission and we're under no obligation to do so under
the Securities Exchange Act of 1934.
(d) REPORTS TO SECURITY HOLDERS
(1) The Company is not required to deliver an annual report to
security holders and at this time does not anticipate the
distribution of such a report.
(2) The Company will file reports with the SEC. The Company
will be a reporting company and will comply with the
requirements of the Exchange Act.
(3) The public may read and copy any materials the Company
files with the SEC at the SEC's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. The public
may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330.
Additionally, the SEC maintains an Internet site that
contains reports, proxy and information statements, and
other information regarding issuers that file
electronically with the SEC, which can be found at
http://www.sec.gov.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company was organized 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 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. The Company will not restrict our
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. The costs of investigating and analyzing business
combinations for the next 12 months and beyond such time will be paid with
money in our treasury, if any, or with additional money contributed by Mr.
William Tay, our sole director, officer and stockholder, or another source.
During the next 12 months we anticipate incurring costs related to:
(i) filing of Exchange Act reports, and
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(ii) costs relating to consummating an acquisition.
We believe we will be able to meet these costs through use of funds in
our treasury and additional amounts, as necessary, to be loaned to or invested
in us by our stockholders, management or other investors.
The Company may consider a business which has recently commenced
operations, is a developing company 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
which 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.
Our sole officer and director has 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,
rapid technological advances being made in some industries and shortages of
available capital, our management believes that there are numerous firms
seeking even the limited additional capital that we will have and/or the
perceived benefits of becoming 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.
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RISK FACTORS
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. IF ANY OF
THE FOLLOWING RISKS ACTUALLY MATERIALIZES, OUR BUSINESS, FINANCIAL CONDITION
AND RESULTS OF OPERATIONS WOULD SUFFER. YOU SHOULD READ THE SECTION ENTITLED
"FORWARD-LOOKING STATEMENTS" IMMEDIATELY FOLLOWING THESE RISK FACTORS FOR A
DISCUSSION OF WHAT TYPES OF STATEMENTS ARE FORWARD-LOOKING STATEMENTS, AS WELL
AS THE SIGNIFICANCE OF SUCH STATEMENTS IN THE CONTEXT OF THIS PROSPECTUS.
THERE MAY BE CONFLICTS OF INTEREST BETWEEN OUR MANAGEMENT AND OUR NON-
MANAGEMENT STOCKHOLDERS.
Conflicts of interest create the risk that management may have an
incentive to act adversely to the interests of other investors. A conflict of
interest may arise between our management's personal pecuniary interest and its
fiduciary duty to our stockholders. Further, our management's own pecuniary
interest may at some point compromise its fiduciary duty to our stockholders.
In addition, William Tay, our sole officer and director, is currently involved
with other blank check companies and conflicts in the pursuit of business
combinations with such other blank check companies with which he is, and may be
the future be, affiliated with may arise. If we and the other blank check
companies that our sole officer and director is affiliated with desire to take
advantage of the same opportunity, then the officer and director that is
affiliated with both companies would abstain from voting upon the opportunity.
OUR BUSINESS IS DIFFICULT TO EVALUATE BECAUSE WE HAVE NO OPERATING HISTORY.
As the Company has no operating history or revenue and only minimal
assets, there is a risk that we will be unable to continue as a going concern
and consummate a business combination. The Company has had no recent operating
history nor any revenues or earnings from operations since inception. We have
no significant assets or financial resources. We will, in all likelihood,
sustain operating expenses without corresponding revenues, at least until the
consummation of a business combination. This may result in our incurring a net
operating loss that will increase continuously until we can consummate a
business combination with a profitable business opportunity. We cannot assure
you that we can identify a suitable business opportunity and consummate a
business combination.
THERE IS COMPETITION FOR THOSE PRIVATE COMPANIES SUITABLE FOR A MERGER
TRANSACTION OF THE TYPE CONTEMPLATED BY OUR MANAGEMENT.
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 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.
FUTURE SUCCESS IS HIGHLY DEPENDENT ON THE ABILITY OF OUR MANAGEMENT TO LOCATE
AND ATTRACT A SUITABLE ACQUISITION.
The nature of our operations is highly speculative and there is a
consequent risk of loss of your investment. The success of our plan of
operation will depend to a great extent on the operations, financial condition
9
and management of the identified business opportunity. While management intends
to seek business combination(s) with entities having established operating
histories, we cannot assure you that we will be successful in locating
candidates meeting that criterion. In the event we complete a business
combination, the success of our operations may be dependent upon management of
the successor firm or venture partner firm and numerous other factors beyond
our control.
THE COMPANY HAS NO EXISTING AGREEMENT FOR A BUSINESS COMBINATION OR OTHER
TRANSACTION.
We have no arrangement, agreement or understanding with respect to
engaging in a merger with, joint venture with or acquisition of, a private or
public entity. No assurances can be given that we will successfully identify
and evaluate suitable business opportunities or that we will conclude a
business combination. Management has not identified any particular industry or
specific business within an industry for evaluation. We cannot guarantee that
we will be able to negotiate a business combination on favorable terms, and
there is consequently a risk that funds allocated to the purchase of our shares
will not be invested in a company with active business operations.
