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EX-5.1 - EXHIBIT 5.1 - GARMAN CABINET & MILLWORK, INC. | ex5_1.htm |
EX-23.1 - EXHIBIT 23.1 - GARMAN CABINET & MILLWORK, INC. | ex23_1.htm |
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
S-1
Amendment
No. 6
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
GARMAN
CABINET & MILLWORK, INC.
(Exact
Name of Registrant as Specified in Its Charter)
North
Carolina
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2430
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56-2115043
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||
(State
or other jurisdiction of
incorporation
or organization)
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(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer
Identification
Number)
|
Garman
Cabinet & Millwork, Inc.
137 Cross
Center Road
Suite
318
Denver,
NC 28037
Telephone
No.: 704-489-2798
(Name,
Address and Telephone Number
of
Principal Executive Offices and Agent for Service)
Copies
of communications to:
JPF
Securities Law, LLC.
19720
Jetton Road
Suite
300
Cornelius,
NC 28031
Telephone
No.: (704) 897-8334
Facsimile
No.: (888) 608-5705
Approximate
date of commencement of proposed sale to the public:
From time
to time after this registration statement becomes effective.
If any of
the securities being registered on this form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. x
If this
form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If this
form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If this
form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If
delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. ¨
Large
Accelerated Filer ¨
Accelerated
Filer ¨
Non-Accelerated
Filer ¨
(Do not check if a smaller reporting company)
Smaller
reporting Company x
Title
of Each Class of
Securities
to be Registered
|
|
Amount
to be
Registered
|
|
Proposed
Maximum
Offering Price
|
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Proposed Maximum
Aggregate Offering
Price
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Amount
of
Registration
Fee
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||||||||||||||
Common
Stock (1)
|
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809,300
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$.10
|
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$
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80,930
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$
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3.15
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||||||||||||
Total:
|
|
809,300
|
|
$.10
|
|
$
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80,930
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$
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3.15
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|||||||||||||
(1)
|
Estimated
solely for the purpose of calculating the registration fee required by
Section 6(B) of the Securities Act and computed pursuant to Rule
457(o) under the Securities Act. No exchange or over the counter market
exists for our common stock. The most recent price paid for our common
stock in a private placement was
$0.10.
|
The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
THE
INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE SELLING
STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO
BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT
TO COMPLETION, DATED OCTOBER 28, 2009
PROSPECTUS
GARMAN
CABINET & MILLWORK, INC.
809,300
Shares of Common Stock
The
selling shareholders named in this prospectus are offering all of the shares of
common stock offered through this prospectus. Please refer to “Selling Security
holders” beginning on page 14.
Our
common stock is presently not traded on any market or securities
exchange.
The
information in this prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
The
selling shareholders will sell our shares at $0.10 per share until our shares
are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices
or privately negotiated prices. We determined this offering price based upon the
price of the last sale of our common stock to investors.
We are
not selling any shares of common stock in this offering and therefore will not
receive any proceeds from this offering. All costs associated with this
registration will be borne by us.
An investment in our Common Stock
involves significant risks. Investors should not buy our Common Stock unless
they can afford to lose their entire investment. See “Risk
Factors ” beginning on
page 8.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
PART
I
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Item
No.
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Page
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Prospectus
Summary
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3
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Summary
Financial Data
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4
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Risk
Factors
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5
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Forward-Looking
Statements
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6
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Use
of Proceeds
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6
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Determination
of Offering Price
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6
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Dilution
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6
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Selling
Security Holders
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6
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Plan
of Distribution
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7
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Description
of Capital Stock
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7
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Interest
of Named Experts and Counsel
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7
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Description
of Business
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8
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Description
of Property
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9
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Legal
Proceedings
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9
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Market
for Common Equity and Related Stockholder Matters
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9
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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9
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Changes
In and Disagreements With Accountants on Accounting and Financial
Disclosure
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11
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Management
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11
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Executive
Compensation
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12
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Security
Ownership of Certain Beneficial Owners and Management
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12
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Certain
Relationships and Related Transactions
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12
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Disclosure
of Commission Position of Indemnification for Securities Act
Liabilities
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13
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Where
You Can Find More Information
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13
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Transfer
Agent
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13
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Index
to the Audited Financial Statements
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14
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This
summary highlights important information about our company and business. Because
it is a summary, it may not contain all of the information that is important to
you. To understand this offering fully, you should read this entire prospectus
and the financial statements and related notes included in this prospectus
carefully, including the “Risk Factors” section. Unless the context requires
otherwise, “we,” “us,” “our”, “ and the “company” and similar terms refer to
Garman Cabinet & Millwork, Incorporated, while the term “Garman Cabinet
& Millwork” refers to Garman Cabinet & Millwork, Inc.” in its corporate
capacity.
Our
Company
We are Garman Cabinet & Millwork,
Inc. (the “Company”), a North Carolina corporation. Garman Cabinet &
Millwork, Inc. (www.garmanmillwork.net) is an existing business located in
Denver, North Carolina. The Company specializes in the installation of
architectural woodwork. As a result of the management’s years of experience and
expertise, Garman Cabinet & Millwork, Inc. has managed and installed a vast
variety of woodwork for small and large companies such as Southern Architectural
Woodwork, RT Dooley, Craftsmanship Unlimited, Fetzers Woodwork, Wachovia, Bank
of America, Four Season’s Resort, Atlantis Hotel & Casino and many other
high profile clients. The Company also provides services and products
to smaller companies and individuals. The Company realizes that the only way to
ensure an excellent finished product is to stay on top of industry techniques
and standards.
Garman
Cabinet & Millwork, Inc. provides high quality architectural woodwork
installation services to large and small clients and individuals at a
competitive price. In the Charlotte, North Carolina area, the market
has grown substantially. However, this business is not limited to the Charlotte,
North Carolina area. Many of Garman Cabinet & Millwork, Inc.’s
clients are large woodwork manufacturers with locations throughout the
country.
When
Garman Cabinet & Millwork, Inc. opened in January 1996, we were a very small
localized installation company with three employees and very little equipment to
complete larger installation projects. Over the past twelve years, we
have grown to a company with twenty plus employees, multiple subcontractors, the
equipment to handle very large projects and many repeat clients.
About
Us
Our
principal executive offices are located at 137 Cross Center Road, Denver, NC
28037 and our telephone number is (704) 489-2798.
Our
common stock is not listed on any exchange or quoted on any similar quotation
service, and there is currently no public market for our common stock. Upon
effectiveness of our registration statement, management plans to apply to enable
our common stock to be quoted on the OTC Bulletin Board.
The
Offering
This
prospectus relates to the sale of up to 809,300 currently issued and outstanding
shares of our common stock by the selling security holders, consisting of 44
shareholders.
We agreed
to file a registration statement with the Commission in order to register the
resale of the common shares issued to the selling security holders.
As of
August 18, 2009 we had 11,709,300 shares of common stock outstanding. The number
of shares registered under this prospectus would represent approximately 6.91%
of the total common stock outstanding. The number of shares ultimately offered
for sale by the selling security holders is dependent on whether, and to what
extent, such holders decide to sell their shares.
We will
not commence seeking a market for our common stock until the registration
statements have cleared all comments from the Securities and Exchange
Commission. Management intends to request a market maker to file a Form 211
to be approved for trading on the NASDAQ. The Company is not permitted to file a
Form 211 with the OTCBB as only Market Makers may apply to the OTCBB for the
issuer to get approval to quote the security on the Exchange.
There
currently is no trading market for our common stock. The Company has not applied
for a listing on any exchanges including Pinksheets.com. Shares registered in
this prospectus may not be sold until it is declared effective. The common
shares offered under this prospectus may not be sold by the selling security
holders, except in negotiated transactions with a broker-dealer or market maker
as principal or agent, or in privately negotiated transactions not involving a
broker or dealer. Information regarding the selling security holders, the common
shares they are offering to sell under this prospectus and the times and manner
in which they may offer and sell those shares is provided in the sections of
this prospectus captioned “Selling Security Holders” and “Plan of
Distribution.”
The
following selected financial data have been derived from the Company’s financial
statements which have been audited by Traci J. Anderson, CPA, an independent
registered public accounting firm, including the balance sheet at December 31,
2008 and 2007, and the related statements of operations, stockholders’ equity
and cash flows for the two years ended December 31, 2008 and December 31, 2007.
The summary financial data as of December 31, 2008 are derived from our audited
financial statements, which are included elsewhere in this prospectus. The
audited condensed financial statements have been prepared on the same basis as
our audited financial statements and include all adjustments, consisting of
normal and recurring adjustments, that we consider necessary for a fair
presentation of our financial position and operating results for the audited
periods. The following data should be read in conjunction with “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” in
this Prospectus and the Financial Statements and notes thereto included in this
Prospectus.
As shown
in the accompanying audited financial statements, the Company has suffered a
loss from operations to date. It has experienced a loss of $317,536 since
inception and has a negative working of capital. These factors raise substantial
doubt about the Company’s ability to continue as a going concern.
Because
this is only a financial summary, it does not contain all the financial
information that may be important to you. It should be read in conjunction with
the consolidated financial statements and related notes presented in this
section.
Unaudited
Financial Summary Information for the Six Months Ended June 30, 2009 and
2008
Statements
of Operations
|
For
the six months ended June 30, 2009
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For
the six months ended June 30, 2008
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||||||
Revenues
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$
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244,524
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$
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591,421
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||||
Cost
of Sales
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$
|
(135,501
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)
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$
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(326,547
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)
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||
Gross
profit
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$
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109,023
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$
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264,874
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||||
Operating
expenses
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$
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253,453
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$
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291,472
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||||
(Loss)
from operations
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$
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(144,430
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)
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$
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(26,598
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)
|
||
Interest
expense
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$
|
(3,210
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)
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$
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(2,451
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)
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||
Net
(loss)
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$
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(147,640
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)
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$
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(29,049
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)
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||
Net
loss per common share
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**
|
**
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** Less
than $.01
Balance
Sheet
|
As
of June 30, 2009
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|||
Cash
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$
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8,907
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Total
current assets
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$
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8,907
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Other
assets
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$
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38,179
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||
Total
Assets
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$
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48,631
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Current
liabilities
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$
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185,237
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Long
term liabilities
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$
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0
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||
Stockholders’
equity (deficit)
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$
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(136,606)
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Total
liabilities and stockholders’ equity (deficit)
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$
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48,631
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Audited
Financial Summary Information for the Years Ended December 31, 2008 and
2007
Statements
of Operations
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For
the year ended December 31, 2008
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For
the year ended December 31, 2007
|
||||||
Revenues
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$
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1,055,710
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$
|
1,205,928
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||||
Cost
of Sales
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$
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(611,092
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)
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$
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(696,338
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)
|
||
Gross
profit
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$
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444,618
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$
|
509,590
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||||
Operating
expenses
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$
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556,546
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$
|
646,184
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||||
(Loss)
from operations
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$
|
(111,928
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)
|
$
|
(136,594
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)
|
||
Interest
expense
|
$
|
(7,302
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)
|
$
|
(0
|
)
|
||
Net
(loss)
|
$
|
(119,230
|
)
|
$
|
(136,594
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)
|
||
Net
loss per common share
|
**
|
**
|
** Less
than $.01
Balance
Sheet
|
As
of December 31, 2008
|
|||
Cash
|
$
|
29,432
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||
Total
current assets
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$
|
101,199
|
||
Other
assets
|
$
|
40,734
|
||
Total
Assets
|
$
|
143,478
|
||
Current
liabilities
|
$
|
132,444
|
||
Long
term liabilities
|
$
|
0
|
||
Stockholders’
equity (deficit)
|
$
|
11,034
|
||
Total
liabilities and stockholders’ equity (deficit)
|
$
|
143,478
|
We
are subject to various risks that may materially harm our business, financial
condition and results of operations. You should carefully consider the risks and
uncertainties described below and the other information in this filing before
deciding to purchase our common stock. If any of these risks or uncertainties
actually occurs, our business, financial condition or operating results could be
materially harmed. In that case, the trading price of our common stock could
decline and you could lose all or part of your investment.
We
received a Going Concern opinion during our recent financial audit
We have
received a report from our independent auditor on our financial statements for
the years ended December 31, 2008 and 2007. The footnotes to our audited
financial statements list factors which raise some doubt about our ability to
continue as a going concern. These factors were related to recurring losses
from operations since inception. In addition, we have yet to generate an
internal cash flow from our business operations. Our plans with regard to
these matters encompass the following actions: 1) obtain funding from new
investors to alleviate our working deficiency, and 2) implement a plan to
generate further sales. Our continued existence is dependent upon our
ability to resolve our liquidity problems and increase profitability in our
current business operations. However, the outcome of management’s plans cannot
be ascertained with any degree of certainty. The accompanying audited financial
statements do not include any adjustments that might result from the outcome of
these risks and uncertainties.
We
have incurred losses from operations and limited cash that raises substantial
doubt as to whether we can continue as a going concern.
As of
June 30, 2009, our accumulated deficit was $317,536. Our cash flows
provided by (used in) operations were $(34,034) and $4,855 for the six months
ended June 30, 2009 and June 30, 2008, respectively. At December 31,
2008, our accumulated deficit was $169,896, and our cash flows provided by (used
in) operations were $(126,583). Our auditor has included in their
report that there is substantial doubt about our ability to continue as a going
concern because of our lack of profitable operations and negative cash flows
from business operations.
Because
we have a limited operating history, our business is difficult to
evaluate.
We were
formed in 1996 and have a limited operating history. An investor in
our common stock must consider the risks and difficulties frequently encountered
by early stage companies in new and rapidly evolving markets. We
expect our operating expenses to increase significantly, especially in the areas
of development, marketing and promotion. As a result we will need to
increase our revenue to remain profitable. If our revenue does not
grow as expected or increases in our expenses are not in line with forecasts,
there could be a material adverse effect on our business, results of operations
and financial condition.
We
need additional financing and there is no assurance it can be obtained; and any
such future financings may significantly dilute your equity interest in our
stock.
Our
current business plan calls for raising a significant amount of additional funds
within the next 12 months. Under the plan, these new funds would be utilized
primarily for increased advertising and to expand the Company’s infrastructure
through hiring key employees. We believe that this future financing
is crucial to our ability to grow and develop our business. We expect
to engage in future financings over the next several years in which we
anticipate efforts to raise additional capital. There can be no
assurances that such financings will ever be completed, but any such financings
could involve a dilution of the interests of our shareholders upon the issuance
of additional shares of common stock and other securities. To the
extent we will need additional financing in the immediate or near future to
implement our business plan, attaining such additional financing may not be
possible. If additional capital is otherwise available, the terms on
which such capital may be available may not be commercially feasible or
advantageous to us or our shareholders.
Our
business could suffer if there is continual decline in economic conditions and
discretionary consumer spending.
A
continuing downturn in the economy could have a negative impact on our revenues,
the extent of such impact is uncertain. During the last year, the
economies of the major developed nations have been declining, and some private
economists declared that in the aftermath of the terrorist attacks in the United
States a global recession is inevitable and possibly present. If
consumer confidence does not rise and the global economy does not show signs of
recovery in the near future, we may lose a significant portion of our business,
revenue and opportunities. Accordingly, due to current economic conditions, the
availability of credit to our customers could decrease since lenders are
tightening their lending policies.
We
face significant competition and there is no assurance that we will be able to
compete.
Given our
relatively limited resources, we may not be able to effectively compete in our
target markets. These markets are characterized by intense
competition and increasing numbers of new market entrants who have developed or
are developing potentially competitive services. Most of our competitors have
significantly greater financial and operating resources compared to us. Our
ability to compete will be dependent on our ability to enhance and upgrade our
services.
Our
limited resources may restrict our ability to manage any growth we may
experience.
Growth of
our business will likely place a significant strain on our management systems
and resources and may require us to implement new operating systems, procedures
and controls. Our failure to manage our growth and expansion could
adversely affect our business, results of operations and financial
condition. Failure to implement new systems effectively or within a
reasonable period of time could adversely affect our business, results of
operations and financial condition.
Unexpected
material changes in consumer tastes and demographic trends or a downturn in
national, regional and local economic conditions may adversely affect our
business.
The
cabinet and millwork industry is affected by changes in consumer tastes and by
national, regional and local economic conditions and demographic
trends. As an industry participant, our ability to generate revenues
is highly sensitive to public tastes, which are unpredictable. We may
not be able to offer a selection of products that are favorable to
consumers. In addition, a general economic downturn may result in a
change of discretionary spending patterns and a decrease in our
revenues.
We must
influence and respond to emerging industry standards and other technological
changes in a timely and cost effective manner. We cannot assure you
that we will be successful in responding to technological and industry
challenges in a timely and cost-effective way. If we are unable to integrate new
technologies and standards effectively, there could be an adverse effect on our
results of our operations.
We
may have difficulty managing our potential growth.
We could
experience a period of significant expansion, and we anticipate that further
expansion will be required to address potential growth in our customer base and
market opportunities. Any expansion is expected to place a
significant strain on our management, operational and financial resources. At
the present time, we expect it will be required to increase our number of
employees during our current fiscal year. To manage the expected
growth of our operations and personnel, we will be required to improve existing
and implement new transaction processing, operational and financial systems,
procedures and controls, and to expand, train and manage our growing employee
base. We also will be required to expand our finance, administrative
and operations staff. Further, we may be required to enter into
relationships with various strategic partners necessary to our
business. There can be no assurance that our current and planned
personnel systems, procedures and controls will be adequate to support our
future operations, that management will be able to hire, train, retain, motivate
and manage required personnel or that our management will be able to identify,
manage and exploit existing and potential strategic relationships and market
opportunities. Our failure to manage growth effectively could have a
material adverse effect on our business, results of operations and financial
condition.
Our
business plan is based, in part, on estimates and assumptions which may prove to
be inaccurate and accordingly our business plan may not succeed.
The
discussion of our business incorporates management’s current best estimate and
analysis of the potential market, opportunities and difficulties that we
face. There can be no assurances that the underlying assumptions
accurately reflect our opportunities and potential for
success. Competitive and economic forces on marketing, distribution
and pricing of our products make forecasting of sales, revenues and costs
extremely difficult and unpredictable.
If
we lose the services of a number of key employees, our business could
suffer.