OUR MANAGEMENT INTENDS TO DEVOTE ONLY A LIMITED AMOUNT OF TIME TO SEEKING A
TARGET COMPANY WHICH MAY ADVERSELY IMPACT OUR ABILITY TO IDENTIFY A SUITABLE
ACQUISITION CANDIDATE.
While seeking a business combination, management anticipates devoting no
more than a few hours per week to the Company's affairs in total. Our officer
has not entered into a written employment agreement with us and is not expected
to do so in the foreseeable future. This limited commitment may adversely
impact our ability to identify and consummate a successful business
combination.
THE TIME AND COST OF PREPARING A PRIVATE COMPANY TO BECOME A PUBLIC REPORTING
COMPANY MAY PRECLUDE US FROM ENTERING INTO A MERGER OR ACQUISITION WITH THE
MOST ATTRACTIVE PRIVATE COMPANIES.
Target companies that fail to comply with SEC reporting requirements may
delay or preclude acquisition. Sections 13 and 15(d) of the Exchange Act
require reporting companies to provide certain information about significant
acquisitions, including certified financial statements for the company
acquired, covering one, two, or three years, depending on the relative size of
the acquisition. The time and additional costs that may be incurred by some
target entities to prepare these statements may significantly delay or
essentially preclude consummation of an acquisition. Otherwise suitable
acquisition prospects that do not have or are unable to obtain the required
audited statements may be inappropriate for acquisition so long as the
reporting requirements of the Exchange Act are applicable.
THE COMPANY MAY BE SUBJECT TO FURTHER GOVERNMENT REGULATION WHICH WOULD
ADVERSELY AFFECT OUR OPERATIONS.
Although we will be subject to the reporting requirements under the
Exchange Act, management believes we will not be subject to regulation under
the Investment Company Act of 1940, as amended (the "Investment Company Act"),
since we will not be engaged in the business of investing or trading in
securities. If we engage in business combinations which result in our holding
passive investment interests in a number of entities, we could be subject to
regulation under the Investment Company Act. If so, we would be required to
register as an investment company and could be expected to incur significant
registration and compliance costs. We have obtained no formal determination
from the SEC as to our status under the Investment Company Act and,
consequently, violation of the Investment Company Act could subject us to
material adverse consequences.
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ANY POTENTIAL ACQUISITION OR MERGER WITH A FOREIGN COMPANY MAY SUBJECT US TO
ADDITIONAL RISKS.
If we enter into a business combination with a foreign concern, we will
be subject to risks inherent in business operations outside of the United
States. These risks include, for example, currency fluctuations, regulatory
problems, punitive tariffs, unstable local tax policies, trade embargoes, risks
related to shipment of raw materials and finished goods across national borders
and cultural and language differences. Foreign economies may differ favorably
or unfavorably from the United States economy in growth of gross national
product, rate of inflation, market development, rate of savings, and capital
investment, resource self-sufficiency and balance of payments positions, and in
other respects.
THERE IS CURRENTLY NO TRADING MARKET FOR OUR COMMON STOCK, AND LIQUIDITY OF
SHARES OF OUR COMMON STOCK IS LIMITED.
Our shares of common stock are not registered under the securities laws
of any state or other jurisdiction, and accordingly there is no public trading
market for our common stock. Further, no public trading market is expected to
develop in the foreseeable future unless and until the Company completes a
business combination with an operating business and the Company thereafter
files a registration statement under the Securities Act of 1933, as amended
(the "Securities Act"). Therefore, outstanding shares of our common stock
cannot be offered, sold, pledged or otherwise transferred unless subsequently
registered pursuant to, or exempt from registration under, the Securities Act
and any other applicable federal or state securities laws or regulations.
Shares of our common stock cannot be sold under the exemptions from
registration provided by Rule 144 under or Section 4(1) of the Securities Act
("Rule 144"), in accordance with the letter from Richard K. Wulff, Chief of the
Office of Small Business Policy of the Securities and Exchange Commission's
Division of Corporation Finance, to Ken Worm of NASD Regulation, dated January
21, 2000 (the "Wulff Letter"). In 2007, the SEC announced that it is changing
certain aspects of the Wulff Letter, and such changes shall apply retroactively
to our stockholders. Effective February 15, 2008, all holders of shares of
common stock of a "shell company" will be permitted to sell their shares of
common stock under Rule 144, subject to certain restrictions, starting one year
after (i) the completion of a business combination with a private company in a
reverse merger or reverse takeover transaction after which the company would
cease to be a "shell company" (as defined in Rule 12b-2 under the Exchange Act)
and (ii) the disclosure of certain information on a Current Report on Form 8-K
within four business days thereafter. Compliance with the criteria for
securing exemptions under federal securities laws and the securities laws of
the various states is extremely complex, especially in respect of those
exemptions affording flexibility and the elimination of trading restrictions in
respect of securities received in exempt transactions and subsequently disposed
of without registration under the Securities Act or state securities laws.