Our
success is dependent, in part, on the personal efforts of Valerie A. Garman, our
President. Although we currently do not have “key-man” insurance, we
plan to obtain "key-man" insurance on her life in the amount of $1,000,000; the
loss of Mrs. Garman's services could have a material adverse effect on our
business and prospects. Our success is also dependent upon our ability to hire
and retain additional qualified management, marketing, technical, financial, and
other personnel. Competition for qualified personnel is intense and we may not
be able to hire or retain additional qualified personnel. Any inability to
attract and retain qualified management and other personnel would have a
material adverse effect on our business and operations.
Certain
shareholders control a substantial portion of our outstanding common
stock.
Our
executive officers, directors and principal shareholders own a significant
portion of the outstanding shares of our common stock. Specifically,
Valerie A. Garman, our President, and Sid Garman, her husband, own 5,100,000 and
4,900,000 shares of our common stock, respectively. In addition,
additional shares and/or options may be issued to our other officers, directors
and employees. Accordingly, these persons, acting together, will be
able to influence the election of our directors and thereby influence or direct
our policies.
We
do not intend to pay any dividend for the foreseeable future.
We do not
anticipate paying cash dividends in the foreseeable future. The
future payment of dividends is directly dependent upon our future earnings,
financial requirements and other factors to be determined by our board of
directors. We anticipate any earnings that may be generated from our
operations will be used to finance our growth and that cash dividends will not
be paid to shareholders.
The
Company does not have a prior public market, and there can be no assurance that
an active trading market will exist in our Stock after the
Offering.
Prior to
the Offering, there has been no public market for the Common Stock, and there
can be no assurance that an active trading market in the Common Stock will
develop after the Offering or be sustained. The initial public
offering price may not be indicative of the market price for the Common Stock
after the Offering. The liquidity of and the market price for the
Common Stock can be expected to vary with changes in market and economic
conditions, the financial condition and prospects of the Company and other
factors that generally influence the market prices of
securities. Such fluctuations may significantly affect liquidity and
market prices independent of the financial performance of and prospects for the
Company.
The
Company’s Financial Position
Although
the economy has slowed and we are in the middle of a financial crisis, we
perform architectural woodwork for a vast variety of the business sectors
including public, private & state owned colleges, law firms, private funded
hospitals, high end hotels, and large office towers. Some of these clients have
continued expansion or new up fits through this tough economic time and have
helped us to stay busy. However, we do depend on customer’s timely payments for
services rendered. We are ultimately affected by the customer’s ability to pay
for goods and services, which could be hindered in this current economy, and
therefore would affect our financial position. We also depend on our suppliers
to service us in a timely manner. These suppliers, such as Home Depot and Lowes
Home Improvement are facing obstacles in this current economy. If they can not
service our supply needs, this could affect our business and thus our financial
position. Our financial position is subject to risk of loss as is a majority of
businesses. Our working capital deficit for the six months ended June 30, 2009
was $176,330. The general slow down in the US economy could have
a material adverse effect on our financial position.
Debt
financing in the current lending market and our ability to obtain future debt
financing.
We
currently have no debt covenants. The ability to obtain debt financing is
currently difficult in light of the bleak US economic situation. The majority
shareholders' credit worthiness would have to serve as a security interest on a
loan if the Company ever received one and there is no guarantee a bank or any
other financial institution would approve the shareholders' credit or the
company's credit and therefore approve the lending. Our ability to obtain
financing could be difficult due to our lack of net assets, lack of cash flows,
lack of net income and in light of the current economy.
This
Prospectus contains certain forward-looking statements regarding management’s
plans and objectives for future operations including plans and objectives
relating to our planned marketing efforts and future economic performance. The
forward-looking statements and associated risks set forth in this Prospectus
include or relate to, among other things, (a) our projected sales and
profitability, (b) our growth strategies, (c) anticipated trends in
our industry, (d) our ability to obtain and retain sufficient capital for
future operations, and (e) our anticipated needs for working capital. These
statements may be found under “Management’s Discussion and Analysis or Plan of
Operations” and “Business,” as well as in this Prospectus generally. Actual
events or results may differ materially from those discussed in forward-looking
statements as a result of various factors, including, without limitation, the
risks outlined under “Risk Factors” and matters described in this Prospectus
generally. In light of these risks and uncertainties, there can be no assurance
that the forward-looking statements contained in this Prospectus will in fact
occur.
The
forward-looking statements herein are based on current expectations that involve
a number of risks and uncertainties. Such forward-looking statements are based
on assumptions that we will be able to keep up with industry techniques and
standards, that there will be no material adverse competitive or technological
change in conditions in our business, that demand for our products will
significantly increase, that our President and Chief Executive Officer will
remain employed as such, that our forecasts accurately anticipate market demand,
and that there will be no material adverse change in our operations or business
or in governmental regulations affecting us or our manufacturers and/or
suppliers. The foregoing assumptions are based on judgments with respect to,
among other things, future economic, competitive and market conditions, and
future business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond our control. Accordingly, although we
believe that the assumptions underlying the forward-looking statements are
reasonable, any such assumption could prove to be inaccurate and therefore there
can be no assurance that the results contemplated in forward-looking statements
will be realized. In addition, as disclosed elsewhere in the “Risk Factors”
section of this prospectus, there are a number of other risks inherent in our
business and operations which could cause our operating results to vary markedly
and adversely from prior results or the results contemplated by the
forward-looking statements. Growth in absolute and relative amounts of cost of
goods sold and selling, general and administrative expenses or the occurrence of
extraordinary events could cause actual results to vary materially from the
results contemplated by the forward-looking statements. Management decisions,
including budgeting, are subjective in many respects and periodic revisions must
be made to reflect actual conditions and business developments, the impact of
which may cause us to alter marketing, capital investment and other
expenditures, which may also materially adversely affect our results of
operations. In light of significant uncertainties inherent in the
forward-looking information included in this prospectus, the inclusion of such
information should not be regarded as a representation by us or any other person
that our objectives or plans will be achieved.
Some of
the information in this prospectus contains forward-looking statements that
involve substantial risks and uncertainties. Any statement in this prospectus
and in the documents incorporated by reference into this prospectus that is not
a statement of an historical fact constitutes a “forward-looking statement”.
Further, when we use the words “may”, “expect”, “anticipate”, “plan”, “believe”,
“seek”, “estimate”, “internal”, and similar words, we intend to identify
statements and expressions that may be forward-looking statements. We
believe it is important to communicate certain of our expectations to our
investors. Forward-looking statements are not guarantees of future performance.
They involve risks, uncertainties and assumptions that could cause our future
results to differ materially from those expressed in any forward-looking
statements. Many factors are beyond our ability to control or predict. You are
accordingly cautioned not to place undue reliance on such forward-looking
statements. Important factors that may cause our actual results to differ from
such forward-looking statements include, but are not limited to, the risk
factors discussed below. Before you invest in our common stock, you should be
aware that the occurrence of any of the events described under “Risk Factors” in
this prospectus could have a material adverse effect on our business, financial
condition and results of operation. In such a case, the trading price of our
common stock could decline and you could lose all or part of your
investment.
With
respect to the sale of unregistered securities referenced above, all
transactions were exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933 (the “1933 Act”), and
Regulation D promulgated under the 1933 Act. In each instance, the purchaser had
access to sufficient information regarding the Company so as to make an informed
investment decision.
This
Prospectus relates to shares of our common stock that may be offered and sold
from time to time by certain selling stockholders. There will be no proceeds to
us from the sale of shares of common stock in this offering.
DETERMINATION
OF OFFERING PRICE
|
The
Selling Security Holders will sell their shares at $.10 per share and thereafter
at prevailing market prices, if and when Garman Cabinet & Millwork, Inc. is
quoted on the Over-The-Counter Bulletin Board. However, there can be no
assurance that we will find a market maker willing to apply for such quotation.
Prior to this offering, there has been no market for our shares. The offering
price of $.10 per share was arbitrarily determined and bears no relationship to
assets, book value, net worth, earnings, actual results of operations, or any
other established investment criteria. Among the factors considered in
determining this price were our historical sales levels, estimates of our
prospects, the background and capital contributions of management, the degree of
control which the current shareholders desired to retain, current conditions of
the securities markets and other information.
DILUTION
|
Our net
tangible book deficit as of the six months ending June 30, 2009 was $136,606 or
less than $.012 per share of common stock. Net tangible book deficit is
determined by dividing our tangible book deficit (total tangible assets less
total liabilities) by the number of outstanding shares of our common stock. As
of August 18, 2009, we had a total of 11,709,300 shares of common stock
outstanding.
The
following table presents information regarding the selling security holders
Unless otherwise stated below, to our knowledge no selling security holder nor
any affiliate of such shareholder has held any position or office with, been
employed by or otherwise has had any material relationship with us or our
affiliates during the three years prior to the date of this prospectus. None of
the selling security holders are members of the National Association of
Securities Dealers, Inc. The selling security holders may be deemed to be
“underwriters” within the meaning of the Securities Act of 1933. The number and
percentage of shares beneficially owned before and after the sales is determined
in accordance with Rule 13d-3 and 13d-5 of the Exchange Act, and the
information is not necessarily indicative of beneficial ownership for any other
purpose. We believe that each individual or entity named has sole investment and
voting power with respect to the securities indicated as beneficially owned by
them, subject to community property laws, where applicable, except where
otherwise noted. The total number of common shares sold under this prospectus
may be adjusted to reflect adjustments due to stock dividends, stock
distributions, splits, combinations or recapitalizations.
For
purposes of calculating the percentage of shares owned after the offering, we
assumed the sale of all common shares offered under this prospectus. However,
the selling security holders are under no obligation to sell all or any portion
of the common shares offered for sale under this prospectus. Accordingly, no
estimate can be given as to the amount or percentage of our common shares that
will ultimately be held by the selling security holders upon termination of
sales pursuant to this prospectus. The percentage of outstanding shares is based
on 11,709,300 shares of common stock outstanding as of August 18,
2009.
Relationship
to Management
|
Shares of
common
Stock owned prior
to
offering
|
Percent of
Common
Stock
owned
prior to
offering (1)
|
Shares of
common
stock
to be
sold
|
Shares of
common
Stock
owned
After
offering
|
Percentage
of
Shares
Owned
Upon
Completion
|
|||||||||||||
(1) Spencer
Richard Garman
|
Sidney
Garman’s Brother
|
20,000
|
.171
|
%
|
20,000
|
0
|
0
|
%
|
||||||||||
(2)
Lester G. Henderson
|
None
|
10,000
|
.085
|
%
|
10,000
|
0
|
0
|
%
|
||||||||||
(3) Donna
C. Henderson
|
None
|
10,000
|
.085
|
%
|
10,000
|
0
|
0
|
%
|
||||||||||
(4) George
B. Roth
|
None
|
50,000
|
.427
|
%
|
50,000
|
0
|
0
|
%
|
||||||||||
(5)
Nellie K. Roth
|
None
|
51,000
|
.436
|
%
|
51,000
|
0
|
0
|
%
|
||||||||||
(6)
Seth R. Garman
|
Sidney
Garman’s Brother
|
30,000
|
.256
|
%
|
30,000
|
0
|
0
|
%
|
||||||||||
(7) Danesha
S. Garmen
|
Sidney
Garman’s Sister in Law
|
15,000
|
.128
|
%
|
10,000
|
0
|
0
|
%
|
||||||||||
(8)
Nicole D. Garman
|
Sidney
Garman’s Niece
|
10,000
|
.085
|
%
|
10,000
|
0
|
0
|
%
|
||||||||||
(9)
Devin J. Garman
|
Sidney
Garman’s Nephew
|
10,000
|
.085
|
%
|
10,000
|
0
|
0
|
%
|
||||||||||
(10)
Sean J. Garman
|
Sidney
Garman’s Brother
|
15,000
|
.128
|
%
|
10,000
|
0
|
0
|
%
|
||||||||||
(11)
Scott & Melissa Garman
|
Sidney
Garman’s Brother and Wife
|
50,000
|
.427
|
%
|
50,000
|
0
|
0
|
%
|
||||||||||
(12)
Donald A. Bello
|
None
|
1,000
|
.009
|
%
|
1,000
|
0
|
0
|
%
|
||||||||||
(13)
Anita M. Bello
|
Sidney
Garman’s Aunt
|
1,000
|
.009
|
%
|
1,000
|
0
|
0
|
%
|
||||||||||
(14)
Patricia Bello
|
None
|
1,000
|
.009
|
%
|
1,000
|
0
|
0
|
%
|
||||||||||
(15)
Jacqueline M. David
|
None
|
3,000
|
.026
|
%
|
3,000
|
0
|
0
|
%
|
||||||||||
(16)
John Paul Leonardos
|
None
|
40,000
|
.342
|
%
|
40,000
|
0
|
0
|
%
|
||||||||||
(17)
Andy Foust
|
None
|
30,600
|
.261
|
%
|
30,600
|
0
|
0
|
%
|
||||||||||
(18)
David Allen Current
|
None
|
150,000
|
1.281
|
%
|
150,000
|
0
|
0
|
%
|
||||||||||
(19)
Tonya S. Martin
|
None
|
1,000
|
.009
|
%
|
1,000
|
0
|
0
|
%
|
||||||||||
(20)
Michael & Melinda Carneal
|
None
|
1,500
|
.013
|
%
|
1,500
|
0
|
0
|
%
|
||||||||||
(21)
Billy L. Clark
|
None
|
2,000
|
.017
|
%
|
2,000
|
0
|
0
|
%
|
||||||||||
(22)
John Tessler
|
None
|
10,000
|
.085
|
%
|
10,000
|
0
|
0
|
%
|
||||||||||
(23)
Sara Smith
|
None
|
5,000
|
.043
|
%
|
5,000
|
0
|
0
|
%
|
||||||||||
(24)
Raymond Roth
|
None
|
5,000
|
.043
|
%
|
5,000
|
0
|
0
|
%
|
||||||||||
(25)
Richard Hilyard
|
None
|
5,000
|
.043
|
%
|
5,000
|
0
|
0
|
%
|
||||||||||
(26)
Donald Rohaley
|
Sidney
Garman’s Cousin
|
10,000
|
.085
|
%
|
10,000
|
0
|
0
|
%
|
||||||||||
(27)
Aubrey B. Rohaley
|
Sidney
Garman’s Cousin
|
3,500
|
.030
|
%
|
3,500
|
0
|
0
|
%
|
||||||||||
(28)
James Frost
|
Sidney
Garman’s Uncle
|
1,000
|
.009
|
%
|
1,000
|
0
|
0
|
%
|
||||||||||
(29)
James Nester
|
None
|
20,000
|
.171
|
%
|
20,000
|
0
|
0
|
%
|
||||||||||
(30)
Malcolm Miller
|
None
|
5,200
|
.044
|
%
|
5,200
|
0
|
0
|
%
|
||||||||||
(31)
Michele Bennett
|
None
|
2,000
|
.017
|
%
|
2,000
|
0
|
0
|
%
|
||||||||||
(32)
David Stroupe
|
None
|
3,000
|
.026
|
%
|
3,000
|
0
|
0
|
%
|
||||||||||
(33)
Douglas E. Darnell
|
None
|
10,000
|
.085
|
%
|
10,000
|
0
|
0
|
%
|
||||||||||
(34)
David James Kubicki
|
None
|
2,000
|
.017
|
%
|
2,000
|
0
|
0
|
%
|
||||||||||
(35)
Peter A. Putukian
|
None
|
15,000
|
.128
|
%
|
15,000
|
0
|
0
|
%
|
||||||||||
(36)Christopher
Howell
|
None
|
10,000
|
.085
|
%
|
10,000
|
0
|
0
|
%
|
||||||||||
(37)
Michael L. Raynor
|
None
|
1,500
|
.013
|
%
|
1,500
|
0
|
0
|
%
|
||||||||||
(38)
Brenda S. Raynor
|
None
|
1,500
|
.013
|
%
|
1,500
|
0
|
0
|
%
|
||||||||||
(39)
Melinda Russell
|
None
|
40,000
|
.342
|
%
|
40,000
|
0
|
0
|
%
|
||||||||||
(40)
Amanda Russell
|
None
|
2,500
|
.021
|
%
|
2,500
|
0
|
0
|
%
|
||||||||||
(41)
Laura Q. Kent
|
None
|
40,000
|
.342
|
%
|
40,000
|
0
|
0
|
%
|
||||||||||
(42)
Ben Joseph Mulligan
|
None
|
10,000
|
.085
|
%
|
10,000
|
0
|
0
|
%
|
||||||||||
(43)
Scott Garman
|
Sidney
Garman’s Brother
|
5,000
|
.043
|
%
|
5,000
|
0
|
0
|
%
|
||||||||||
(46) Greentree Financial Group,
Inc [2]
|
None
|
1,000,000
|
8.608
|
%
|
100,000
|
900,000
|
7.686
|
%
|
||||||||||
Totals
[1]
|
1,709,300
|
100.00
|
%
|
809,300
|
0
|
0
|
%
|
|||||||||||
[1]
|
Applicable
percentage of ownership is based on 11,709,300 shares as of August 18,
2009 (there are no securities exercisable or convertible into shares of
common stock). Beneficial ownership is determined in accordance with the
rules of the Commission and generally includes voting or investment power
with respect to securities. Note that affiliates are subject to
Rule 144 and Insider trading regulations – percentage computation is for
form purposes only.
|
[2]
|
Robert
C. Cottone and Michael Bongiovanni are the owners of Greentree Financial
Group, Inc. Mr. Cottone and Mr. Bongiovanni share equal voting
power over the investments of Greentree Financial Group,
Inc. Greentree Financial Group, Inc. is contracted to receive
$50,000 and 1,000,000 shares of our common stock for consulting services
that consist of assisting in the preparation of this Form S-1 registration
statement and the prospectus included herein, compliance with state Blue
Sky regulations, selection of an independent transfer agent and Edgar
services. A copy of our consulting agreement with Greentree Financial
Group, Inc. is attached hereto as Exhibit 10.1. Greentree
Financial Group, Inc. is one of the largest shareholders in our
company. Investors should be aware that Greentree should be
considered an “underwriter” of our securities that could potentially sell
our securities into the market.
|
Sales By Selling Security
Holders
The
Garman Cabinet & Millwork Selling Security Holders are offering to sell
809,300 shares of our common stock. All Selling Security Holders will sell their
shares at $0.10 per share until such time as a market develops for our common
stock, if ever. Then the shareholders shall be permitted to sell at the then
prevailing market price. We will not receive any proceeds from the
sale of the shares by the Garman Cabinet & Millwork Selling Security
Holders. The securities offered by this prospectus may be sold by the Garman
Cabinet & Millwork Selling Security Holders, but not by us. We
are not aware of any underwriting arrangements that have been entered into by
the Selling Security Holders. The distribution of the securities by the Garman
Cabinet & Millwork Selling Security Holders may be effected in one or more
transactions that may take place in the over-the-counter market, including
broker's transactions or privately negotiated transactions.
Any of
the Garman Cabinet & Millwork Selling Security Holders, acting alone or in
concert with one another, may be considered underwriters under the Securities
Act of 1933, if they are directly or indirectly conducting an illegal
distribution of the securities on our behalf. For instance, an
illegal distribution may occur if any of the Garman Cabinet & Millwork
Selling Security Holders provide us with cash proceeds from their sales of the
securities. If any of the Garman Cabinet & Millwork Selling
Security Holders determined to be underwriters, they may be liable for
securities violations in connection with any material misrepresentations or
omissions made in this prospectus.
In
addition, the Garman Cabinet & Millwork Selling Security Holders and any
brokers through whom sales of the securities are made may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, and the
commissions or discounts and other compensation paid to such persons may be
regarded as underwriters' compensation.
The
Garman Cabinet & Millwork Selling Security Holders may pledge all or a
portion of the securities owned as collateral for margin accounts or in loan
transactions, and the securities may be resold pursuant to the terms of such
pledges, accounts or loan transactions. Upon default by such Garman Cabinet
& Millwork Selling Security Holders, the pledgee in such loan transaction
would have the same rights of sale as the Garman Cabinet & Millwork Selling
Security Holders under this prospectus so long as the Company files a
post-effective amendment to name and identify the new selling security holder.
The Garman Cabinet & Millwork Selling Security Holders also may enter into
exchange trading of listed option transactions that require the delivery of the
securities listed under this prospectus. The Garman Cabinet &
Millwork Selling Security Holders may also transfer securities owned in other
ways not involving market makers or established trading markets, including
directly by gift, distribution, or other transfer without consideration, and
upon any such transfer the transferee would have the same rights of sale as such
Selling Security Holders under this prospectus so long as the Company files a
post-effective amendment to name and identify the new selling security holder.
If a post-effective amendment is not filed with the Securities and Exchange
Commission by the Company, 'pledgees' and 'transferees' of a Selling Security
Holder would not have rights to resell under this prospectus.
There can
be no assurances that the Garman Cabinet & Millwork Selling Security Holders
will sell any or all of the securities. In order to comply with state securities
laws, if applicable, the securities will be sold in jurisdictions only through
registered or licensed brokers or dealers. In various states, the securities may
not be sold unless these securities have been registered or qualified for sale
in such state or an exemption from registration or qualification is available
and is complied with. Under applicable rules and regulations of the Securities
and Exchange Act of 1934, as amended, any person engaged in a distribution of
the securities may not simultaneously engage in market-making activities in
these securities for a period of one or five business days prior to the
commencement of such distribution.
All of
the foregoing may affect the marketability of the securities. Pursuant to the
various agreements we have with the Garman Cabinet & Millwork Selling
Security Holders, we will pay all the fees and expenses incident to the
registration of the securities, other than the Garman Cabinet & Millwork
Selling Security Holders' pro rata share of underwriting discounts and
commissions, if any, which are to be paid by the Garman Cabinet & Millwork
Selling Security Holders.
DESCRIPTION
OF CAPITAL STOCK
General
The
Company is authorized to issue 100,000,000 shares of common stock, par value of
$.0001 per share. As of August 18, 2009 there were 11,709,300 shares of common
stock issued and outstanding.
Common
Stock
The
holders of common stock are entitled to one vote per share for the election of
directors and on all other matters to be voted upon by the stockholders. Subject
to preferences that may be applicable to any outstanding securities, the holders
of common stock are entitled to receive, when and if declared by the board of
directors, out of funds legally available for such purpose, any dividends on a
pro rata basis. In the event of our liquidation, dissolution or winding up, the
holders of common stock are entitled to share ratably in all assets remaining
after payment of liabilities. The common stock has no preemptive or conversion
rights or other subscription rights. There are no redemption or sinking fund
provisions applicable to the common stock. All outstanding shares of common
stock are fully paid and non-assessable.
On June
16, 2008, the Board of Directors and Shareholders of the Company authorized an
increase in the amount of the authorized common shares from 1,000 to 100,000,000
and to perform a 10,000 to one forward split of Valerie and Sid Garman’s 1,000
pre-split shares (i.e. 510 and 490 shares, respectively) to 10,000,000
post-split shares (i.e. 5,100,000 and 4,900,000 shares, respectively) and
increase the par value from none to $.0001.
Limitation
of Liability: Indemnification
Our
Bylaws provide that the Company shall indemnify its officers, directors,
employees and other agents to the maximum extent permitted by North Carolina
law. Our Bylaws also permit it to secure insurance on behalf of any officer,
director, employee or other agent for any liability arising out of his or her
actions in such capacity, regardless of whether the Bylaws would permit
indemnification.
We
believe that the provisions in its Articles of Incorporation and its Bylaws are
necessary to attract and retain qualified persons as officers and
directors.
Insofar
as indemnification for liabilities arising under the 1933 Act may be permitted
to directors, officers and controlling persons of Company pursuant to the
foregoing, or otherwise, the Company has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the 1933 Act
and is, therefore, unenforceable.
Our
financial statements for the year ended December 31, 2008 and 2007, contained in
this prospectus have been audited by Traci J. Anderson, CPA, registered
independent certified public accountants, to the extent set forth in their
report, and are set forth in this prospectus in reliance upon such report given
upon their authority as experts in auditing and accounting. Traci J. Anderson,
CPA does not own any interest in us.
JPF
Securities, LLC passed upon the validity of the issuance of the common shares to
be sold by the selling security holders under this prospectus. JPF Securities,
LLC does not own any interest in us.
DESCRIPTION
OF BUSINESS
History
When
Garman Cabinet & Millwork, Inc. began operations in Florida in January,
1996, we were a very small localized installation company with three employees
and very little equipment to complete larger installation
projects. Over the past thirteen years, we have grown to a company of
fourteen employees, multiple subcontractors, and the equipment to handle large
projects.
Shortly
after Garman Cabinet & Millwork opened its doors, our President, Valerie A.
Garman, and Vice President, Sidney L. Garman, Jr., realized the location
potential and moved our operations to Charlotte, NC in January,
1999.
We
specialize in the installation of architectural woodwork. Our mission
is to provide the best quality of architectural woodwork installation to meet
its clients’ needs and deadlines. We focus on providing superior, reasonably
priced architectural woodwork installation as well as unparalleled customer
service and commitment. Garman Cabinet & Millwork seeks to provide efficient
and high-quality installation services to clients. The Company strives to
nurture the best practices, technology and talent of the industry and share them
broadly to try and create value for its customers, shareholders and employees.
Our target market includes general contractors, architects, woodwork
manufacturers and individuals seeking superior service and excellent customer
support and woodwork installation. The Company’s geographic focus is the
Charlotte, North Carolina area, but better than 50% of our installation projects
are outside North Carolina. We primarily travel to Washington, DC,
Atlanta, GA, New York State, Greenville, SC, Spartanburg, SC, Myrtle Beach, SC,
and Charleston, SC. With membership in AGC, BBB, AWI and the BlueBook.com and
through the internet, the Company has the ability to operate nationwide. Our
ability to travel nationwide is made available by keeping well trained
employees, offering competitive out of town rates and having the willingness to
work long hours to keep jobs on schedule. If we do not keep jobs on schedule, we
could experience job delays which would not be reimbursed by the client and
would therefore be an out of pocket expense for us.
Products
and Services
Garman
Cabinet & Millwork, Inc. installs a broad range of products from varied
materials in its execution of architectural woodwork. We install all
of these items in accordance with the AWI standards. Our company has full
control over all aspects of architectural woodwork such as material handling,
unload and distribution, installation and final punch-out.
Garman
Cabinet & Millwork, Inc. presently offers the following installation
services:
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High
End architectural wood
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Specialty
items, detail ceiling and audio visual
units
|
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Custom
furniture: reception/security desks, credenzas, conference
tables, and system type furniture
|
·
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Panels: wall,
soffit and ceiling
|
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Trim: primed
and stained
|
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Casework: plastic
laminate and wood
|
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Doors: flush,
stile and rail, and louver
|
·
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Jambs: cased
openings, portals and pilasters
|
·
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Solid
Surface
|
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Elevator
cab interiors
|
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Stairways
|
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Columns
|
Our
Company specializes in the installation of cabinets, veneer wall panels, wood
base molding, wood crown molding, wood chair rail, wood wainscot panels, a
variety of doors, door jambs and door hardware, window casings, window sills,
door casing and bathroom vanities. We accommodate the high end aspects of these
installations in regards to the design and delicate intricacies that the
customer chooses. Architectural woodwork is 100% of our business and
installation of veneer wood wall panels is the largest percentage of our
business. Woodwork manufacturers are by far the largest customers for our
business.
Sources
and Availability of Raw Materials
We obtain
our supplies, such as screws, caulk, nails, hammer etc. from Home Depot or Lowes
Home Improvement retail stores. Raw materials for our installation work are
readily available at these retail stores.
Dependence
on One or A Few Customers
We do not
depend on any one customer or a few customers. However, we do depend on timely
payments from our existing customers. A default in payment from customers
results in an unfavorable expense for us.
There are
many woodwork manufacturing companies in NC, United States and Canada that we
provide installation services for. Our top customers include; Stephenson
Woodwork of Raleigh, NC, Cleora Sterling of Mebane, NC, Hollywood Woodwork of
Hollywood, FL, and Sefina Industries of Montreal, Canada.
Number
of Employees
As of
this filing, we have 14 full time employees and have a large supply of woodwork
installation subcontractors available to us if we have a surplus of work or a
very large project that we need more manpower.
Our
Business Model
Garman
Cabinet & Millwork, Inc. generates its business by providing reasonably
priced architectural woodwork installation as well as valued customer service
and commitment. The Company targets clients throughout the
construction industry whether it is the general contractor, architect, woodwork
manufacturer or directly to the owner. We control all of the steps involved with
estimation, pricing, and the quality of the installation.
Strategy
and Implementation Summary
We will
watch our results very carefully. Believing that a business opportunity exists
is important. However, we will not pursue a business model if we cannot afford
to be in that business. We will strategically focus on building professional and
customer relationships within relevant sectors for our proprietary products and
services. Our business strategy is to quickly and aggressively pursue and
expand in areas of success and market dominance that have not already been
successfully penetrated by other businesses, or to provide services and
solutions not presently offered by other leading brands.
Sales
Strategy
Our
strategy focuses first on establishing an identity for our products and
services. By maintaining strong relationships fostered from previous business
relationships, we have an existing list of prominent contacts and decision
makers that we can continually approach with new and innovative ideas. We will
focus on capitalizing the relationships and industry contacts we have
established in the past. We will work with established brands with large clients
and bases.
Sales
and Marketing
Garman
Cabinet & Millwork, Inc. will sell its products through a direct sales team
and online marketing campaigns. The inside sales team will interact with
customers and supplement the outside sales team with the materials needed for a
successful campaign. The Company will also sell its products and services
through referrals and through bidding processes. It will attempt to
attract new customers in a variety of manners:
·
|
An
aggressive advertising campaign targeting local and regional retailers,
commercial developers/builders and
individuals;
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·
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Word-of-mouth
advertising through superior customer service and
installation;
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·
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Update
Internet website and advertise using search engine driven
marketing;
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·
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Focused
advertising on the Internet to allow the Company to gain exposure on a
larger basis, thereby allowing for further expansion in the future;
and
|
·
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Hire
additional project management and
estimator.
|
Competition
The
cabinet and millwork industry is highly competitive and characterized by
frequent product introductions, platforms and new technologies. As demand for
these products and services continues to increase, we expect new competitors to
enter the market and existing competitors to allocate more resources to develop
and market their cabinet and millwork products and services. As a result, we
expect competition in the cabinet and millwork industry to
intensify.
Although
the economy has slowed, we perform architectural woodwork for a vast variety of
the business sectors including public, private & state owned colleges, law
firms, private funded hospitals, high end hotels, and large office towers. We
have stayed busy performing interior architectural woodwork at Charlotte
universities and medical facilities that have continued to grow during this
recession. Having the availability to install woodwork in a variety of
businesses gives our company a greater selection to bid or install by the hour
for a variety of woodwork packages. Some of our clients have continued expansion
or new up fits through this tough economic time and have helped us to stay busy.
We do anticipate that within the next six months to a year, the number of our
commercial construction projects could decrease. In order to deal with this slow
down in business, we have decreased the size of our installation crews. We will
not increase the size of our installation crews until we see that the commercial
industry is gaining strength again.
Competition
is strong which requires innovative ideas. Garman Cabinet &
Millwork, Inc. has positioned itself to compete in slow markets as well as
strong markets. The hotel and commercial building construction is
very competitive to attract businesses for tenant up-fit and in the case of
hotel occupancy, they must have rooms and public spaces that are very attractive
and functional to help keep the occupancy level high. Because of this
competitive market, builders, general contractors and hotel owners are choosing
higher end woodwork and cabinetry to out-do their competition.
Garman
Cabinet & Millwork, Inc. is one of only two large architectural woodwork
installation companies in North Carolina; therefore, we are very competitive in
the industry. Garman Cabinet & Millwork, Inc.’s only closest competitor that
can handle similar size projects is Craftsmanship Unlimited located in Raleigh,
North Carolina. While this company offers similar services, we feel
that Garman Cabinet & Millwork is better equipped with state of the art
installation equipment, comprehensive on the job training and a more convenient
location to better serve our clients.
We
believe we compete favorably in the principal competitive factors in our market,
which consist of the following:
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Reputation.
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On
time finish.
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Price.
|
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Friendly,
knowledgeable customer service.
|
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Quick
lead times.
|
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Expert
installation.
|
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Customer
satisfaction.
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Experienced
and knowledgeable management.
|
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State
of the art installation equipment.
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DESCRIPTION
OF PROPERTY
Property
One: 7710
Bankhead Road. Denver NC 28037
Property
Two: 3433
Durham Lane, Charlotte, NC 28269
Property
Three: 5425
Datha Avenue, Charlotte NC 28269
Property
Four: 15019
Beatties Ford Road, Huntersville, NC 28078 (sold in August 2008)
Property
Five: 14241
Tribute Place Dr, Apt. 106, Huntersville, NC 28078
Our
corporate headquarters are located at 7710 Bankhead Road, Denver NC. We
lease a 2,000 square foot building in close proximity to our largest top three
customers and their largest supplier. This building is specifically used for
storage and supplies. The majority of the Company’s operations are held offsite
at the project sites. The Company has 5 lease agreements. The first lease
agreement is for the corporate headquarters at 7710 Bankhead Road, Denver NC
28037. The next lease is at 3433 Durham Lane, Charlotte, NC 28269 and this piece
of property is used for employee housing and owned by the President and Vice
President of the Company. The next lease is on 5425 Datha Avenue, Charlotte, NC
28269 and is also used for employee housing. The next lease is at 15019 Beatties
Ford Road, Huntersville, NC 28078 and is used for employee operations; it was
sold in August of 2008. The piece of property used by the Company but not owned
by the Company is located at 14241 Tribute Place Dr. Apt 106, Huntersville, NC
28078 and it is used for employee housing. The 137 Cross Center Rd, Denver, NC
28037 is the mailing address of the Company. We believe our space is adequate
for our current needs and that suitable additional or substitute space will be
available to accommodate the foreseeable expansion of our business and
operations. The area provides low overhead and abundant skilled labor. Copies of
the updated lease agreements are attached hereto as Exhibit 10.2, 10.3, 10.4,
10.5, and 10.6.
As for
our stipulations for employee housing, in 1997 we moved our company to NC from
Kissimmee, FL. At that point none of our employees were from NC. We were
spending a couple of thousand dollars per month, approximately $4,000.00 on
lodging and per diem. Our men at that time were paid $25.00 per day for per diem
and lodging expense for out of town work. We were able to purchase two homes in
the Charlotte area so we could cut our cost for lodging in about half. We also
informed our employees that they can stay there for free, but they would no
longer receive per diem for the Charlotte region. This has helped our company to
save thousands of dollars in expenses. Supplying housing and per diem to our
installation crews is customary within our industry.
We are
not a party to any pending litigation and none is contemplated or
threatened.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our
common shares are not currently quoted on any exchange.
Holders
Dividend
Policy
We have
never paid any cash dividends on our common shares, and we do not anticipate
that we will pay any dividends with respect to those securities in the
foreseeable future. Our current business plan is to retain any future earnings
to finance the expansion development of our business.
Equity
Compensation Plan and Stock Option Plan Information
The
Company, at the current time, has no stock option plan or any equity
compensation plans
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s
Discussion and Analysis contains various “forward looking statements” regarding
future events or the future financial performance of the Company that involve
risks and uncertainties. Certain statements included in this S-1, including,
without limitation, statements related to anticipated cash flow sources and
uses, and words including but not limited to “anticipates”, “believes”, “plans”,
“expects”, “future” and similar statements or expressions, identify forward
looking statements. Any forward-looking statements herein are subject to certain
risks and uncertainties in the Company’s business, including but not limited to,
reliance on key customers and competition in its markets, market demand, product
performance, technological developments, maintenance of relationships with key
suppliers, difficulties of hiring or retaining key personnel and any changes in
current accounting rules, all of which may be beyond the control of the Company.
Management will elect additional changes to revenue recognition to comply with
the most conservative recognition on a forward going accrual basis as the model
is replicated with other similar markets (i.e. SBDC). The Company’s actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including those set forth
therein.
Management’s
Discussion and Analysis of Results of Financial Condition and Results of
Operations (“MD&A”) should be read in conjunction with the financial
statements included herein.
Business
Model
Garman
Cabinet & Millwork, Inc.’s mission is to provide the best quality of
architectural woodwork installation to meet its clients’ needs and
deadlines. The Company focuses on providing superior, reasonably
priced architectural woodwork installation as well as unparalleled customer
service and commitment.