WE HAVE NEVER PAID DIVIDENDS ON OUR COMMON STOCK.
We have never paid dividends on our Common Stock and do not presently
intend to pay any dividends in the foreseeable future. We anticipate that any
funds available for payment of dividends will be re-invested into the Company
to further its business strategy.
THE COMPANY MAY BE SUBJECT TO CERTAIN TAX CONSEQUENCES IN OUR BUSINESS, WHICH
MAY INCREASE OUR COST OF DOING BUSINESS.
We may not be able to structure our acquisition to result in tax-free
treatment for the companies or their stockholders, which could deter third
parties from entering into certain business combinations with us or result in
being taxed on consideration received in a transaction. Currently, a
transaction may be structured so as to result in tax-free treatment to both
companies, as prescribed by various federal and state tax provisions. We intend
to structure any business combination so as to minimize the federal and state
tax consequences to both us and the target entity; however, we cannot guarantee
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that the business combination will meet the statutory requirements of a tax-
free reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non-qualifying reorganization
could result in the imposition of both federal and state taxes that may have an
adverse effect on both parties to the transaction.
OUR BUSINESS WILL HAVE NO REVENUES UNLESS AND UNTIL WE MERGE WITH OR ACQUIRE AN
OPERATING BUSINESS.
We are a development stage company and have had no revenues from
operations. We may not realize any revenues unless and until we successfully
merge with or acquire an operating business.
THE COMPANY INTENDS TO ISSUE MORE SHARES IN A MERGER OR ACQUISITION, WHICH WILL
RESULT IN SUBSTANTIAL DILUTION TO EXISTING SHAREHOLDERS.
Our Certificate of Incorporation authorizes the issuance of a maximum of
250,000,000 shares of common stock and a maximum of 20,000,000 shares of
preferred stock. Any merger or acquisition effected by us may result in the
issuance of additional securities without stockholder approval and may result
in substantial dilution in the percentage of our common stock held by our then
existing stockholders. Moreover, the common stock issued in any such merger or
acquisition transaction may be valued on an arbitrary or non-arm's-length basis
by our management, resulting in an additional reduction in the percentage of
common stock held by our then existing stockholders. Our Board of Directors has
the power to issue any or all of such authorized but unissued shares without
stockholder approval. To the extent that additional shares of common stock or
preferred stock are issued in connection with a business combination or
otherwise, dilution to the interests of our stockholders will occur and the
rights of the holders of common stock might be materially and adversely
affected.
THE COMPANY HAS CONDUCTED NO MARKET RESEARCH OR IDENTIFICATION OF BUSINESS
OPPORTUNITIES, WHICH MAY AFFECT OUR ABILITY TO IDENTIFY A BUSINESS TO MERGE
WITH OR ACQUIRE.
The Company has neither conducted nor have others made available to us
results of market research concerning prospective business opportunities.
Therefore, we have no assurances that market demand exists for a merger or
acquisition as contemplated by us. Our management has not identified any
specific business combination or other transactions for formal evaluation by
us, such that it may be expected that any such target business or transaction
will present such a level of risk that conventional private or public offerings
of securities or conventional bank financing will not be available. There is no
assurance that we will be able to acquire a business opportunity on terms
favorable to us. Decisions as to which business opportunity to participate in
will be unilaterally made by our management, which may act without the consent,
vote or approval of our stockholders.
BECAUSE WE MAY SEEK TO COMPLETE A BUSINESS COMBINATION THROUGH A "REVERSE
MERGER," FOLLOWING SUCH A TRANSACTION WE MAY NOT BE ABLE TO ATTRACT THE
ATTENTION OF MAJOR BROKERAGE FIRMS.
Additional risks may exist since we will assist a privately held
business to become public through a "reverse merger." Securities analysts of
major brokerage firms may not provide coverage of our Company since there is no
incentive to brokerage firms to recommend the purchase of our common stock. No
assurance can be given that brokerage firms will want to conduct any secondary
offerings on behalf of our post-merger company in the future.
WE CANNOT ASSURE YOU THAT FOLLOWING A BUSINESS COMBINATION WITH AN OPERATING
BUSINESS, OUR COMMON STOCK WILL BE LISTED ON NASDAQ OR ANY OTHER SECURITIES
EXCHANGE.
12
Following a business combination, we may seek the listing of our common
stock on NASDAQ or the American Stock Exchange. However, we cannot assure you
that following such a transaction, we will be able to meet the initial listing
standards of either of those or any other stock exchange, or that we will be
able to maintain a listing of our common stock on either of those or any other
stock exchange. After completing a business combination, until our common stock
is listed on the NASDAQ or another stock exchange, we expect that our common
stock would be eligible to trade on the OTC Bulletin Board, another over-the-
counter quotation system, or on the "pink sheets," where our stockholders may
find it more difficult to dispose of shares or obtain accurate quotations as to
the market value of our common stock. In addition, we would be subject to an
SEC rule that, if it failed to meet the criteria set forth in such rule,
imposes various practice requirements on broker-dealers who sell securities
governed by the rule to persons other than established customers and accredited
investors. Consequently, such rule may deter broker-dealers from recommending
or selling our common stock, which may further affect its liquidity. This would
also make it more difficult for us to raise additional capital following a
business combination.