We
generate our business by providing superior, reasonably priced architectural
woodwork installation as well as unparalleled customer service and
commitment. The Company targets clients throughout the construction
industry whether it is the general contractor, architect, woodwork manufacturer
or directly to the owner. No job is too large or too small. Garman
Cabinet & Millwork, Inc. is set apart from other companies in that it is
able to control all of the steps involved with estimation, pricing, and the
quality of the installation. The Company offers superior knowledge of
the customers’ needs and desires. Customer service and satisfaction
is the Company’s number one priority and is monitored from start to
finish.
Our
services include a broad range of products from varied materials in the
execution of architectural woodwork. This includes installation
services such as high end architectural wood, specialty items, custom furniture,
panels, trim, casework, doors, jambs, solid surfaces, elevator cab interiors,
stairways, and columns. We have the expertise and capability to
install all of these items to the highest AWI standards. Garman
Cabinet & Millwork has managed and installed a vast variety of woodwork for
small and large companies such as Southern Architectural Woodwork, RT Dooley,
Craftsmanship Unlimited, Fetzers Woodwork, Wachovia, Bank of America, Four
Season’s Resort, Atlantis Hotel & Casino and many other high profile
clients. The Company also provides services and products to smaller
companies and individuals.
We are
headquartered in Denver, North Carolina and seek to enhance stockholder value by
building brand awareness and recognition of our high quality products and
services.
Plan
of Operation
We plan
to raise additional funds through future sales of our common stock, until such
time as our revenues are sufficient to meet our cost structure, and ultimately
achieve profitable operations. There is no assurance that we will be successful
in raising additional capital or achieving profitable operations. Our financial
statements do not include any adjustments that might result from the outcome of
these uncertainties. We will need financing within 12 months to execute our
business plan.
For the
next 12 months, our Plan of Operations is as follows:
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|
Establish
Garman Cabinet & Millwork, Inc. as the first and only destination of
choice for retailers, manufacturers, builders and
individuals.
|
·
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Establish
a more prominent identity in the local market through aggressive
marketing.
|
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Establish
an excellent reputation in the community through superior customer service
and installation.
|
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Establish
professional relationships with local and regional
clients.
|
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|
Develop
and maintain extraordinary relationships with retail merchandisers,
manufacturers and contractors through superior service and quality
installation resulting in word-of-mouth
advertising.
|
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Continuously
service existing customer base.
|
·
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Continuously
update our internet website: www.garmanmillwork.net.
|
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Advertise
aggressively on the internet using search engine
marketing.
|
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Continuously
update equipment to meet demands of
customers.
|
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Hire
additional project managers and one additional
estimator.
|
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Continue
to build our installation team and office
staff.
|
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Open
a facility to house our office, equipment and
material.
|
·
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Update
the training of our existing installation team and hire additional
installers to help meet the needs of our
clients.
|
We are
currently improving our installation skills and strengthening our industry
relationships.
Major
ongoing Tasks:
—
building and strengthening professional relationships,
—
building and strengthening customer relationships,
— seeking
investors,
—
continue with improving our installation skills.
RESULTS OF OPERATIONS – FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008
Revenues
We had
revenues of $173,761 for the three months ended June 30, 2009 compared with
$273,117 for the three months ended June 30, 2008. The decrease in revenues is
attributable to a decrease in project work in the three months ended June 30,
2009 compared to the prior three months ended June 30, 2008.
We had
revenues of $244,524 for the six months ended June 30, 2009 compared with
$591,421 for the six months ended June 30, 2008. The decrease in revenues is
attributable to a decrease in project work in the three months ended June 30,
2009 compared to the prior three months ended June 30, 2008.
Cost of Good
Sold
We had
cost of goods sold of $95,874 or 55% of sales for the three months ended June
30, 2009 compared with $149,964 or 55% for the three months ended June 30, 2008.
The amount decrease in cost of good sold is attributable to a decrease in
project work in the three months ended June 30, 2009 compared to the prior three
months ended June 30, 2008. The percentage of sales for cost of goods sold
remained constant.
We had
cost of goods sold of $135,501 or 55% of sales for the six months ended June 30,
2009 compared with $326,547 or 55% for the six months ended June 30, 2008. The
amount decrease in cost of good sold is attributable to a decrease in project
work in the six months ended June 30, 2009 compared to the prior six months
ended June 30, 2008. The percentage of sales for cost of goods sold remained
constant.
Operating
Expenses
We had
operating expenses of $156,681 for the three months ended June 30, 2009 compared
with $144,366 for the three months ended June 30, 2008. The increase in
operating expenses is attributable to an increase in selling, general and
administrative support staff in the three months ended June 30, 2009 compared to
the prior three months ended June 30, 2008.
We had
operating expenses of $253,453 for the six months ended June 30, 2009 compared
with $291,472 for the six months ended June 30, 2008. The decrease in operating
expenses is attributable to an overall decrease in project work partially offset
by an increase in selling, general and administrative support staff in the six
months ended June 30, 2009 compared to the prior three months ended June 30,
2008.
Other
Expenses
We had an
interest expense of $2,012 for the three months ended June 30, 2009 compared
with $1,265 for the three months ended June 30, 2008. This was attributable to
an incurrence of a bank loan toward the end of the prior year.
We had an
interest expense of $3,210 for the six months ended June 30, 2009 compared with
$2,451 for the six months ended June 30, 2008. This was attributable to an
incurrence of a bank loan toward the end of the prior year.
Liquidity and Capital
Resources
We had
$8,908 cash on hand for the six months ended June 30, 2009 compared to $22,203
cash for the six months ended June 30, 2008. We will be required to raise
capital on an ongoing basis. Most recently we raised funds from unrelated
accredited investors through private placements of common stock. In the future
we will potentially need to raise capital to sustain operations through this
channel.
Net cash
provided by (used in) operations for the six months ended June 30, 2009 and 2008
was $(34,034) and $4,855, respectively. A net loss of $147,640 and $29,049 less
decrease in accounts payable of $39,283 and $36,448 for the six months ended
June 30, 2009 and 2008, respectively, are the main reasons for the net cash
usages in both periods. Also, for the six months ended June 30, 2009, we
recorded a prepaid expense in the amount of $66,667.
During
the six months ended June 30, 2009 and 2008, we used cash in investing
activities of $0 and $0, respectively.
Net cash
provided by financing activities for the six months ended June 30, 2009 and 2008
was $13,510 and $3,574, respectively. This is attributable to the borrowings
from a bank note payable.
Prepaid Expense
Asset
The
Company has a prepaid expense asset of $-0-. As of September 30, 2008 we did
have a prepaid asset in the amount of $100,000. This asset accounted for the
1,000,000 common shares issued to Greentree Financial Group, Inc. pursuant
to our contract attached in Exhibit 10.1. The fair values of the shares issued
were determined by the price that the accredited investors paid for the shares
through the Private Placement Memorandum, ten cents ($.10). Therefore 1,000,000
shares at $.10 a share equal $100,000, recorded as $100,000 in the September 30,
2008 financials. The shares were issued on September 22, 2008 therefore before
the September 30 cut off and thus were capitalized for the future economic
benefit of the services. The prepaid expense asset was expensed evenly over a
nine month period which expired on June 30, 2009
Critical Accounting Policies
and Estimates
The
preparation of our financial statements requires us to make estimates and
assumptions that affect the reported amount 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 reported
period. A critical accounting policy is one that is both very important to the
portrayal of our financial condition and results, and requires management’s most
difficult, subjective or complex judgments. Typically, the circumstances that
make these judgments difficult, subjective and/or complex have to do with the
need to make estimates about the effect of matters that are inherently
uncertain.
Recent Accounting
Pronouncements
In
February 2007, the FASB issued SFAS No. 159 (SFAS 159), “THE FAIR VALUE
OPTION FOR FINANCIAL ASSETS AND FINANCIAL LIABILITIES, INCLUDING AN AMENDMENT TO
SFAS 115. ” SFAS No. 159 allows the measurement of many financial
instruments and certain other assets and liabilities at fair value on an
instrument-by-instrument basis under a fair value option. In addition, SFAS 159
includes an amendment of SFAS No. 115, “Accounting for Certain Investments in Debt and
Equity Securities,” and applies to all entities with available-for-sale
and trading securities. SFAS 159 is effective for fiscal years that begin after
November 15, 2007. We are currently evaluating the impact, if any, of
adopting SFAS 159 on our financial statements.
In
December 2007, the FASB issued SFAS No. 160, “NONCONTROLLING INTERESTS IN
FINANCIAL STATEMENTS—AN AMENDMENT OF ARB NO.51”. SFAS 160 is intended to improve
the relevance, comparability, and transparency of the financial information that
a reporting entity provides in its financial statements by establishing
accounting and reporting standards that require; the ownership interests in
subsidiaries held by parties other than the parent and the amount of net income
attributable to the parent and to the noncontrolling interest be clearly
identified and presented on the face of the statement of income, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently, when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary be initially measured at fair value, and entities to provide
sufficient disclosures to clearly identify and distinguish between the interests
of the parent and the interests of the noncontrolling owners. SFAS No.160
affects those entities that have an outstanding noncontrolling interest in one
or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160 is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Early adoption is prohibited. The
adoption of this statement is not expected to have an effect our financial
statements.
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. Certain officers and directors of the Company have provided personal
guarantees to our various lenders as required for the extension of credit to the
Company.
Estimates and
Assumptions
Management
uses estimates and assumptions in preparing financial statements in accordance
with accounting principles generally accepted in the United States of America.
Those estimates and assumptions affect the reported amounts of the assets
and liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing these financial
statements.
Trends, Events, and
Uncertainties
The
success of our business depends in large part on our ability to identify word
work manufacturing trends as well as to react to changing customer demand in a
timely manner. Consequently, we depend in part upon the continuing favorable
market response to the creative efforts of our sales and marketing team’s
ability to anticipate customer needs and services that appeal to our client
base. Failure on our part to anticipate, identify and respond effectively to
changing consumer demands and trends will adversely affect our sales. Within the
fourth quarter of 2008, we did obtain a new project for United Woodworking out
of Schaumburg, IL. The project was for a resort in Washington, DC for the amount
of $52,380.00. This project however was not enough to put us at a profit for the
year ended December 31, 2008.
Revenue
recognition
We
recognize revenue when architectural woodwork services are completed,
persuasive evidence of an arrangement exists, the fee is fixed or determinable
and collectability is probable. We assess collectability based upon the clients’
financial condition and prior payment history, as well as our performance under
the contract. The standard length of time it takes for installation of the
architectural woodwork before we recognize revenue ranges from one week to
several weeks depending on the size of the project.
Accounts
Receivable and Related Allowance for Doubtful Accounts
We extend
unsecured credit to our customers in the ordinary course of business but
mitigate the associated risks by performing credit checks and actively pursuing
past due accounts. An allowance for doubtful accounts is established and
recorded based on managements’ assessment of the credit history with the
customer and current relationships with them.
Income
Taxes and Related Deferral Reserves
Income
taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS No. 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-carry
forwards.
Deferred
tax assets 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 asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of
enactment.
Litigation
We are
not a party to any pending litigation and none is contemplated or threatened.
There is no pending material litigation or proceeding involving our directors,
executive officers, employees or other agents as to which indemnification is
being sought exists, and we are not aware of any pending or threatened material
litigation that may result in claims for indemnification by any of our directors
or executive officers. Therefore, there is no critical accounting policy for
litigation as one is not required.
RESULTS OF OPERATIONS - YEAR
ENDED DECEMBER 31, 2008 and DECEMBER 31, 2007 (AUDITED)
Revenues
The
Company had revenues of $1,055,710 for the year ended December 31, 2008 compared
with $1,205,928 for the year ended December 31, 2007. The decrease in revenues
is attributable to a decrease in project work in the year ended December 31,
2008 compared to the year ended December 31, 2007.
Cost of
Sales
The company had cost of sales of
$611,092 for the year ended December 31, 2008 compared with $696,338 for the
year ended December 31, 2007. As a percentage of revenues, cost of sales
basically remained constant at 57.89% in 2008 and 57.74% in 2007. The reason
cost of sales remained constant from 2007 to 2008 is because we increased our
pricing per hour and streamlined the way we perform our architectural woodwork
installation process by task orienting or specializing our employees so they can
be more productive.
Operating
Expenses
The
Company had operating expenses of $556,546 for the year ended December 31, 2008
compared with $646,184 for the year ended December 31, 2007. The decrease in
operating expenses is attributable to decreased advertising in the year ended
December 31, 2008 compared to the year ended December 31, 2007 in order to try
to save money.
Other
Expenses
The
Company had no other expenses for the year ended December 31, 2008 and
2007.
Liquidity and Capital
Resources
We had
$29,432 cash for the year ended December 31, 2008 compared to $13,774 cash for
the year ended December 31, 2007. We will be required to raise capital on an
ongoing basis. Most recently we raised funds from unrelated accredited investors
through private placements of common stock. In the future we will potentially
need to raise capital to sustain operations through this channel.
Net cash
provided by (used in) operations for the year ended December 31, 2008 and 2007
was $(56,781) and $(126,583), respectively. A net income (loss) of $(119,230)
and $(136,594) less an increase in accounts payable of $15,005 and $10,000 for
the year ended December 31, 2008 and 2007, respectively, are the main reasons
for the net cash provision (usages) in both periods. Also, for the year ended
December 31, 2008, we had an increase in operating assets in the amount of
$66,667 as opposed to $0 for the year ended December 31, 2007.
During
the year ended December 31, 2008 and 2007, we used cash in investing activities
of $648 and $0, respectively, for purchases of fixed assets.
Net cash
provided by financing activities for the year ended December 31, 2008 and 2006
was $73,087 and $94,028, respectively. We repaid $11,254 to a shareholder in the
2007 period whereas we mainly raised proceeds from the issuance of common stock
to accredited investors in the amount of $70,930 for the year ended December 31,
2008.
We have
an outstanding debt under a bank line of credit payable in the amount of $3,702
as of December 31, 2008. There are no debt covenants in the debt
agreement.
WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
We have
had no disagreements on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures with any of our
accountants for the year ended December 31, 2008.
Directors
are elected at the Company’s annual meeting of Stockholders and serve for one
year until the next annual Stockholders’ meeting or until their successors are
elected and qualified. Officers are elected by the Board of Directors and their
terms of office are, except to the extent governed by employment contract, at
the discretion of the Board. The Company may reimburse all Directors for their
expenses in connection with their activities as directors of the Company.
Directors of the Company who are also employees of the Company will not receive
additional compensation for their services as directors.
The
following is a biographical summary of the experience of each of the executive
officers:
The
following table sets forth certain information with respect to our directors,
executive officers and key employees. The annual meeting of stockholders is held
on December 31.
NAME
|
AGE
|
POSITION
|
DATE OF APPOINTMENT
|
NUMBER OF TERMS SERVED AS
DIRECTOR
|
|||
Valerie
A. Garman
|
37 |
President
& Director
|
Inception
|
13
terms
|
|||
Sidney
L. Garman
|
45 |
Vice
President and Treasurer
|
Inception
|
0
terms
|
Valerie
A. Garman – President & Director
Ms.
Garman is responsible for the defining corporate vision and implementation of
management structure and oversight of marketing/sales, and domestic business
development. Since 1996, she has headed up the payroll, accounts receivable,
accounts payable, invoicing and office functions.
Ms.
Garman has taken office management classes and computer classes from Osceola
College. She has twelve years of experience in office management and
computers. She is skilled in QuickBooks Pro, Microsoft Office software and
Windows operating systems.
Sidney
L. Garman – Vice President & Treasurer
Mr.
Garman’s role is on site management of installations of interior architectural
woodwork projects. He is responsible for estimating and scheduling
field crews and materials for each project. He works together with
customers, architects, millwork companies and general contractors to go over
blueprints and approved shop drawings. His prior experiences include
working with multiple general contractors to install intricate woodwork
throughout Walt Disney World in Orlando, Florida.
Mr.
Garman completed six semesters of structural engineering at Harrisburg Community
College and became OSHA certified in 2001.
The Board
of Directors may compensate directors for their services as such. We
have not paid our Directors any fees in connection with their role as members of
our Board. The Board of Directors may also provide for the payment of all travel
and out-of-pocket expenses in connection with Directors’ attendance at Board
meetings. Each board member serves for a one year term until elections are held
at each annual meeting.
Directors
are elected at the Company’s annual meeting of Stockholders and serve for one
year until the next annual Stockholders’ meeting or until their successors are
elected and qualified. Officers are elected by the Board of Directors and their
terms of office are, except to the extent governed by employment contract, at
the discretion of the Board. The Company may reimburse all Directors for their
expenses in connection with their activities as directors of the Company.
Directors of the Company who are also employees of the Company will not receive
additional compensation for their services as directors.
Family
Relationships
Valerie
A. Garman is married to Sidney L. Garman. Please refer to the Selling Security
Holders section for disclosure on Shareholder relationships to
management.
Involvement
In Certain Legal Proceedings
To the
best of our knowledge, during the past five years, none of the following
occurred with respect to a present or former director or executive officer of
the Company: (1) 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; (2) any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses);
(3) being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of any competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; and
(4) being found by a court of competent jurisdiction (in a civil action),
the Commission or the commodities futures trading commission to have violated a
Federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
Not
applicable.
Code
of Ethics
The
Company has adopted a Code of Ethics that applies to its principal executive
officer, principal financial officer or controller or persons performing similar
functions. Such Code of Ethics is filed as Exhibit 14.1 hereto.
The
following table sets forth for the fiscal years ended December 31, 2008 and
2007, the compensation awarded to, paid to, or earned bye our executive
officers:
SUMMARY
COMPENSATION TABLE
|
|||||||||
Name
and principal position
(a)
|
Year
(b)
|
Salary
($)
(c)
|
Bonus
($)
(d)
|
Stock
Awards (1)
($)
(e)
|
Option
Awards ($)
(f)
|
Non-Equity
Incentive Plan Compensation ($)
(g)
|
Nonqualified
Deferred Compensation Earnings ($)
(h)
|
All
Other Compensation ($)
(i)
|
Total
($)
(j)
|
Valerie
A. Garman, President
|
2007
2008
|
38,740
44,044
|
-
|
0
|
-
|
-
|
-
|
-
|
38,740
44,044
|
Sidney
L. Garman, Vice President & Treasurer
|
2007
2008
|
67,340
75,504
|
-
|
0
|
-
|
-
|
-
|
-
|
67,340
75,504
|
Outstanding
Equity Awards At Fiscal Year-End Table
None.
Option
Exercises And Stock Vested Table
None.
Pension
Benefits Table
None.
Nonqualified
Deferred Compensation Table
None.
All
Other Compensation Table
None.
Perquisites
Table
None.
Potential
Payments Upon Termination Or Change In Control Table
None.
Long-Term
Incentive Plan Awards
We do not
have any long-term incentive plans that provide compensation intended to serve
as incentive for performance to occur over a period longer than one fiscal year,
whether such performance is measured by reference to our financial performance,
our stock price, or any other measure.
Compensation
of Directors
The
Director did not receive any other compensation for serving as members of the
Board of Directors. The Board has not implemented a plan to award options. There
are no contractual arrangements with any member of the Board of
Directors.
We do not
intend to pay any additional compensation to our Directors. As of the date
hereof, we have not entered into employment contracts with any of our officers,
and we do not intend to enter into any employment contracts until such time as
it profitable to do so.
The
following table sets forth certain information regarding beneficial ownership of
the common stock as of August 18, 2009, by (i) each person who is known by
the Company to own beneficially more than 5% of any classes of outstanding
Stock, (ii) each director of the Company, (iii) each officer and
(iv) all directors and executive officers of the Company as a
group.
The
number and percentage of shares beneficially owned is determined in accordance
with Rule 13d-3 and 13d-5 of the Exchange Act, and the information is not
necessarily indicative of beneficial ownership for any other purpose. We believe
that each individual or entity named has sole investment and voting power with
respect to the securities indicated as beneficially owned by them, subject to
community property laws, where applicable, except where otherwise
noted.
Name of Beneficial Owner
|
Number of Shares
of Common Stock
(1)
|
Percent of
Class
|
||||||
Valerie
A. Garman
President
& Director
137
Cross Center Road
Box
318
Denver,
North Carolina 28037
|
5,100,000
|
43.555
|
%
|
|||||
Sidney
L. Garman
Vice
President & Treasurer
137
Cross Center Road
Box
318
Denver,
North Carolina 28037
|
4,900,000
|
41.847
|
%
|
|||||
Greentree
Financial Group, Inc.
19720
Jetton Road
Suite
300
Cornelius, NC 28031
|
1,000,000
|
8.54%
|
||||||
All
officers and directors as a group (2 persons)
|
10,000,000
|
85.402
|
%
|
(1)
|
Based
on 11,709,300 issued and outstanding shares of common
stock.
|
The
President and Vice President of the Company, who together owns 85.402% of the
company, personally own 4 of the 5 properties that the Company uses for business
purposes related to millwork and cabinet manufacturing. The Company has four
separate lease agreements with Mr. Sidney Garman and Mrs. Valerie Garman, the
Vice President and President of the Company. The first property is the 5425
Datha Avenue, Charlotte, NC 28269 property. This is a 1 year lease, ending on
December 31, 2009. The Company pays $11,880 annually for this space, monthly
payments of $990. The second property is located at 3433 Durham Lane, Charlotte,
NC 28269. This is a 1 year lease ending December 31, 2009. The Company pays
$19,800 annually, with monthly payments totaling $1650. The third property is
located at 7710 Bankhead Road, Denver, NC 28037. This is a 1 year lease, ending
July 31, 2010. The Company pays $31,680 annually, monthly payments of $2,460.
The fourth property is located at 15019 Beatties Ford Road, Huntersville, NC
28078. This was a 1 year lease, ending December 31, 2008 but the property was
sold in August 2008. The annual rent was $31,680, monthly payments of $2,640.
Each lease agreement calls for the Company to bear the cost of their own
electric, water, gas, phone, and cable. Payment for each property is due at the
first of the month. The fifth property, which is not owned by the
President or Vice President, is a lease agreement for 14241 Tribute Place Drive
#106, Huntersville, NC 28078. This is a 15 month lease, ending January 14, 2010.
The monthly rent for this lease is $970. Copies of the updated lease agreements
are attached hereto as Exhibit 10.2, 10.3, 10.4, 10.5, and 10.6.
The
property located at 14241 Tribute Place Drive #106, Huntersville, NC 28078 has
Sharon Garman listed as a leaser. Sharon Garman is the mother of Sidney Garman.
Due to the amount of travel required with our business, Management needed a
person that can be called on in the event of an emergency to answer questions or
deal with issues, the apartment complex required her to be named on the lease to
legally give her any information necessary.
In 2006,
the Company accepted a shareholder loan in the amount of $11,254. The loan was
repaid in 2007. It was for monies advanced by Sidney and Valerie Garman to the
Company to help fund expenses. There was no written agreement and the effects of
imputed interest were immaterial to the financial statements taken as a
whole.
Pursuant to a June 13, 2008 consulting
agreement (Exhibit 10.1) the Issuer agreed to pay a sum of $50,000 to Greentree
Financial Group, Inc. in exchange for financial consulting services relating to
the Issuer becoming as a “public company.” To date, the Company has paid 3
installments of $10,000 and issued 1,000,000 shares the Company’s common stock
to Greentree Financial Group, Inc.
Greentree
Financial Group, Inc. is considered a “related person” because they are a
security holder covered by Item 403(a) of SEC Regulation S-B since they are
known to the Issuer to be the beneficial owner of more than five percent of our
common stock.
Greentree
Financial Group, Inc. acts as a financial consultant to the
Issuer. Robert C. Cottone and Michael Bongiovanni are the owners of
Greentree Financial Group, Inc. Mr. Cottone and Mr. Bongiovanni share
equal voting power over the investments of Greentree Financial Group,
Inc. Greentree Financial Group, Inc. received 1,000,000 shares of our
common stock for consulting services that consist of assisting in the
preparation of this Form S-1 registration statement and the prospectus included
herein, compliance with state Blue Sky regulations, selection of an independent
transfer agent and Edgar services. A copy of our consulting agreement with
Greentree Financial Group, Inc. is attached hereto as Exhibit 10.1.
As
disclosed under the Management’s Discussion and Analysis, certain officers and
directors of the Company have provided personal guarantees to our various
lenders as required for the extension of credit to the Company. These personal
guarantees are considered a related transaction under Item 404(d) of Regulation
S-K. For further information, please see the accompanying financial notes to our
financial statements.
No
pending material litigation or proceeding involving our directors, executive
officers, employees or other agents as to which indemnification is being sought
exists, and we are not aware of any pending or threatened material litigation
that may result in claims for indemnification by any of our directors or
executive officers.
The North
Carolina Business Corporation Act (the “NC Act”) permits a North Carolina
corporation to indemnify a present or former director or officer of the
corporation (and certain other persons serving at the request of the corporation
in related capacities) for liabilities, including legal expenses, arising by
reason of service in such capacity if such person shall have acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and in any criminal proceeding if such person had
no reasonable cause to believe his conduct was unlawful. However, in the case of
actions brought by or in the right of the corporation, no indemnification may be
made with respect to any matter as to which such director or officer shall have
been adjudged liable, except in certain limited circumstances. The Company’s
Articles of Incorporation provide that the Company shall indemnify directors and
executive officers to the fullest extent now or hereafter permitted by the NC
Act. The indemnification provided by the NC Act and the Company’s Articles of
Incorporation is not exclusive of any other rights to which a director or
officer may be entitled. The general effect of the foregoing provisions may be
to reduce the circumstances which an officer or director may be required to bear
the economic burden of the foregoing liabilities and expense. The Company may
also purchase and maintain insurance for the benefit of any director or officer
that may cover claims for which we could not indemnify such person.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, we have been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed hereby in the
Securities Act and we will be governed by the final adjudication of such
issue.
WHERE
YOU CAN FIND MORE INFORMATION
We have
filed with the Commission a registration statement on Form S-1 under the 1933
Act with respect to the securities offered by this prospectus. This prospectus,
which forms a part of the registration statement, does not contain all the
information set forth in the registration statement, as permitted by the rules
and regulations of the Commission. For further information with respect to us
and the securities offered by this prospectus, reference is made to the
registration statement. Statements contained in this prospectus as to the
contents of any contract or other document that we have filed as an exhibit to
the registration statement are qualified in their entirety by reference to the
to the exhibits for a complete statement of their terms and conditions. The
registration statement and other information may be read and copied at the
Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549
The public may obtain information on the operation of the Public Reference Room
by calling the Commission at 1-800-SEC-0330. The Commission maintains a web site
at http://www.sec.gov that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the
Commission.
GUARDIAN
REGISTRAR & TRANSFER INC.
7951 S.W. 6th
Street
Suite
216
Plantation,
FL 33324
Tel:
(954) 915-0105
Fax:
(954) 449-0582
INDEX TO
GARMAN CABINET AND MILLWORK, INC. FINANCIAL STATEMENTS
Garman Cabinet and Millwork,
Inc. Page
Balance
Sheets 41
Statements
of
Operations 42
Statements
of Cash
Flows 43
Notes to
Financial
Statements 44
GARMAN
CABINET & MILLWORK, INC.
|
||||||||
BALANCE
SHEETS
|
||||||||
AS
OF JUNE 30, 2009 AND DECEMBER 31, 2008
|
||||||||
ASSETS
|
(unaudited)
|
(unaudited)
|
||||||
6/30/2009
|
12/31/2008
|
|||||||
CURRENT
ASSETS:
|
||||||||
Cash
|
$
|
8,907
|
$
|
29,432
|
||||
Prepaid
expenses
|
-
|
66,667
|
||||||
Employee
advances
|
-
|
5,100
|
||||||
TOTAL
CURRENT ASSETS
|
8,907
|
101,199
|
||||||
FIXED
ASSETS:
|
||||||||
Machinery
and equipment
|
29,708
|
29,708
|
||||||
Vehicles
|
47,351
|
47,351
|
||||||
Accumulated
depreciation
|
(38,881
|
)
|
(36,325
|
)
|
||||
TOTAL
FIXED ASSETS
|
38,179
|
40,734
|
||||||
Security
deposits
|
1,545
|
1,545
|
||||||
TOTAL
ASSETS
|
$
|
48,631
|
$
|
143,478
|
||||
LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$
|
64,288
|
$
|
25,005
|
||||
Current
portion of bank note payable
|
120,949
|
107,439
|
||||||
TOTAL
CURRENT LIABILITIES
|
185,237
|
132,444
|
||||||
LONG-TERM
LIABILITIES
|
||||||||
Bank
note payable
|
-
|
-
|
||||||
TOTAL
LONG-TERM LIABILITIES
|
-
|
-
|
||||||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
||||||||
Common
stock ($.0001 par value, 100,000,000 shares authorized; 11,709,300 shares
issued and outstanding)
|
11,709
|
11,709
|
||||||
Additional
paid in capital
|
169,221
|
169,221
|
||||||
Retained
deficit
|
(317,536
|
)
|
(169,896
|
)
|
||||
TOTAL
STOCKHOLDERS' EQUITY (DEFICIT)
|
(136,606
|
)
|
11,034
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$
|
48,631
|
$
|
143,478
|
The
accompanying notes are an integral part of these financial
statements.
GARMAN
CABINET & MILLWORK, INC.
|
||||||||||||||||
STATEMENTS
OF OPERATIONS
|
||||||||||||||||
FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008
|
||||||||||||||||
Three
Months
|
Six
Months
|
|||||||||||||||
Ended
June 30,
|
Ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
REVENUES:
|
||||||||||||||||
Sales
|
$
|
173,761
|
$
|
273,117
|
$
|
244,524
|
$
|
591,421
|
||||||||
Cost
of sales
|
(95,874
|
)
|
(149,964
|
)
|
(135,501
|
)
|
(326,547
|
)
|
||||||||
Gross
profit
|
77,887
|
123,153
|
109,023
|
264,874
|
||||||||||||
EXPENSES:
|
||||||||||||||||
Selling,
general and administrative expenses
|
156,681
|
144,366
|
253,453
|
291,472
|
||||||||||||
Total
expenses
|
156,681
|
144,366
|
253,453
|
291,472
|
||||||||||||
(Loss)
from operations
|
$
|
(78,794
|
)
|
$
|
(21,213
|
)
|
$
|
(144,430
|
)
|
$
|
(26,598
|
)
|
||||
Interest
expense
|
(2,012
|
)
|
(1,265
|
)
|
(3,210
|
)
|
(2,451
|
)
|
||||||||
(Loss)
before income taxes
|
(80,806
|
)
|
(22,478
|
)
|
(147,640
|
)
|
(29,049
|
)
|
||||||||
Provision
for income taxes
|
-
|
-
|
-
|
-
|
||||||||||||
NET
(LOSS)
|
$
|
(80,806
|
)
|
$
|
(22,478
|
)
|
$
|
(147,640
|
)
|
$
|
(29,049
|
)
|
||||
Basic
and fully diluted net (loss) per common share
|
$
|
(0.01
|
)
|
$
|
**
|
$
|
(0.01
|
)
|
$
|
**
|
||||||
Weighted
average common shares outstanding
|
11,709,300
|
10,854,650
|
11,709,300
|
10,854,650
|
||||||||||||
**
less than $.01 per share.
|
The
accompanying notes are an integral part of these financial
statements.
GARMAN
CABINET & MILLWORK, INC.
|
||||||||
STATEMENTS
OF CASH FLOWS
|
||||||||
FOR
THE SIX MONTHS ENDED JUNE 30, 2009 and 2008
|
||||||||
2009
|
2008
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
(loss)
|
$
|
(147,640
|
)
|
$
|
(29,049
|
)
|
||
Adjustments
to reconcile net (loss) to net cash provided by (used in)
operations:
|
||||||||
Depreciation
|
2,556
|
2,556
|
||||||
(Increase)
decrease in operating assets
|
||||||||
Prepaid
expenses
|
66,667
|
-
|
||||||
Employee
advances
|
5,100
|
(5,100
|
)
|
|||||
Increase
(decrease) in operating liabilities
|
||||||||
Accounts
payable
|
39,283
|
36,448
|
||||||
NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
(34,034
|
)
|
4,855
|
|||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Borrowings
from bank note payable
|
13,510
|
3,574
|
||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
13,510
|
3,574
|
||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(20,524
|
)
|
8,429
|
|||||
CASH
AND CASH EQUIVALENTS,
|
||||||||
BEGINNING
OF THE PERIOD
|
29,432
|
13,774
|
||||||
END
OF THE PERIOD
|
$
|
8,908
|
$
|
22,203
|
||||
The
accompanying notes are an integral part of these financial
statements.
GARMAN CABINET &
MILLWORK, INC.
NOTES TO FINANCIAL
STATEMENTS
For the Three and Six Months
Ended June 30, 2009 and 2008
NOTE
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Business
Activity
Garman
Cabinet & Millwork, Inc., (the “Company”) is a North Carolina corporation
that installs architectural woodwork mainly in and around the Charlotte, North
Carolina area. The Company was incorporated in the State of North Carolina on
December 10, 1998.
Basis of
Presentation
The
financial statements include the accounts of Garman Cabinet & Millwork, Inc.
and its wholly owned subsidiaries under the accrual basis of accounting. All
intercompany accounts and transactions have been eliminated.
Management’s 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 affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates.
Deferred
Taxes
Income
taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS No. 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-carry
forwards.
Deferred
tax assets 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 asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of
enactment.
Fair Value of Financial
Instruments
The
Company’s financial instruments are cash, employee advances, security deposits
and accounts payable. The recorded values of cash and payables approximate their
fair values based on their short-term nature.
Cash and Cash
Equivalents - For purposes of the Statements of Cash Flows, the Company
considers highly liquid investments with an original maturity of three months or
less to be cash equivalents.
Revenue Recognition –
Revenue is recognized when architectural woodwork services are completed
provided collection from the customer of the resulting receivable is
probable.
Comprehensive Income
(Loss) - The Company adopted Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive
Income”, which establishes standards for the reporting and display of
comprehensive income and its components in the financial statements. There were
no items of comprehensive income (loss) applicable to the Company during the
period covered in the financial statements.
GARMAN CABINET &
MILLWORK, INC.
NOTES TO FINANCIAL
STATEMENTS
For the Three and Six Months
Ended June 30, 2009 and 2008
NOTE
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES CONTINUED
Loss Per
Share - The Company reports loss per share in accordance with Statement of
Financial Accounting Standard (SFAS) No.128. This statement requires dual
presentation of basic and diluted earnings (loss) with a reconciliation of the
numerator and denominator of the loss per share computations. Basic earnings per
share amounts are based on the weighted average shares of common outstanding. If
applicable, diluted earnings per share would assume the conversion, exercise or
issuance of all potential common stock instruments such as options, warrants and
convertible securities, unless the effect is to reduce a loss or increase
earnings per share. There were no adjustments required to net loss for the
period presented in the computation of diluted earnings per share. There were no
common stock equivalents necessary for the computation of diluted loss per
share.
Long-Lived Assets -
In accordance with SFAS No. 144, the Company reviews and evaluates its
long-lived assets for impairment whenever events or changes in circumstances
indicate that their net book value may not be recoverable. When such factors and
circumstances exist, including those noted above, the Company compares the
assets’ carrying amounts against the estimated undiscounted cash flows to be
generated by those assets over their estimated useful lives. If the carrying
amounts are greater than the undiscounted cash flows, the fair values of those
assets are estimated by discounting the projected cash flows. Any excess of the
carrying amounts over the fair values are recorded as impairments in that fiscal
period.
Property and Equipment -
Property and equipment is stated at cost. Depreciation is provided by the
straight-line method over the estimated economic life of the property and
equipment remaining from three to seven years.
When
assets are sold or retired, their costs and accumulated deprecation are
eliminated from the accounts and any gain or loss resulting from their disposal
is included in the statement of operations.
The
Company recognizes an impairment loss on property and equipment when evidence,
such as the sum of expected future cash flows (undiscounted and without interest
charges), indicates that future operations will not produce sufficient revenue
to cover the related future costs, including depreciation, and when the carrying
amount of the asset cannot be realized through sale. Measurement of the
impairment loss is based on the fair value of the assets.