OUR CERTIFICATE OF INCORPORATION AUTHORIZES THE ISSUANCE OF PREFERRED STOCK.
Our Certificate of Incorporation authorizes the issuance of up to
20,000,000 shares of preferred stock with designations, rights and preferences
determined from time to time by its 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 its authorized preferred stock, there can be
no assurance that the Company will not do so in the future.
THIS REGISTRATION STATEMENT CONTAINS FORWARD-LOOKING STATEMENTS AND INFORMATION
RELATING TO US, OUR INDUSTRY AND TO OTHER BUSINESSES.
These forward-looking statements are based on the beliefs of our
management, as well as assumptions made by and information currently available
to our management. When used in this prospectus, the words "estimate,"
"project," "believe," "anticipate," "intend," "expect" and similar expressions
are intended to identify forward-looking statements. These statements reflect
our current views with respect to future events and are subject to risks and
uncertainties that may cause our actual results to differ materially from those
contemplated in our forward-looking statements. We caution you not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this prospectus. We do not undertake any obligation to publicly release
any revisions to these forward-looking statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events.
ITEM 3. DESCRIPTION OF PROPERTY
The Company neither rents nor owns any properties. 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
(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
The following tables set forth the ownership of our common stock by each
person known by us to be the beneficial owner of more than 5% of our
outstanding common stock, our directors, and our executive officers and
directors as a group. To the best of our knowledge, the persons named have sole
13
voting and investment power with respect to such shares, except as otherwise
noted. There are not any pending arrangements that may cause a change in
control. However, it is anticipated that there will be one or more change of
control, including adding members of management, possibly involving the private
sale or redemption of our principal shareholder's securities or our issuance of
additional securities, at or prior to the closing of a business combination.
The information presented below regarding beneficial ownership of our
voting securities has been presented in accordance with the rules of the U.S.
Securities and Exchange Commission and is not necessarily indicative of
ownership for any other purpose. Under these rules, a person is deemed to be a
"beneficial owner" of a security if that person has or shares the power to vote
or direct the voting of the security or the power to dispose or direct the
disposition of the security. A person is deemed to own beneficially any
security as to which such person has the right to acquire sole or shared voting
or investment power within 60 days through the conversion or exercise of any
convertible security, warrant, option or other right. More than one person may
be deemed to be a beneficial owner of the same securities. The percentage of
beneficial ownership by any person as of a particular date is calculated by
dividing the number of shares beneficially owned by such person, which includes
the number of shares as to which such person has the right to acquire voting or
investment power within 60 days, by the sum of the number of shares outstanding
as of such date plus the number of shares as to which such person has the right
to acquire voting or investment power within 60 days. Consequently, the
denominator used for calculating such percentage may be different for each
beneficial owner. Except as otherwise indicated below, we believe that the
beneficial owners of our common stock listed below have sole voting and
investment power with respect to the shares shown.
Amount and Nature
Name and of Beneficial Percentage
Address Ownership of Class
- ------- --------- --------
William Tay (1) 31,340,000 100%
305 Madison Avenue
Suite 1166
New York, NY 10165
All Officers and 31,340,000 100%
Directors as a group
- ------------------------
(1) William Tay is President, Chief Financial Officer, Secretary and sole
director of Nexam Acquisition Corp., a Delaware corporation.
This table is based upon information derived from our stock records. We
believe that each of the shareholders named in this table has sole or shared
voting and investment power with respect to the shares indicated as
beneficially owned; except as set forth above, applicable percentages are based
upon 31,340,000 shares of common stock outstanding as of the date of this
registration statement on Form 10-12G.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our officers and directors and additional information concerning them
are as follows:
Name Age Position
- ---- --- --------
William Tay 36 President, Chief Financial Officer,
Secretary, and Director
WILLIAM TAY, age 36, has been the President, Chief Financial Officer,
Secretary and Director of Nexam Acquisition Corp., a Delaware corporation,
since its inception on January 11, 2008. For the past five years, Mr. Tay has
14
been a business consultant, specializing in corporate and securities consulting
services for small to medium sized entrepreneurial companies. Mr. Tay has years
of experience in starting new enterprises; having spent the last 9 years in
forming many companies and providing consulting services to a variety of
businesses. Mr. Tay also has experience in business reorganizations and cross
border business transactions. Prior to that, Mr. Tay was a licensed National
Association of Securities Dealers (NASD) Series 7 Registered Representative
with several brokerage firms in New York.
The term of office of each director expires at our annual meeting of
stockholders or until their successors are duly elected and qualified.
B. Significant Employees. None.
C. Family Relationships. None.
D. Involvement in Certain Legal Proceedings.
No officer, director, or persons nominated for such positions, promoter
or significant employee has been involved in the last five years in any of the
following:
o Any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at
the time of the bankruptcy or within two years prior to that time;
o Any conviction in a criminal proceeding or being subject to a
pending criminal proceeding (excluding traffic violations and other
minor offenses);
o Being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; and
o Being found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed,
suspended, or vacated.
E. The Board of Directors acts as the Audit Committee and the Board has
no separate committees. The Company has no qualified financial expert at this
time because it has not been able to hire a qualified candidate. Further, the
Company believes that it has inadequate financial resources at this time to
hire such an expert. The Company intends to continue to search for a qualified
individual for hire.
F. Code of Ethics. We do not currently have a code of ethics.
ITEM 6. EXECUTIVE COMPENSATION
The Company's officer and director does not receive any compensation for
his services rendered to the Company since inception, has not received such
compensation in the past, and is not accruing any compensation pursuant to any
agreement with the Company. No remuneration of any nature has been paid for or
on account of services rendered by a director in such capacity. The Company's
sole officer and director intend to devote no more than a few hours a week to
our affairs.
15
The officer and director of the Company will not receive any finder's
fee, either directly or indirectly, as a result of his efforts to implement the
Company's business plan outlined herein.
It is possible that, after the Company successfully consummates a
business combination with an unaffiliated entity, that entity may desire to
employ or retain one or a number of members of our management for the purposes
of providing services to the surviving entity. However, the Company has adopted
a policy whereby the offer of any post-transaction employment to members of
management will not be a consideration in our decision whether to undertake any
proposed transaction.
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 our
management will receive after a business combination that is required to be
included in this table, or otherwise.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 11, 2008 (inception), the Company issued 31,340,000
restricted shares of its common stock to William Tay in exchange for
incorporation fees, annual resident agent fees in the State of Delaware, and
developing our business concept and plan. All shares were considered issued at
their par value ($.0001 per share). See Item 4, "Recent Sales of Unregistered
Securities." Mr. Tay, the sole officer and director of the Company, is the sole
shareholder of Nexam Acquisition Corp. With respect to the sales made to Mr.
Tay, the Company relied upon Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act").
William Tay, the Company's sole officer and director (its original
incorporator), has paid all expenses incurred by the Company, which includes
only resident agent fees, basic state and local fees and taxes. On a going
forward basis, Mr. Tay has committed to taking responsibility for all expenses
incurred by the Company through the date of completion of a business
transaction described in Item 1 of this Form 10-12G. Therefore, the Company
will not have any expenses until the consummation of a transaction.
We utilize the office space and equipment of our stockholder at no cost.
Management estimates such amounts to be immaterial.
Except as otherwise indicated herein, there have been no related party
transactions, or any other transactions or relationships required to be
disclosed pursuant to Item 404 of Regulation S-B.
ITEM 8. DESCRIPTION OF SECURITIES
(A) COMMON OR PREFERRED STOCK.
The authorized capital stock of the Company consists of 250,000,000
shares of Common Stock, par value $.0001 per share, of which there are
31,340,000 issued and outstanding and 20,000,000 shares of Preferred Stock, par
value $.0001 per share, of which none have been designated or issued. The
following summarized the important provisions of the Company's capital stock.
16
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of common
stock do not have cumulative voting rights. Holders of common stock are
entitled to share ratably in dividends, if any, as may be declared from time to
time by the Board of Directors in its discretion from funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
company, the holders of common stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. All of the outstanding
shares of common stock are fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the
Company's common stock. There are no conversion or redemption rights or sinking
fund provisions with respect to the common stock.
PREFERRED STOCK
The Board of Directors is authorized to provide for the issuance of
shares of preferred stock in series and, by filing a certificate pursuant to
the applicable law of Delaware, to establish from time to time the number of
shares to be included in each such series, and to fix the designation, powers,
preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof without any further vote or
action by the shareholders. Any shares of preferred stock so issued would have
priority over the common stock with respect to dividend or liquidation rights.
Any future issuance of preferred stock may have the effect of delaying,
deferring or preventing a change in control of our Company without further
action by the shareholders and may adversely affect the voting and other rights
of the holders of common stock. At present, we have no plans to neither issue
any preferred stock nor adopt any series, preferences or other classification
of preferred stock.
The issuance of shares of preferred stock, or the issuance of rights to
purchase such shares, could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of preferred stock might
impede a business combination by including class voting rights that would
enable the holder to block such a transaction, or facilitate a business
combination by including voting rights that would provide a required percentage
vote of the stockholders. In addition, under certain circumstances, the
issuance of preferred stock could adversely affect the voting power of the
holders of the common stock. Although the Board of Directors is required to
make any determination to issue such stock based on its judgment as to the best
interests of our stockholders, the Board of Directors could act in a manner
that would discourage an acquisition attempt or other transaction that some, or
a majority, of the stockholders might believe to be in their best interests or
in which stockholders might receive a premium for their stock over the then
market price of such stock. The Board of Directors does not at present intend
to seek stockholder approval prior to any issuance of currently authorized
stock, unless otherwise required by law or stock exchange rules. We have no
present plans to issue any preferred stock.