Risk and Uncertainties
- The Company is subject to risks common to companies in the service
industry, including, but not limited to, litigation, development of new
technological innovations and dependence on key personnel.
Share-Based Payments -
The Company accounts for share-based compensation using the fair value
method of Financial Accounting Standard No. 123R. Common shares issued for
services rendered by a third party (both employees and non-employees) are
recorded at the fair value of the shares issued or services rendered, whichever
is more readily determinable. The Company accounts for options and warrants
under the same authoritative guidance using the Black-Scholes Option Pricing
Model.
Advertising Costs -
Advertising costs are expensed as incurred. The Company does not incur any
direct-response advertising costs.
Recent Accounting
Pronouncements - In May 2008, FASB issued FASB Staff Position
(“FSP”) APB 14-1, “Accounting for Convertible Debt Instruments That May Be
Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB
14-1”). FSP APB 14-1 clarifies that convertible debt instruments that may be
settled in cash upon either mandatory or optional conversion (including
partial cash settlement) are not addressed by paragraph 12 of APB Opinion
No. 14, “Accounting for Convertible Debt and Debt issued with Stock
Purchase Warrants.” Additionally, FSP APB 14-1 specifies that issuers of
such instruments should separately account for the liability and equity
components in a manner that will reflect the entity’s nonconvertible debt
borrowing rate when interest cost is recognized in subsequent periods. FSP APB
14-1 is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal years. We
will adopt FSP APB 14-1 beginning in the first quarter of 2009, and this
standard must be applied on a retrospective basis. The adoption of this
statement is not expected to have a material effect on the Company’s financial
statements.
In April
2008, the FASB issued FSP No. 142-3, “Determination of the Useful Life of
Intangible Assets” (“FSP 142-3”). FSP 142-3 amends the factors an entity should
consider in developing renewal or extension assumptions used in determining the
useful life of recognized intangible assets under FASB Statement No. 142,
“Goodwill and Other Intangible Assets”. This new guidance applies prospectively
to intangible assets that are acquired individually or with a group of other
assets in business combinations and asset acquisitions. FSP 142-3 is effective
for financial statements issued for fiscal years and interim periods beginning
after December 15, 2008. Early adoption is prohibited. The adoption of this
statement is not expected to have a material effect on the Company’s financial
statements.
Recent Accounting
Pronouncements (cont.) - In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”. SFAS 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of non-governmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. It is effective 60 days following the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles”. The adoption
of this statement is not expected to have a material effect on the Company’s
financial statements.
In March
2008, the FASB issued FASB Statement No. 161 ("SFAS 161"),
"Disclosures about Derivative Instruments and Hedging Activities". SFAS 161
requires companies with derivative instruments to disclose information that
should enable financial-statement users to understand how and why a company uses
derivative instruments, how derivative instruments and related hedged items are
accounted for under FASB Statement No. 133 "Accounting for Derivative
Instruments and Hedging Activities" and how derivative instruments and related
hedged items affect a company's financial position, financial performance and
cash flows. SFAS 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008. The
adoption of this statement is not expected to have a material effect on the
Company's future financial position or results of operations.
In
December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
160, “Noncontrolling Interests in Financial Statements - An amendment of ARB No.
51”.SFAS 160 requires companies
with noncontrolling interests to disclose such interests clearly as a portion of
equity but separate from the parent’s equity. The noncontrolling
interest’s portion of net income must also be clearly presented on the Income
Statement. SFAS 160 is effective for financial statements issued for
fiscal years beginning after December 15, 2008. The adoption of this statement
is not expected to have a material effect on the Company's future financial
position or results of operations.
In
December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
141,(revised 2007), “Business Combinations”. SFAS 141 (R) applies the
acquisition method of accounting for business combinations established in SFAS
141 to all acquisitions where the acquirer gains a controlling interest,
regardless of whether consideration was exchanged. Consistent with SFAS 141,
SFAS 141 (R) requires the acquirer to fair value the assets and liabilities of
the acquiree and record goodwill on bargain purchases, with main difference the
application to all acquisitions where control is achieved. SFAS 141 (R) is
effective for financial statements issued for fiscal years beginning after
December 15, 2008. The adoption of this statement is not expected to have
a material effect on the Company's future financial position or results of
operations.
NOTE
2 INCOME
TAXES
At June
30, 2009, the Company had federal and state net operating loss carry forwards of
approximately $317,000 that expire in various years through the year
2022.
Due to
operating losses, there is no provision for current federal or state income
taxes for the three and six months ended June 30, 2009 and 2008.
Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amount used for federal and state income tax purposes.
The
Company’s deferred tax asset at June 30, 2009 consists of net operating loss
carry forwards calculated using federal and state effective tax rates equating
to approximately $123,000 less a valuation allowance in the amount of
approximately $123,000. Because of the Company’s lack of earnings history, the
deferred tax asset has been fully offset by a valuation allowance. The valuation
allowance increased by approximately $76,000 and $21,000 for the six months
ended June 30, 2009 and 2008, respectively.
The
Company’s total deferred tax asset as of June 30, 2009 is as
follows:
Net
operating loss carry
forwards $ 123,000
Valuation
allowance (123,000)
Net
deferred tax
asset $ --
GARMAN CABINET &
MILLWORK, INC.
NOTES TO FINANCIAL
STATEMENTS
For the Three and Six Months
Ended June 30, 2009 and 2008
NOTE
2 INCOME TAXES
(CONTINUED)
The
reconciliation of income taxes computed at the federal and state statutory
income tax rate to total income taxes for the six months ended June 30, 2009 and
2008 is as follows:
Income
tax computed at the federal statutory
rate 34%
Income
tax computed at the state statutory
rate
5%
Valuation
allowance
(39%)
Total
deferred tax
asset
0%
NOTE
3 CAPITAL
STOCK
The
Company is authorized to issue 100,000,000 common shares at $.0001 par value per
share.
During
the nine months ended September 30, 2008, the Company enacted a ten thousand for
one forward stock split. The effects of this split are retroactively reflected
in the financial statements as of the beginning of the period.
NOTE
4 INCOME (LOSS) PER
SHARE
Income
(loss) per share is computed by dividing the net income (loss) by the weighted
average number of common shares outstanding during the period. Basic and diluted
income (loss) per share was the same for the six months ended June 30, 2009 and
2008.
NOTE
5 SUPPLEMENTAL CASH FLOW
INFORMATION
Supplemental
disclosures of cash flow information for the six months ended June 30, 2009 and
2008 are summarized as follows:
Cash paid
during the period for interest and income taxes:
2009 2008
Income
Taxes
$ -- $
--
Interest $
1,198 $2,451
NOTE
6 GOING CONCERN AND
UNCERTAINTY
The
Company has suffered recent losses from operations since inception. In addition,
the Company has recently generated a negative internal cash flow from its
business operations. These factors raise substantial doubt as to the ability of
the Company to continue as a going concern.
Management’s
plans with regard to these matters encompass the following actions: 1) obtain
funding from new investors to alleviate the Company’s working deficiency, and 2)
implement a plan to generate sales. The Company’s continued existence is
dependent upon its ability to resolve it liquidity problems and increase
profitability in its current business operations. However, the outcome of
management’s plans cannot be ascertained with any degree of certainty. The
accompanying financial statements do not include any adjustments that might
result from the outcome of these risks and uncertainties.
NOTE
7 LEASE COMMITMENTS AND
RELATED PARTY TRANSACTIONS
The
Company has four operating lease agreements at various rates with unrelated
parties. The leases all expire in 2008 and, therefore, no future minimum lease
commitment exists beyond one year.
The
Company leases approximately 2,000 square feet of space for its corporate
headquarter offices. The Company also leases three residences which are used for
employee housing.
NOTE
8 BANK LINE OF CREDIT
PAYABLE
The
Company has a bank line of credit payable to an unrelated banking institution
bearing annual interest of 1% above the Wall Street Journal prime rate or 7% as
of June, 2008, secured by machinery and equipment with a net book value of
approximately $38,179 at June 30, 2009. The bank line of credit was originally
for $125,000 in maximum borrowings available and consists of no specific monthly
payments of principal and interest due to the nature of the line. The principal
maturity was originally November, 2008 but the line of credit was extended for
an additional one year. The line of credit is dated November 2, 2007 and is
guaranteed by two of the Company’s officers and directors.
Principal
maturities of the bank note payable as of June 30, 2009 for the next five years
and thereafter are as follows:
2009 $ 120,949
Total $ 120,949
GARMAN
CABINET & MILLWORK, INC.
YEAR
ENDED DECEMBER
31, 2008 and 2007
INDEX
TO FINANCIAL STATEMENTS
REPORT OF
INDEPENDENT REGISTERED ACCOUNTING FIRM 51
BALANCE
SHEETS 52
|
STATEMENTS
OF OPERATIONS53
|
STATEMENT
OF STOCKHOLDERS’ EQUITY (DEFICIT) 54
|
STATEMENTS
OF CASH FLOWS55
|
NOTES TO
FINANCIAL STATEMENTS 56
TRACI J.
ANDERSON, CPA
TRACI J.
ANDERSON
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors: Garman Cabinet & Millwork, Inc.
I have
audited the balance sheet of Garman Cabinet & Millwork, Inc. as of December
31, 2008 and 2007, and the related statements of operations, stockholders'
equity, and cash flows for the two years ended December 31, 2008. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
our audits.
I
conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor was I engaged to perform, an audit of its internal control
over financial reporting. My audit 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, I 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. I believe that my audits provide a reasonable
basis for my opinion.
In my
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Garman Cabinet & Millwork, Inc.
as of December 31, 2008 and December 31, 2007 and the results of its operations
and its cash flows for the two years ended December 31, 2008 in conformity with
U.S. generally accepted accounting principles.
The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. The Company has suffered recurring losses and has a
recent negative internal cash flow from business operations that raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are described in Note 6. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Traci J.
Anderson
Traci J.
Anderson, CPA
Huntersville,
North Carolina
April 6,
2009
14026
CINNABAR PLACE
HUNTERSVILLE,
NC 28078
PHONE:
704/904-0062
FAX:
704/948-3885
MEMBER OF
AICPA AND PCAOB
GARMAN
CABINET & MILLWORK, INC.
|
||||||||
AS
OF DECEMBER 31, 2008 AND 2007
|
||||||||
ASSETS
|
(Audited)
|
(Audited)
|
||||||
12/31/2008
|
12/31/2007
|
|||||||
CURRENT ASSETS:
|
||||||||
Cash
|
$ | 29,432 | $ | 13,774 | ||||
Prepaid
expenses
|
66,667 | - | ||||||
Employee
advances
|
5,100 | 5,100 | ||||||
TOTAL
CURRENT ASSETS
|
101,199 | 18,874 | ||||||
FIXED ASSETS:
|
||||||||
Machinery
and equipment
|
29,708 | 29,060 | ||||||
Vehicles
|
47,351 | 47,351 | ||||||
Accumulated
depreciation
|
(36,325 | ) | (31,214 | ) | ||||
TOTAL
FIXED ASSETS
|
40,734 | 45,197 | ||||||
Security
deposits
|
1,545 | - | ||||||
TOTAL
ASSETS
|
$ | 143,478 | $ | 64,071 | ||||
LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts
payable
|
$ | 25,005 | $ | 10,000 | ||||
Current
portion of bank note payable
|
107,439 | 103,737 | ||||||
TOTAL
CURRENT LIABILITIES
|
132,444 | 113,737 | ||||||
LONG-TERM LIABILITIES
|
||||||||
Bank
note payable
|
- | - | ||||||
TOTAL
LONG-TERM LIABILITIES
|
- | - | ||||||
STOCKHOLDERS' DEFICIT
|
||||||||
Common
stock ($.0001 par value, 100,000,000 shares authorized; 11,709,300 and
10,000,000 shares issued and outstanding at December 31, 2008 and 2007,
respectively)
|
11,709 | 1,000 | ||||||
Additional
paid in capital
|
169,221 | - | ||||||
Retained
deficit
|
(169,896 | ) | (50,666 | ) | ||||
TOTAL
STOCKHOLDERS' DEFICIT
|
11,034 | (49,666 | ) | |||||
|
||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$ | 143,478 | $ | 64,071 |
The
accompanying notes are an integral part of these financial
statements
GARMAN
CABINET & MILLWORK, INC.
|
||||||||
FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
|
||||||||
|
||||||||
For
the Years
|
||||||||
Ended
December 31,
|
||||||||
2008
|
2007
|
|||||||
REVENUES:
|
||||||||
Sales
|
$ | 1,055,710 | $ | 1,205,928 | ||||
Cost
of sales
|
(611,092 | ) | (696,338 | ) | ||||
Gross
profit
|
444,618 | 509,590 | ||||||
EXPENSES:
|
||||||||
Selling,
general and administrative expenses
|
556,546 | 646,184 | ||||||
Total
expenses
|
556,546 | 646,184 | ||||||
(Loss)
from operations
|
$ | (111,928 | ) | $ | (136,594 | ) | ||
Interest
expense
|
(7,302 | ) | - | |||||
(Loss)
before income taxes
|
(119,230 | ) | (136,594 | ) | ||||
Provision
for income taxes
|
- | - | ||||||
NET
(LOSS)
|
$ | (119,230 | ) | $ | (136,594 | ) | ||
Basic
and fully diluted net (loss) per common share
|
$ | (0.01 | ) | $ | (0.01 | ) | ||
Weighted
average common shares outstanding
|
10,854,650 | 10,000,000 |
The
accompanying notes are an integral part of these financial
statements
GARMAN
CABINET & MILLWORK, INC.
|
||||||||||||||||
STATEMENT
OF STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||||||||||
FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
|
||||||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Additional
|
|
|||||||||||||||
Common
Stock
|
Paid-in
|
Retained
|
||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
|||||||||||||
Balances,
December 31, 2006
|
10,000,000 | $ | 10,000 | $ | - | $ | 85,928 | |||||||||
Net
income for the year ended December 31, 2007
|
- | - | - | (136,594 | ) | |||||||||||
Balances,
December 31, 2007
|
10,000,000 | $ | 10,000 | $ | - | $ | (50,666 | ) | ||||||||
Issuance
of common stock to accredited investors
|
709,300 | 709 | 70,221 | - | ||||||||||||
Issuance
of common stock to service provider
|
1,000,000 | 1,000 | 99,000 | - | ||||||||||||
Net
(loss) for the year ended December 31, 2008
|
- | - | - | (119,230 | ) | |||||||||||
Balances,
December 31, 2008
|
11,709,300 | $ | 11,709 | $ | 169,221 | $ | (169,896 | ) | ||||||||
*
Common stock amount and shares have been retroactively restated herein for
the ten thousand for one forward split.
|
The
accompanying notes are an integral part of these financial
statements
GARMAN
CABINET & MILLWORK, INC.
|
||||||||
STATEMENTS
OF CASH FLOWS
|
||||||||
FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
|
||||||||
|
||||||||
2008
|
2007
|
|||||||
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
||||||||
Net
income (loss)
|
$ | (119,230 | ) | $ | (136,594 | ) | ||
Adjustments
to reconcile net loss to net cash (used in) operations:
|
||||||||
Depreciation
|
5,111 | 5,111 | ||||||
Forward
split adjustment to par value
|
9,000 | - | ||||||
(Increase)
decrease in operating assets
|
(66,667 | ) | ||||||
Value
for common stock issued for services
|
100,000 | - | ||||||
Employee
advances
|
- | (5,100 | ) | |||||
Increase
(decrease) in operating liabilities
|
||||||||
Accounts
payable
|
15,005 | 10,000 | ||||||
NET
CASH (USED IN) OPERATING ACTIVITIES
|
(56,781 | ) | (126,583 | ) | ||||
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
||||||||
Purchases
of fixed assets
|
(648 | ) | - | |||||
NET
CASH (USED IN) INVESTING ACTIVITIES
|
(648 | ) | - | |||||
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
||||||||
(Repayment
of) shareholder loans payable
|
- | (11,254 | ) | |||||
Issuance
of common stock to accredited investors
|
70,930 | - | ||||||
Refund
(payment of) of security deposits
|
(1,545 | ) | 1,545 | |||||
Borrowings
from bank note payable
|
3,702 | 103,737 | ||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
73,087 | 94,028 | ||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
15,658 | (32,555 | ) | |||||
CASH
AND CASH EQUIVALENTS,
|
||||||||
BEGINNING
OF THE YEAR
|
13,774 | 46,329 | ||||||
END
OF THE YEAR
|
$ | 29,432 | $ | 13,774 | ||||
SUPPLEMENTAL
NON-CASH FINANCING ACTIVITIES:
|
||||||||
Common
shares issued for prepaid consulting services
|
$ | 100,000 | $ | - |
The
accompanying notes are an integral part of these financial
statements
GARMAN
CABINET & MILLWORK, INC.
NOTES TO
FINANCIAL STATEMENTS
For the
Years Ended December 31, 2008 and 2007
NOTE
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Business
Activity
Garman
Cabinet & Millwork, Inc., (the “Company”) is a North Carolina corporation
that installs architectural woodwork mainly in and around the Charlotte, North
Carolina area. The Company was incorporated in the State of North Carolina on
December 10, 1998.
Basis of
Presentation
The
financial statements include the accounts of Garman Cabinet & Millwork, Inc.
and its wholly owned subsidiaries under the accrual basis of accounting. All
intercompany accounts and transactions have been eliminated.
Management’s 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 affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates.
Deferred
Taxes
Income
taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS No. 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-carry
forwards.
Deferred
tax assets 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 asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of
enactment.
Fair Value of Financial
Instruments
The
Company’s financial instruments are cash, employee advances, security deposits
and accounts payable. The recorded values of cash and payables approximate their
fair values based on their short-term nature.
Cash and Cash
Equivalents - For purposes of the Statements of Cash Flows, the Company
considers highly liquid investments with an original maturity of three months or
less to be cash equivalents.
Revenue Recognition –
Revenue is recognized when architectural woodwork services are completed
provided collection from the customer of the resulting receivable is
probable.
Comprehensive Income
(Loss) - The Company adopted Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive
Income”, which establishes standards for the reporting and display of
comprehensive income and its components in the financial statements. There were
no items of comprehensive income (loss) applicable to the Company during the
period covered in the financial statements.