The description of certain matters relating to the securities of the
Company is a summary and is qualified in its entirety by the provisions of the
Company's Certificate of Incorporation and By-Laws, copies of which have been
filed as exhibits to this Form 10-12G.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and
earnings, if any, capital requirements and financial conditions. The payment of
dividends, if any, will be within the discretion of the Company's Board of
Directors. The Company presently intends to retain all earnings, if any, for
use in its business operations and accordingly, the Board of Directors does not
anticipate declaring any dividends prior to a business combination.
17
TRADING OF SECURITIES IN SECONDARY MARKET
The Company presently has 31,340,000 shares of common stock issued and
outstanding, all of which are "restricted securities," as that term is defined
under Rule 144 promulgated under the Securities Act, in that such shares were
issued in private transactions not involving a public offering.
Following a business combination, a target company will normally wish to
list its common stock for trading in one or more United States markets. The
target company may elect to apply for such listing immediately following the
business combination or at some later time.
In order to qualify for listing on the Nasdaq SmallCap Market, a company
must have at least (i) net tangible assets of $4,000,000 or market
capitalization of $50,000,000 or net income for two of the last three years of
$750,000; (ii) public float of 1,000,000 shares with a market value of
$5,000,000; (iii) a bid price of $4.00; (iv) three market makers; (v) 300
shareholders and (vi) an operating history of one year or, if less than one
year, $50,000,000 in market capitalization. For continued listing on the Nasdaq
SmallCap Market, a company must have at least (i) net tangible assets of
$2,000,000 or market capitalization of $35,000,000 or net income for two of the
last three years of $500,000; (ii) a public float of 500,000 shares with a
market value of $1,000,000; (iii) a bid price of $1.00; (iv) two market makers;
and (v) 300 shareholders.
If, after a business combination, we do not meet the qualifications for
listing on the Nasdaq SmallCap Market, we may apply for quotation of our
securities on the NASD OTC Bulletin Board. In certain cases we may elect to
have our securities initially quoted in the "pink sheets" published by the Pink
Sheets, LLC. On April 7, 2000, the Securities and Exchange Commission issued a
clarification with regard to the reporting status under the Securities Exchange
Act of 1934 of a non-reporting company after it acquired a reporting "blank
check" company. This letter clarified the Commission's position that such
Company would not be a successor issuer to the reporting obligation of the
"blank check" company by virtue of Exchange Act Rule 12g-3(a).
We intend that any merger we undertake would not be deemed a "back door"
registration since we would remain the reporting company and the Company that
we merge with would not become a successor issuer to our reporting obligations
by virtue of Commission Rule 12g-3(a).
RULE 504 OF REGULATION D
The Commission is of the opinion that Rule 504 of Regulation D regarding
exemption for limited offerings and sales of securities not exceeding
$1,000,000 is not available to blank check companies.
TRANSFER AGENT
It is anticipated that Holladay Stock Transfer, Inc., Scottsdale,
Arizona will act as transfer agent for the Company's common stock. However, the
Company may appoint a different transfer agent or act as its own until a merger
candidate can be identified.
(B) DEBT SECURITIES. NONE.
(C) OTHER SECURITIES TO BE REGISTERED. NONE.
18
PART II.
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) Market Information. The Company's Common Stock is not trading on
any stock exchange. The Company is not aware of any market activity in its
stock since its inception and through the date of this filing. There is no
assurance that a trading market will ever develop or, if such a market does
develop, that it will continue.
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for purposes relevant to us, as
any equity security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and
the rights and remedies available to an investor in cases of fraud in penny
stock transactions. Finally, monthly statements have to be sent disclosing
recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
(b) Holders. As of the date of this filing, there was one record holder
of 31,340,000 shares of the Company's Common Stock. The issued and outstanding
shares of the Company's common stock were issued in accordance with the
exemptions from registration afforded by Section 4(2) of the Securities Act of
1933, as amended, and Rule 506 promulgated thereunder.
(c) Dividends. The Registrant has not paid any cash dividends to date
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 Registrant's business.
ITEM 2. LEGAL PROCEEDINGS.
Presently, there are not any material pending legal proceedings to which
the Registrant is a party or as to which any of its property is subject, and
the Registrant does not know nor is it aware of any legal proceedings
threatened or contemplated against it.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There are not and have not been any disagreements between the Registrant
and its accountants on any matter of accounting principles, practices or
financial statement disclosure.
19
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
On January 11, 2008, the day of its incorporation, the Company issued an
aggregate of 31,340,000 restricted shares of its common stock to William Tay in
exchange for incorporation fees and annual resident agent fees in the State of
Delaware, and developing our business concept and plan.