Loss Per
Share - The Company reports loss per share in accordance with Statement of
Financial Accounting Standard (SFAS) No.128. This statement requires dual
presentation of basic and diluted earnings (loss) with a reconciliation of the
numerator and denominator of the loss per share computations. Basic earnings per
share amounts are based on the weighted average shares of common outstanding. If
applicable, diluted earnings per share would assume the conversion, exercise or
issuance of all potential common stock instruments such as options, warrants and
convertible securities, unless the effect is to reduce a loss or increase
earnings per share. There were no adjustments required to net loss for the
period presented in the computation of diluted earnings per share. There were no
common stock equivalents necessary for the computation of diluted loss per
share.
Long-Lived Assets -
In accordance with SFAS No. 144, the Company reviews and evaluates its
long-lived assets for impairment whenever events or changes in circumstances
indicate that their net book value may not be recoverable. When such factors and
circumstances exist, including those noted above, the Company compares the
assets’ carrying amounts against the estimated undiscounted cash flows to be
generated by those assets over their estimated useful lives. If the carrying
amounts are greater than the undiscounted cash flows, the fair values of those
assets are estimated by discounting the projected cash flows. Any excess of the
carrying amounts over the fair values are recorded as impairments in that fiscal
period.
Property and Equipment -
Property and equipment is stated at cost. Depreciation is provided by the
straight-line method over the estimated economic life of the property and
equipment remaining from three to seven years.
When
assets are sold or retired, their costs and accumulated deprecation are
eliminated from the accounts and any gain or loss resulting from their disposal
is included in the statement of operations.
The
Company recognizes an impairment loss on property and equipment when evidence,
such as the sum of expected future cash flows (undiscounted and without interest
charges), indicates that future operations will not produce sufficient revenue
to cover the related future costs, including depreciation, and when the carrying
amount of the asset cannot be realized through sale. Measurement of the
impairment loss is based on the fair value of the assets.
Risk and Uncertainties
- The Company is subject to risks common to companies in the service
industry, including, but not limited to, litigation, development of new
technological innovations and dependence on key personnel.
Share-Based Payments -
The Company accounts for share-based compensation using the fair value
method of Financial Accounting Standard No. 123R. Common shares issued for
services rendered by a third party (both employees and non-employees) are
recorded at the fair value of the shares issued or services rendered, whichever
is more readily determinable. The Company accounts for options and warrants
under the same authoritative guidance using the Black-Scholes Option Pricing
Model.
Advertising Costs -
Advertising costs are expensed as incurred. The Company does not incur any
direct-response advertising costs.
Recent Accounting
Pronouncements - In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements
(“SFAS 157”). SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. SFAS 157 is effective for
financial statements issued for fiscal years beginning after
November 15, 2007. However, in February 2008, the FASB Staff Position
No. 157-2 was issued, which delays the effective date of the requirements
of SFAS 157 as to nonfinancial assets and nonfinancial liabilities except for
items that are recognized or disclosed at fair value in the financial statements
on a recurring basis. The effective date has been deferred to fiscal years
beginning after November 15, 2008 for these nonfinancial assets and
liabilities. The Company’s adoption of SFAS 157 on January 1, 2008 did not
have a material impact on its financial position, results of operations or cash
flows during the year ended December 31, 2008. The Company does not expect
the deferred portion of the adoption of SFAS 157 to have a material impact on
its financial statements.
In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations” (“SFAS 141R”). SFAS 141R establishes principles and
requirements for how the acquirer in a business combination recognizes and
measures in its financial statements the fair value of identifiable assets
acquired, the liabilities assumed and any noncontrolling interest in the
acquiree at the acquisition date. SFAS 141R determines what information to
disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. SFAS 141R is effective for
fiscal years beginning after December 15, 2008. The Company is currently
evaluating the impact of adopting SFAS 141R on its results of operations and
financial condition and plans to adopt it as required in the first quarter of
fiscal 2009.
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests
in Financial Statements” (“SFAS 160”), an amendment of Accounting Research
Bulletin No. 51, “Financial Statements” (“ARB 51”). SFAS 160
establishes accounting and reporting standards for the noncontrolling interest
in a subsidiary and for the deconsolidation of a subsidiary. Minority interests
will be recharacterized as noncontrolling interests and will be reported as a
component of equity separate from the parent’s equity, and purchases or sales of
equity interests that do not result in a change in control will be accounted for
as equity transactions. In addition, net income attributable to the
noncontrolling interest will be included in net income on the face of the income
statement and upon a loss of control, the interest sold, as well as any interest
retained, will be recorded at fair value with any gain or loss recognized in
earnings. This pronouncement is effective for fiscal years beginning after
December 15, 2008. The Company is currently evaluating the impact of
adopting SFAS 160 on its results of operations and financial condition and plans
to adopt it as required in the first quarter of fiscal 2009.
In
March 2008, the FASB issued SFAS No. 161, “Disclosures about
Derivative Instruments and Hedging Activities — an amendment to FASB Statement
No. 133.” SFAS No. 161 is intended to improve financial standards for
derivative instruments and hedging activities by requiring enhanced disclosures
to enable investors to better understand their effects on an entity’s financial
position, financial performance, and cash flows. Entities are required to
provide enhanced disclosures about: (a) how and why an entity uses
derivative instruments; (b) how derivative instruments and related hedged
items are accounted for under Statement 133 and its related interpretations; and
(c) how derivative instruments and related hedged items
GARMAN
CABINET & MILLWORK, INC.
NOTES TO
FINANCIAL STATEMENTS
For the
Years Ended December 31, 2008 and 2007
NOTE
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)
affect an
entity’s financial position, financial performance, and cash flows. It is
effective for financial statements issued for fiscal years beginning after
November 15, 2008, with early adoption encouraged. The adoption of this
statement, which is expected to occur in the first quarter of 2009, is not
expected to have a material effect on the Company’s financial
statements.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS No. 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. It is effective 60 days following the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” The adoption of this statement is not expected to have a material
effect on the Company’s financial statements.
In
May 2008, the FASB issued SFAS No. 163, “Accounting for Financial
Guarantee Insurance Contracts — an interpretation of FASB Statement
No. 60.” SFAS No. 163 requires that an insurance enterprise recognize
a claim liability prior to an event of default when there is evidence that
credit deterioration has occurred in an insured financial obligation. It also
clarifies how Statement No. 60 applies to financial guarantee insurance
contracts, including the recognition and measurement to be used to account for
premium revenue and claim liabilities, and requires expanded disclosures about
financial guarantee insurance contracts. It is effective for financial
statements issued for fiscal years beginning after December 15, 2008,
except for some disclosures about the insurance enterprise’s risk-management
activities. SFAS No. 163 requires that disclosures about the
risk-management activities of the insurance enterprise be effective for the
first period beginning after issuance. Except for those disclosures, earlier
application is not permitted. The adoption of this statement is not expected to
have a material effect on the Company’s financial statements
On May 9,
2008, the FASB issued FASB Staff Position (“FSP”) APB 14-1, “Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement).” FSP APB 14-1 clarifies that convertible
debt instruments that may be settled in cash upon conversion (including partial
cash settlement) are not addressed by paragraph 12 of APB Opinion No. 14,
“Accounting for Convertible Debt and Debt Issued with Stock Purchase
Warrants.” Additionally, FSP APB 14-1 specifies that issuers of such
instruments should separately account for the liability and equity components in
a manner that will reflect the entity’s nonconvertible debt borrowing rate when
interest cost is recognized in subsequent periods. FSP APB14-1 is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. FSP APB 14-1 will be effective
for the Company on January 1, 2009. The adoption of FSP APB 14-1 is not
expected to have a material impact on the Company’s results of operations or its
financial position.
On June
16, 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities”, to
address the question of whether instruments granted in share-based payment
transactions are participating securities prior to vesting. FSP EITF 03-6-1
indicates that unvested share-based payment awards that contain rights to
dividend payments
should be
included in earnings per share calculations. The guidance is effective for
fiscal years beginning after December 15, 2008. FSP EITF 03-6-1 will be
effective for the Company on January 1, 2009. The adoption of FSP EITF
03-6-1 is not expected to have a material impact on the Company’s results of
operations or financial position.
In June
2008, the FASB issued EITF Issue 07-5 (EITF 07-5), “Determining whether an
Instrument (or Embedded Feature) is indexed to an Entity’s Own Stock.” EITF
07-5 is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal years. Early
application is not permitted. Paragraph 11(a) of SFAS No. 133 “Accounting for
Derivatives and Hedging Activities”, specifies that a contract that would
otherwise meet the definition of a derivative but is both (a) indexed to the
Company’s own stock and (b) classified in stockholders’ equity in the statement
of financial position would not be considered a derivative financial instrument.
EITF 07-5 provides a new two-step model to be applied in determining whether a
financial instrument or an embedded feature is indexed to an issuer’s own stock
and thus able to qualify for the SFAS No. 133 paragraph 11(a) scope
exception. EITF 07-5 will be effective for the Company on January 1,
2009. The adoption of EITF 07-5 is not expected to have a material impact
on the Company’s financial statements.
In June
2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted
in Share-Based Payment Transactions are Participating Securities” (FSP 03-6-1).
FSP 03-6-1 clarifies that unvested share-based payment awards that contain
nonforfeitable rights to dividends or dividend equivalents (whether paid or
unpaid) are participating securities and are to be included in the computation
of earnings per share under the two-class method described in SFAS No. 128,
“Earnings Per Share”. This FSP will be effective for the Company on January
1, 2009 and requires that all prior-period earnings-per-share data that are
presented be adjusted retrospectively. The Company does not expect FSP 03-6-1 to
have a material impact on its earnings per share calculations.
In
October 2008, the FASB issued FSP No. 157-3, “Determining the Fair Value of
a Financial Asset When the Market for That Asset Is Not Active” (FSP 157-3). FSP
157-3 clarifies the application of SFAS 157 in a market that is not active and
provides an example to illustrate key considerations in determining the fair
value of a financial asset when the market for that financial asset is not
active. As it relates to the Company’s financial assets and liabilities
recognized or disclosed at fair value in the Company’s financial statements on a
recurring basis (at least annually), the adoption of FSP 157-3 did not have a
material impact on the Company’s financials.
In
November 2008, the EITF reached consensus on Issue No. 08-6, “Equity Method
Investment Accounting Considerations” (EITF 08-6), which clarifies the
accounting for certain transactions and impairment considerations involving
equity method investments. The intent of EITF 08-6 is to provide guidance
on (i) determining the initial carrying value of an equity method
investment, (ii) performing an impairment assessment of an underlying
indefinite-lived intangible asset of an equity method investment,
(iii) accounting for an equity method investee’s issuance of shares, and
(iv) accounting for a change in an investment from the equity method to the
cost method. EITF 08-6 is effective for the Company’s year beginning
January 1, 2009 and is to be applied prospectively. The adoption of Issue
No. 08-6 is not expected to have a material impact on the Company’s financial
position or results of operations.
In
December 2008, the FASB issued FSP FAS 140-4 and FIN 46(R)-8,
“Disclosures by Public Entities (Enterprises) About Transfers of Financial
Assets and Interest in Variable Interest Entities” (FSP 140-4).
FSP 140-4 requires additional disclosure about transfers of financial
assets and an enterprise’s involvement with variable interest entities.
FSP 140-4 was effective for the first reporting period ending after
December 15, 2008. The adoption of FSP 140-4 did not have any impact
on the Company’s financial statements.
NOTE
2 INCOME
TAXES
At
December 31, 2008 the Company had federal and state net operating loss carry
forwards of approximately $170,000 that expire in various years through the year
2022.
Due to
operating losses, there is no provision for current federal or state income
taxes for the years ended December 31, 2008 and 2007.
Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amount used for federal and state income tax purposes.
The
Company’s deferred tax asset at December 31, 2008 consists of net operating loss
carry forwards calculated using federal and state effective tax rates equating
to approximately $68,000 less a valuation allowance in the amount of
approximately $68,000. Because of the Company’s lack of earnings history, the
deferred tax asset has been fully offset by a valuation allowance. The valuation
allowance increased by approximately $48,000 and $14,000 for the years ended
December 31, 2008 and 2007, respectively.
The
Company’s total deferred tax asset as of December 31, 2008 is as
follows:
Net operating loss carry
forwards $ 68,000
Valuation
allowance (68,000)
Net
deferred tax
asset $ --
========
GARMAN
CABINET & MILLWORK, INC.
NOTES TO
FINANCIAL STATEMENTS
For the
Years Ended December 31, 2008 and 2007
NOTE
2 INCOME TAXES
CONTINUED
The
reconciliation of income taxes computed at the federal and state statutory
income tax rate to total income taxes for the years ended December 31, 2008 and
2007 is as follows:
Income
tax computed at the federal statutory
rate 34%
Income
tax computed at the state statutory
rate 5%
Valuation
allowance (39%)
Total
deferred tax
asset 0%
NOTE
3 CAPITAL
STOCK
The
Company is authorized to issue 100,000,000 common shares at $.0001 par value per
share.
During
the year ended December 31, 2008, the Company enacted a ten thousand for one
forward stock split. The effects of this split are retroactively reflected in
the financial statements as of the beginning of the period.
During
the year ended December 31, 2008, the Company issued 1,709,300 common shares in
exchange for $70,930 and $100,000 in cash collections and services received,
respectively, from the sale thereof pursuant to private placements to accredited
investors made under Regulation 504.
NOTE
4 INCOME (LOSS) PER
SHARE
Income
(loss) per share is computed by dividing the net income (loss) by the weighted
average number of common shares outstanding during the period. Basic and diluted
income (loss) per share was the same for the years ended December 31, 2008 and
2007.
NOTE
5 SUPPLEMENTAL CASH FLOW
INFORMATION
Supplemental
disclosures of cash flow information for the years ended December 31, 2008 and
2007 are summarized as follows:
Cash paid
during the period for interest and income taxes:
2008 2007
Income
Taxes $ -- $ --
Interest
$7,302 $ --
NOTE
6 GOING CONCERN AND
UNCERTAINTY
The
Company has suffered recent losses from operations since inception. In addition,
the Company has recently generated a negative internal cash flow from its
business operations. These factors raise substantial doubt as to the ability of
the Company to continue as a going concern.
Management’s
plans with regard to these matters encompass the following actions: 1) obtain
funding from new investors to alleviate the Company’s working deficiency, and 2)
implement a plan to generate sales. The Company’s continued existence is
dependent upon its ability to resolve it liquidity problems and increase
profitability in its current business operations. However, the outcome of
management’s plans cannot be ascertained with any degree of certainty. The
accompanying financial statements do not include any adjustments that might
result from the outcome of these risks and uncertainties.
NOTE
7 LEASE COMMITMENTS AND
RELATED PARTY TRANSACTIONS
The
Company has four operating lease agreements at various rates with unrelated
parties. The leases all expire in 2008 and, therefore, no future minimum lease
commitment exists beyond one year.
The
Company leases approximately 2,000 square feet of space for its corporate
headquarter offices. The Company also leases three residences which are used for
employee housing.
NOTE
8 BANK LINE OF CREDIT
PAYABLE
The
Company has a bank line of credit payable to an unrelated banking institution
bearing annual interest of 1% above the Wall Street Journal prime rate or 7% as
of December, 2008, secured by machinery, equipment and accounts receivable with
a net book value of approximately $40,734 at December 31, 2008. The bank line of
credit was originally for $125,000 in maximum borrowings available and consists
of no specific monthly payments of principal and interest due to the nature of
the line. The principal maturity was originally November, 2008 but the line of
credit was extended for an additional one year. The line of credit is dated
November 2, 2007 and is guaranteed by two of the Company’s officers and
directors.
Principal
maturities of the bank note payable as of December 31, 2008 for the next five
years and thereafter are as follows:
2009 $ 107,439
Total $ 107,439
Garman
Cabinet & Millwork, Inc.
809,300
Shares of Common Stock
No person
is authorized to give any information or to make any representation other than
those contained in this prospectus, and if made, such information or
representation must not be relied upon as having been given or authorized. This
prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any securities other than the securities offered by this prospectus or an
offer to sell or a solicitation of an offer to buy the securities in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction.
The
delivery of this prospectus shall not, under any circumstances, create any
implication that there have been no changes in the affairs of the company since
the date of this prospectus. However, in the event of a material change, this
prospectus will be amended or supplemented accordingly.
Until [
], 2009, all dealers that effect transactions in these securities, whether or
not participating in the offering, may be required to deliver a prospectus.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
The
following table sets forth estimated expenses expected to be incurred in
connection with the issuance and distribution of the securities being
registered. The Company will pay all expenses in connection with this
offering.
Commission
Registration Fee
|
|
$
|
3.15
|
Printing
and Engraving Expenses
|
|
$
|
1000.00
|
Accounting
Fees and Expenses
|
|
$
|
15,000.00
|
Legal
Fees and Expenses
|
|
$
|
25,000.00
|
Miscellaneous
|
|
$
|
123,996.85 [1]
|
TOTAL
|
|
$
|
165,000.00
|
[1] The
miscellaneous fee includes $50,000 paid to Greentree Financial Group, Inc (minus
the $3.15 commission registration fee, minus the $1,000 printing and engraving
expenses, and minus the $25,000 legal fees and expenses) leaving $23,996.85. It
also includes the aggregate value of the 1,000,000 shares of Common Stock of the
Company issued to Greentree Financial Group, Inc. pursuant to the financial
services agreement filed with the SEC as Exhibit 10.1 on February 19, 2009
(1,000,000 at $.10 a share = $100,000)
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
No
pending material litigation or proceeding involving our directors, executive
officers, employees or other agents as to which indemnification is being sought
exists, and we are not aware of any pending or threatened material litigation
that may result in claims for indemnification by any of our directors or
executive officers.