We relied upon Section 4(2) of the Securities Act of 1933, as amended
for the above issuances. We believed that Section 4(2) was available because:
o None of these issuances involved underwriters, underwriting discounts
or commissions;
o We placed restrictive legends on all certificates issued;
o No sales were made by general solicitation or advertising;
o Sales were made only to accredited investors
In connection with the above transactions, we provided the following to
all investors:
o Access to all our books and records.
o Access to all material contracts and documents relating to our
operations.
o The opportunity to obtain any additional information, to the extent
we possessed such information, necessary to verify the accuracy of
the information to which the investors were given access.
The Company's Board of Directors has the power to issue any or all of
the authorized but unissued Common Stock without stockholder approval. The
Company currently has no commitments to issue any shares of common stock.
However, the Company will, in all likelihood, issue a substantial number of
additional shares in connection with a business combination. Since the Company
expects to issue additional shares of common stock in connection with a
business combination, existing stockholders of the Company may experience
substantial dilution in their shares. However, it is impossible to predict
whether a business combination will ultimately result in dilution to existing
shareholders. If the target has a relatively weak balance sheet, a business
combination may result in significant dilution. If a target has a relatively
strong balance sheet, there may be little or no dilution.
ITEM 5. 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
20
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:
o any breach of the director's duty of loyalty to the corporation or
its stockholders;
o acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
o payments of unlawful dividends or unlawful stock repurchases or
redemptions; or
o 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.
PART F/S
NEXAM ACQUISITION CORP.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
FEBRUARY 15, 2008
- --------------------------------------------------------------------------------
21
NEXAM ACQUISITION CORP.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FEBRUARY 15, 2008
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm F-1
Balance Sheet F-2
Statement of Operations F-3
Statement of Changes in Stockholders' Equity (Deficit) F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6
- --------------------------------------------------------------------------------
22
STAN J.H. LEE, CPA
2160 NORTH CENTRAL RD. SUITE 203 * FORT LEE * NJ 07024
794 BROADWAY * CHULA VISTA * CA 91910
619-623-7799 FAX 619-564-3408 E-MAIL) STAN2U@GMAIL.COM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Nexam Acquisition Corp.
(A Development Stage Company)
We have audited the accompanying balance sheet of Nexam Acquisition Corp. as of
February 15, 2008 and the related statements of operation, changes in
shareholders' equity and cash flows for the period from January 11, 2008
(inception) to February 15, 2008. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Nexam Acquisition Corp. as of
February 15, 2008, and the results of its operation and its cash flows for the
period from January 11, 2008 (inception) to February 15, 2008 in conformity
with U.S. generally accepted accounting principles.
The financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 3 to the financial
statements, the Company's losses from operations raise substantial doubt about
its ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Stan J.H. Lee, CPA
- --------------------------------
Stan J.H. Lee, CPA
February 23, 2008
Chula Vista, CA
Registered with the Public Company Accounting Oversight Board
F-1
- --------------------------------------------------------------------------------
23
Nexam Acquisition Corp.
(A Development Stage Company)
Balance Sheet
As of
February 15,
2008
------------
ASSETS
Current Assets
Cash $ --
------------
Total Current Assets --
------------
TOTAL ASSETS $ --
============
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities $ --
------------
Total Current Liabilities --
------------
TOTAL LIABILITIES --
Stockholders' Equity (Deficit)
Preferred stock, ($.0001 par value, 20,000,000
shares authorized; none issued and outstanding.) --
Common stock ($.0001 par value, 250,000,000
shares authorized; 31,340,000 shares issued and
outstanding as of February 15, 2008) 3,134
Deficit accumulated during development stage (3,134)
------------
Total Stockholders' Equity (Deficit) --
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY (DEFICIT)
------------
$ --
============
See Notes to Financial Statements
F-2
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24
Nexam Acquisition Corp.
(A Development Stage Company)
Statement of Operations
January 11, 2008
(Inception)
through
February 15,
2008
----------
Revenues
Revenues $ --
----------
Total Revenues --
General & Administrative Expenses
Organization and related expenses 3,134
----------
Total General & Administrative Expenses 3,134
----------
Net Loss $ (3,134)
==========
Basic loss per share $ (0.00)
==========
Weighted average number of
common shares outstanding 31,340,000
==========
See Notes to Financial Statements
F-3
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25
Nexam Acquisition Corp.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity (Deficit)
From January 11, 2008 (inception) through February 15, 2008
Deficit
Accumulated
Common Common Additional During
Stock Stock Paid-in Development
Amount Capital Stage Total
---------- ---------- ---------- ----------- ----------
January 11, 2008 (inception)
Shares issued for services at $.0001
per share 31,340,000 $ 3,134 $ -- $ -- $ 3,134
Net loss, February 15, 2008 (3,134) (3,134)
---------- ---------- ---------- ----------- ----------
Balance, February 15, 2008 31,340,000 $ 3,134 $ -- $ (3,134) $ --
========== ========== ========== =========== ==========
See Notes to Financial Statements
F-4
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26
Nexam Acquisition Corp.