The North
Carolina Business Corporation Act (the “NC Act”) permits a North Carolina
corporation to indemnify a present or former director or officer of the
corporation (and certain other persons serving at the request of the corporation
in related capacities) for liabilities, including legal expenses, arising by
reason of service in such capacity if such person shall have acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and in any criminal proceeding if such person had
no reasonable cause to believe his conduct was unlawful. However, in the case of
actions brought by or in the right of the corporation, no indemnification may be
made with respect to any matter as to which such director or officer shall have
been adjudged liable, except in certain limited circumstances. The Company’s
Articles of Incorporation provide that the Company shall indemnify directors and
executive officers to the fullest extent now or hereafter permitted by the NC
Act. The indemnification provided by the NC Act and the Company’s Articles of
Incorporation is not exclusive of any other rights to which a director or
officer may be entitled. The general effect of the foregoing provisions may be
to reduce the circumstances which an officer or director may be required to bear
the economic burden of the foregoing liabilities and expense. The Company may
also purchase and maintain insurance for the benefit of any director or officer
that may cover claims for which we could not indemnify such person.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, we have been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed hereby in the
Securities Act and we will be governed by the final adjudication of such
issue.
Issuances
of Unregistered Securities
During
the past three years the registrant has issued the following securities without
registration under the Securities Act of 1933, as amended:
On
September 22, 2008, we issued 1,000,000 common shares to Greentree Financial
Group, Inc. for professional services in connection with preparing this
registration statement, EDGAR services, selecting an independent transfer agent
and advisement on blue sky issues. These shares are valued at $.10 per share,
yielding an aggregate expense of $100,000 that will be included in our financial
statements during fiscal 2008. We will also pay Greentree Financial Group, Inc.
$50,000 cash for these services. As of the date of this registration statement,
$20,000 has already been paid. We relied on exemptions provided by Section 4(2)
of the Securities Act of 1933, as amended. We made this offering based on the
following facts: (1) the issuance was an isolated private transaction which did
not involve a public offering; (2) there was only one offeree, (3) the offeree
has agreed to the imposition of a restrictive legend on the face of the stock
certificate representing its shares, to the effect that it will not resell the
stock unless its shares are registered or an exemption from registration is
available; (4) the offeree was a sophisticated investor very familiar with our
company and stock-based transactions; (5) there were no subsequent or
contemporaneous public offerings of the stock; (6) the stock was not broken down
into smaller denominations; and (7) the negotiations for the sale of the stock
took place directly between the offeree and our management.
During 2008, we issued 1,000 common shares
each to Donald A. Bello, Anita M. Bello, Patricia Bello, Tonya S. Martin, and
James Frost at $0.10 per share for a total of $100 from each investor and an
aggregate of $400. We used the proceeds from these offerings for working capital
purposes. We relied on exemptions provided by Section 4(2) of the Securities Act
of 1933, as amended. We made these offerings based on the following facts: (1)
the issuances were isolated private transactions which did not involve a public
offering; (2) there was only one offeree in each offering, (3) each offeree has
agreed to the imposition of a restrictive legend on the face of the stock
certificate representing its shares, to the effect that it will not resell the
stock unless its shares are registered or an exemption from registration is
available; (4) the offerees were sophisticated investors very familiar with our
company and stock-based transactions; (5) there were no subsequent or
contemporaneous public offerings of the stock; (6) the stock was not broken down
into smaller denominations; and (7) the negotiations for the sale of the stock
took place directly between the offeree and our management.
During
2008, we issued 1,500 common shares each to Michael & Melinda Carneal,
Michael Raynor, and Brenda Raynor at $0.10 per share for a total of $150 from
each investor and an aggregate of $400. We used the proceeds from these
offerings for working capital purposes. We relied on exemptions provided by
Section 4(2) of the Securities Act of 1933, as amended. We made these offerings
based on the following facts: (1) the issuances were isolated private
transactions which did not involve a public offering; (2) there was only one
offeree in each offering, (3) each offeree has agreed to the imposition of a
restrictive legend on the face of the stock certificate representing its shares,
to the effect that it will not resell the stock unless its shares are registered
or an exemption from registration is available; (4) the offerees were
sophisticated investors very familiar with our company and stock-based
transactions; (5) there were no subsequent or contemporaneous public offerings
of the stock; (6) the stock was not broken down into smaller denominations; and
(7) the negotiations for the sale of the stock took place directly between the
offeree and our management.
During
2008, we issued 2,000 common shares each to Billy L. Clark, Michele Bennett, and
David J. Kubicki at $0.10 per share for a total of $200 from each investor and
an aggregate of $600. We used the proceeds from these offerings for working
capital purposes. We relied on exemptions provided by Section 4(2) of the
Securities Act of 1933, as amended. We made these offerings based on the
following facts: (1) the issuances were isolated private transactions which did
not involve a public offering; (2) there was only one offeree in each offering,
(3) each offeree has agreed to the imposition of a restrictive legend on the
face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offerees were sophisticated investors very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
In 2008,
we issued 2,500 common shares to Amanda L. Russell at $0.10 per share for an
aggregate price of $250. We used the proceeds from these offerings
for working capital purposes. We relied on exemptions provided by
Section 4(2) of the Securities Act of 1933, as amended. We made this offering
based on the following facts: (1) the issuance was an isolated private
transaction which did not involve a public offering; (2) there was only one
offeree, (3) the offeree has agreed to the imposition of a restrictive legend on
the face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offeree was a sophisticated investor very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
During
2008, we issued 3,000 common shares each to David Stroupe and Jacqueline M.
David at $0.10 per share for a total of $300 from each investor and an aggregate
of $600. We used the proceeds from these offerings for working capital purposes.
We relied on exemptions provided by Section 4(2) of the Securities Act of 1933,
as amended. We made these offerings based on the following facts: (1) the
issuances were isolated private transactions which did not involve a public
offering; (2) there was only one offeree in each offering, (3) each offeree has
agreed to the imposition of a restrictive legend on the face of the stock
certificate representing its shares, to the effect that it will not resell the
stock unless its shares are registered or an exemption from registration is
available; (4) the offerees were sophisticated investors very familiar with our
company and stock-based transactions; (5) there were no subsequent or
contemporaneous public offerings of the stock; (6) the stock was not broken down
into smaller denominations; and (7) the negotiations for the sale of the stock
took place directly between the offeree and our management.
In 2008,
we issued 3,500 common shares to Aubrey B. Rohaley at $0.10 per share for an
aggregate price of $350. We used the proceeds from these offerings
for working capital purposes. We relied on exemptions provided by
Section 4(2) of the Securities Act of 1933, as amended. We made this offering
based on the following facts: (1) the issuance was an isolated private
transaction which did not involve a public offering; (2) there was only one
offeree, (3) the offeree has agreed to the imposition of a restrictive legend on
the face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offeree was a sophisticated investor very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
During
2008, we issued 5,000 common shares each to Raymond Roth, Richard Hilyard, Sara
Smith, and Scott J. Garman at $0.10 per share for a total of $500 from each
investor and an aggregate of $2,000. We used the proceeds from these offerings
for working capital purposes. We relied on exemptions provided by Section 4(2)
of the Securities Act of 1933, as amended. We made these offerings based on the
following facts: (1) the issuances were isolated private transactions which did
not involve a public offering; (2) there was only one offeree in each offering,
(3) each offeree has agreed to the imposition of a restrictive legend on the
face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offerees were sophisticated investors very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
In 2008,
we issued 5,200 common shares to Malcolm Miller at $0.10 per share for an
aggregate price of $520. We used the proceeds from these offerings
for working capital purposes. We relied on exemptions provided by
Section 4(2) of the Securities Act of 1933, as amended. We made this offering
based on the following facts: (1) the issuance was an isolated private
transaction which did not involve a public offering; (2) there was only one
offeree, (3) the offeree has agreed to the imposition of a restrictive legend on
the face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offeree was a sophisticated investor very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
During
2008, we issued 10,000 common shares each to Donald Rohaley, John Tessler,
Nicole D. Garman, Lester G, Henderson, Donna C. Henderson, Devin J. Garman,
Douglas E. Darnell, Christopher Howell, and Ben Joseph Mulligan at $0.10 per
share for a total of $1,000 from each investor and an aggregate of $9,000. We
used the proceeds from these offerings for working capital purposes. We relied
on exemptions provided by Section 4(2) of the Securities Act of 1933, as
amended. We made these offerings based on the following facts: (1) the issuances
were isolated private transactions which did not involve a public offering; (2)
there was only one offeree in each offering, (3) each offeree has agreed to the
imposition of a restrictive legend on the face of the stock certificate
representing its shares, to the effect that it will not resell the stock unless
its shares are registered or an exemption from registration is available; (4)
the offerees were sophisticated investors very familiar with our company and
stock-based transactions; (5) there were no subsequent or contemporaneous public
offerings of the stock; (6) the stock was not broken down into smaller
denominations; and (7) the negotiations for the sale of the stock took place
directly between the offeree and our management.
During
2008, we issued 15,000 common shares each to Denesha S. Garman, Sean J. Garman,
and Peter A. Putukian at $0.10 per share for a total of $1,500 from each
investor and an aggregate of $4,500. We used the proceeds from these offerings
for working capital purposes. We relied on exemptions provided by Section 4(2)
of the Securities Act of 1933, as amended. We made these offerings based on the
following facts: (1) the issuances were isolated private transactions which did
not involve a public offering; (2) there was only one offeree in each offering,
(3) each offeree has agreed to the imposition of a restrictive legend on the
face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offerees were sophisticated investors very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
During
2008, we issued 20,000 common shares each to James Nester and Spencer Richard
Garman at $0.10 per share for a total of $2,000 from each investor and an
aggregate of $4,000. We used the proceeds from these offerings for working
capital purposes. We relied on exemptions provided by Section 4(2) of the
Securities Act of 1933, as amended. We made these offerings based on the
following facts: (1) the issuances were isolated private transactions which did
not involve a public offering; (2) there was only one offeree in each offering,
(3) each offeree has agreed to the imposition of a restrictive legend on the
face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offerees were sophisticated investors very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
In 2008,
we issued 30,000 common shares to Seth R. Garman at $0.10 per share for an
aggregate price of $3,000. We used the proceeds from these offerings
for working capital purposes. We relied on exemptions provided by
Section 4(2) of the Securities Act of 1933, as amended. We made this offering
based on the following facts: (1) the issuance was an isolated private
transaction which did not involve a public offering; (2) there was only one
offeree, (3) the offeree has agreed to the imposition of a restrictive legend on
the face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offeree was a sophisticated investor very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
In 2008,
we issued 30,600 common shares to Andy Foust at $0.10 per share for an aggregate
price of $3,060. We used the proceeds from these offerings for
working capital purposes. We relied on exemptions provided by Section
4(2) of the Securities Act of 1933, as amended. We made this offering based on
the following facts: (1) the issuance was an isolated private transaction which
did not involve a public offering; (2) there was only one offeree, (3) the
offeree has agreed to the imposition of a restrictive legend on the face of the
stock certificate representing its shares, to the effect that it will not resell
the stock unless its shares are registered or an exemption from registration is
available; (4) the offeree was a sophisticated investor very familiar with our
company and stock-based transactions; (5) there were no subsequent or
contemporaneous public offerings of the stock; (6) the stock was not broken down
into smaller denominations; and (7) the negotiations for the sale of the stock
took place directly between the offeree and our management.
During
2008, we issued 40,000 common shares each to John Paul Leonardos, Melinda Q.
Russell, and Laura Q. Kent at $0.10 per share for a total of $4,000 from each
investor and an aggregate of $12,000. We used the proceeds from these offerings
for working capital purposes. We relied on exemptions provided by Section 4(2)
of the Securities Act of 1933, as amended. We made these offerings based on the
following facts: (1) the issuances were isolated private transactions which did
not involve a public offering; (2) there was only one offeree in each offering,
(3) each offeree has agreed to the imposition of a restrictive legend on the
face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offerees were sophisticated investors very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
During
2008, we issued 50,000 common shares each to George B. Roth and Scott &
Melissa Garman, at $0.10 per share for a total of $5,000 from each investor and
an aggregate of $10,000. We used the proceeds from these offerings for working
capital purposes. We relied on exemptions provided by Section 4(2) of the
Securities Act of 1933, as amended. We made these offerings based on the
following facts: (1) the issuances were isolated private transactions which did
not involve a public offering; (2) there was only one offeree in each offering,
(3) each offeree has agreed to the imposition of a restrictive legend on the
face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offerees were sophisticated investors very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
In 2008,
we issued 51,000 common shares to Nellie K. Roth at $0.10 per share for an
aggregate price of $5,100. We used the proceeds from these offerings
for working capital purposes. We relied on exemptions provided by
Section 4(2) of the Securities Act of 1933, as amended. We made this offering
based on the following facts: (1) the issuance was an isolated private
transaction which did not involve a public offering; (2) there was only one
offeree, (3) the offeree has agreed to the imposition of a restrictive legend on
the face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offeree was a sophisticated investor very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
In 2008,
we issued 150,000 common shares to David Allen Current at $0.10 per share for an
aggregate price of $15,000. We used the proceeds from these offerings
for working capital purposes. We relied on exemptions provided by
Section 4(2) of the Securities Act of 1933, as amended. We made this offering
based on the following facts: (1) the issuance was an isolated private
transaction which did not involve a public offering; (2) there was only one
offeree, (3) the offeree has agreed to the imposition of a restrictive legend on
the face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offeree was a sophisticated investor very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
Also in
2008, we issued 5,100,000 (originally 510 shares subject to a 10,000 for 1
forward split) common shares to Valerie Garman for her services to the Company
as President. We relied on exemptions provided by Section 4(2) of the
Securities Act of 1933, as amended. We made this offering based on the following
facts: (1) the issuance was an isolated private transaction which did not
involve a public offering; (2) there was only one offeree, (3) the offeree has
agreed to the imposition of a restrictive legend on the face of the stock
certificate representing its shares, to the effect that it will not resell the
stock unless its shares are registered or an exemption from registration is
available; (4) the offeree was a sophisticated investor very familiar with our
company and stock-based transactions; (5) there were no subsequent or
contemporaneous public offerings of the stock; (6) the stock was not broken down
into smaller denominations; and (7) the negotiations for the sale of the stock
took place directly between the offeree and our management.
Also in
2008, we issued 4,900,000 (originally 490 shares subject to a 10,000 for 1
forward split) common shares to Sidney Garman for his services to the Company as
Vice-President. We relied on exemptions provided by Section 4(2) of
the Securities Act of 1933, as amended. We made this offering based on the
following facts: (1) the issuance was an isolated private transaction which did
not involve a public offering; (2) there was only one offeree, (3) the offeree
has agreed to the imposition of a restrictive legend on the face of the stock
certificate representing its shares, to the effect that it will not resell the
stock unless its shares are registered or an exemption from registration is
available; (4) the offeree was a sophisticated investor very familiar with our
company and stock-based transactions; (5) there were no subsequent or
contemporaneous public offerings of the stock; (6) the stock was not broken down
into smaller denominations; and (7) the negotiations for the sale of the stock
took place directly between the offeree and our management.
Exhibits
3.2
Amendments to the Articles of Incorporation *
3.3
Bylaws *
5.1
Opinion re Legality
10.1 Consulting
Agreement with Greentree Financial Group, Inc. *
10.2 Lease
Agreement Durham Lane Address**
10.3 Lease
Agreement Datha Avenue Address**
10.4 Lease
Agreement Bankhead Road Address**
10.5 Lease
Agreement Tribute Place Address**
10.6 Lease
Agreement Beatties Ford Road Address**
14.1 Code
of Ethics *
23.1 Consent
of Registered Certified Public Accountants
23.2
|
Consent
of Legal Counsel (included in Exhibit 5.1
hereto)
|
*Previously
Filed with the SEC on February 19, 2009
**Previously Filed
with the SEC on October 13, 2009
|
a.
|
UNDERTAKINGS
The
undersigned registrant hereby
undertakes:
|
1.
|
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
|
i.
|
To
include any prospectus required by section 10(a)(3) of the Securities Act
of 1933;
|
ii.
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee” table in the effective
registration statement.
|
iii.
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement;
|
2.
|
That,
for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
|
3.
|
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
|
4.
|
That,
for the purpose of determining liability under the Securities Act of 1933
to any purchaser:
|
i.
|
If
the registrant is relying on Rule 430B (230.430B of this
chapter):
|
A.
|
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be
deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement;
and
|
B.
|
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or
(x) for the purpose of providing the information required by section
10(a) of the Securities Act of 1933 shall be deemed to be part of and
included in the registration statement as of the earlier of the date such
form of prospectus is first used after effectiveness or the date of the
first contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which that prospectus
relates, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof. Provided, however, that no
statement made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such effective date, supersede or modify
any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such effective date; or
|
ii.
|
If
the registrant is subject to Rule 430C, each prospectus filed pursuant to
Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of
and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time of contract
of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to
such date of first use.
|
5.
|
That,
for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such
purchaser:
|
i.
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
ii.
|
Any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
iii.
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
|
iv.
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
|
Insofar
as indemnification for liabilities arising under the 1933 Act may be permitted
to our director, officer and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small business issuer
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the 1933 Act, and is, therefore,
unenforceable.
In the
event that a claim for indemnification against such liabilities (other than
the payment by the small business issuer of expenses incurred or paid by a
director, officer or controlling person of the small business issuer in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act, and will be governed by the
final adjudication of such issue.
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Cornelius, State of North
Carolina, on October 20, 2009.
Garman
Cabinet & Millwork, Inc.
|
||||
Date:
October 28, 2009
|
By:
|
/s/ Valerie
A. Garman
|
||
Name:
|
Valerie
A. Garman
|
|||
Title:
|
|
President
|
||
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
Date: October
28, 2009
By: /s/
Sidney L. Garman
Sidney
L. Garman
Vice
President/Principal Accounting Officer, Principal Financial Officer
Date: October
28, 2009
By: /s/
Valerie A.
Garman
Valerie
A.
Garman
President,
Director, and Principal Executive Officer
Index to
Exhibits
3.1
Articles of Incorporation *
3.2
Amendments to the Articles of Incorporation *
3.3
Bylaws *
10.1 Consulting
Agreement with Greentree Financial Group, Inc. *
10.2 Lease
Agreement Durham Lane Address**
10.3 Lease
Agreement Datha Avenue Address**
10.4 Lease
Agreement Bankhead Road Address**
10.5 Lease
Agreement Tribute Place Address**
10.6 Lease
Agreement Beatties Ford Road Address**
14.1 Code
of Ethics *
23.2.1
|
Consent
of Legal Counsel (included in Exhibit 5.1
hereto)
|
*Previously
Filed with the SEC on February 19, 2009
**Previously Filed with the SEC on
October 13, 2009