(A Development Stage Company)
Statement of Cash flows
January 11, 2008
(Inception)
through
February 15,
2008
------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (3,134)
Changes in working capital 3,134
------------
Net cash provided by (used in) operating activities --
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash provided by (used in) investing activities --
------------
CASH FLOWS FROM FINANCING ACTIVITIES
------------
Net cash provided by (used in) financing activities --
------------
Net increase (decrease) in cash --
Cash at beginning of year --
------------
Cash at end of year $ --
============
NONCASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued to founder for services rendered $ 3,134
============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ --
============
Income taxes paid $ --
============
See Notes to Financial Statements
F-5
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27
Nexam Acquisition Corp.
(A Development Stage Company)
Notes to Financial Statements
For the Period from January 11, 2008 (inception) to February 15, 2008
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Nexam Acquisition Corp. (the "Company") was incorporated under the laws of the
State of Delaware on January 11, 2008 and has been inactive since inception.
The Company intends to serve as a vehicle to effect an asset acquisition,
merger, exchange of capital stock or other business combination with a domestic
or foreign business.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - DEVELOPMENT STAGE COMPANY
The Company has not earned any revenue from operations. Accordingly, the
Company's activities have been accounted for as those of a "Development Stage
Company" as set forth in Financial Accounting Standards Board Statement No. 7
("SFAS 7"). Among the disclosures required by SFAS 7 are that the Company's
financial statements be identified as those of a development stage company, and
that the statements of operations, stockholders' equity and cash flows disclose
activity since the date of the Company's inception.
ACCOUNTING METHOD
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a fiscal year ending on December 31.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. In
the opinion of management, all adjustments necessary in order to make the
financial statements not misleading have been included. Actual results could
differ from those estimates.
CASH EQUIVALENTS
The Company considers all highly liquid investments with maturity of three
months or less when purchased to be cash equivalents.
INCOME TAXES
Income taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax
asset or liability is recorded for all temporary differences between financial
and tax reporting and net operating loss carryforwards. Deferred tax expense
(benefit) results from the net change during the year of deferred tax assets
and liabilities. Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion of
all of the deferred tax assets will be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on
the date of enactment. There were no current or deferred
F-6
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28
Nexam Acquisition Corp.
(A Development Stage Company)
Notes to Financial Statements
For the Period from January 11, 2008 (inception) to February 15, 2008
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
income tax expenses or benefits due to the Company not having any material
operations for period ended February 15, 2008.
BASIC EARNINGS (LOSS) PER SHARE
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for
earnings (loss) per share for entities with publicly held common stock. SFAS
No. 128 supersedes the provisions of APB No. 15, and requires the presentation
of basic earnings (loss) per share and diluted earnings (loss) per share. The
Company has adopted the provisions of SFAS No. 128 effective January 11, 2008
(inception).
Basic net loss per share amounts is computed by dividing the net income by the
weighted average number of common shares outstanding. Diluted earnings per
share are the same as basic earnings per share due to the lack of dilutive
items in the Company.
IMPACT OF NEW ACCOUNTING STANDARDS
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position, or cash flow.
NOTE 3. GOING CONCERN
The Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern that contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not established
any source of revenue to cover its operating costs. The Company will engage in
very limited activities without incurring any liabilities that must be
satisfied in cash until a source of funding is secured. The Company will offer
noncash consideration and seek equity lines as a means of financing its
operations. If the Company is unable to obtain revenue producing contracts or
financing or if the revenue or financing it does obtain is insufficient to
cover any operating losses it may incur, it may substantially curtail or
terminate its operations or seek other business opportunities through strategic
alliances, acquisitions or other arrangements that may dilute the interests of
existing stockholders.
NOTE 4. SHAREHOLDER'S EQUITY
Upon formation, the Board of Directors issued 31,340,000 shares of common stock
for $3,134 in services to the founding shareholder of the Company to fund
organizational start-up costs.
The stockholders' equity section of the Company contains the following classes
of capital stock as of February 15, 2008:
o Common stock, $ 0.0001 par value: 250,000,000 shares authorized;
31,340,000 shares issued and outstanding
F-7
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29
Nexam Acquisition Corp.
(A Development Stage Company)
Notes to Financial Statements
For the Period from January 11, 2008 (inception) to February 15, 2008
NOTE 4. SHAREHOLDER'S EQUITY (CONTINUED)
o Preferred stock, $ 0.0001 par value: 20,000,000 shares authorized; but
not issued and outstanding.
F-8
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30
PART III.
ITEM 1. INDEX TO EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.1 Certificate of Incorporation
3.2 By-Laws
3.3 Specimen Stock Certificate
23.1 Consent of the Independent Registered Public Accounting Firm
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Date: March 4, 2008 NEXAM ACQUISITION CORP.
By: /s/ William Tay
------------------------------------
Name: William Tay
Title: President and Chief Executive Officer
31
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
3.1 Certificate of Incorporation
3.2 By-Laws
3.3 Specimen Stock Certificate
23.1 Consent of the Independent Registered Public Accounting Firm
32